George et al v. Urban Settlement Services et al.

Filing 42

ORDER. ORDERED that Urban's Motion to Dismiss the First Amended Class Action Complaint [Docket No. 13] is GRANTED. ORDERED that BOA's Motion to Dismiss the First Amended Class Action Complaint [Docket No. 14] is GRANTED. ORDERED that, within 14 days of the entry of judgment, defendants may have their costs by filing a bill of costs with the Clerk of the Court. ORDERED that this case is dismissed in its entirety by Judge Philip A. Brimmer on 09/30/14.(jhawk, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 13-cv-01819-PAB-KLM
RICHARD GEORGE,
STEVEN LEAVITT,
SANDRA LEAVITT,
DARRELL DALTON,
and all others similarly situated,
Plaintiffs,
v.
URBAN SETTLEMENT SERVICES, d/b/a Urban Lending Solutions, and
BANK OF AMERICA, N.A.,
Defendants.
_____________________________________________________________________
ORDER
_____________________________________________________________________
This matter is before the Court on the Motion to Dismiss the First Amended
Class Action Complaint [Docket No. 13] filed by defendant Urban Settlement Services
(“Urban”) and the Motion to Dismiss the First Amended Class Action Complaint [Docket
No. 14] filed by defendant Bank of America, N.A. (“BOA”).1 This Court has subject
matter jurisdiction pursuant to 28 U.S.C. § 1331 and § 1332(d).

1

BOA formerly did business under the name BAC Home Loans Servicing, LP. All
references to BOA are to Bank of America, N.A. and BAC Home Loans Servicing, LP
collectively unless otherwise indicated.

I. BACKGROUND2
This case arises out of BOA’s and Urban’s administration of the Home
Affordable Modification Program (“HAMP”). Plaintiffs Richard George, Steven and
Sandra Leavitt, and Darrell Dalton all obtained home mortgages that were held by
Countrywide Home Loans. Docket No. 12 at 53, ¶ 134, id. at 62, ¶ 163, id. at 69, ¶ 193.
BOA purchased Countrywide Home Loans in 2008 and acquired hundreds of
thousands of mortgages, including those of plaintiffs. Id. at 10, ¶ 23. Pursuant to a
contract between BOA and Urban, Urban provided HAMP-related services to BOA. Id.
at 35, ¶ 78. On behalf of themselves and a nationwide class, plaintiffs bring a claim
against BOA and Urban under the Racketeer Inf luenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. § 1962(c). Id. at 82-92. Plaintiffs’ RICO claim alleges that BOA
and Urban were part of an enterprise that engaged in mail and wire fraud and extortion.
Id. On behalf of themselves and statewide classes of similarly situated borrowers,
plaintiffs also bring a claim against BOA for promissory estoppel. Id. at 92-93.
A. HAMP
In response to the foreclosure crisis, the federal government launched HAMP in
2009, which attempted to give mortgage servicers an incentive to modify loan terms for
delinquent borrowers. Docket No. 12 at 11, ¶ 25. HAMP provided a vehicle by which
2

The following facts are taken from plaintiffs’ First Amended Class Action
Complaint (the “amended complaint”) [Docket No. 12]. Plaintiffs’ factual allegations are
presumed true unless, as noted herein, they are conclusory or contradicted by other
allegations of plaintiffs. See Khalik v. United Air Lines, 671 F.3d 1188, 1193 (10th Cir.
2012) (“conclusory and formulaic recitations” of the elements “are insufficient to survive
a motion to dismiss”); DPWN Holdings (USA), Inc. v. United Air Lines, Inc., 747 F.3d
145, 152 (2d Cir. 2014) (holding that “general allegations that are contradicted by more
specific allegations in the Complaint” need not be accepted as true (quotation omitted)).
2

borrowers could initially make lower monthly payments, thereby decreasing the risk of
default and the instances of foreclosure. Id. at 12, ¶ 28. For each successful HAMP
modification, servicers were paid $1000 by the federal government. Id. at 22, ¶ 50.
The HAMP program was largely successful for those borrowers receiving HAMP
modifications. Id. at 13, ¶ 29. HAMP was administered by the United States Treasury
Department; banks who accepted funds through the Troubled Asset Relief Program
were required to participate. Id. at 12, ¶ 27. Participating banks entered into a Servicer
Participation Agreement (the “Agreement”) with the Treasury Department at which point
the bank became a Participating Servicer. Id. at 12-13, ¶¶ 27, 30. Under the
Agreement, Participating Servicers were required to evaluate for HAMP eligibility all
loans that were more than 60 days delinquent or appeared to be in imminent default.
Id. If a borrower contacted the Participating Servicer regarding HAMP, the servicer was
required to collect income and hardship information to determine HAMP eligibility. Id. at
13-14, ¶ 30.
The HAMP process has two steps. At step one, the servicer evaluates the
borrower based upon information the borrower provides, determining if each of the
threshold eligibility requirements is met and if modification would provide the mortgage
holder a net present benefit. If the threshold eligibility requirements are met, the
borrower is placed on a Trial Period Plan (“TPP”), which is a three-month period that
allows the servicer to verify the borrower’s information. Id. at 14-15, ¶ 32-34. 3 The
Treasury Department expected servicers to reach a decision as to whether to extend a
3

Servicers are prohibited from initiating or continuing foreclosure proceedings
while the evaluation process and trial period are ongoing. Id. at 16, ¶ 36.
3

TPP to a borrower within 30 days of receiving the borrower’s financial documents for
95% of submissions. Id. at 53, ¶ 132. The TPP’s terms and conditions are explained in
an FHA Home Affordable Modification Trial Period Plan (“TPP document”) provided to
the borrower, which both the borrower and the loan servicer are required to sign. See,
e.g., Docket No. 14-2; Docket No. 14-3. 4 If the borrower complies with the TPP, makes
all monthly payments, and the servicer verifies the borrower’s information, then process
proceeds to step two, which requires that the servicer make an offer of permanent
modification if the borrower has met the required conditions. Docket No. 12 at 15-16,
¶ 35.5
B. BOA’s Implementation of HAMP
As a recipient of Troubled Asset Relief Program funds, BOA was required to
participate in HAMP. In April 2009, BOA signed a Servicer Participation Agreement
with the Treasury Department and began administering the HAMP program to
borrowers. Id. at 12, ¶ 27. BOA contracted with third parties, including Urban, to
provide services related to its implementation of HAMP. Id. at 35, ¶ 78. BOA
represented publicly that it was participating in HAMP and that qualifying homeowners
would be able to secure a permanent loan modification. Id. at 18, ¶ 41. A BOA

4

Because these documents are explicitly referenced in the amended complaint
and are central to plaintiffs’ claims, see Docket No. 12 at 64, ¶ 172, the Court can
consider them without converting BOA’s motion into a motion for summary judgment.
See Alvarado v. KOB-TV, L.L.C., 493 F.3d 1210, 1215 (10th Cir. 2007).
5

In March 2010, the Treasury Department changed the process, requiring
servicers to verify borrowers’ financial information prior to instituting TPPs. Id. at 16,
¶ 38.
4

executive testified before Congress that efforts to place borrowers in the HAMP
program were hindered by borrowers’ failure to provide financial information and failure
to respond to outreach efforts, statements which plaintiffs claim were knowingly false.
Id. at 26-27, ¶ 59.

However, BOA also offered internal or proprietary non-HAMP

modification programs, which were more profitable for BOA. Id. at 25, ¶ 56. Privately,
BOA supervisors were told that the more the HAMP process was delayed, the more
fees BOA would collect and the more borrowers would be directed towards proprietary
modification programs. Id. at 25, ¶¶ 55-56. Thus, BOA instituted a practice of delaying
the HAMP application process, implemented by regional vice presidents, including
executives Rebecca Mairone, John Berens, Kenneth Scheller, Troy Novotny, Patricia
Feltch, and Tyrone Wells. Id. at 27, ¶¶ 60-61, at 31, ¶ 71. Former BOA employees
stated that BOA did not have sufficient underwriting staff to implement the program and
complete review of borrowers’ documents within the 30 days of submission. Id. at 27,
¶¶ 60-61. A former employee stated that BOA executives knowingly failed to provide
sufficient underwriting staff to process all of the incoming HAMP applications. Id. at 28,
¶ 62. By early 2012, the average case load size for a customer relationship manager
was 600 loans. Id. at 34, ¶ 74. BOA employees were instructed to inform applying
borrowers that their application documents had not been received, to hold application
documents for 30 days, or to scatter application documents so that the documents
could not be viewed on a single system. Id. at 28-30, ¶¶ 63-65. In some instances,
BOA would order borrowers’ applications denied “for no reason other than that the
borrower documents were more than 60 days old.” Id. at 30, ¶ 66. For those

5

applications that were considered, BOA failed to properly employ the HAMP-mandated
qualifications. Id. at 30, ¶ 68. In some instances, BOA offered managers and
employees rewards based upon the number of homeowner applications they could
decline. Id. at 31, ¶ 70. In 2010 and 2011, the United States Of fice of the Comptroller
of the Currency evaluated BOA’s practices and, on March 29, 2011, BOA executed a
consent decree, wherein BOA agreed to implement remedial measures to correct
issues in its loan modification process. Id. at 32-34, ¶ 73. Plaintiff claims that BOA
failed to comply with its obligations under the consent decree, including failing to lessen
the case load of its customer relationship managers. Id. at 34, ¶¶ 74-76.
C. Urban
Urban maintained offices and a corporate identity separate from BOA. Id. at 35,
¶ 80. Plaintiff claims that BOA assigned Urban specific tasks and broad duties to
manage, that Urban communicated regularly with BOA, and that both entities were
engaged in the common goal of reducing the number of HAMP modifications issued to
borrowers. Id. at 36, ¶ 82. Urban was compensated based upon the volume of loan
files it processed. Id. at 37, ¶ 87. Within parameters set by BOA, Urban performed key
functions related to BOA’s implementation of HAMP, including deciding, based upon
BOA criteria, “which modification program a particular borrower should be steered
toward, and deciding which borrowers should be denied modifications in order to meet
quotas and timeframes.” Id. at 35-36, ¶¶ 80-81, 83. BOA also directed Urban to
receive financial documents from borrowers, field telephone inquiries from borrowers,
and notify borrowers when required documents were missing. Id. at 37, ¶¶ 84-86.

6

Although borrowers believed that they were returning financial documents to BOA, the
address and fax number BOA provided borrowers was a Urban address and fax
number. Id. at 37, ¶ 88. Urban employees fielding calls from borrowers would
represent themselves as BOA employees and were given titles and email addresses
suggesting that they were BOA employees. Id. at 37-38, ¶ 89. BOA executives were
aware of the problems with Urban’s role in implementing HAMP, but made no effort to
correct its own or Urban’s performance. Id. at 38, ¶ 93.
D. The Enterprise
Plaintiffs claim that BOA and Urban were part of an enterprise (the “enterprise”)
with the goal of furthering a fraudulent scheme to keep borrowers from acquiring
permanent HAMP loan modifications. Plaintiffs claim that BOA’s TPP documents
induced borrowers to make trial payments with the expectation that they would receive
a permanent modification. Id. at 17, ¶ 38. Plaintiffs claim that Urban served as a
“black hole” for borrowers’ HAMP-related documents, effectively guaranteeing that
TPPs would not be converted to permanent modifications. Id. at 39, ¶ 94. At BOA’s
direction, Urban delayed forwarding modification packages, falsely informed inquiring
borrowers that their loans were being processed, and falsely telling borrowers that their
files were incomplete, requiring the borrowers to send additional documents. Id. at 39,
¶ 96. For example, Urban was directed to close any file that contained a letter to the
borrower seeking additional information, regardless of whether the borrower had
provided the requested information. Id. at 41, ¶ 100. Despite the fact that BOA
required that documents such as bank statements be less than 90 days old, Urban

7

would allow the documents to age until they could no longer be used in the underwriting
process, at which point BOA would deem the documents unacceptable and deem the
file incomplete. Id. at 40, ¶ 97. Pursuant to the TPP documents, BOA instructed
borrowers to make temporary payments – in amounts lower than would ordinarily be
due under their un-modified mortgages –, yet BOA continued to consider full,
unmodified loan payments due from each borrower. Id. at 40, ¶ 98. Eventually, due to
the delay in processing borrowers’ TPPs, the borrowers’ debt would continue to
accumulate and rise to a level where BOA would decline the loan modification due to
“excessive forbearance.” Id. at 40-41, ¶ 98. 6 As a result of this “delay loop,” plaintiffs
claim that BOA and Urban fraudulently denied permanent loan modifications to tens of
thousands of borrowers who had otherwise fulfilled their requirements under the TPPs.
Id. at 41, ¶¶ 99-100.
By the third quarter of 2012, BOA had approximately 20,000 unresolved
complaints or service requests from borrowers. BOA provided Urban with lists of
service requests to close. Id. at 41-42, ¶¶ 102-104. Despite the fact that some of the
service requests may have required follow-up work, BOA instructed Urban employee to
close service requests as quickly as possible such that Urban employees were
expected to close dozens of service requests per day and did so, in some cases, by
6

In other words,
Borrowers who participate in the HAMP program, and thus make lower
payments as instructed by Defendants, are necessarily in default by virtue
of making the lower payments. This places already economically stressed
borrowers in the extremely tenuous position of being in default on their
original mortgage, but also unable to obtain a HAMP modification due to
Defendants’ scheme.
Id. at 25-26, ¶ 57.
8

deeming the borrowers to have failed the HAMP application process. Id. at 42, ¶ 105.
Urban employees raised concerns to Urban executives regarding the manner in which
service requests were being closed. Employees who did so were disciplined and the
practice of improperly closing service requests continued. Id. at 43-45, ¶¶ 109-114.
Plaintiffs allege that BOA executives Mr. Scheller, Ms. Mairone, Mr. Swain, and Ms.
Feltch were repeatedly informed that BOA’s application of HAMP was wrongfully
denying a majority of borrowers’ loan modifications, but that those individuals, along
with BOA executives Robbie Nicholson, Tony Meola, and John Berens continued to
direct a program of mass declinations. Id. at 45-56, ¶¶ 115-119.
As a result of BOA’s and Urban’s knowledge of their scheme of mass
declinations, BOA and Urban made knowingly false statements to borrowers by mail,
telephone, email, and over the internet, including: letters, website communications, TPP
documents, and phone calls containing misleading representations regarding the
availability of HAMP modifications, phone calls misrepresenting the status of borrowers’
loan modifications, notices that application documents or information was missing, and
notices of denial of permanent modifications. Id. at 47-48, ¶ 123. 7
BOA used other entities to further its scheme. Sykes Enterprises, Inc. was
retained by BOA to communicate with customers. Wingspan Portfolio Advisors was
used by BOA to process customer efforts to secure loan modifications. Robertson
7

BOA’s website contained criteria and instructions for applying for HAMP through
BOA. Id. at 18-21, ¶¶ 42-45. BOA’s website stated, “You can expect to hear back from
us within 10 business days from when we receive all your required documents.” Id. at
21, ¶ 46. Plaintiffs claim that BOA’s website was deceptive and misled borrowers into
believing that, if they applied for HAMP, qualified for HAMP, and made trial payments,
they would receive an offer of permanent modification. Id. at 21, ¶ 47.
9

Anschutz & Vetters and Robertson Anschutz & Schneed (the “law firms”) were law firms
BOA used to facilitate the foreclosure of homes once borrowers were denied loan
modifications. BOA retained Stewart Lender Services to mail and receive HAMP
application documents. Id. at 48-49, ¶ 125.
E. Plaintiffs’ Modification Applications
1. Mr. George
In 2007, Mr. George refinanced his mortgage with Countrywide. Id. at 62, ¶ 164.
In 2008, Mr. George’s work hours were reduced. Id. at 62, ¶ 165. Mr. George
contacted BOA about HAMP and was told to pay a modified amount. Rather than
receiving a TPP document, Mr. George received a Notice of Intent to Accelerate. Id. at
62-63, ¶¶ 166-67. Mr. George attempted to continue to pay the full amount of his
mortgage payment. Id. at 63, ¶ 168. After receiving a letter from BOA directing him to
submit documents for TPP consideration, Mr. George submitted all documents
requested. Unbeknownst to Mr. George, the address to which he sent the requested
documents belonged to Urban. Id. at 63-64, ¶¶ 170-71. On June 24, 2010, Mr. Georg e
received a TPP document. Id. at 64, ¶ 172. Mr. George signed the TPP as instructed
and returned it to the address belonging to Urban and thereafter fulfilled all the TPP
requirements. Id. at 65, ¶ 174-75. Mr. George claims that the TPP document and
BOA’s website “indicated that Mr. George could expect a permanent modification within
a month of the end of the trial period,” but Mr. George received no such loan
modification. Id. at 65, ¶ 175. 8 On several occasions, Mr. George attempted to contact
8

With regard to this allegation and others like it, see, e.g., id. at 76, ¶ 219, the
amended complaint does not quote or otherwise refer to any specific language in the
10

BOA regarding the status of his HAMP modification and, on January 19, 2013, received
a permanent modification agreement. Id. at 66, ¶¶ 177-79. Mr. George subsequently
received conflicting representations from BOA regarding the status of his modification
paperwork, but returned the signed paperwork to Urban’s address as instructed. Id. at
67, ¶¶ 181-185. Despite this, on April 20, 2013, Mr. Georg e received yet another set of
modification papers. Id. at 67, ¶ 186. As a result of these interactions with BOA, Mr.
George claims, among other things, to be living in constant risk of foreclosure, alleging
that he relied on BOA’s and Urban’s misrepresentations regarding HAMP availability
and that BOA demanded that Mr. George pay $8,000 before it would consider him for a
HAMP modification. Id. at 68, ¶¶ 187, ¶ 189, ¶ 191. Mr. George claims that he was
additionally harmed by being denied the benefit of a HAMP modification and through
incurring additional debt and interest that would have been avoided had BOA timely
placed him in a HAMP modification. Id. at 69, ¶ 192.
2. Mr. and Mrs. Leavitt
After experiencing financial difficulties, on July 21, 2011, the Leavitts contacted
BOA, requesting a HAMP modification. BOA represented that HAMP paperwork would
be sent to them, but, after the Leavitts called BOA to follow up on the status of such
paperwork, the Leavitts were unable receive any information. Id. at 54, ¶¶ 135, 137.
Over the course of their interactions with BOA, the Leavitts were assigned multiple
customer relationship managers (“CRMs”), each of whom was generally unreachable
and lacked knowledge of the modification process. Id. at 55, ¶ 140. On November 3,
TPP document or on BOA’s website that indicates a permanent modification would be
received within thirty days of the end of the trial period.
11

2011, the Leavitts received HAMP application materials, which they claim contained
multiple misrepresentations. Id. at 55-56, ¶¶ 141, 142. After returning the requested
information to an address that, unbeknownst to the Leavitts, belonged to Urban, the
Leavitts inquired of their CRM each week as to the status of their application. Id. at 5657, ¶¶ 143-44. The CRM falsely represented that their application was under review
and the Leavitts were additionally instructed to resubmit documents. Id. at 57, ¶¶ 14445. On February 25, 2012, the Leavitts were informed that they were ineligible for a
HAMP modification and again instructed to resubmit documents. Id. at 57, ¶ 146. On
March 30, 2012, the Leavitts received the TPP documents, setting a monthly payment
amount that was improperly calculated, but indicating that if the TPP was successfully
completed a permanent HAMP modification would be provided – statements the
Leavitts claim were deceptive. Id. at 58, ¶ 148-49. Despite representations that they
could expect a permanent modification within 30 days after completing the TPP, the
Leavitts were not offered a permanent modification after making the required payments.
Id. at 59, ¶ 151. The Leavitts were again assigned to different CRMs and were unable
to get information on the status of their application, but eventually, in November 2012,
received a permanent modification offer. Id. at 59, ¶¶ 152-53. The modification was
contingent on a $12,000 balloon payment due at the end of the mortgage term. Id. at
60, ¶ 153. The Leavitts returned the modification agreement, but, before the
modification was processed, the Leavitts’ loan was sold to Nationstar Mortgage. Id .at
60, ¶¶ 155, 156. According to Nationstar Mortgage, the Leavitts’ payments during the
TPP had been recorded as underpayments and showed that the Leavitts were in

12

default by more than $6,000. Id. at 61, ¶ 157. The Leavitts reapplied for HAMP
modification with Nationstar Mortgage and received a permanent modification in
approximately four months. Id. at 61, ¶ 158. The Leavitts claim that they suffered harm
in the form of $19,000 in additional debt, personal expenses from the time spent
following up on the modification application, and interest and fees that the Leavitts
would not have incurred had BOA and Urban acted within the timeframe set forth in
HAMP rules. Id. at 61-62, ¶ 162.
3. Mr. Dalton
After losing his job, Mr. Dalton contacted BOA in May 2009 regarding a HAMP
modification. Id. at 69, ¶ 195. Mr. Dalton complied with BOA’s request to provide
application documents, but, when contacting BOA to follow up on his application, was
told that his file was under review and did not contain the necessary documents. Id. at
70, ¶¶ 196-98. In September 2009, Mr. Dalton was advised by BOA that no file
regarding his modification application had been opened and was again instructed to
send in the required documents. Id. at 71, ¶¶ 200-01. On January 25, 2010, BOA
informed Mr. Dalton that his HAMP TPP had been approved and that he should begin
making trial payments; however, the TPP documents did not arrive. Id. at 71-72, ¶ 202.
Throughout April, May, and June of 2010 Mr. Dalton received conflicting information
from BOA representatives regarding whether his TPP had been approved. Id. at 72,
¶¶ 203, 205. In late 2010, after receiving a notice of intent to foreclose, BOA and Mr.
Dalton entered into pre-foreclosure mediation, after which BOA and Mr. Dalton entered
into a written “internal modification” plan with a three-month trial period. Id. at 73,

13

¶ 208. After making his trial payments on time, Mr. Dalton was presented with a
permanent modification that added $18,000 in interest and f ees to the principal of his
loan. Id. at 73, ¶ 209. Mr. Dalton refused the modification, at which point Mr. Dalton
was placed in a second trial plan, but one which did not comply with the HAMP formula
for calculating the monthly payment. Id. at 74, ¶¶ 209, 211-212. 9 Mr. Dalton believed
that, if he made his trial payments on time, he would receive a permanent modification.
Id. at 74, ¶ 213. On February 13, 2013, BOA sent Mr. Dalton a third trial plan, which
also did not comply with the HAMP formula. Id. at 75, ¶¶ 215-16. After Mr. Dalton
complied with the trial plan, BOA sent a permanent modification that added more than
$22,000 to the loan principal. Id. at 75, ¶ 217. Mr. Dalton suffered injuries in the form
of incurring additional debt that would not have been incurred had BOA and Urban
provided him a timely permanent HAMP modification. Id. at 77, ¶ 224.
F. Procedural History
On July 10, 2013, plaintiffs filed the present case. Docket No. 1. On August 26,
2013, plaintiffs filed the amended complaint. Docket No. 12. On September 16, 2013,
Urban and BOA filed motions to dismiss, seeking dismissal of all claims asserted
against them pursuant to Federal Rule of Civil Procedure 12(b)(6). Docket Nos. 13 and
14.10

9

The amended complaint does not indicate that Mr. Dalton received a HAMP
TPP document for either the second or third trial plan.
10

The amended complaint’s class allegations are not at issue in the present
motions and, as such, the Court will not restate them in this order.
14

II. STANDARD OF REVIEW
To survive a motion to dismiss under Rule 12(b)(6), a complaint must allege
enough factual matter that, taken as true, makes the plaintiff’s “claim to relief . . .
plausible on its face.” Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008) (citing
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “[W ]here the well-pleaded facts
do not permit the court to infer more than the mere possibility of misconduct, the
complaint has alleged–but it has not shown–that the pleader is entitled to relief.”
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (internal quotation marks and alteration
marks omitted).
III. ANALYSIS
A. RICO Claims
Plaintiffs bring their RICO claim pursuant to 18 U.S.C. § 1962(c). “To
successfully state a RICO claim, a plaintiff must allege four elements: “(1) [participation
in the] conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.’”
Robbins v. Wilkie, 300 F.3d 1208, 1210 (10th Cir. 2002) (quoting Sedima, S.P.R.L. v.
Imrex Co., Inc., 473 U.S. 479, 496 (1985)). Urban argues that plaintiffs’ allegations fail
to satisfy the first and fourth elements. Docket No. 13 at 7, 10. BOA argues that
plaintiffs’ allegations fail to satisfy the second and fourth elements. Docket No. 14 at 3,
7.
1. Conduct
The Court first considers whether, with respect to Urban, plaintiffs have
sufficiently alleged the first element. To determine whether a defendant has

15

participated in the conduct of a RICO enterprise, the Supreme Court has adopted the
“operation or management” test. Reves v. Ernst & Young, 507 U.S. 170, 179 (1993).
In order to “participate, directly or indirectly, in the conduct of such
enterprise’s affairs,” one must have some part in directing those affairs.
. . . RICO liability is not limited to those with primary responsibility for
directing the enterprise’s affairs, just as . . . RICO liability is not limited to
those with a formal position in the enterprise, but some part in directing the
enterprise’s affairs is required.
Id. (quoting § 1962(c)) (emphasis in original); see also BancOklahoma Mortg. Corp. v.
Capital Title Co., Inc., 194 F.3d 1089, 1100 (10th Cir. 1999). “An enterprise is
‘operated’ not just by upper management but also by lower rung participants in the
enterprise who are under the direction of upper management.” Reves, 507 U.S. at 184.
Outsiders having no official position can nonetheless be held liable “if they are
‘associated with’ the enterprise and ‘exert control over it.’” Gen. Steel Domestic Sales,
LLC v. Denver/Boulder Better Business Bureau, No. 07-cv-01145-DME-KMT, 2009 WL
535780, at *22 (D. Colo. March 2, 2009), amended in part on other grounds 2009 WL
129270 (D. Colo. May 8, 2009) (quoting Reves, 507 U.S. at 184). “‘Simply because
one provides goods or services that ultimately benefit the enterprise does not mean that
one becomes liable under RICO.’” BancOklahoma, 194 F.3d at 1102 (quoting Univ. of
Md. at Baltimore v. Peat, Marwick, Main & Co., 996 F.2d 1534, 1539 (3d Cir. 1993)).
As a result, a plaintiff must allege that the RICO defendant did “more than provide their
regular services.” Id. at 1101.11
11

The Tenth Circuit has recognized that interpretations of Reves differ slightly
among the circuits, but has thus far declined to explicitly adopt another circuit’s
approach to the operation or management test. See United States v. Hutchinson, 573
F.3d 1011, 1034 (10th Cir. 2009). For example, in the Second Circuit, a defendant who
does not have a managerial role must at least “exercise[] broad discretion in carrying
16

Plaintiffs do not appear to dispute that Urban acted under BOA’s superv ision and
had no primary or formal responsibility for the alleged enterprise’s affairs. The Court’s
review of the amended complaint provides no basis to conclude otherwise. See Reves,
507 U.S. at 179. BOA entered into a contract with Urban to provide “HAMP-related
ministerial services.” Docket No. 12 at 35, ¶ 78. The amended complaint contains no
allegations upon which to conclude that Urban employees had a role in setting the
enterprise’s agenda or otherwise exercised control over anyone but their own
employees. The amended complaint states that Urban effectuated the goals of the
enterprise “[w]ithin parameters set by BOA.” Id. at 35, ¶ 80. The acts complained of
were assigned by BOA and carried out either at BOA’s explicit direction or based upon
criteria set by BOA. Docket No. 12 at 36-39, ¶¶ 83-90, 94-96. Moreov er, “BOA
demanded, and Urban provided, constant updates on virtually all aspects of work Urban
performed.” Id. at 37, ¶ 86. Thus, the question becomes whether, as an outside
contractor having no official position within the enterprise, Urban is nonetheless liable
for having an association with and exerting control over the enterprise. See General
Steel, 2009 WL 535780, at *22.

out the instructions of his principal” such that “the simple taking of directions and
performance of tasks that are ‘necessary or helpful’ to the enterprise, without more, is
insufficient to bring a defendant within the scope of § 1962(c).” United States v. Diaz,
176 F.3d 52, 92 (2d Cir. 1999). The First Circuit has interpreted Reves more liberally,
holding liable those who “‘knowingly implement decisions’ made by upper
management.” Hutchinson, 573 F.3d at 1034 (quoting United States v. Oreto, 37 F.3d
739, 750 (1st Cir. 1994)). Neither party advocates for the application of the First
Circuit’s more liberal approach. Instead, plaintiffs rely on the argument that Urban is
liable based upon its ability to exercise discretion. Docket No. 19 at 6. As discussed
below, plaintiffs’ claim against Urban fails based upon existing Tenth Circuit precedent
and therefore the Court need not speculate as to which interpretation of the operation
or management test the Tenth Circuit would apply.
17

Plaintiffs argue that Urban participated in the alleged conduct of the enterprise
because Urban had “discretion in how it carried out BOA’s directions.” Docket No. 19 at
6. Plaintiffs allege that BOA assigned Urban “specific tasks and broad duties to
manage.” Docket No. 12 at 36, ¶ 82. However, plaintiffs fail to plead facts that indicate
what discretion Urban actually had and how it exercised such discretion in directing the
enterprise. For example, the amended complaint states that Urban was given
discretion to determine whether borrowers should be given HAMP or BOA proprietary
modifications. Docket No. 19 at 6. However, BOA “assigned” this task to Urban and
directed Urban to complete it “[u]sing BOA’s criteria” and the amended complaint does
not otherwise indicate what, if any, meaningful control Urban had in implementing
BOA’s criteria. Docket No. 12 at 36, ¶ 83. Plaintiffs refer to the fact that Urban
communicated with thousands of BOA customers with regard to HAMP; however, this
task and all those associated with it were assigned or directed by BOA. Id. at 37-38, ¶¶
84-90. Plaintiffs rely on the fact that Urban created backlogs of documents and then
denied modifications for borrowers’ failure to provide the necessary documents.
However, “BOA used Urban as a repository for borrower documents” and Urban’s delay
in forwarding modification packages was “[a]t BOA’s direction.” Id. at 39, ¶¶ 94-96
(emphasis added). Plaintiffs assert that Urban began closing modification files for false
reasons, but admit that Urban did so to meet BOA’s directive of “service requests that
needed to be closed on a daily basis.” Id. at 42, ¶ 104. Plaintiff also relies on the fact
that Urban executives disciplined employees who did not meet the targets established
by BOA, id. at 43-45, ¶¶109-114, but provides no factual basis for concluding that this
discretion was anything more than what Urban would exercise in providing its regular
18

services to a customer if employees failed to meet that customer’s expectations or
more than what BOA would ordinarily require from its contractors. See BancOklahoma,
194 F.3d at 1101; see also Docket No. 12 at 31, ¶ 70 (describing “intense pressure
BOA placed on Urban and that Urban supervisors placed on employees to close files
as fast as possible”). Because plaintiffs have failed to allege facts indicating the scope
and degree of the discretion Urban exercised, plaintiffs fail to show that such discretion
rose to a level of directing the enterprise, as opposed to simply performing acts that
benefit the enterprise. See Handeen v. Lemaire, 112 F.3d 1339, 1348 (8th Cir. 1997)
(“Congress did not mean for § 1962(c) to penalize all who are employed by or
associated with a RICO enterprise, but only those who, by virtue of their association or
employment, play a part in directing the enterprise’s affairs.”).
Plaintiffs also appear to rely on the fact that Urban executives knew that HAMP
applications were being wrongfully denied. Docket No. 12 at 43-44, ¶109-113.
However, “‘simply performing services for an enterprise, even with knowledge of the
enterprise’s illicit nature, is not enough to subject an individual to RICO liability . . . ;
instead, the individual must have participated in the operation and management of the
enterprise itself.’” See General Steel, 2009 WL 535780, at *22 (quoting Goren v. New
Vision Int’l, Inc., 156 F.3d 721, 728 (7th Cir. 1998)). In other words, to the extent Urban
operated within BOA’s criteria, plaintiffs do not provide facts indicating that Urban’s
ability to exercise such discretion amounted to a role in directing the enterprise’s affairs.
See Albright v. Attorney’s Title Ins. Fund, 504 F. Supp. 2d 1187, 1205 (D. Utah 2007)
(“plaintiffs have failed to show that the Florida Fund did anything other than provide its

19

regular services”). Plaintiffs have failed to state a claim that Urban participated in the
operation or management of the alleged RICO enterprise.
2. RICO Enterprise
The Court next considers whether, with respect to BOA, plaintiffs have
sufficiently alleged the existence of an enterprise. The statutory definition of an
“enterprise” is broad, encompassing “any individual, partnership, corporation,
association, or other legal entity, and any union or group of individuals associated in
fact although not a legal entity.” 18 U.S.C. § 1961(4). 12 As § 1962(c) makes clear, “it is
required that the ‘person’ and the ‘enterprise’ engaged in racketeering activities be
different entities.” Bd. of Cnty. Comm’rs of San Juan Cnty. v. Liberty Grp., 965 F.2d
879, 885 (10th Cir. 1992). Thus, the plaintiff in a RICO case must establish that
“defendants were part of an enterprise which had an existence and purpose distinct
from any one of them.” Id. It is for this reason that “officers and employees of an
organization cannot, in the ordinary course of their duties, constitute an association in
fact separate from the organization itself.” Id. at 886. Moreover, courts reject the
notion that a corporation can conduct the af fairs of a RICO enterprise “merely because
it is a firm with agents or affiliates.” See Brannon v. Boatmen’s First Nat’l Bank of
Oklahoma, 153 F.3d 1144, 1148 (10th Cir. 1998) (citing Emery v. Am. Gen. Fin., Inc.,
134 F.3d 1321, 1323-24 (7th Cir. 1998)); Fitzgerald v. Chrysler Corp., 116 F.3d 225,
227 (7th Cir. 1997). Rather, the defendant corporation “must be shown to use the
12

An association in fact must have at least three features: “a purpose,
relationships among those associated with the enterprise, and longevity sufficient to
permit these associates to pursue the enterprise’s purpose.” Boyle v. United States,
556 U.S. 938, 946 (2009).
20

alleged enterprise ‘as the instrument of [its] criminality,’ and the plaintiff must plead that
the alleged enterprise ‘somehow made it easier to commit or conceal the fraud of which
the plaintiff complains.’” Brannon, 153 F.3d at 1148 (quoting Emery, 134 F.3d at 1324).
In Fitzgerald, plaintiff brought a RICO claim against a car manufacturer, claiming that its
subsidiaries and dealers participated in an enterprise to sell f raudulent warranties. 116
F.3d at 225. The Seventh Circuit noted that the prototypical RICO case is one where “a
person bent on criminal activity seizes control of a previously legitimate firm and uses
the firm’s resources . . . and appearance of legitimacy to perpetrate more, and less
easily discovered, criminal acts than he could do in his own person.” Id. at 227. The
court rejected the notion that RICO applied to the m anufacturer merely because it did
business through agents, “as virtually every manufacturer does,” noting that if the
manufacturer had no agents, “but only employees . . . , it could not be made liable for
warranty fraud under RICO.” Id. The court held that plaintiff’s claims failed to state that
the manufacturer “established dealerships in order to fool car buyers into thinking that
they are not dealing with the ‘racketeer’ [manufacturer], or to enable [the manufacturer]
to engage in fraud on a scale that would be impossible if it internalized the dealership
function.” Id. at 228.
BOA argues that plaintiffs’ amended complaint fails to allege that BOA was
distinct from the enterprise itself. Docket No. 14 at 4. Plaintiffs allege that the
enterprise consisted, in part, of BOA and its subsidiary BAC Home Loans and BOA’s
employees. Docket No. 12 at 83, ¶ 248. However, the amended complaint contains no
allegations that BAC Home Loans took actions separate from BOA and the involvement
of a subsidiary in the parent corporation’s affairs does not, by itself, render the RICO
21

enterprise distinct from the parent corporation. See Brannon, 153 F.3d 1147-48.
Plaintiffs’ amended complaint contains no allegations suggesting that BOA’s employees
constitute an association in fact separate from BOA itself. Liberty Grp., 965 F.2d at
886.
Plaintiffs also allege that Urban and several of Urban’s employees comprised the
enterprise in fact. Docket No. 12 at 83, ¶ 248. However, plaintiffs’ amended complaint
contains no specific facts upon which to conclude that BOA’s delegation of tasks to
Urban “made it easier to commit or conceal the fraud” or that BOA’s association with
Urban gave the alleged enterprise more legitimacy than it otherwise would have
enjoyed. See Brannon, 153 F.3d at 1148; Fitzgerald, 116 F.3d at 228. The fact that
Urban employees were given titles and email addresses suggesting that they were BOA
employees belies any notion that BOA needed Urban to lend BOA th e necessary
legitimacy to conduct a criminal enterprise. See Docket No. 12 at 84, ¶ 250. As noted
above, although plaintiffs allege that BOA directed Urban to carry out the mission of the
enterprise, plaintiffs fail to identify any factual allegations suggesting that Urban did
anything more than follow BOA’s instructions, which does not indicate that Urban was
acting as anything other than an agent of BOA.
Finally, plaintiffs allege that the enterprise was also composed of Sykes
Enterprises, Inc., Wingspan Portfolio Advisors, Robertson Anschutz & Vetters,
Robertson Anschutz & Schneed, and Stewart Lender Services. Id. at 48-49, ¶ 125.
However, the fact that BOA retained these entities to perf orm specific functions, without
more, does not evidence the existence of a RICO enterprise. As such, plaintiff has
failed to show that BOA’s association with those entities was anything more than an
22

agency relationship. See Fitzgerald, 116 F.3d at 228. In other words, there is no
indication that, were BOA not to associate with the above-mentioned entities, its ability
to carry out the allegedly unlawful goals of the enterprise would in any way be
diminished. Plaintiffs have therefore failed to allege that BOA was distinct from the
alleged enterprise. See Liberty Grp., 965 F.2d at 885.
Plaintiffs rely on Cedric Kushner Promotions v. King, 533 U.S. 158 (2001), in
support of their argument that BOA is distinct from the alleged enterprise, but such
reliance is misplaced. King held that, in certain circumstances, RICO liability can attach
to a corporate employee when the employee unlawfully conducts the affairs of the
corporation. Id. at 166. However, the Supreme Court specifically limited its discussion
to cases where “a corporate employee is the ‘person’ and the corporation is the
‘enterprise.’” Id. at 164. Here, unlike King, the RICO “person” is BOA, the corporation
itself, and plaintiffs claim that BOA the corporation is separate from the enterprise – a
scenario that King explicitly declined to address. Id. at 164.13 As such, plaintiffs’
argument that BOA’s “actions were led by a group of mid-level executives,” Docket No.
20 at 3, does not attach RICO liability to BOA’s actions. See Liberty Grp., 965 F.2d at
886.14

13

Contrary to plaintiffs’ claim that King altered the applicable standard, the
Supreme Court cited Liberty Group favorably in noting that “12 Courts of Appeals have
interpreted the [RICO] statute as embodying some such distinctness requirement.” Id.
at 162 (collecting cases).
14

Plaintiffs’ citation to Charleswell v. Chase Manhattan Bank, N.A., 308 F. Supp.
2d 545, 575-76 (D.V.I. 2004), is similarly unpersuasive. The Charleswell court
concluded that the defendants were distinct from the alleged RICO enterprise without
analysis of the factual circumstances of their involvement in the enterprise. Id.
23

Plaintiffs argue that the outside entities serving as BOA’s agents should be
considered functionally separate from BOA. The relevant question, however, is
whether plaintiff has alleged sufficient facts to conclude that the outside entities’
conduct was used to facilitate the alleged enterprise’s purpose as opposed to simply
facilitating BOA’s purpose. BOA’s use of outside entities to communicate with
borrowers does not evidence that BOA is distinct from the alleged enterprise.
Moreover, although plaintiffs allege that BOA used outside law firms to “facilitate
foreclosures,” plaintiffs fail to provide sufficient facts upon which to conclude that this
conduct facilitated the enterprise’s purpose as distinct from BOA’s purpose.15 The
Court also rejects plaintiffs’ argument that non-exclusive agents of a corporation are, in
all cases, distinct from the RICO person-corporation. Docket No. 20 at 4. Althoug h this
may be a relevant factual consideration, plaintiffs fail to identify relevant authority
stating that non-exclusive agents of a RICO person-corporation are categorically distinct

15

Living Designs, Inc. v. Dupont de Nemours & Co., 431 F.3d 353, 362 (9th Cir.
2005), does not, as plaintiffs suggest, stand for the proposition that BOA divisions and
executives are sufficiently distinct from the enterprise for RICO liability to attach to BOA.
Rather, Living Designs held that a large corporation and its law firms retained for the
purpose of defending the corporation in a lawsuit can be distinct from the corporation –
the RICO “person” named in the amended complaint. Id. at 361-62. Although plaintiffs
do not specifically argue this point, alleging that a law firm participated in the enterprise
does not automatically, without more, make the enterprise distinct from the corporation
that retained the law firm. See Walter v. Drayson, 496 F. Supp. 2d 1162, 1166 (D.
Haw. 2007) (citing Living Designs and rejecting RICO claim against law firms because
complaint failed to allege that law firms operated or managed RICO enterprise or “did
something more than act in a professional capacity”). As such, plaintiffs’ allegations
concerning the BOA-retained law firms are insufficient to show that the law firms acted
outside their capacity as BOA agents in participating in the alleged RICO enterprise.
24

from that RICO person-corporation. 16 The Court recognizes that outside agents of a
RICO person can, under some circumstances, be considered distinct from the RICO
person, but in the present case plaintiffs have failed to identify sufficient facts upon
which to conclude that the identified entities acted in furtherance of the enterprise
outside the scope of their agency with BOA. Cf. In re ClassicStar Mare Lease Litig.,
727 F.3d 473, 493 (6th Cir. 2013) (“NELC’s ostensible status as an independent thirdparty lender was used to convince investors that ClassicStar’s financing scheme was
legitimate”).
For the foregoing reasons, plaintiffs have failed to state a RICO claim against
BOA.17
B. Promissory Estoppel
BOA argues that plaintiffs fail to state a claim for promissory estoppel. In
Colorado,18 the elements of a promissory estoppel claim are:
(1) a promise which the promisor should reasonably expect to induce action
or forbearance of a definite and substantial character on the part of the

16

Plaintiffs’ citation to Gottstein v. Nat’l Ass’n for Self Employed, 53 F. Supp. 2d
1212, 1220 (D. Kan. 1999), is inapposite f or the reasons that BOA suggests, namely,
unlike the present case, the court in Gottstein found that the enterprise itself was not an
exclusive agent of one the enterprise’s alleged members.
17

The Court need not address BOA’s or Urban’s remaining arguments
concerning plaintiffs’ RICO claim.
18

Plaintiffs assert that the law governing promissory estoppel claims in Alabama,
Arizona, Arkansas, Colorado, Idaho, Kansas, Kentucky, Louisiana, Maine, Nebraska,
Nevada, New Hampshire, New Mexico, Oregon, Pennsylvania, South Dakota,
Washington, and Wisconsin is identical or substantially similar enough to allow plaintiffs
to represent a class of borrowers. Docket No. 12 at 92, ¶ 276. Given plaintiffs’
representation, the Court finds no compelling reason to apply the law of another
jurisdiction and therefore will apply Colorado law to plaintiffs’ promissory estoppel claim.
25

promisee; (2) action or forbearance inducted by that promise; and (3) the
existence of circumstances such that injustice can be avoided only by
enforcement of the promise.
Nelson v. Elway, 908 P.2d 102, 110 (Colo. 1995). 19
BOA argues that the TPP documents make no promises or representations that
plaintiffs would be entitled to a permanent HAMP modification. Docket No. 14 at 13.
To sustain a claim for promissory estoppel, a plaintiff must establish that the statement
or statements at issue were “sufficiently specific so that the judiciary can understand
the obligation assumed and enforce the promise according to its terms.” Watson v.
Pub. Serv. Co. of Colo., 207 P.3d 860, 869 (Colo. App. 2008). Althou gh a promise may
be stated in words or inferred from conduct, any such promise must be “clear and
unambiguous.” G & A Land, LLC v. City of Brighton, 233 P.3d 701, 704 (Colo. App.
2010).
Circuit courts considering promissory estoppel claims based in part on HAMPrelated representations have come to different conclusions. Some circuits hold that
similar TPP document language constitutes a definite promise or obligation. See
Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 566 (7th Cir. 2012) (finding allegations
sufficient to show that “Wells Fargo made an unambiguous promise that if [plaintiff]

19

BOA initially argued that the underlying TPP documents are formal agreements
such that plaintiffs cannot maintain a promissory estoppel claim. Docket No. 14 at 13.
“Recovery on a theory of promissory estoppel is incompatible with the existence of an
enforceable contract.” Wheat Ridge Urban Renewal Authority v. Cornerstone Group
XXII, L.L.C., 176 P.3d 737, 741 (Colo. 2007) (citing Scott Co. of Cal. v. MK-Ferguson
Co., 832 P.2d 1000, 1003 (Colo. App. 1992)). However, plaintiffs respond that the
amended complaint does not allege that the TPPs are enforceable agreements.
Docket No. 20 at 12-13. BOA appears to have abandoned its argument on this point.
See Docket No. 22 at 8-10.
26

made timely payments and accurate representations during the trial period, she would
receive an offer for a permanent loan modification”); see also Corvello v. Wells Fargo
Bank, NA, 728 F.3d 878, 884 (9th Cir. 2013) (holding that TPP document placed upon
bank contractual obligation to promptly communicate HAMP eligibility determination to
borrower and consider borrower for modification alternative); Young v. Wells Fargo
Bank, N.A., 717 F.3d 224, 234 (1st Cir. 2013) (holding that TPP document’s
contemplate that, if the borrower complies with its obligations, the lender will send the
borrower a modification agreement). Other circuits reach the opposite conclusion. See
Freitas v. Wells Fargo Home Mortg., Inc., 703 F.3d 436, 440-441 (8th Cir. 2013) (finding
that defendants’ representations were too inconsistent as to be a definite promise);
Pennington v. HSBC Bank USA, N.A., 493 F. App’x 548, 556 (5th Cir. 2012)
(unpublished) (“Even the statement from the bank in January that she would be
approved was still subject to maintaining the requirements of the TPP, including her
inability to make payments on the loan; it was not an absolute guarantee.”); DeLuca v.
Citimortgage, 543 F. App’x 194, 197 (3d Cir. 2013) (unpublished) (“[T]hese documents,
signed by the DeLucas to obtain a modification, specify that any offer for a permanent
modification by Citimortgage was subject to qualifications. This negated any assertion
of their reasonable reliance.”); Miller v. Chase Home Finance, LLC, 677 F.3d 1113,
1117 (11th Cir. 2012) (holding that plaintiff failed to state a claim that servicer promised
to permanently modify the loan); Bloch v. Wells Fargo Home Mortg., 755 F.3d 886, 889
(11th Cir. 2014) (“A letter stating that they might be eligible for a trial modification under

27

HAMP was not ‘a binding promise’ that the [borrowers] would receive a loan
modification under HAMP.” (emphasis in original)).
Plaintiffs’ amended complaint alleges that “BOA, by way of its trial-payment
agreements, made representations to Plaintiffs that if they made their trial payments
and otherwise qualified for HAMP modifications, they would receive offers of permanent
HAMP modifications.” Docket No. 12 at 92, ¶ 277. The Court must therefore determine
whether BOA’s statements to each plaintiff rose to the level of a clear and unambiguous
promise to that effect.
1. Mr. George
The letter that accompanied Mr. George’s TPP document stated
After you successfully complete your Trial Period Plan by making timely
payments and returning the Trial Period Plan Agreement, we will send you
additional documents. These documents will include a Partial Claim and
a Partial Claim and FHA-Home Affordable Modification Agreement that
you will need to sign and return before your loan will be permanently
modified.
Docket No. 12 at 64, ¶ 172. Plaintiffs rely on these statements and the first paragraph
of the TPP document that Mr. George signed, which contains similar language. Docket
No. 14-2 at 1. Plaintiffs focus on the phrases “will send” and “will provide.” However,
plaintiffs fail to account for the remainder of the document, which contemplates that
BOA retains discretion to decline a modification request or, at the least, is entitled to
discretion in determining whether the borrower has in fact complied with the agreement.
See Toone v. Wells Fargo Bank, N.A., 716 F.3d 516, 521 (10th Cir. 2013) (holding that,
when document referenced in complaint is properly considered, “we examine the
document itself, rather than the complaint’s description of it”). For example, the TPP
28

document states that it “is not a modification of the Loan Documents and . . . the Loan
documents will not be modified unless and until I meet all of the conditions required for
modification, including signing the Modification Agreement and Partial Claim
documents.” Id. at 2. BOA “will not be obligated or bound to make any modification of
the Loan Documents if [the borrower] fail[s] to meet any one of the requirements under
this Plan,” and “nothing in this Plan shall be understood or construed to be a
modification, satisfaction or release in whole or in part of the obligations contained in
the Loan Documents.” Id. at 3. BOA’s acceptance of a trial period payment is not “a
waiver of, the acceleration of the loan or foreclosure action and related activities and
shall not constitute a cure of my default.” Id. at 2. The Court cannot conclude that the
TPP document contained the clear and unambiguous promise that plaintiffs suggest.
The TPP document states that the borrower must meet certain conditions and that the
loan remains in full effect unless and until a permanent modification agreement is
executed. See Pennington, 493 F. App’x at 556.
Even if the TPP constituted a promise to send the borrower a Partial Claim and
Modification Agreement upon successful completion of the trial period, Mr. George
received such documents on January 19, 2013. Docket No. 12 at 66, ¶ 179. Althoug h
this delay may have caused Mr. George significant hardship, the TPP contains no clear
and unambiguous promise concerning when a permanent modification would be
offered. In other words, the TPP does not promise that BOA will administer the HAMP
program in a competent manner. Although plaintiff alleges that the TPP itself and
BOA’s website “indicated that Mr. George could expect a permanent modification within
a month of the end of the trial period,” id. at 65, ¶ 175, the TPP appears to contain no
29

such promise and plaintiffs’ amended complaint does not include language from BOA’s
website to that effect.20 As such, the Court has no basis upon which to conclude that
BOA made a clear and unambiguous promise to that effect. Mr. George has failed to
state a claim for promissory estoppel. See Premier Farm Credit, PCA v. W-Cattle, LLC,
155 P.3d 504, 522 (Colo. App. 2006) (“Fritzler’s alleged statements are non-committal,
whether considered in isolation or in the context of the parties’ dealings”).
2. Mr. Dalton
According to the amended complaint, Mr. Dalton entered pre-foreclosure
mediation with BOA and was placed on an “internal modification” plan. Docket No. 12
at 73, ¶ 208. The amended complaint contains no specific factual allegations
concerning the statements contained within such a plan, yet makes clear that it not a
HAMP TPP. Id. (“This ‘internal modification’ was less advantageous than a HAMP
modification.”). The amended complaint indicates that the second and third plans Mr.
Dalton underwent also did not comply with HAMP and suggests that his trial plan may
20

The amended complaint hints at the fact that HAMP regulations required an
offer of permanent modification within a month of successful completion of the TPP. Id.
at 59, ¶ 151. The allegation that the Treasury Department expected lenders to extend
TPPs within 30 days of receipt of materials is not relevant to plaintiffs’ promissory
estoppel claim, which is based upon a failure to provide permanent modifications. The
amended complaint references the term Modification Effective Date, which is discussed
in a footnote, stating “the anticipated Modification Effective Date is the first day of the
month following the month when the last trial payment is due.” Id. at 18, ¶ 39 n.27
(citing www.hampadmin.com) (quotations omitted). However, plaintiffs do not explain
whether this is a regulation or an aspiration and, regardless, courts considering the
question have held that HAMP does not create a private right of action. See, e.g.,
Nelson v. Bank of Am., N.A., 446 F. App’x 158, 159 (11th Cir. 2011) (collecting cases).
The Court need not proceed further on this issue because plaintiffs’ promissory
estoppel claim does not appear based upon BOA’s delay in providing a permanent
modification, but, rather, on the BOA’s complete failure to provide a permanent HAMP
modification.
30

not have contained the same statements as those found in Mr. George’s and the
Leavitts’ TPPs. Id. at 74-75, ¶ 212, 216. Because the am ended complaint does not
specifically allege the statements forming the basis of BOA’s alleged promise, Mr.
Dalton has failed to state a claim for promissory estoppel.21
3. Mr. and Mrs. Leavitt
On March 30, 2012, the Leavitts received the TPP document. Docket No. 12 at
58, ¶ 148. The Leavitts’ cover letter and TPP document contain substantially the same
statements as Mr. George’s cover letter and TPP document. Thus, for the reasons
stated in regard to Mr. George, BOA did not make a clear and unambiguous promise
that the Leavitts would be given a permanent HAMP modification. See Lund v.
CitiMortgage, Inc., 2011 WL 1873690, at *2 (D. Utah May 17, 2011) (“the HAMP Loan
Trial Agreement makes clear that it is not a loan modification and that any modification
would be contingent upon further approval”). Even if the TPP were construed as a
promise to provide a Partial Claim and Modification Agreement upon completion of the
trial period, in November 2012, the Leavitts received such documents. Id. at 59, ¶ 153.
As noted above, plaintiffs fail to sufficiently allege that the Leavitts were clearly
promised permanent modification documents within a specific time frame and the TPP
document did not clearly promise the Leavitts that HAMP would be administered to

21

Although plaintiffs’ promissory estoppel claims appear to be exclusively based
on representations contained in the TPP and related documents, to the extent Mr.
Dalton’s promissory estoppel claim is based upon BOA’s failure to provide a timely
TPP, the amended complaint admits that Mr. Dalton received “conflicting information”
from BOA that he was approved for a TPP and that some documents were missing.
Docket No. 12 at 72, ¶ 205. As such, to the extent it is asserted, this aspect of his
claim fails. See Freitas, 703 F.3d at 440-441.
31

them in an efficient or competent manner. Thus, for the foregoing reasons, the Leavitts
have failed to state a claim for promissory estoppel.
The amended complaint indicates that plaintiffs experienced immense
disappointment, frustration, and even hardship as a result of their interactions with BOA
and Urban. However, plaintiffs’ experiences do not state a RICO claim or promissory
estoppel claim. The Court will therefore grant BOA’s and Urban’s motions to dismiss.
C. Leave to Amend
Rule 15(a) of the Federal Rules of Civil Procedure instructs courts to “freely give
leave [to amend] when justice so requires.” Id. Nevertheless, denying leave to amend
is justified if the proposed amendments are unduly delayed, unduly prejudicial, futile, or
sought in bad faith. Foman v. Davis, 371 U.S. 178, 182 (1962); Frank v. U.S. West,
Inc., 3 F.3d 1357, 1365 (10th Cir. 1993). As a general rule, the Court retains the
discretion to permit such amendments. Minter v. Prime Equip. Co., 451 F.3d 1196,
1204 (10th Cir. 2006). The Court must delineate its rationale if it refuses leave to
amend. Federal Ins. Co. v. Gates Learjet Corp., 823 F.2d 383, 387 (10th Cir. 1987).
Plaintiffs argue that they should be granted leave to amend for two reasons: (1)
because defendants did not confer with plaintiffs before filing the present motions and
(2) because BOA has refused to lift a protective order and grant plaintiffs access to
documents and testimony produced in a related multi-district litigation case, In re Bank
of America HAMP Contract Litigation, M.D.L. No. 2193-RWZ, currently pending in the
District of Massachusetts. Docket No. 19 at 14. However, plaintiffs admit that they
amended their amended complaint “following a brief conference with defense counsel”

32

and plaintiffs do not explain with any specificity what facts they hope to uncover if given
access to the documents in the multi-district action. The Court finds that it would be
futile to give plaintiffs an opportunity to amend their RICO claims. Plaintiffs have
already amended their complaint to add allegations that other non-BOA entities were
involved in the alleged RICO enterprise, amendments which, as noted above, were
insufficient. Plaintiffs do not specifically indicate how information produced as part of
the multi-district action may be relevant to showing the degree and scope of Urban’s
discretion in carrying out BOA directives. With regard to plaintiffs’ promissory estoppel
claim, there is no indication that any additional factual allegations would alter the fact
that the TPP document does not contain the clear and unam biguous promise alleged
as a basis for plaintiffs’ promissory estoppel claim. Thus, the Court will deny plaintiffs’
request to amend their claims.
IV. CONCLUSION
For the foregoing reasons, it is
ORDERED that Urban’s Motion to Dismiss the First Amended Class Action
Complaint [Docket No. 13] is GRANTED. It is further
ORDERED that BOA’s Motion to Dismiss the First Amended Class Action
Complaint [Docket No. 14] is GRANTED. It is further
ORDERED that, within 14 days of the entry of judgment, defendants may have
their costs by filing a bill of costs with the Clerk of the Court. It is further
ORDERED that this case is dismissed in its entirety.

33

DATED September 30, 2014.
BY THE COURT:

s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge

34