Geesey v. CitiMortgage, Inc., Civil Action No. 3:14–188.

• Decision Date: 29 September 2015
• Docket Number: Civil Action No. 3:14–188.
• Parties: Kenneth G. GEESEY and Wendy Geesey, Plaintiffs, v. CITIMORTGAGE, INC., Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

135 F.Supp.3d 332

Kenneth G. GEESEY and Wendy Geesey, Plaintiffs,

v.CITIMORTGAGE, INC., Defendant.

Civil Action No. 3:14–188.

United States District Court, W.D. Pennsylvania.

Signed Sept. 29, 2015.

Michael B. Cohen, Altoona, PA, for Plaintiffs.

Martin C. Bryce, Jr., Rachel Keene, Ballard, Spahr LLP, Philadelphia, PA, for Defendant.

MEMORANDUM OPINION AND ORDER OF COURT

KIM R. GIBSON, District Judge.

I. Introduction

Presently before this Court is Defendant's Motion to Dismiss for Failure to State a Claim. ECF No. 7. Defendant moves to dismiss with prejudice Plaintiffs' Complaint. Id. For the reasons that follow, the Court will grant in part and deny in part Defendant's motion to dismiss.

II. Jurisdiction

The Court has jurisdiction over all of the parties' claims pursuant to 28 U.S.C. § 1332, as there is complete diversity of citizenship between Plaintiffs and Defendant and the amount in controversy exceeds $75,000, exclusive of interest and costs. This case was filed originally in the Blair County Court of Common Pleas, but Defendant removed it to this Court pursuant to 28 U.S.C. § 1441(b).

III. Factual background

The facts as pleaded in the Complaint are as follows.

In 2007, the Plaintiffs, Kenneth and Wendy Geesey, secured a mortgage on their home. Originally, the loan was with PNC Bank, but the loan was assigned to Defendant CitiMortgage shortly thereafter. ECF No. 2–2 at ¶ 3.

Immediately after the mortgage was assigned to CitiMortgage, Plaintiffs inquired about modifying their loan. Id. They were told that they were not yet eligible for a loan modification and would have to wait one year before a loan modification would be considered. Id. Plaintiffs again contacted Defendant in late Summer of 2009 to request a loan modification. Id. at ¶ 4. An agent of Defendant told Plaintiffs that they would not be eligible for a modification unless they were three months behind on their payments. Id. Although they were current with their payments at that time, Plaintiffs intentionally defaulted on their mortgage payments for three months, at which time they again contacted CitiMortgage to request a modification. Id.

In early October of 2009, Plaintiff Kenneth Geesey spoke to Nancy, an agent of CitiMortgage, who explained that Plaintiffs were being placed into the "HAMP" Program. Nancy told Geesey that this would lower his interest rate to 4.00% and that it would begin on November 1, 2009. Id. at ¶ 5. On October 16, 2009, Plaintiff Kenneth Geesey spoke to Tracey, another agent of Defendant, who reaffirmed the Geesey's placement into the HAMP program with the same terms that Nancy had articulated. Id. at ¶ 6. On October 28, 2009, Plaintiff spoke to Delynn, another agent of Defendant, who expressed a new modification offer with an interest rate of 5.20% that would begin on December 1, 2009. Id. at ¶ 7. Lastly, on October 30, 2009, Plaintiff spoke to Roshanda, another agent of Defendant who first confirmed the modification offered by Delynn, but then later retracted that offer, stating that there was a problem with Plaintiff's second mortgage. Id. at ¶ 8. Plaintiffs do not have a second mortgage on their home. Id.

Having learned that they were no longer eligible for a loan modification from CitiMortgage, Plaintiffs then, through their attorney, Michael Emerick, sent a letter to Defendant. Id. at ¶ 9. This letter stated, in relevant part, "Enclosed please find my clients' check in the amount of $1,591.40. This represents the amount of the original modification agreement which Citi ultimately reneged upon. Your cashing of this check will represent Citi's acceptance of the modification of the Geeseys' mortgage. Do not cash this check unless Citi agrees to the same." Id. at Ex. A. Defendant cashed the check that was enclosed with the letter in the amount of $1,591.40. Id. at 9–10. Plaintiffs continued to make monthly payments on unspecified dates in unspecified amounts for the next five months. Id. at 10. In the sixth month, Plaintiffs received a returned check in the amount of $1,196.09 and a letter from CitiMortage, stating that it would not accept the payment because it was not sufficient. Id. at 10, Ex. B. The letter also demanded the sum of $13,651.36, which included late charges. Id.

In July of 2010, CitiMortgage assigned Plaintiffs' mortgage to Selene Finance LP. Id. at ¶ 11. Plaintiffs immediately requested modifications from Selene Finance, LP, but Selene Finance, LP was unable to offer a reasonable or sustainable loan modification to Plaintiffs and a foreclosure action was filed. Id. Plaintiffs filed the Complaint on July 30, 2014, claiming that as a result of the circumstances described in this section, they have been put in imminent danger of losing their home, have suffered catastrophic damage to their credit, have lost significant income from lost business opportunities, and have suffered health problems from severe stress. Id. at ¶ 12. Defendant timely removed the action to this Court and now moves to dismiss Plaintiffs' claims.

IV. Legal Standard

A pleading that states a claim for relief must contain a short and plain statement of the grounds for the court's jurisdiction, a short and plain statement of the claim showing that the pleader is entitled to relief, and a demand for the relief sought. Fed.R.Civ.P. 8(a). A party may ask that a complaint or portion of a complaint be dismissed for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6).

In determining the sufficiency of the complaint, a district court must conduct a two-part analysis. First, the court should separate the factual and legal elements of a claim.

Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.2009). The court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions. Threadbare recitals of the cause of action do not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Second, the court must determine whether the factual matters averred are sufficient to show that the plaintiff has a "plausible claim for relief." Fowler, 578 F.3d at 211 (quoting Iqbal, 556 U.S. at 679, 129 S.Ct. 1937 ). The complaint need not include "detailed factual allegations." Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir.2008) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). The court must construe the alleged facts, and draw all inferences gleaned therefrom, in the light most favorable to the nonmoving party. See id. at 233 (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n. 7 (3d Cir.2002) ). A complaint must present sufficient "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." (Sheridan v. NGK Metals Corp., 609 F.3d 239, 262 n. 27 (3d Cir.2010) (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 )).

In determining whether a plaintiff has shown a "plausible claim for relief" the Court must conduct a "context specific" inquiry that requires it to "draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679, 129 S.Ct. 1937. The relevant record under consideration includes the complaint and any "document integral to or explicitly relied upon in the complaint." U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir.2002) (citing In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.1997) ).

If a complaint is vulnerable to dismissal under Rule 12(b)(6), the district court must permit a curative amendment, irrespective of whether a plaintiff seeks leave to amend, unless such amendment would be inequitable or futile. Phillips, 515 F.3d at 236 ; see also Shane v. Fauver, 213 F.3d 113, 115 (3d Cir.2000) ("[L]eave to amend generally must be granted unless the amendment would not cure the deficiency.").

V. Discussion

a. Plaintiffs' Claims

In Count I of their Complaint, Plaintiffs claim that Defendant is liable to them for breach of contract damages. Plaintiffs allege that the December 1, 2009 letter sent to Defendant constituted a valid offer, which Defendant accepted by cashing the enclosed check. ECF No. 2–2 at ¶¶ 9–10;15–18. They further allege that Defendant breached this contract when Defendant returned to Plaintiffs their 6th payment with a letter stating that Defendant would not accept this payment and demanded the sum of $13,651.36. Id. at ¶ 18. Plaintiffs claim that they suffered harm including foregoing other remedies they might have pursued to save their home, such as restructuring their debts under the bankruptcy code or pursuing other strategies to deal with their defaults, such as selling their home. Id. at ¶ 19. Plaintiffs also allege that they built up delinquency in an amount exceeding that which would otherwise have accrued. Id. Plaintiffs claim that Defendant imposed improper fees and costs on borrowers' accounts during and after their trial modification period. Id. at ¶ 20. Plaintiffs also claim to have suffered the additional harms of foreclosure and collection activity against their home and adverse credit reporting, which undermined their credit standing for lower cost refinancing and other necessary credit transactions. Id. at ¶¶ 21–22. Lastly, Plaintiffs allege that they have lived in a state of stressful anxiety as a result of the limbo in which Defendant placed them. Id. at 23. Plaintiffs ask for judgment in the form of compensatory damages in excess of $50,000¹ in connection with Count I. Id.

In Count II of their Complaint, Plaintiffs claim that Defendant is liable to them for breaching the implied covenant of good faith and fair dealing. Plaintiffs allege that Defendant breached this duty in seven ways: by (i) failing to perform loan servicing function consistent with its responsibilities to Plaintiff; (ii) failing to supervise its agents and employees properly including, without limitation, its loss mitigation and collection personnel and its foreclosure attorneys; (iii) routinely...