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Hector Avevedo and Juanita Bermudez v. Citimortgage

July 25, 2012


The opinion of the court was delivered by: Blanche M. Manning United States District Judge


Plaintiffs Hector Avevedo and Juanita Bermudez contend that defendant CitiMortage failed to honor its written agreement to modify their mortgage and stop foreclosure on their home pursuant to the federal government's Home Affordable Modification Program ("HAMP"). Specifically, the plaintiffs claim that CitiMortgage either breached a HAMP Trial Period Plan agreement ("TPP") to modify their mortgage or defrauded them with a false promise of a HAMP loan modification to induce them to make additional mortgage payments when they could have been directing those funds to other means of saving their home. The plaintiffs filed a five-count complaint alleging breach of contract based on the TPP (Count I), breach of the duty of good faith and fair dealing associated with the TPP (Count II), promissory estoppel (Count III), a violation of the Illinois Consumer Fraud Act, 815 ILCS § 505/2 (Count IV), and a claim of "wrongful foreclosure" (Count V). CitiMortgage seeks to dismiss the complaint in its entirety. For the following reasons, the breach of contract claim is dismissed and the court orders further briefing on the remaining counts as detailed below.

I. Background

For the purposes of the motion to dismiss, the facts in the complaint are accepted as true. The plaintiffs experienced financial hardships in early 2009 which made it challenging to afford payments on a loan secured by a mortgage on their home in Chicago. They contacted CitiMortgage, the mortgagee on the property, by phone to request assistance under HAMP. CitiMortgage sent the plaintiffs a letter dated December 14, 2009, with a TTP based on the information the plaintiffs had provided during their telephone call. See Complaint, Ex. A, Dkt. 2-1. The letter urged the plaintiffs to "act now!" and asked them to "accept this offer and see if you qualify for a Home Affordable Modification." Id. It also asked the plaintiffs "to submit specified documents and information, the TPP signed by them, and the first TTP payment by January 1, 2010, and to make timely monthly trial payments." Id.

The TTP advised the plaintiffs that CitiMortgage would either send a signed copy of the TTP to them if they qualified for the offer described in the TTP or provide a written notice if they did not qualify. Id. Specifically, it provided that, "[t]his [TTP] will not take effect unless and until both I and the Lender sign it and Lender provides me with a copy of this Plan with the Lender's signature." Id. In addition, it provided that:

F. If prior to the Modification Effective Date, (I) the Lender does not provide me with a fully executed copy of this Plan and the Modification Agreement . . . ; or (iv) I do not provide all information and documents required by Lender, the Loan Documents will not be modified and this Plan will terminate.

G. I understand that this Plan is not a modification of the Loan Documents and that the Loan Documents will not be modified unless and until (I) I meet all of the conditions required for modification . . . . I further understand and agree that the Lender will not be obligated or bound to make any modification of the Loan Documents if the Lender determines that I do not qualify or I fail to meet any one of the requirements under this Plan.


On August 17, 2010, CitiMortgage advised the plaintiffs that it declined to approve their modification request because they had not provided all of the required documents. The plaintiffs allege that they provided all of the necessary documents but concede that they provided additional documentation to CitiMortgage during the review process that followed the rejection. They characterize the request for further documents as unfair and contend that they repeatedly provided all of the necessary documents to CitiMortgage. They also allege that they made all payments required by the TTP in full and on time.

After the trial period ended and CitiMortgage did not convert the plaintiffs' TTP into a permanent loan modification, CitiMortgage continued to debit the monthly TTP payment from the plaintiffs' bank account for the next five months. Despite acknowledging that they received CitiMortgage's August 17, 2010, letter (Complaint at ¶ 67), the plaintiffs allege that they never received a written explanation of the denial or any notice that they were purportedly missing documents (Complaint at ¶¶ 67-68, 71-75).

The plaintiffs submitted a second HAMP application. They contend that CitiMortgage told them it was complete but nevertheless sent them a request for more documents which, according to the plaintiffs, CitiMortgage already had. On February 3, 2011, CitiMortgage sold the plaintiffs' home.

II. Discussion

A. Standard for a Rule 12(b)(6) Motion to Dismiss

To survive a motion to dismiss, a complaint's request for relief must be "'plausible on its face.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009), quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007). A complaint meets this standard when the alleged facts "allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "[N]aked assertions devoid of further factual enhancement" are insufficient. Id. at 1949 (internal quotation marks omitted). Determining if a complaint states a ...

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