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Cook v. Citifinancial, Inc.

United States District Court, W.D. Virginia, Charlottesville Division

May 16, 2014



GLEN E. CONRAD, Chief District Judge.

Alan and Jackie Cook filed this action against CitiFinancial, Inc. ("Citi") and ALG Trustee, LLC ("ALG Trustee"). Citi has moved to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons set forth below, Citi's motion will be granted in part and denied in part.


The following facts, taken from the plaintiffs' complaint, are accepted as true for purposes of the instant motion. See Erickson v. Pardus , 551 U.S. 89, 94 (2007).

On March 18, 2008, Mr. Cook obtained a mortgage loan from Citi. The loan was evidenced by a note signed by Mr. Cook, and secured by a deed of trust on the Cooks' property located at 8241 Thomas Nelson Highway, Lovingston, Virginia.[1] The note and the deed of trust provide that the failure to make mortgage payments constitutes an event of default that may lead to foreclosure and other remedies in favor of the lender.

On September 12, 2011, Mr. Cook went to Citi's office in Charlottesville and spoke to the company's office manager, Danielle Clements. At that time, Mr. Cook "was current on the note but struggling to make payments and in imminent danger of default." Compl. ¶ 19. When Mr. Cook shared this information with Ms. Clements, she suggested that he consider pursuing a mortgage loan modification under the federal Home Affordable Modification Program ("RAMP"). Ms. Clements advised Mr. Cook that he would be required to stop making his mortgage payments and allow his home to fall into foreclosure in order to qualify for the program. She claimed that Citi would "have to modify the loan" once his home fell into foreclosure, and that Citi would "probably be able to cut [his] interest rate to under four percent [and] reduce the amount [he owed] by 25 to 30 thousand dollars." Id. at 721, 25.

Mr. Cook responded that he was "leery" about the possibility of foreclosure, and advised Ms. Clements that he would need time to think about the requirements that she mentioned. Id. at ¶¶ 22, 26. When Mr. Cook asked what he would need to do if he elected to take this course of action, Ms. Clements responded as follows: "You do nothing, don't come back here, or anything. [Stop] making the payments, and you will begin to get letters from the loan [modification] people, but ignore the letters until you get a date for a foreclosure sale and then call the office listed on the letter and they'll get you started." Id. at 41127.

Relying on Ms. Clements' representations, which the plaintiffs now claim were false, Mr. Cook subsequently stopped making his mortgage payments. In the spring of 2012, Mr. Cook began receiving correspondence from Citi informing him of his default and directing him to call a toll free number for assistance. However, "because Clements had told [him] he would receive such letters and that he should not respond until the letters advised him he was in foreclosure, [Mr.] Cook, doing what Clement[s] had told him to do, did not respond to such correspondence." Id. at ¶ 41.

At some point prior to 2013, Citi engaged One Main Financial ("One Main") to service Mr. Cook's loan. On June 17, 2013, Mr. Cook received a letter from One Main encouraging him to call Ronald Bates in One Main's loss mitigation department for help in resolving his mortgage payment issues. That same day, Mr. Cook received a letter from Atlantic Law Group advising him that ALG Trustee had been appointed as substitute trustee, and that his property would be sold at a foreclosure sale on July 17, 2013.

Based on his initial conversation with Ms. Clements, Mr. Cook believed that it was now time for him to pursue a HAMP loan modification. He subsequently placed over 20 phone calls to One Main in an effort to reach Mr. Bates. On several occasions, the line went dead following a short recording, and he was unable to leave a message. On other occasions, Mr. Cook briefly spoke to representatives who proceeded to hang up on him.

On July 11, 2013, Mr. Cook spoke to a One Main representative named Patricia, who advised him of several items of information that he would need to provide with his application for a loan modification. Patricia gave Mr. Cook a fax number to use for submitting the necessary documents and told him that his case had been assigned to Charissa Brown-Warren.

On July 15, 2013, Mr. Cook spoke to Ms. Brown-Warren, who introduced herself as the loss mitigation department supervisor. Ms. Brown-Warren advised Mr. Cook that his case was on hold because certain income documents pertaining to Mr. Cook's federal government benefits had not been dated for the current year. She indicated that his case would remain on "pending/hold status" for 30 days in order for him to obtain the necessary documents, and that the scheduled foreclosure would be postponed during that time. Id. at ¶ 55.

Mr. Cook subsequently made arrangements for the requested income documents to be sent to One Main. On July 17, 2013, Mr. Cook called One Main and spoke to a representative named Miriam. Miriam told Mr. Cook that she had "great news, " and that "it looked like the underwriters had approved a loan modification." Id. at ¶ 65. However, later that day, Mr. Cook called the same phone number and spoke to a One Main representative named Taskeba. After confirming Mr. Cook's identity, Taskeba told him that the foreclosure sale would proceed that day as originally scheduled, because Mr. Cook failed to timely provide the necessary income documents. When Mr. Cook asked her about the 30-day hold that Ms. Brown-Warren had mentioned, the representative indicated that "she had never heard of such a thing, " and that there was nothing that he could do to stop the foreclosure sale. Id. at ¶ 67.

Upon receiving this information, Mr. Cook rushed to see an attorney in Lovingston. Although the attorney wrote a letter to Atlantic Law Group on Mr. Cook's behalf, it was too late for the plaintiffs to stop the ...

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