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

Filing 21

ORDER: Adopting Report and Recommendation 17 as to plaintiff's claim of negligent misrepresentation; Denying Motion to Dismiss 6 as to the plaintiff's claims of breach of contract and intentional infliction of emotional distress. Plaintiff is granted 14 days leave to file amended complaint. Ordered & Signed on 3/21/12 by Judge Owen M. Panner. (kf)

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

PAUL R. ANDRE, an individual,
1:11-cv-3077-CL
Plaintiff,
v.

ORDER

BANK OF AMERICA, N.A.i
COUNTRYWIDE HOME LOANS, INC.,
a New York Corporat
i and
BAC HOME LOANS SERVICING, LP,
Defendants.

PANNER, District Judge:

Magistrate Judge Mark D. Clarke filed a Report and
Recommendation, and the matter is now be

me. See 28 U.S.C.

§

636(b) (1) (B), Fed. R. Civ. P. 72(b}. Although no objections have
been filed, I review the legal principles de novo. See Lorin Corp.

1 - ORDER

I

v Goto & Co., Ltd., 700 F.2d 1202, 1206 (9th Cir. 1983). I adopt
the report as to plaintiff's claim of negligent misrepresentation.
I decline to adopt the report as to pla

iff's claims of breach

of contract and intentional infliction of emotional distress.

STANDARDS
On a motion to dismiss, the court must review the sufficiency
of the complaint. Scheuer v. Rhodes,

416 U.S. 232, 236 (1974). All

allegations of material fact are taken as true and construed in
the light most favorable to the nonmoving party.

American Family

Ass'n, Inc. v. City & County of San Francisco, 277 F.3d 1114, 1120
(9th Cir. 2002). If the well-pleaded factual allegations

ausibly

give rise to the relief sought, a court shall deny the motion to
dismiss. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950

(2009).

DISCUSSION
As noted, I construe all alleged facts as both true and in
the light most favorable to plaintiff. Therefore, defendants
informed plaintiff that in order to be considered for a loan
modification, plaintiff would first have to default.

(Compl.

Although plaintiff had yet to miss any payments, pl
to default

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5.)

iff chose
they

reliance on defendants' representations t

would not foreclose on plaintiff's home during the loan
modi

cation review period.

(Compl.

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6.) Defendants informed

plaintiff that they could not proceed with a foreclosure while

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plaintiff was in the loan modi

I

On June 28, 2009, although pla

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cation program.

(Compl.

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iff had yet to rece

20.)
the

necessary paperwork, defendants assured plaintiff that they could
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ORDER

not go ahead with the foreclosure sale scheduled for July 1, 2009.
(Compl.

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20.)

Defendants told pi

upcoming sale because pi

ntiff not to worry about the

ntiff was still under review and it

would be illegal for defendants to proceed with the sa
scheduled.

(Compl.

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as

20.) On July 1, 2009, defendants sold

plaintiff's home "during a period in which Defendants told
Plaintiff that he was still in workout status or under review.
(Compl.

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25.) After defendants sold plaintiff's home, defendants

informed pia

iff that his application had been denied on June 9,

2009.
As noted, I assume the above alleged facts are true and
construe those facts in the light most favorable to plaintiff.
American Family, 277 F.3d at 1120.

Negligent
I

~srepresentation

agree with Judge Clarke that the part

s involved were in

an arms length relationship. I adopt Judge Clarke's report as to
plaintiff's claim of negligent misrepresentation. I decline to
determine whether plaintiff adequately pleaded fraud or fraudulent
misrepresentation. As noted below, plaintiff is granted leave to
file an amended complaint.

Breach of Contract
Defendants state that defendants received nothing from the
alleged modification other than benefits to which they were
already entitled. I disagree. Construed in the light most
favorable to plaintiff, plaintiff alleges that he only defaulted

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ORDER

based on defendants' representations that they would consider
plaintiff's application for a modification, and that defendants
could not legally foreclose during that workout period. Absent
such representations from defendants, plaintiff would not have
defaulted on the original loan. In other words, defendants
received late
modification

s and the like only as a result of the parties'
the original contract. Additionally, even assuming

there was no consideration given by plaintiff, that would not bar
pla

iff from stating a claim based on promissory estoppel. See

Schafer v. Fraser, 206 Or. 446, 480 81 (1955). I reject
defendants' contention that because plaintiff defaulted on the
underlying note, plaintiff is somehow prevented from applying for
equitable estoppel.
As to whether plaintiff alleged any facts demonstrating the
part

s agreed to modify the forebearance section of the deed of

trust, plaintiff alleges that "Defendants further agreed not to
foreclose while Plaintiff's loan was in workout status or in
review." (Compl.
plaintiff,

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34.) Construed in the light most favorable to

I conclude plaintiff suf

ciently alleges the parties

mutually bargained over the forebearance waiver prior to the
modi

cation.

Intentiona1 Inf1iction of Emotiona1 Distress
Plaintiff alleges defendants intentionally induced plaintiff
to default, and then intentionally induced plaintiff to wa
months for documents defendants knew they would not provide, with

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ORDER

the sole purpose of fore

osing on plaintiff's home due to

plaintiff's failure to submit the required paperwork. On June 28,
2009, defendants lied to plainti
plainti

by stating that because

's application was still under review, it would be

illegal for defendants to proceed with the July 1 sale. In fact,
defendants had denied pIa

iff's application on June 9, 2009.

Plaintiff alleges that defendants stated that in order to be
considered for a loan modification, plaintiff would

rst have to

default. Plaintiff alleges that absent plaintiff's promise to
review his application for a modification (and to hold off on a
foreclosure during that process), plaintiff would not have
defaulted. Plaintiff had not been in default prior to defendants'
assurances. I must accept those allegations as true.
Plaintiff alleges sufficient facts to demonstrate that
defendants had ulterior motives in st

nging plaintiff along;

defendants needed plaintiff to default in order to foreclose on
the property. Defendants' argument - essentially that plaintiff
was never promised that the loan would end up being modified, and
that t

deed of trust

self authorized a foreclosure sa

misses the mark. I conclude that at this stage, plainti

alleges

sufficient facts to demonstrate defendants' conduct was both
outrageous and outside the bounds of socially tolerable conduct.
CONCLOSION

I adopt Magistrate Judge Clarke's Report and Recommendation
(#17) as to plaintiff's claim of negligent misrepresentation.

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ORDER

Because plaintiff did not specifically bring a claim for fraud or
fraudulent misrepresentation, I make no conclusions as to whether
plaintiff adequately pleaded such a claim. I deny the motion to
dismiss as to plaintiff's claims of breach of contract and
intentional infliction of emotional distress. Plaintiff is granted
14 days leave to file an amended complaint.
IT IS SO ORDERED.

DATED this

?- I

day of March, 2012.

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U~){fI~
OWEN M. PANNER
U.S. DISTRICT JUDGE

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