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White v. Jpmorgan Chase Bank, Na

United States District Court, Fourth Circuit

June 17, 2013

BLAINE A. WHITE, et ux., Plaintiffs,


GEORGE L. RUSSELL, III, District Judge.

Plaintiffs Blaine A. White and Virylnn D. Atkinson-White (collectively, "Plaintiffs") commenced this action against Defendant JPMorgan Chase Bank, N.A. ("Chase") alleging various causes of action that stem from Chase's alleged failure to modify Plaintiffs' mortgage loan under the Home Affordable Modification Program ("HAMP"). Currently pending before the Court are Chase's Motion to Dismiss the Complaint (ECF No. 6), Chase's Motion to Dismiss the Amended Complaint (ECF No. 12), Chase's Motion for Rule 11 Sanctions (ECF No. 18), and Plaintiffs' Motion for Leave to File Second Amended Complaint (ECF No. 20). The Court, having reviewed the pleadings and supporting documents, finds no hearing necessary. See Local Rule 105.6 (D.Md. 2011). For reasons outlined in detail below, the Court will deny as moot Chase's Motion to Dismiss the Complaint, grant Chase's Motion to Dismiss the Amended Complaint, grant in part and deny in part Chase's Motion for Rule 11 Sanctions, and grant Plaintiffs' Motion for Leave to File Second Amended Complaint.


In December 2006, Plaintiffs executed a mortgage loan of $253, 300 (the "Loan") to purchase a home in Baltimore, Maryland. Chase currently services the Loan. On or about March 21, 2009, Mrs. White contacted Chase via telephone and spoke with a loss mitigation representative named Bobbi. During that call, Mrs. White provided Bobbi with the couple's gross and net monthly household income. According to Plaintiffs, Bobbi informed Mrs. White that the couple qualified for a loan modification.

On May 6, 2009, Chase mailed Plaintiffs an offer to participate in the HAMP Trial Period Plan ("TPP").[2] Under the TPP, Plaintiffs were required to make three monthly payments of $1, 395 beginning in June 2009. The TPP letter provides, in relevant part, "[the TPP] is the first step. Once we are able to confirm your income and eligibility for the program, we will finalize your modified loan terms and send you a loan modification agreement...." (Am. Compl. Ex. C, at 5, [3] ECF No. 11-4). Moreover, the actual TPP Agreement reads:

I understand that the Plan is not a modification of the Loan Documents and that the Loan Documents will not be modified unless and until (i) I meet all of the conditions required for modification, (ii) I receive a fully executed copy of a Modification Agreement, and (iii) the Modification Effective Date has passed. I further understand and agree that the Lender will not be obligated or bound to make any modification of the Loan Documents if I fail to meet any one of the requirements under this Plan.

(Am. Compl. Ex. D, at 4, ECF No. 11-5). Soon thereafter, on May 29, 2009, Chase sent Plaintiffs four temporary TPP payment coupons. Although only three payments were required under the TPP Agreement, Chase sent Plaintiffs a fourth coupon for the purpose of making an additional payment during the month between the third TPP payment and final loan modification.

After accepting the TPP Agreement and making three timely TPP payments for June, July, and August 2009, Plaintiffs had not heard from Chase regarding finalization of their loan modification. As a result, Plaintiffs continued to make monthly reduced TPP payments of $1, 395 for over two years. During that time, Plaintiffs inquired about the status of their loan modification on three occasions and Chase informed them a "decision would be made any day." (Am. Compl. ¶ 36).

On March 3, 2011, Chase denied Plaintiffs' request for a permanent loan modification because their "monthly housing expense... [was] less than or equal to 31% of [their] gross monthly income." (Def.'s Mot. to Dismiss Ex. D, at 2, ECF No. 12-5). Approximately four months later, Chase provided Plaintiffs with a new TPP offer, dated July 15, 2011, with a payment amount of $2, 274.49. Plaintiffs rejected the new offer and continued to submit reduced payments in the original amount of $1, 395 until Chase returned their November 2011 payment and demanded that Plaintiffs repay the full amount in arrears.

On December 6, 2012, Plaintiffs filed a five-count Complaint in this Court alleging: (1) breach of contract; (2) promissory estoppel; and violations of (3) the Maryland Consumer Debt Collection Act ("MCDCA"), Md. Code Ann., Com. Law §§ 14-201 et seq. (West 2013); (4) the Maryland Consumer Protection Act ("MCPA"), Id . §§ 13-101 et seq. (West 2013); and (5) the Maryland Mortgage Fraud Protection Act ("MMFPA"), Md. Code Ann., Real Prop. §§ 7-401 et seq. (West 2013). (See ECF No. 1). On January 29, 2013, Chase filed its first Motion to Dismiss. (ECF No. 6). In response, Plaintiffs filed an Amended Complaint, alleging the same causes of action, on March 15, 2013.[4] (ECF No. 11). Chase filed its second Motion to Dismiss on March 29, 2013. (ECF No. 12). On April 22, 2013, Chase filed a Motion for Rule 11 Sanctions to which Plaintiffs responded by filing a Motion for Leave to File Second Amended Complaint on May 10, 2013. (See ECF Nos. 18 & 20).


A. Standard of Review

Chase moves to dismiss Plaintiffs' Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. "[T]he purpose of Rule 12(b)(6) is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Presley v. City of Charlottesville , 464 F.3d 480, 483 (4th Cir. 2006) (alterations and internal quotation marks omitted) (quoting Edwards v. City of Goldsboro , 178 F.3d 231, 243 (4th Cir. 1999)).

When ruling on such a motion, the court must "accept the well-pled allegations of the complaint as true, " and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff." Ibarra v. U.S. , 120 F.3d 472, 474 (4th Cir. 1997). "Even though the requirements for pleading a proper complaint are substantially aimed at assuring that the defendant be given adequate notice of the nature of a claim being made against him, they also provide criteria for defining issues for trial and for early disposition of inappropriate complaints." Francis v. Giacomelli , 588 F.3d 186, 192 (4th Cir. 2009).

To survive a motion to dismiss, the factual allegations of a complaint "must be enough to raise a right to relief above the speculative level, ... on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007) (alterations and internal citations omitted). Thus, the plaintiff's obligation is to set forth sufficiently the "grounds of his entitlement to relief, " offering more than "labels and conclusions." Id . (internal quotation marks and alterations omitted). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, ...

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