Sergeant v. Bank of America, N.A.
3:17-cv-05232
W.D. Wash.Jun 14, 2017Background
- Janice and Thomas Sergeant refinanced their home in March 2009; servicing and beneficial interest were later assigned to Bank of America, N.A. (BANA).
- The Sergeants fell behind on payments in May 2010, submitted multiple loan-modification applications (2011–2014), and participated in Washington’s foreclosure-mediation program in 2014.
- Servicing transferred to Carrington Mortgage Services, LLC (CMS); CMS offered a temporary plan in 2015 (rejected) and a permanent modification in October 2016.
- Plaintiffs filed a 48-page complaint (12 claims) in March 2017 against BANA, CMS, and others alleging violations including the Washington CPA, ECOA, and the tort of outrage.
- BANA moved to dismiss certain claims (CPA, ECOA, outrage); the Sergeants cross-moved to set aside the foreclosure-mediator’s certification and declare bad faith in mediation.
- The Court denied the Sergeants’ cross-motion as procedurally improper and not pleaded in the complaint; granted BANA’s motion in part, dismissed several claims, but gave leave to amend limited claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to set aside foreclosure-mediator certification / declare bad faith | Sergeants asked court to set aside certification and find defendants acted in bad faith in mediation | BANA argued the motion is procedurally improper and plaintiffs cite no authority | Denied: relief not pleaded in complaint; procedurally improper |
| CPA — statute of limitations | Sergeants argued equitable tolling applies to save CPA claim | BANA argued CPA claims are time-barred (4-year limit) | Granted dismissal on statute-of-limitations ground; plaintiffs failed to support equitable tolling |
| CPA — merits | Sergeants asserted complaint contains sufficient facts (cited complaint pages) | BANA argued plaintiffs failed to plead each CPA element plausibly | Granted dismissal for failure to plead CPA elements; Court refused to comb the record for facts |
| ECOA — procedural notice (§1691(d)(1)) | Sergeants contended procedural-notice violations occurred | BANA argued duty to notify is waived where applicant is delinquent | Denied dismissal on procedural-notice theory; BANA failed to show legal deficiency |
| ECOA — substantive adverse action (§1691(d)(6)) | Sergeants alleged adverse substantive acts under ECOA | BANA argued denial is not an adverse action where applicants were in default | Granted dismissal of substantive ECOA claim with prejudice (plaintiffs admitted default) |
| Outrage (intentional infliction of emotional distress) — statute of limitations | Sergeants relied on alleged continuing failure to mitigate after 2009 acts | BANA argued claim is time-barred (3-year limitation) | Granted dismissal: outrage claim barred by statute of limitations |
Key Cases Cited
- Balistreri v. Pacifica Police Department, 901 F.2d 696 (9th Cir. 1990) (standard for Rule 12(b)(6) dismissal and construing complaints for purposes of motion)
- Keniston v. Roberts, 717 F.2d 1295 (9th Cir. 1983) (material allegations taken as admitted on motion to dismiss)
- Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778 (Wash. 1986) (elements required to establish a Washington CPA violation)
- Pickett v. Holland Am. Line–Westours, Inc., 145 Wn.2d 178 (Wash. 2001) (statute of limitations for CPA claims)
- Cox v. Oasis Physical Therapy, PLLC, 153 Wn. App. 176 (Wash. Ct. App. 2009) (statute of limitations applicable to negligence-based claims)