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Braden v. PNC Bank, N.A.

United States District Court, D. Oregon

May 6, 2014

PNC BANK, N.A., Defendant.

Sandy N. Webb Law Offices of Sandy N. Webb, P.C., Portland, OR, Attorney for Plaintiffs

Peter J. Van Zandt, LeClairRyan San Francisco, CA, Stephen P. Yoshida, Michael A. Yoshida Martin Bischoff Templeton Langslet & Hoffman, Portland, OR, Attorneys for Defendant.


MARCO A. HERNANDEZ, District Judge.

Plaintiffs Dale and Sherrill Braden bring this foreclosure-related action against Defendant PNC Bank, alleging that it breached a loan modification agreement and wrongfully foreclosed on their property, breached its duty of good faith and fair dealing, and trespassed on their property. Defendant moves for summary judgment. I grant Defendant's motion because Plaintiffs repudiated the loan modification and waived their right to enforce it, Defendant's alleged breach did not cause Plaintiffs' damages, and the contract expressly permitted Defendant's conduct.


Plaintiffs Dale and Sherrill Braden purchased their home in 2008 with a mortgage from National City Mortgage, which was later acquired by Defendant PNC Bank. Plaintiffs stopped making mortgage payments around April or May 2010. On August 25, 2010, Plaintiffs signed a loan modification agreement (the "August modification"). Compl. ¶ 9. Defendant signed that agreement on August 31, 2010. Compl. ¶ 8. When Plaintiffs submitted the signed agreement to Defendant, they also included a check for the amount due, $1, 435.90. Compl. ¶ 9. Defendant cashed that check, but on September 18, 2010, it sent Plaintiffs a check for the same amount along with a letter that read, "[t]he enclosed check for $1, 435.90 is being returned to you because the amount received is not sufficient to reinstate your loan from default." Compl. Ex. 3. Plaintiffs called Defendant three times for an explanation, Yoshida Decl. Ex. 1, at 3, but they "could never find a human [at PNC] to talk with that seemed to know anything about" the August modification. Pls.' Resp. Ex. 4, at 3 (Dale Braden Depo. 48:10-12). One PNC representative did tell them, however, that according to PNC's system, the modification was approved. Yoshida Decl. Ex. 1, at 3. Later, a PNC representative admitted in a deposition that returning the check was "an accident." Pls.' Resp. Ex. 5 (McGrew Depo. 16:22). Defendant explains that "soon after receiving the August 2010 modification agreement and payment, PNC determined that the monthly payment amount of... $1, 435.90... was out of tolerance with Fannie [Mae] modification guidelines and required a $10.47 correction to... $1, 446.37[.]" Def.'s Mem. 3-4.

Plaintiffs assert that nobody told them to resubmit the $1, 435.90 check to Defendant. See Pls.' Resp. Ex. 4, at 5 (Dale Braden Depo. 69:10-13) ("[W]e couldn't get them to even say there was a modification so why would they ask for payment for something that they say doesn't exist?"); Yoshida Decl. Ex. 11, at 9 (Dale Braden Depo. 34:7-12). Later, Dale Braden stated Defendant or ServiceLink[1] told him not to send in a check but rather to work for another loan modification. Pls.' Resp. Ex. 4, at 10 (Dale Braden Depo. 77:4-8)..

Defendant, however, states that according to "PNC's call log, Plaintiffs were told to resend the $1, 435.90 because it was returned to them in error, and were further advised that a corrected modification agreement would be sent to them." Def.'s Mem. 4. That call log, though, indicates Defendant did not speak directly to Plaintiffs, but rather it left them a voicemail. See Justice Decl. Ex. A, at 1 (PNC call log from 10/1/10 noting, "B needs to send back the funds for the mod per lmt it was sent back in error l/m on recorder ") (emphasis added).

Plaintiffs did not return the check or make another payment. Dale Braden explained: "What's the point? They already sent [the August check] back. It was... like I say, talking with them, if they don't get it on the phone, they're just not going to get it." Pls.' Resp. Ex. 4, 4-5 (Dale Braden Depo. 68:25-69:5).

On October 13, 2010, Plaintiffs wrote Defendant a letter requesting a principal reduction and a corresponding reduction in monthly payments to $1, 050. Yoshida Decl. Ex. 2. Notwithstanding that letter, Plaintiffs thought the August modification had been fully executed by both parties. Pls.' Resp. Ex. 4, at 4 (Dale Braden Depo. 67:16-25). However, Defendant points out the letter did not "state that the August 2010 modification agreement had been breached, did not mention that the $1, 435.90 payment had been returned, and did not provide any indication that Plaintiffs desired to enforce the August 2010 modification." Def.'s Mem. 4. Nor did Plaintiffs mention the August modification in any subsequent letter or phone call. See e.g., Def.'s Mem. 9. Plaintiffs explained: "[We were] frustrated that we could never get them to even acknowledge that it existed so if we write to them and say - mention this thing, they're going to go well, what the heck are you talking about?" Pls.' Resp. Ex. 4, at 4 (Dale Braden Depo. 66:17-22).

On November 18, 2010, Defendant sent Plaintiffs a new loan modification proposal with monthly payments of $1, 446.37. Justice Decl. Ex. C; Pls.' Resp. Ex. 3. That proposal also requested that Plaintiffs "enclose certified funds paid to the order of PNC Mortgage in the amount of: $10.47." Pls.' Resp. Ex. 3, at 1. The proposal did not explain the $10.47 charge, although Defendant characterizes the proposal as "the corrected modification agreement reflecting a $10.47 change from the August 2010 modification agreement."[2] Def.'s Mem. 5.

Plaintiffs believed the November 2010 proposal "raised the payments like $111 a month, " and they "didn't understand what that was about." Yoshida Decl. Ex. 11, at 9 (Dale Braden Depo. 34:17-25). Plaintiffs "had no clue what the heck [Defendant was] doing, " stating: "A loan modification and you only want $10 for it?... [I]t seemed kind of preposterous.... [We had] loans modified [before]... and there's always... way more than $10" that had to be paid. Pls.' Resp. Ex 4, at 3 (Dale Braden Depo. 46:17-25). Plaintiffs were "happy with the modification [they had]." Yoshida Decl. Ex. 11, at 9 (Dale Braden Depo. 34:20-21). But they thought, "if [Defendant was] going to try to renegotiate, " then they were going to revise the proposal "so that it would make [their] budget better." Yoshida Decl. Ex. 11, at 9 (Dale Braden Depo. 34:17-25). They revised the proposal to reduce the monthly payments from $1, 446.37 to $1, 010.20. Pls.' Resp. Ex. 3; Def.'s Mem. 5. Plaintiffs returned the revised proposal to Defendant on November 20, 2010 and included a check for $10.47. Yoshida Decl. Ex. 3, at 1. "Interpreting Plaintiffs' November 2010 modification proposal as a rejection of the loan modification process, " Defendant informed Plaintiffs on December 8, 2010 that "they were no longer under a modification review because, based on a recent conversation or document received, [they were] no longer interested in a loss mitigation alternative.'" Def.'s Mem. 5 (quoting Yoshida Decl. Ex. 4).

On December 2, 2010, Plaintiffs were notified that Defendant would foreclose on their property on April 11, 2011. Compl. ¶ 12.

On January 9, 2011, Plaintiffs wrote to Defendant "one more time to request [their] loan be modified to reduce the rate and principal on [their] mortgage to adjust [their] payment to a manageable amount." Yoshida Decl. Ex. 5, at 1. In that letter, Plaintiffs stated that Defendant "offered to lower the total monthly payment from $1, 786.04... to $1, 446.37" and they rejected that offer because it was "still too high for ...

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