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Hazaimeh v. United States Bank Nat'l Ass'n

United States District Court, E.D. Virginia, Richmond Division

March 4, 2015

YAHIA A. HAZAIMEH, et al., Plaintiffs,

Decided: March 3, 2015.

For Yahia A. Hazaimeh, Karen A. Hazaimeh, Plaintiffs: Henry W. McLaughlin, III, LEAD ATTORNEY, Drew David Sarrett, The Law Office of Henry McLaughlin, P. C., Richmond, VA.

For U.S. Bank National Association, As Trustee for the C-Bass Mortgage Loan Asset-Backed Certificates, Series 2006-RP2, Ocwen Loan Servicing, LLC, Defendants: Andrew Brian Pittman, LEAD ATTORNEY, Troutman Sanders LLP (VA Beach), Virginia Beach, VA.


James R. Spencer, Senior United States District Judge.

THIS MATTER is before the Court on Defendants' Motion to Dismiss Amended Complaint (" Motion" ) (ECF No. 12), filed on January 16, 2015. Plaintiffs filed a response in opposition on February 6, 2015 (" Opp'n Mem.) (ECF No. 16), and Defendants subsequently filed a reply on February 19, 2015 (" Reply Mem." ) (ECF No. 17). The parties have not requested a hearing on this matter, and the Court finds that oral argument is unnecessary. See E.D. Va. Loc. Civ. R. 7(J). For the reasons set forth below, the Motion is GRANTED in part and DENIED in part.


Plaintiffs, Yahia A. Hazaimeh and Karen A. Hazaimeh (collectively, the " Hazaimehs" ), purchased a home on January 7, 2009 located at 5113 Futura Avenue, Richmond, Virginia 23231. On that day, the Hazaimehs entered into a mortgage loan in the principal amount of $67,950, in which they were the borrowers and David L. Holley and Charlotte Y. Holley (collectively, the " Holleys" ) were the lenders. The loan was evidenced by a note, signed by the Hazaimehs, and secured by a deed of trust. ( See Am. Compl. Ex. A.) The deed of trust appointed Robert E. Kane, Jr. (" Kane" ) and Theodore M. Galanides (" Galanides" ) as trustees.

On December 6, 2000, the Holleys and the Hazaimehs entered into a " Modification of Note and Deed of Trust" (the " modification agreement" ). (Am. Compl. Ex. B.) The modification agreement deleted all references to the " balloon payment" provided for in the original note and deed of trust. The Holleys subsequently assigned the note, and U.S. Bank asserted rights as holder of the note. U.S. Bank then retained Ocwen as servicer as to the note and the deed of trust.

In late 2011, the Hazaimehs fell behind in payments on the note. In April of 2012, Ocwen sent a letter to the Hazaimehs stating that the loan was due to mature within the next thirty days. (Am. Compl. Ex. C.) Over the course of 2012, the Hazaimehs sent payments to Ocwen through MoneyGram, but Ocwen returned those payments, asserting that such payments were insufficient to cover the balance due on the loan. Additionally over the course of that year, Joylyn D. Givens (" Givens" ) made telephone calls to Ocwen and Samuel I. White, P.C. (" White" ) on behalf of Karen Hazaimeh. During these calls, Givens would represent herself as being Karen Hazaimeh, with Karen Hazaimeh's consent. Ocwen representatives allegedly stated that the loan was due and owing for a balloon payment and the Hazaimehs would have to pay off the loan through the balloon payment to avoid foreclosure of the residence. Givens disputed with Ocwen that there was a balloon payment due and owing on the loan.

In April of 2012, Karen Hazaimeh contacted James A. Chisholm, Esquire (" Chisholm" ) regarding the loan. Chisholm provided advice to Karen Hazaimeh about how to handle the ongoing dispute with Ocwen regarding the balloon payment, specifically advising her to send to Ocwen a copy of the modification agreement. On August 7, 2012, Karen Hazaimeh, through Givens, sent to Ocwen a letter enclosing copies of the deed of trust and modification agreement and requested that Ocwen confirm that there was no balloon payment on the loan. However, Ocwen never responded.

In August of 2012, U.S. Bank removed the original trustees on the deed of trust and appointed White as substitute trustee. (Am. Compl. Ex. F.) On August 14, 2012, White sent a letter to the Hazaimehs, which stated that the Hazaimehs' property would be foreclosed upon, and the amount of the remaining debt was $59,183.13. (Am. Compl. Ex. G.) The Hazaimehs responded with a letter asking " how much [they] would have to pay to bring [the] note current excluding the balloon payment of $59,183.13." (Am. Compl. Ex. H.) On September 6, 2012, the Hazaimehs, through Givens, sent another letter to White requesting reinstatement figures for the loan.

Ocwen instructed White to foreclose on the residence, and White subsequently placed a foreclosure advertisement in the Richmond Times-Dispatch on October 23, 2012 and October 30, 2012 for foreclosure of the residence on November 6, 2012 at 1:00 p.m. Karen Hazaimeh learned of the scheduled foreclosure near the end of October 2012 after Givens showed her the advertisement in the Richmond Times-Dispatch.

On October 22, 2012, Karen E. Dailey, Esquire, an attorney then employed by White, wrote a letter to the Hazaimehs, which stated that White was " requesting reinstatement figures so that you may know the amount needed in order to bring your loan current." (Am. Compl. Ex. I.) On October 26, 2012, White purported to provide a reinstatement for the loan; however, that letter stated a reinstatement figure " good through October 24, 2012," a date two days prior to the date of the letter. (Am. Compl. Ex. J.)

On November 1, 2012, Givens called White and spoke with a representative of White. Givens provided that representative an e-mail address for White to use in sending the reinstatement amount for the loan to Karen Hazaimeh. On November 5, 2012 at approximately 9:30 a.m., Givens again called White and spoke with another representative. Givens was told that she would be sent an e-mail with the reinstatement amount; however, she never received an e-mail.

On that same day at approximately 1:10 p.m., Givens called Ocwen and spoke with a representative identified as " Javed." Javed provided to Givens a reinstatement amount of $8,441.69. Javed then stated that if Karen Hazaimeh made a MoneyGram payment in that amount to Ocwen that day and then called Ocwen and provided the identifying information for that MoneyGram payment, then Ocwen would stop the foreclosure sale of the residence scheduled for November 6, 2012.

Relying on Javed's statement, Karen Hazaimeh, acting through Givens, made a payment to Ocwen of $8,441.69 through MoneyGram, and called Ocwen to notify the servicer of the payment. Hazaimeh and Givens spoke to a male Ocwen representative (the " 5:25 p.m. Ocwen representative" ) who acknowledged the MoneyGram payment but responded that such payment would not stop the foreclosure sale because the Hazaimehs owed a balloon payment on the loan. Givens demanded to speak with the representative's supervisor, and Givens and Karen Hazaimeh were subsequently transferred to a female Ocwen representative who identified herself as " Francis." Francis requested that Karen Hazaimeh fax to her copies of the deed of trust and modification agreement. After faxing over the requested documents, Givens and Karen Hazaimeh again called Francis, and Francis assured them that the foreclosure sale had been put on hold and would not proceed on November 6, 2012. ( See Am. Compl. Ex. L.)

However, the foreclosure did in fact proceed on November 6, 2012. White conducted the sale, and U.S. Bank made the high bid of $62,989, which was significantly less than the $117,800 fair value of the residence. Title to the residence was subsequently transferred by White to U.S. Bank. (Am. Compl. Ex. M.)

On February 4, 2013, U.S. Bank filed an unlawful detainer summons against the Hazaimehs in the General District Court of Henrico County, Virginia. The Court granted judgment for possession of the residence to U.S. Bank on May 6, 2013. The Hazaimehs then timely appealed to the Circuit Court of Henrico County, Virginia, and the Circuit Court affirmed the judgment. U.S. Bank subsequently sought and obtained a writ of possession for eviction of the occupants of the residence, and a final notice for eviction was posted at the residence for a lock-out on October 1, 2013. The occupants at the time, Karen Hazaimeh's son, daughter, and nephew, moved out of the residence prior to the lock-out.

On November 6, 2014, Plaintiffs filed a five-count Complaint in the Circuit Court of the City of Richmond, which alleged actual fraud, constructive fraud, breach of the deed of trust, breach of contract, and breach of the implied covenant of good faith and fear dealing. Defendants removed the case to this Court on December 3, 2014, and filed their first motion to dismiss on December 10, 2014. Plaintiffs then filed an Amended Complaint on December 31, 2014, thereby mooting the Defendants' original motion to dismiss. ( See O., January 6, 2015, ECF No. 11.) The three-count Amended Complaint alleges actual fraud (count one), constructive fraud (count ...

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