Voss v. Bank of America, N.A., et al

Filing 31

MEMORANDUM-DECISION and ORDERED, that Defendants Motion (Dkt. No. 15) to dismiss is GRANTED in part, as to the dismissal of Plaintiffs breach of contract claim; Plaintiffs claim that her HAMP applications were negligently denied; Plaintiffs tortious interference with contract claim; and Plaintiffs TILA and RESPA claims; and DENIED in part, as to Plaintiffs New York General Business Law § 349 claim; Plaintiffs breach of the implied covenant of good faith and fair dealing claim; and Plaintiff s claim that she is a third-party beneficiary of Bank of Americas obligations under HAMP; and it is further ORDERED, that Defendant Ocwens Motion (Dkt No. 18) to join Bank of Americas Motion is GRANTED; and it is further ORDERED, that Plaintiff is instructed to file a motion to amend her New York General Business Law § 349 claim within thirty (30) days of the issuance of this Memorandum-Decision and Order. Signed by Senior Judge Lawrence E. Kahn on December 30, 2015. (sas)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
DEBORAH VOSS,
Plaintiff,
-against-

5:15-cv-0232 (LEK/TWD)

BANK OF AMERICA, N.A. et al.,
Defendants.

MEMORANDUM-DECISION and ORDER
I.

INTRODUCTION
Plaintiff Deborah Voss (“Plaintiff”) commenced this action against Defendants Bank of

America, N.A. (“Bank of America”) and Ocwen Loan Servicing, LLC (“Ocwen”) (collectively,
“Defendants”) alleging various causes of action relating to Defendants’ servicing and modification
of Plaintiff’s home mortgage. See Dkt. No. 1 (“Complaint”). Presently before the Court is
Defendant Bank of America’s Motion to dismiss. Dkt. Nos. 15 (“Motion”); 17 (“Memorandum”).1
Plaintiff opposes the Motion. Dkt. No. 22 (“Opposition”). Defendants filed a Reply. Dkt. No. 27
(“Reply”).2 For the following reasons, the Motion is granted in part and denied in part.

1

Ocwen filed a Motion seeking to join Bank of America’s Motion. Dkt. No. 18. Since
Ocwen raises no arguments of its own, no party opposes Ocwen’s Motion, and Plaintiff will not be
prejudiced by granting the Motion, the Court will treat Bank of America’s Motion (Dkt. No. 15) as a
Motion filed by both Defendants. See Gross v. City of Albany, No. 14-cv-0736, 2015 WL 5708445,
at *3 (N.D.N.Y. Sept. 29, 2015) (Kahn, J.) (“Where a motion to join is unopposed, the arguments
proffered by the defendant initiating the motion apply equally to all co-defendants, and granting the
motion to join will not prejudice the plaintiff, the motion to join is generally granted.”)
2

Ocwen similarly filed a Motion seeking to join Bank of America’s Reply. Dkt. No. 28.
Accordingly, the Court will treat Bank of America’s Reply (Dkt. No. 27) as a Reply filed by both
Defendants.

II.

BACKGROUND3
A. Bank of America
On December 12, 2002, Plaintiff entered into a home equity line of credit with Fleet Bank

for $203,100. Compl. ¶ 9. The line of credit was collateralized by a mortgage lien. Id.4 In 2009,
Fleet Bank merged with Defendant Bank of America. Id. ¶ 10. Bank of America currently owns
Plaintiff’s loan. Id. ¶ 11. Until 2011, the loan was serviced directly by Bank of America and its
predecessor, Fleet Bank. Id. ¶ 12. In February 2008, Plaintiff fell behind in her payments for the
first time. Id. Plaintiff alleges that an issue with her insurance company was the reason for her
nonpayment and stated that she did her best to keep up with her mortgage payments despite her
financial difficulties. Id.
In July 2008, Bank of America informed Plaintiff that she had been selected for loan
modification. Id. ¶ 13. Plaintiff contends that she neither requested nor consented to the loan

3

Because this matter is before the Court on a motion to dismiss, the allegations of the
Complaint are accepted as true and form the basis of this section. See Boyd v. Nationwide Mut. Ins.
Co., 208 F.3d 406, 408 (2d Cir. 2000); see also Matson v. Bd. of Educ., 631 F.3d 57, 72 (2d Cir.
2011) (noting that, in addressing a motion to dismiss, a court must view a plaintiff’s factual
allegations “in a light most favorable to the plaintiff and draw[] all reasonable inferences in her
favor”).
4

Defendants argue that Plaintiff obtained a mortgage rather than a line of credit from Fleet
Bank. Mem. at 2. In the Complaint, Plaintiff also refers to the loan as a “mortgage,” rather than a
line of credit. See, e.g., Compl. ¶¶ 9; 12. Defendants contend that the mortgage, note, and HUD
Financing Statement show that Plaintiff obtained a mortgage and not a line of credit. Mem. at 2.
The Court may consider the documents attached to the Complaint without converting the Motion
into a motion for summary judgment. See FED. R. CIV. P. 10(c) (“A copy of any written instrument
which is an exhibit to a pleading is a part thereof for all purposes.”); see also Chambers v. Time
Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2009) (“The complaint is deemed to include any written
instrument attached to it as an exhibit or any statements or documents incorporated in it by
reference.”). Accordingly, the Court finds that Plaintiff obtained a home mortgage, rather than a
line of credit.
2

modification. Id. Despite not having her consent, Bank of America sent Plaintiff a loan
modification and informed her that signing it would allow her to avoid foreclosure. Id.
In March 2009, Plaintiff spoke with Bank of America employee Valencia Almond, who
informed Plaintiff that the modification program would convert delinquent payments, interest, fees,
and delinquent taxes to principal in the new loan. Id. ¶ 14. Additionally, the new loan would have a
lower interest rate. Id. The modification converted the mortgage to a traditional, closed-end
mortgage. Id. ¶ 15. However, the modification failed to include all of the delinquent property taxes
in the new principal amount. Id. ¶ 16. Plaintiff signed the modification and continued to make
payments, while “disputing various errors for multiple months in 2009.” Id. ¶ 17.
On July 3, 2009, Bank of America obtained insurance on Plaintiff’s house without her
consent. Id. ¶ 18. Plaintiff already had homeowner’s insurance on the property and mailed a copy
of her policy to Bank of America. Id. Plaintiff believed that Bank of America’s insurance premium
charge was unnecessary and requested the policy’s cancellation. Id. On September 29, 2010,
Plaintiff was charged $1,341 for insurance, even though she notified BAC Home Loans Servicing,
LP (“BAC”), her servicer at the time, on August 5, 2010 that she had already procured her own
homeowner’s insurance policy. Id. ¶ 24.
On October 9, 2009, Plaintiff received a letter stating that her escrow account was
inadequately funded. Id. ¶ 19. Plaintiff claims that she never authorized any money to be held in
escrow. Id. Plaintiff received an escrow statement on November 19, 2009 and learned that the back
taxes she owed were erroneously included in the escrow account, rather than in the modified loan’s
principal. Id.

3

B. BAC
On October 21, 2009, Bank of America informed Plaintiff that her loan was going to be
serviced by BAC moving forward. Id. ¶ 20. Plaintiff repeatedly contacted BAC to attempt to
correct the perceived errors with her modified mortgage. Id. ¶ 21. Plaintiff repeatedly received
form letters indicating that she needed to contact BAC, despite the fact that she was in weekly
contact with them. Id. ¶ 22. Plaintiff admits that she withheld payments to BAC “because BAC
continually failed to address Plaintiff’s concerns or correct their loan errors.” Id. ¶ 23. On
September 1, 2010, BAC sent Plaintiff an acceleration notice. Id. Thereafter, BAC sent Plaintiff
multiple acceleration notices without addressing the disputed errors with the mortgage. Id.
In May 2011, Plaintiff received a letter from BAC explaining that her previous payment was
only a partial payment, despite her belief that it was a full payment. Id. ¶ 25. Plaintiff’s monthly
payment had been recalculated based on the fact that the escrow account reflected delinquent taxes
that were not rolled into the modified loan’s principal. Id.
Although Plaintiff does not specify the date, she alleges that after almost two years, she was
notified that there had been a designated representative assigned to her loan throughout its duration.
Id. ¶ 27. However, rather than allowing Plaintiff to contact the designated representative directly,
BAC repeatedly referred Plaintiff to multiple unassigned representatives who were unfamiliar with
the underlying issues associated with the loan. Id. Plaintiff contends that BAC failed to provide her
with meaningful assistance. Id. ¶ 28. BAC would discuss the issues with Plaintiff, then send her
form letters that reflected the previously discussed errors in her loan modification. Id. Plaintiff sent
BAC a letter summarizing the outstanding issues on February 20, 2010, but never received a
response. Id.
4

C. Saxon
On June 10, 2011, Plaintiff was informed that her loan had been transferred back to Bank of
America by BAC, and the loan would be serviced by Saxon. Id. ¶ 29. Plaintiff then contacted Bank
of America and requested that the errors present in the modified loan that were unresolved by BAC
be addressed before the loan was sent to Saxon. Id. ¶ 30. Plaintiff did not receive a response from
Bank of America. Id. Saxon began servicing the loan in July 2011, without addressing any of the
disputed issues. Id. ¶ 31. Plaintiff alleges that Saxon either did not review Plaintiff’s file prior to
beginning servicing, or that Saxon did not receive Plaintiff’s file prior to beginning servicing. Id.
¶ 32. Soon after Saxon began servicing the loan, Plaintiff started to receive form letters indicating
that her loan was in default and her house was in jeopardy of foreclosure. Id. ¶ 31. Plaintiff
continued to contact Saxon regarding the issues with the loan and sent another letter to Bank of
America. Id. ¶ 33.
In October 2011, Plaintiff requested a copy of the mortgage documents that were transferred
to Saxon. Id. ¶ 34. Despite receiving acknowledgment of her request, Saxon never replied to it. Id.
She made the request again, but Saxon again did not provide documents and suggested that Plaintiff
contact Bank of America to obtain the documents. Id. Plaintiff believes that Saxon did not receive
the loan file from Bank of America. Id. ¶ 35.
Beginning in October 2011, Saxon sent representatives and field inspectors to Plaintiff’s
house to make observations about the house and to place notices on the door instructing Plaintiff to
contact Saxon. Id. ¶ 36. The representatives waited until they thought Plaintiff was not home or
would not see them approach the house. Id. On one occasion, a representative told Plaintiff that he
was paid to place the notices according to a set schedule, regardless of the actual contact occurring
5

between Saxon and Plaintiff. Id. Plaintiff believes that Saxon intended to bill her for these visits,
despite the fact that she was in constant contact with them. Id. ¶ 37.
In October and November 2011, Plaintiff sent additional letters to Bank of America detailing
the loan modification errors and requesting specific documents. Id. ¶ 38. She also made a third
request for documents to Saxon. Id. ¶ 39. Saxon responded that no representative was assigned to
Plaintiff’s file and referred her to a foreclosure attorney. Id. On February 7, 2012, Saxon partially
responded to Plaintiff’s request for documents, but the documents they produced were not
responsive. Id. On February 16, 2012, Plaintiff received the “entirety” of her file from Saxon, but
alleges that it was missing many significant documents. Id.
Saxon threatened to start a foreclosure action on multiple occasions and in December 2011
and January 2012, Plaintiff repeatedly called Saxon in an attempt to learn the amount of money
required to bring the mortgage back to good standing. Id. ¶ 40. In January 2012, Plaintiff requested
Saxon’s physical address so that she could send a certified check, but Saxon employees refused to
provide the physical address and Plaintiff was informed that certified checks would be rejected. Id.
¶ 41. Plaintiff alleges that on January 6, 2012, “after refusing to receive [Plaintiff’s] tender,” Saxon
assigned her an “advocate” for her loan. Id. ¶ 42.
Plaintiff filed her first Home Affordable Modification Program (“HAMP”) application on
January 23, 2012.5 Id. ¶ 43. For the next few months, Saxon requested additional documents that
5

HAMP is a federally sponsored program that was included in the Emergency Economic
Stabilization Act, 12 U.S.C. § 5211, in response to rapidly deteriorating financial market conditions
in the late summer and early fall of 2008. The centerpiece of the Act was the Troubled Asset Relief
Program (“TARP”), which authorized the Secretary of the Treasury to “implement a plan that seeks
to maximize assistance for homeowners and . . . encourage the servicers of the underlying
mortgages . . . to take advantage of . . . available programs to minimize foreclosures.” 12 U.S.C. §
5219(a). The Act also gave the Secretary the authority to “use loan guarantees and credit
6

they claim Plaintiff was missing, while Plaintiff maintains that many of the documents had already
been provided. Id. Plaintiff believes that Saxon is no longer in the business of servicing mortgage
loans. Id. ¶ 47.
D. Ocwen
On May 14, 2012, Plaintiff was informed that Ocwen would begin servicing the loan on
June 1, 2012. Id. ¶ 44. When the mortgage was transferred to Ocwen, Plaintiff’s HAMP
application was still under review. Id. ¶ 45. Saxon assured Plaintiff that the HAMP application
would be transferred to Ocwen and that processing the application would not be interrupted by the
transfer. Id. Ocwen immediately began sending Plaintiff form letters regarding the loan’s
delinquency. Id. ¶ 48. Ocwen assigned Plaintiff a relationship manager, however, the relationship
manager was frequently changed and was inaccessible to Plaintiff because Plaintiff did not have
their direct phone line. Id. ¶ 50. Plaintiff believes that Ocwen constantly reassigned her mortgage
loan to new representatives as part of a deliberate scheme. Id. ¶ 51. The effect of the constant
reassignment was that Plaintiff constantly had to re-explain the situation to each new representative,
and no representative stayed assigned to Plaintiff’s account long enough to see even a small process
through. Id.

enhancements to facilitate loan modifications to prevent avoidable foreclosures.” Id. In February
2009, the Secretary set aside $50 billion of TARP funding to induce lenders to refinance mortgages
with more favorable interest rates to allow distressed homeowners to avoid foreclosure. Wigod v.
Wells Fargo Bank, N.A., 673 F.3d 547, 556 (7th Cir. 2012). The Secretary negotiated Servicer
Participation Agreements (“SPAs”) with mortgage lenders, including Bank of America. See
http://www.makinghomeaffordable.gov/get-answers/Pages/get-answers-how-contact-mortagecompany.aspx (last accessed Dec. 29, 2015). The SPAs require servicers to identify homeowners
who were in default or would likely soon be in default on their mortgage payments, and to provide
mortgage modification for eligible participants. See Wigod, 673 F.3d at 556. HAMP included
supplemental guidelines outlining the criteria for determining a participant’s eligibility. Id.
7

Plaintiff also believes that Saxon failed to provide Ocwen with her file. Id. ¶ 52. On June
28, 2012, Ocwen requested the entire loan file directly from Plaintiff, which she provided. Id.
Saxon claimed that the file was transferred in its entirety, however, when Ocwen disclosed the
documents that were transferred, the file was missing Plaintiff’s HAMP application and her
documentation regarding Bank of America’s modification errors. Id. Ocwen advised Plaintiff to get
the documents from Saxon. Id. Saxon, in turn, told Plaintiff they could not respond to her request
because Ocwen was her current servicer. Id.
On June 13, 2012, Ocwen denied Plaintiff’s HAMP application on the basis that it was
incomplete. Id. ¶ 53. Plaintiff contends that the documents Ocwen claims were missing had, in
fact, been disclosed multiple times. Id. Plaintiff filed another HAMP application on June 29, 2012.
Id. ¶ 56. The application was denied on July 30, 2012 because Ocwen was “unable to create a
monthly payment with at least a 10% principal and interest deduction.” Id. On August 10, 2012,
Ocwen denied Plaintiff’s June HAMP application for a second reason, specifically that the new loan
payment did not comply with HAMP’s income requirements. Id. Plaintiff protested the denial on
the basis that Ocwen did not use Plaintiff’s stated income. Id.
On June 15, 2012, Ocwen informed Plaintiff that they were unable to modify her loan
because Bank of America, the loan’s owner, did not modify loans. Id. ¶ 54. The next day, however,
they informed her that HAMP’s new guidelines indicated that modification was possible. Id. On
June 26, 2012, Ocwen sent Plaintiff a generic letter about loan modification, even though it had
recently told her that Bank of America did not allow for modification. Id. ¶ 55.
A multi-state investigation was conducted regarding Ocwen’s loan servicing practices. Id.
¶ 57. Following the investigation, Ocwen’s CEO issued a statement requesting that anyone with

8

loan servicing complaints send him a complaint that his office would review. Id. Plaintiff sent a
complaint, along with detailed attachments. Id. Ocwen did not respond. Id.
Plaintiff submitted a third HAMP application to Ocwen on September 26, 2012. Id. ¶ 58.
Plaintiff was notified that the application was denied because Bank of America had “very technical
and strict guidelines for participating in HAMP.” Id. Plaintiff later received a separate letter
explaining that her modification was denied for another reason, namely that she had submitted two
prior applications. Id. ¶ 59. However, Plaintiff contends that she was forced to submit multiple
applications because of Saxon and Ocwen’s processing errors. Id. Plaintiff filed a fourth HAMP
application on February 19, 2013. Id. ¶ 60. She received a letter denying the application based on
the wrong income information on April 4, 2013; however, the letter was dated November 28, 2012,
more than four months before Plaintiff filed the fourth HAMP application. Id. Plaintiff believes
that the fourth application was not considered by Ocwen until May 2013, when Ocwen requested
additional supporting documents. Id. Plaintiff sent the documents on June 14, 2013 and Ocwen
responded the same day that the documents were too old. Id. Plaintiff attributes this problem to
Ocwen’s failure to timely notify her that the documents were missing. Id. Plaintiff filed a fifth
HAMP application on June 14, 2003. Id. ¶ 61.
While dealing with Ocwen, Plaintiff filed complaints with the Consumer Financial
Protection Bureau and the New York State Department of Financial Services. Id. ¶¶ 62, 63. Ocwen
disclosed information to these agencies that it had withheld from Plaintiff, telling her that the
documents did not exist. Id. ¶ 63. Plaintiff also contacted nonprofit entities, Credibility, and Home
Headquarters, who ran independent calculations based on HAMP modifications and repeatedly
found that Plaintiff qualified for the HAMP program based upon the statutory and regulatory

9

formulas. Id. ¶ 64.
Plaintiff contends that because Bank of America, its subsidiary, BAC, and its agents, Saxon
and Ocwen, failed to properly modify Plaintiff’s loan multiple times, she no longer qualifies for a
HAMP modification. Id. ¶ 65. Plaintiff further argues that Defendants continue to add excessive
fees that would never have been assessed absent Defendants’ failures to remedy the loan’s errors.
Id. As a result, Plaintiff has lost the use of the equity in her home, which is presently valued at
approximately $330,000 and was valued at $165,000 at the time the loan was originally modified.
Id. ¶ 66. Plaintiff contends that the loan’s balance continues to be improperly computed at close to
$300,000 because of the improper fees that have been assessed and ongoing servicing errors. Id.
¶ 67.
Plaintiff filed the instant Complaint on February 27, 2015, asserting the following causes of
action (1) unfair and deceptive acts and practices in violation of New York General Business Law
§ 349(a); (2) breach of contract for Defendants’ bad faith failure to correct and modify the loan; (3)
interference with Plaintiff’s rights as a third party beneficiary to Bank of America’s participation in
the HAMP program; (4) negligent denial of Plaintiff’s HAMP applications; (5) tortious interference
with contractual relations; (6) failure to provide required disclosures under the Truth in Lending Act
(“TILA”); (7) failure to provide required disclosures under the Real Estate Settlement Procedures
Act (“RESPA”); and (8) breach of the covenant of good faith and fair dealing. See id.
Plaintiff seeks to have the loan reformed to correct the errors included in the 2009
modification, the forgiveness of fees and expenses caused by Defendants’ actions, and monetary
damages. Id. ¶ 25.
III.

LEGAL STANDARD

10

To survive a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure, a “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also FED. R. CIV. P. 12(b)(6). A court must
accept as true the factual allegations contained in a complaint and draw all inferences in favor of a
plaintiff. See Allaire Corp. v. Okumus, 433 F.3d 248, 249-50 (2d Cir. 2006). A complaint may be
dismissed pursuant to Rule 12(b)(6) only where it appears that there are not “enough facts to state a
claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. Plausibility requires
“enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the alleged
misconduct].” Id. at 556. The plausibility standard “asks for more than a sheer possibility that a
defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). “[T]he
pleading standard Rule 8 announces does not require ‘detailed factual allegations,’ but it demands
more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. (citing Twombly,
550 U.S. at 555). Where a court is unable to infer more than the mere possibility of the alleged
misconduct based on the pleaded facts, the pleader has not demonstrated that she is entitled to relief
and the action is subject to dismissal. See Iqbal, 556 U.S. at 678-79.
IV.

DISCUSSION
A. New York General Business Law § 349
New York General Business Law § 349 prohibits “[d]eceptive acts or practices in the

conduct of any business, trade or commerce or in the furnishing of any service.” N.Y. GEN. BUS.
LAW § 349(a). To state a claim under § 349, “a plaintiff must demonstrate that (1) the defendant’s
deceptive acts were directed at consumers, (2) the acts are misleading in a material way, and (3) the

11

plaintiff has been injured as a result.” Maurizio v. Goldsmith, 230 F.3d 518, 521 (2d Cir. 2000).
Defendants argue that Plaintiff has not alleged that Defendants engaged in any challenged
practice that is consumer-oriented or that was misleading. Mem. at 5. In response, Plaintiff
requests leave to amend the Complaint. Opp’n at 3. Plaintiff contends that the amended complaint
will “clarify that what happened to [Plaintiff] was a part of a systemic policy that deceived the
public into believing that the Defendants’ servicers were acting in good faith and servicing loans in
good faith, when the Defendants were engaged in systemic deceptive practices aimed at foiling
consumers’ abilities to have their loans properly serviced or modified.” Id. It must be noted that in
her Opposition, Plaintiff does not seek leave to amend, but rather, Plaintiff requests leave to file a
motion to amend. Id.
Leave to amend a pleading should be “freely given when justice so requires.” FED. R. CIV.
P. 15(a). District courts are vested with broad discretion to grant a party leave to amend, and should
deny such a request only in the face of undue delay, bad faith, undue prejudice to the non-movant,
futility of amendment, or where the movant has repeatedly failed to cure deficiencies in previous
amendments. Foman v. Davis, 371 U.S. 178, 182 (1962); SCS Commc’n, Inc. v. Herrick Co., 360
F.3d 329, 345 (2d Cir. 2004). “The party opposing a motion for leave to amend has the burden of
establishing that granting such leave would be unduly prejudicial.” Media Alliance v. Mirch, No.
09-CV-659, 2010 WL 2557450, at *2 (N.D.N.Y. June 24, 2010) (Kahn, J.) (quoting New York v.
Panex Indus., No. 94-CV-0400, 1997 WL 128369, at *2 (W.D.N.Y. Mar. 14, 1997)).
Defendants argue that leave to amend should be denied because any amendment would be
futile. Reply at 2. Futility is an appropriate basis for denying leave to amend, and “should be
contemplated within the standards necessary to withstand a motion to dismiss.” Vail v. Fischer, No.

12

9:12-cv-1718, 2013 WL 5406637, at *3 (N.D.N.Y. Sept. 25, 2013). Here, Plaintiff has not
submitted a proposed amended complaint, but rather requests leave to file an amended complaint to
clarify that “Defendants were engaged in systemic deceptive practices aimed at foiling consumers’
abilities to have their loans properly serviced or modified.” Opp’n at 3. Contrary to Defendants’
argument that similar § 349 claims are routinely dismissed when they involve an individual loan
dispute, the Court finds that allowing amendment would not be futile if Plaintiff can show that
Defendants were operating under a systemic policy that applied to generally to all consumers. See,
e.g., Reynolds v. Xerox Educ. Servs., No. 13-CV-1223, 2014 WL 4437622, at *6 (N.D.N.Y. Sept.
9, 2014) (Kahn, J.) (finding consumer-oriented act where defendant was in the business of servicing
student loans and issued form documents to plaintiff, just as it did to other borrowers); Kapsis v.
Am. Home Mortg. Servicing, 923 F. Supp. 2d 430, 449 (E.D.N.Y. 2013) (finding general business
practice sufficiently aimed at the public where the plaintiff alleged that loan servicer failed to
properly credit payments on accounts, and issued false or misleading monthly statements); Cyphers
v. Litton Loan Servicing, 503 F. Supp. 2d 547, 553 (N.D.N.Y. 2007) (finding consumer-oriented act
where defendant was in the business of servicing loans and had obtained plaintiff’s loans, along
with others, as part of a pooling and servicing agreement);. Accordingly, Plaintiff’s request to file a
motion to amend is granted and Plaintiff is instructed to file a formal motion within thirty (30) days
of the issuance of this Memorandum-Decision and Order.
B. Breach of Contract
1. Breach of Contract for Bad Faith Failure to Correct or Modify the Mortgage
Defendants argue that Plaintiff’s second cause of action for breach of contract should be
dismissed because she has not identified a contractual provision that has been breached and has also

13

failed to allege that she performed her obligations under the contract. Mem. at 7. “To state a claim
for breach of contract under New York law, a plaintiff must allege: (1) a contract; (2) performance
of the contract by one party; (3) breach of the contract by the other; and (4) damages.” Adams v.
Smith, No. 07-cv-0452, 2010 WL 3522310, at *15 (N.D.N.Y. Sept. 1, 2010) (Kahn, J.) (quoting
Universal Marine Med. Supply v. Levecchio, 8 F. Supp. 2d 214, 221 (E.D.N.Y. 1998)).
The Court finds that Plaintiff has not stated a prima facie case for breach of contract. In the
Complaint, Plaintiff recounts Defendants’ repeated failures to fix the perceived errors in her
modified mortgage, as well as the alleged improper denial of her HAMP applications. Compl. ¶¶
77-85. However, Plaintiff fails to allege any specific contractual provision that was breached by
Defendants’ conduct. See M&T Bank Corp. v. LaSalle Bank Nat. Ass’n, 852 F. Supp. 2d 324, 334
(W.D.N.Y. 2012) (“A claim or counterclaim based on breach of contract must identify the specific
contractual provision(s) allegedly breached.”); see also Paul v. Bank of Am. Corp., No. 09-CV1932, 2011 WL 684083, at *5 (E.D.N.Y. Feb. 14, 2011) (dismissing plaintiff’s breach of contract
claim after finding that plaintiff’s failure to identify a specific provision that was allegedly breached
was a “fatal flaw”). Accordingly, Plaintiff’s second cause of action for breach of contract is
dismissed.
2. Implied Covenant of Good Faith and Fair Dealing
Plaintiff’s eighth cause of action is based upon a breach of the covenant of good faith and
fair dealing, which is implied in all contracts. Opp’n at 4; N.Y. Univ. v. Continential Ins. Co., 87
N.Y.2d 308, 318 (1995). Plaintiff contends that a plaintiff pleading a breach of the covenant of
good faith and fair dealing does not require citation to a specific contractual provision, because the
covenant applies to the contract as a whole. Opp’n at 4 (citing Wood v. Lucy, 222 N.Y. 88, 91

14

(1917)).
New York law recognizes an implied covenant of good faith and fair dealing in every
contract. Hoover v. HSBC Mortg. Corp., 9 F. Supp. 3d 223, 248 (N.D.N.Y. 2014). This duty
encompasses “any promises which a reasonable person in the position of the promisee would be
justified in understanding were included.” Rowe v. Great Atl. & Pac. Tea Co., 385 N.E.2d 566, 569
(N.Y. 1978) (quoting 5 WILLISTON, CONTRACTS § 1293, at 3682 [rev ed 1937]). Under this duty,
“neither party shall do anything which will have the effect of destroying or injuring the right of the
other party to receive the fruits of the contract.” Kirke La Shelle Co. v. Armstrong Co., 188 N.E.
163, 167 (N.Y. 1933). “Where the contract contemplates the exercise of discretion, this pledge
includes a promise not to act arbitrarily or irrationally in exercising that discretion.” Dalton v. Educ.
Testing Serv., 663 N.E.2d 289, 292 (N.Y. 1995).
Plaintiff alleges that Bank of America breached its loan contract with Plaintiff by delegating
its loan servicing to other entities who have “negligently or in bad faith serviced the mortgage such
that [Plaintiff’s] HAMP modification was a practical impossibility, despite her eligibility.” Compl.
¶ 17. She alleges that a promisee would reasonably expect the promisor to properly handle the loan
file, process paperwork, calculate her balance, and apply payments in good faith and fairly. Opp’n
at 5. While Defendants argue that Plaintiff’s failure to make her mortgage payments on time
constitutes a breach of contract in its own right, Mem. at 7, Plaintiff argues that her default on her
mortgage payments triggers an additional duty on the part of Defendants to act reasonably and
provide Plaintiff with access to mortgage relief programs that were being offered. Opp’n at 5.
Defendants do not specifically address Plaintiffs’ good faith and fair dealing claim, instead
addressing their arguments to a traditional “breach of contract” claim. See Mem. at 6-8. The Court

15

finds that the Complaint contains multiple allegations of intentional conduct by Defendants that
could support a finding of breach of good faith and fair dealing. See Adams, 2010 WL 3522310, at
*16 (finding defendant’s conclusory statement that plaintiff’s breach of good faith and fair dealing
claim was insufficiently pleaded could not support motion to dismiss); see also Leghorn v. Wells
Fargo Bank, N.A., 950 F. Supp. 2d 1093, 1120 (N.D. Cal. 2013) (“[T]he Plaintiffs here have stated
a claim under the implied covenant that Defendants abused this discretion by acting in bad faith and
outside the reasonable expectations of the parties. Whether Defendants’ acts were done in bad faith
and not within the reasonable expectations of the parties is a question of fact that cannot be decided
at the pleading stage.”). Accordingly, Defendants’ Motion to dismiss Plaintiff’s breach of the
implied covenant of good faith and fair dealing claim is denied.
3. Private Right of Action Under HAMP
“The law is clear that HAMP ‘does not create a private right of action for borrowers against
loan servicers.’” Jordan v. Chase Manhattan Bank, No. 13 Civ. 9015, 2014 WL 3767010, at *7
(S.D.N.Y. July 31, 2014) (quoting Wheeler v. Citigroup, 938 F. Supp. 2d 466, 471 (S.D.N.Y.
2013)). Defendants move to dismiss Plaintiff’s second, third, and fourth causes of action on the
basis that HAMP does not provide for a private right of action. Mem. at 8. Plaintiff counters that
HAMP is not the vehicle by which she seeks recovery on these counts; rather, HAMP’s provisions
inform the merits of the various state law claims Plaintiff brings in the second, third, and fourth
cause of action. Opp’n at 3.
A plaintiff cannot avoid the fact that HAMP does not provide for a private right of action by
pleading HAMP violations via other causes of action. See Davis v. Citibank, N.A., 984 N.Y.S.2d
388 (App. Div. 2014). In Davis, the plaintiffs entered an agreement with Citimortgage in

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accordance with HAMP after experiencing difficulties paying their mortgage. Id. at 390. The
agreement provided that if the plaintiffs met all HAMP requirements during a trial period, they
would be offered a permanent HAMP modification. Id. The plaintiffs later filed suit, asserting
claims for breach of contract and violation of General Business Law § 349, inter alia. Id. The
appellate court affirmed the trial court’s dismissal of the complaint in its entirety, reasoning that
“[s]ince the plaintiffs’ claims here are intertwined with the defendants’ alleged obligations under the
HAMP, and as no private right of action exists under the HAMP, the Supreme Court should have
granted the defendants’ motion to dismiss the amended complaint on the ground that it failed to
state a cause of action.” Id. at 392.

a. Third-Party Beneficiary Status
Plaintiff’s third cause of action alleges that she is a third-party beneficiary of Bank of
America’s contractual obligations under HAMP. Compl. ¶¶ 90-91. The issue of whether a borrower
is a third-party beneficiary to a service party agreement between a mortgage servicer and the
government is an issue of first impression among courts in the Second Circuit. Rivera v. Bank of
Am. Home Loans, No. 09 CV 2450, 2011 WL 1533474, at *3 (E.D.N.Y. Apr. 21, 2011). Under the
Restatement of Contracts, a plaintiff who claims “to be the intended third-party beneficiary of a
government contract must show that he was ‘intended to benefit from the contract and that the thirdparty beneficiary claims are consistent with the terms of the contract and the policy underlying it.’”
Id. at *4 (quoting Speleos v. BAC Home Loans Servicing, L.P., 755 F. Supp. 2d 304, 308 (D. Mass.
2010)).
The United States Department of the Treasury established HAMP pursuant to the Emergency

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Economic Stabilization Act of 2008. 12 U.S.C. § 5211. The purpose of HAMP is to help distressed
homeowners avoid foreclosure by obtaining loan modification. U.S. Dep’t of the Treasury, Home
Affordable Modification Program Guidelines, § VII, 610 (Mar. 4, 2009); see also Speleos, 755 F.
Supp. 2d at 309 (“Indeed, the HAMP program is clearly intended to benefit qualified borrowers.”).
Courts interpreting the HAMP Guidelines have concluded that a plaintiff borrower may be able to
state a claim against a defendant lender as an intended third-party beneficiary of the service
contractor between the lender and Fannie Mae. See Speleos, 755 F. Supp. 2d at 309; Marques v.
Wells Fargo Home Mortg., No. 09-cv-1985, 2010 WL 2132131, at *6 (S.D. Ca. Aug. 12, 2010).
Therefore, Plaintiff has met her burden of showing that she was an intended third-party beneficiary
of Defendants contractual obligations under HAMP.
However, Plaintiff must also show that allowing third-party beneficiary claims is consistent
with the terms of the contract. Restatement (Second) of Contracts, § 311(b). For example, in
Escobedo v. Countrywide Home Loans, the court found that allowing third-party beneficiary status
conflicted with the express language of the contract, which stated that the contract “shall inure to the
benefit . . . of the parties to the Agreement and their permitted successors-in-interest.” No.
09cv1557, 2009 WL 4981618, at *2-3 (S.D. Cal. Dec. 15, 2009). The court found that a borrower
could not reasonably rely on the agreement as manifesting an intention to confer a right on him
because the agreement at issue did not require that Countrywide modify eligible loans, rather the
agreement just set forth the HAMP Guidelines. Id. at *3. The majority of courts who have
addressed this issue decline to allow claims by third-party beneficiaries. See Rivera, 2011 WL
1533474, at *6 (“With very few exceptions, almost all federal courts to have addressed this precise
issue have rejected borrowers’ claims to enforce the Service Participation Agreements as third party

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beneficiaries.”) (collecting cases); see also Thomas v. JPMorgan Chase & Co., 811 F. Supp. 2d 781,
797 (S.D.N.Y. 2011) (finding that borrower had no third-party right to enforce agreement between
JP Morgan and Sallie Mae). However, some courts have found that plaintiffs made a substantial
showing that they are intended beneficiaries under HAMP. Compare Sampson v. Wells Fargo
Home Mortg., No. CV 10-08836, 2010 WL 5397236, at *6 (C.D. Cal. Nov. 19, 2010) (finding that
plaintiff made a substantial showing that she is an intended beneficiary of HAMP), with Rivera,
2011 WL 1533474, at *6-7 (finding that plaintiff failed to show that the agreement at issue
conferred a right to third-party beneficiaries to enforce the agreement).
Plaintiff requests that given the lack of binding precedent on this issue that she be allowed to
conduct discovery. Opp’n at 8. The Court finds that Plaintiff is entitled to conduct further
discovery to determine whether conferring third-party beneficiary status is consistent with the terms
of Bank of America’s contractual obligations with the government. Accordingly, Defendants’
Motion to dismiss Plaintiff’s third cause of action is denied.
b. Claim for Negligent Denial of HAMP Applications
Plaintiff’s fourth claim, that her HAMP applications were negligently denied, must fail.
Here, Plaintiff is attempting to enforce Defendants’ obligations under HAMP, which constitutes an
impermissible attempt to create a private right of action. See Jordan, 2014 WL 3767070, at *7;
Wheeler, 938 F. Supp. 2d at 471; Davis, 116 A.D.3d at 823. Accordingly, Plaintiff’s fourth cause of
action is dismissed.
D. Tortious Interference with Contract
Under New York law, in order to state a claim for tortious interference with contractual
relations, a plaintiff must allege: “(1) the existence of a valid contract between the plaintiff and a

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third party; (2) the defendant’s knowledge of the contract; (3) the defendant’s intentional
procurement of the third-party’s breach of the contract without justification; (4) actual breach of the
contract; and (5) damages resulting therefrom.” Kirch v. Liberty Media Corp., 449 F.3d 388, 40102 (2d Cir. 2006) (quoting Lama Holding Co. v. Smith Barney, 668 N.E.2d 1370, 1375 (N.Y.
1996)) (internal quotations omitted). Defendants argue that Plaintiff has failed to allege any of the
necessary elements. Mem. at 10.
Plaintiff counters that Defendants “were aware that Plaintiff was a small businesswoman
with many contractual and business relationships, including other mortgages and obligations
relating to her small businesses . . . through her HAMP applications and especially her financial
hardship affidavit.” Opp’n at 11. Defendants were also aware that Plaintiff sometimes used her
house as an asset to borrow against, since she previously obtained an equity line of credit mortgage.
Id.
The Court finds that Plaintiff fails to allege several necessary elements of her tortious
interference with contract claim. First, Plaintiff has not plausibly alleged adequate details about a
specific contract between herself and a third party, instead merely alleging that Defendants’ conduct
has adversely affected her ability to “run, maintain, or start businesses, which has deprived her of
income and has diminished her ability to enter into contractual relations.” Compl. ¶ 102; see
Plasticware, LLC v. Flint Hill Resources, LP, 852 F.Supp. 2d 398, 404 (S.D.N.Y. 2012) (dismissing
claim for tortious interference with contract where plaintiff claimed generally that it had contracts
with various parties, but did not provide details about the terms of the contracts or the specific
parties involved); Bose v. Interclick, No. 10-CV-9183, 2011 WL 4343517, at *10-11 (S.D.N.Y.
Aug. 17, 2011) (same); Ho Myung Moolsan Co. v. Manitou Mineral Water, 665 F. Supp. 2d 239,

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255 (S.D.N.Y. 2009) (denying leave to amend tortious interference with contract claim that had
been dismissed because plaintiffs failed to allege specifics about contract interference). Second, the
Complaint is silent as to whether Defendants knew of Plaintiff’s contracts with third parties, and
Plaintiff only states in her Opposition that Defendants “were aware that [Plaintiff] was a small
businesswoman with many contractual and business relationships.” Opp’n at 11. “Although a
defendant need not be aware of all the details of a contract, it must have actual knowledge of the
specific contract.” Medtech Prods. Inc. v. Ranir, 596 F. Supp. 2d 778, 796 (S.D.N.Y. 2008); see
also Boehner v. Heise, 734 F. Supp. 2d 389, 404-05 (S.D.N.Y. 2010) (granting summary judgment
where plaintiffs failed to offer evidence that defendants knew of any contracts, but merely stated
that defendants knew that plaintiffs sold to their customers). Further, the Complaint does not allege
that Defendants took any actions toward third parties with which Plaintiff had contracts, or that any
third party breached its contract with Plaintiff. Accordingly, Plaintiff’s claim for tortious
interference with contract is dismissed.

E. TILA and RESPA Claims
The statutes of limitations for filing claims under the Truth in Lending Act (“TILA”), 15
U.S.C. § 1640(e), and Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2614,
(“RESPA”) are both one year. See Cardiello v. The Money Store, 29 F. App’x 780, 781 (2d Cir.
2002) (stating that TILA statute of limitations is “one year from the date of occurrence of the
violation”); Done v. Option One Mortg., No. 09-CV-4770, 2011 WL 1260820, at *8 (E.D.N.Y.
Mar. 30, 2011) (“[T]he RESPA statute of limitations is one year.”). Claims under TILA and
RESPA accrue when a plaintiff signs the fraudulent or deceptive loan document in question.

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Murphy v. Flagstar Bank, FSB, No. 10-CV-0645, 2011 WL 4566139, at *1 (N.D.N.Y. Sept. 29,
2011) (Kahn, J.).
1. TILA
Defendants argue that Plaintiff’s TILA and RESPA claims should be dismissed as untimely.
Mem. at 10. Plaintiff does not address the timeliness of her TILA or RESPA claims in her
Opposition.6 In the Complaint, Plaintiff alleges that “Defendant Bank of America, through its
agents, Saxon and OCWEN, has repeatedly failed to provide [Plaintiff] disclosures required by the
Truth in Lending Act.” Compl. ¶ 103. Plaintiff claims that she has requested her “mortgage’s
owner, the amount due, her arrearages, and charges that are being added to her mortgage’s balance.”
Id. ¶ 103. Plaintiff further alleges that due to their failure to provide the requested information,
“Saxon violated TILA five times and OCWEN violated TILA four times while agents for Bank of
America.” Id. ¶ 104. Plaintiff requested her mortgage documents from Saxon in September,
October, and November of 2011. Id. ¶¶ 34-37. Plaintiff concedes that Saxon stopped servicing her
loan on June 1, 2012. Id. ¶¶ 46-47. Therefore, the one-year statute of limitations to bring a TILA
claim against Saxon expired no later than June 1, 2013, well before the Complaint was filed in
February 2015. Similarly, Plaintiff does not allege any conduct by Ocwen following June 20, 2013.
Id. ¶ 61. Therefore, the time period to file a TILA claim against Ocwen expired no later than June 1,
2014. Accordingly, Plaintiff’s TILA claims are untimely. See Rodriguez v. SLM Corp., No.
07cv1866, 2009 WL 3769217, at *2-3 (D. Conn. Nov. 10, 2009) (finding TILA claim that was
previously dismissed as untimely was not saved by equitable tolling based on fraudulent

6

In the accompanying Attorney Affirmation filed with Plaintiff’s Opposition, Plaintiff
concedes that her TILA and RESPA claims are untimely. See Dkt. No. 21 (“Oudemool
Affirmation”) ¶ 3.
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concealment where plaintiff did not plead fraudulent concealment with particularity); see also
Boursiquot v. Citibank F.S.B., 323 F. Supp. 2d 350, 354 (D. Conn. 2004) (“[I]t is generally
established that mere nondisclosures provide insufficient grounds for tolling the statute of
limitations, regardless of when the plaintiffs should have discovered the nondisclosure.”).
2. RESPA
Plaintiff alleges that Defendant Bank of America, through its agents, Saxon and Ocwen,
violated RESPA by again failing to make requisite disclosures. Compl. ¶ 107. For the same reasons
stated with respect to Plaintiff’s TILA claims, the Court finds that any RESPA claims against Saxon
should have been filed no later than June 1, 2013. With respect to Ocwen, Plaintiff alleges that she
submitted a Qualified Written Request to Ocwen in 2012, and “Ocwen failed to provide the
information requested in violation of RESPA.” Id. ¶ 108. Plaintiff’s RESPA claim against Ocwen
should have been filed within one year of Ocwen’s failure to provide the information requested in
the form, which would have occurred some time in 2013. Accordingly, Plaintiff’s RESPA claims
are untimely.

V.

CONCLUSION
Accordingly, it is hereby:
ORDERED, that Defendants’ Motion (Dkt. No. 15) to dismiss is GRANTED in part, as to

the dismissal of Plaintiff’s breach of contract claim; Plaintiff’s claim that her HAMP applications
were negligently denied; Plaintiff’s tortious interference with contract claim; and Plaintiff’s TILA
and RESPA claims; and DENIED in part, as to Plaintiff’s New York General Business Law § 349
claim; Plaintiff’s breach of the implied covenant of good faith and fair dealing claim; and Plaintiff’s

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claim that she is a third-party beneficiary of Bank of America’s obligations under HAMP; and it is
further
ORDERED, that Defendant Ocwen’s Motion (Dkt No. 18) to join Bank of America’s
Motion is GRANTED; and it is further
ORDERED, that Plaintiff is instructed to file a motion to amend her New York General
Business Law § 349 claim within thirty (30) days of the issuance of this Memorandum-Decision
and Order; and it is further
ORDERED, that the Clerk of the Court serve a copy of this Memorandum-Decision and
Order on all parties in accordance with the Local Rules.
IT IS SO ORDERED.

DATED:

December 30, 2015
Albany, New York

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