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Whitmer v. Citimortgage Inc.

December 21, 2012


Name of Assigned Judge Philip G. Reinhard Sitting Judge if Other or Magistrate Judge than Assigned Judge



For the reasons stated below, defendant's motion to dismiss is granted in part and denied in part. The motion is granted as to the claims in Count III and Count IV and the request for punitive damages set forth in Count V. These counts are dismissed with prejudice. The motion is denied as to the claims in Count I and Count II. The court requires the parties to report to Magistrate Judge Mahoney within 30 days as to whether they wish to engage in mediation/settlement with Magistrate Judge Mahoney.

O[ For further details see text below.] Electronic Notices /Copy to Magistrate Judge Mahoney.


Plaintiff, Michelle Whitmer, brought this action against defendant, CitiMortgage, Inc., in state court alleging a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA") 815 ILCS 505/2 (Count I), intentional infliction of emotional distress (Count II), tortious interference with a property right (Count III), tortious interference with an expectancy (Count IV) and punitive damages (Count V). Defendant removed the action to this court premised on diversity of citizenship. Plaintiff is a citizen of Illinois. Defendant is a New York corporation with its principal place of business in Missouri. The amount in controversy exceeds $75,000 when both compensatory and punitive damage claims are considered. Subject matter jurisdiction is proper under 28 U.S.C. § 1332(a). Defendant moves to dismiss all claims pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim. Defendant also argues that failure to meet the heightened pleading requirements of Fed. R. Civ. P. 9(b) is an additional basis for dismissing the ICFA claim of Count I.

For purposes of a motion to dismiss, the facts alleged in the complaint are taken as true. Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 555 (7th Cir. 2012). Plaintiff's claims arise from the loan modification process she engaged in with defendant when she sought to modify her home mortgage loan under the federal Home Affordable Modification Program ("HAMP"). HAMP does not create a federal private right of action. Id. However, it does not pre-empt all state-law claims and federal law can supply the standard of care imposed by state law. See id. at 578-79.

HAMP, as relevant here, involved loan servicers offering loan modifications to certain home-mortgage borrowers to help them avoid foreclosure. It involved the servicer and borrower entering into a "trial period plan" ("TPP") and provided that "[a]fter the trial period, if the borrower complied with all terms of the TPP Agreement -- including making all required payments and providing all required documentation-- and if the borrower's representations remained true and correct, the servicer had to offer a permanent modification." Id. at 557.

Plaintiff contacted defendant in December 2009 seeking the pay-off amount for her mortgage. Plaintiff's husband had died in August 2009 and plaintiff intended to pay off her mortgage with life insurance proceeds. During the conversation she had with defendant's employee about the pay-off amount, the employee offered to modify plaintiff's loan instead. Plaintiff provided financial information verbally and the employee advised her that her new payment amount would be $1,293.83, due January 1, 2010 with 2% interest for five years and that interest would never exceed 4.75%.

Plaintiff made the January 1, 2010 payment and it cleared her bank on January 19, 2010. She contacted defendant on January 19, 2010 to advise she had yet to receive the paperwork ("Initial Package") for her modification. Defendant's employee told her the mortgage department was overwhelmed. Plaintiff later contacted defendant to make her February payment and defendant's employee asked her to authorize the next three TPP mortgage payments in advance so her modification would not be at risk due to a possible missed payment. Plaintiff gave the authorization and arranged for three payments of $1,293.83 to be deducted automatically from her checking account on the first of March, April, and May. The March payment cleared her bank on March 5, 2010. Later in March, she received a collection call for her account despite the payment having cleared. She never received the Initial Package for her first modification request.

During the week of April 11, 2010, plaintiff received statements indicating her loan was in arrears. She called defendant and was advised her loan was in foreclosure. On April 19, 2010, she received a letter from defendant stating that her automatic draft for April 2010 was returned by her bank for "unable-to-locate account number." The letter demanded payment of $19,919.74 in certified funds. There had been no problem locating plaintiff's account for the prior drafts in January, February, and March 2010.

In April 2010, plaintiff was advised by an employee of defendant that the reason she had never received the Initial Package for her first modification attempt was because the employee she had spoken to at the time had not clicked the "accept" button to acknowledge plaintiff's verbal acceptance of the terms. She was told that the only way to avert foreclosure at this point was to cure the debt. Plaintiff later made a second modification request. On April 27, 2010, plaintiff received the Initial Package for this modification request and immediately sent defendant the requested documentation. On May 3, 2010 she was advised by defendant that the second modification could not be completed before the foreclosure of her home. Plaintiff immediately sent defendant a cashier's check for $23,933.88. As of May 5, 2010, plaintiff's account was listed as "current."

By letter from defendant dated May 28, 2010, plaintiff was advised defendant had received her Initial Package information for her second modification attempt and it was being forwarded for review. On June 1, 2010, plaintiff authorized a TPP payment to defendant in the amount of $1,293.83. During June 2010 plaintiff sent defendant updated financial information per a request she had received from defendant.

In July 2010, plaintiff called defendant to arrange her TPP payment but was told defendant could not accept her payment as the terms of her modification were about to change. Plaintiff asked to make a payment in her pre-modification amount but was told it made more sense to wait until the new modification was complete so she could make the payment at a much lower rate. On August 1, 2010, plaintiff again called about making her monthly payment. She was advised there was still no new information on her modification or how much she should ...

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