Shaw v. CitiMortgage, Inc.
3:13-cv-00445
D. Nev.Jun 26, 2015Background
- Shaw obtained a 2003 residential mortgage; loan was secured by note and deed of trust and later transferred to Bank of New York; Aurora initially serviced, then CitiMortgage serviced until 2011.
- In May 2011 Shaw and CitiMortgage allegedly executed a loan modification that reduced monthly payments; CitiMortgage later repudiated that modification twice (July and December 2011) and sent an alternative agreement Shaw rejected.
- After the second repudiation Shaw stopped making payments; CitiMortgage initiated non-judicial foreclosure proceedings.
- Shaw sued (filed July 2013) and his second amended complaint asserts claims for declaratory relief, breach of contract, breach of implied covenant of good faith and fair dealing, interference with prospective economic advantage, and RESPA violations (fraud/negligent misrepresentation were previously dismissed).
- CitiMortgage moved for summary judgment; the court found multiple genuine disputes of material fact and denied summary judgment in full, allowing the case to proceed to pretrial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence/enforceability of May 2011 loan modification | May 2011 agreement was signed by both parties and is a final, binding modification | CitiMortgage never signed or received consideration and thus no valid modification; any modification was later extinguished | Disputed facts exist; summary judgment denied on declaratory relief regarding the modification |
| Breach of contract and implied covenant | CitiMortgage breached the May 2011 modification (twice) and frustrated its purpose; Shaw refused payments after repudiation reasonably | CitiMortgage cured repudiations, offered to reinstate and waive fees; Shaw’s refusal to make catch-up payments precludes damages | Genuine factual disputes (breach, causation, damages) preclude summary judgment |
| Interference with prospective economic advantage (short sale) | CitiMortgage requested Shaw list the home as a short sale and forward offers, then ignored offers, creating a duty to consider them | Generally servicers have no duty to approve/consider short sales | Fact question: CitiMortgage’s affirmative request created a duty; summary judgment denied |
| RESPA claims (qualified written request & reporting) | CitiMortgage provided incorrect owner/contact information and continued reporting adverse credit during the 60-day dispute period | Any needed contact info was that of the servicer (CitiMortgage), which Shaw already had, so no harm from any defective response | Shaw proffered evidence of incorrect contact info and continued adverse reporting; summary judgment denied |
Key Cases Cited
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (summary judgment standard and drawing inferences for the nonmoving party)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (movant’s burden in a summary judgment motion)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (materiality and genuine dispute standards for summary judgment)
- A.C. Shaw Constr. v. Washoe County, 784 P.2d 9 (Nev. 1989) (every contract imposes duty of good faith and fair dealing)
- Hilton Hotels Corp. v. Butch Lewis Prod. Inc., 808 P.2d 919 (Nev. 1991) (elements of implied covenant claim under Nevada law)
- Perry v. Jordan, 900 P.2d 335 (Nev. 1995) (requirements to plead breach of implied covenant in Nevada)
- Morris v. Bank of America, 886 P.2d 454 (Nev. 1994) (conduct that frustrates contract purpose can violate covenant of good faith)
- Saini v. Int’l Game Tech., 434 F. Supp. 2d 913 (D. Nev. 2006) (elements of breach of contract claim)
- Brown v. Kinross Gold U.S.A., Inc., 531 F. Supp. 2d 1234 (D. Nev. 2008) (breach of contract pleading/element guidance)