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Munk v. Citimortgage, Inc.

United States District Court, D. Oregon, Portland Division

August 14, 2014



ANCER L. HAGGERTY, District Judge.

Pro se plaintiff, Joshua Paul Munk, filed this action against defendant CitiMortgage, Inc., the prior owner and servicer of his residential mortgage loan. Plaintiff faults defendant for failing to approve his second loan modification despite assurances to the contrary, for selling.his loan to a different servicer, and for damaging his credit rating by advising him to forgo loan payments in order to qualify for a second loan modification. Defendant has filed a Motion to Dismiss [7]. For the following reasons, defendant's Motion to Dismiss is granted in part and denied in part and plaintiffs Complaint is dismissed without prejudice.


To survive a motion to dismiss under Federal Rule of Civil Procedure (FRCP) 12(b)(6), a complaint must allege sufficient facts to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009). When considering a motion to dismiss, the court must determine whether the plaintiff has made factual allegations that are "enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007). Dismissal under FRCP 12(b)(6) is proper only where there is no cognizable legal theory, or an absence of sufficient facts alleged to suppoti a cognizable legal theory. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010).

The reviewing court must treat all facts alleged in the complaint as true and resolve all doubts in favor of the nonmoving party. Barnes v. Yahoo!, Inc., 570 F.3d 1096, 1098 n. 1 (9th Cir. 2009) (citation omitted). The court need not accept any legal conclusions set forth in a plaintiffs pleading. Ashcroft, 129 S.Ct. at 1949-50.

In evaluating the Motion to Dismiss, the court is mindful that the Ninth Circuit upholds a "policy of liberal construction in favor of pro se litigants." Rand v. Rowland, 154 F.3d 952, 957 (9th Cir. 1998). Litigants have a statutory right to self-representation in civil matters, see 28 U.S.C. ยง 1654 (1982), and me entitled to meaningful access to the courts. Rand, 154 F.3d at 957; (citing Bounds v. Smith, 430 U.S. 817, 823 (1977); Wolff v. McDonnell, 418 U.S. 539, 579 (1974); Johnson v. Avery, 393 U.S. 483 (1969); Hatfield v. Bailleaux, 290 F.2d 632, 637 (9th Cir. 1961)). "Consequently, we tolerate informalities from civil pro se litigants." Id. (citations omitted).


Plaintiff purchased a home in Portland, Oregon with defendant as the holder and servicer of the loan. On April 27, 2009, plaintiff entered into a Loan Modification Agreement with defendant. The terms of the Loan Modification Agreement provided for an interest rate of 3.25% for the first year, 5% for the second year, and a fixed rate of 8.5% for the remainder of the loan term.

After the first year of making payments under the Loan Modification Agreement, plaintiff requested a second loan modification as he believed the fixed rate of 8.5% beginning in the third year was unreasonable and usurious. The process of attempting to obtain a second loan modification was a long and frustrating one. Plaintiff first requested a second loan modification on June 1, 2010. Plaintiff applied for a loan modification on multiple occasions. He was variously told that his applications were in the final stages of review, that he needed to submit additional documents (some of which he had repeatedly submitted), and that his applications would be approved. Each of his applications was ultimately rejected. Plaintiff was told that his applications were rejected because the amount of forbearance was too great, because certain requirements were not met, because his property had a negative net present value, and because he had not provided defendant with sufficient documentation.

On May 5, 2011, plaintiff called defendant and was told that he was back in the loan modification program and that he should submit his May 2011 loan payment but should withhold his payment for June 2011 (the month his interest rate was scheduled to increase to 8.5%). Defendant told him that he was in the probationary period and that he would receive a new reduced mortgage amount. On May 15, 2011, plaintiff called to check on the status of the loan modification and was again told that he should withhold payment in June. On June 17, 2011, defendant reassured plaintiff that he would receive a new interest rate soon and that he did not need to submit any money at that point. On June 20, 2011, plaintiff received a letter stating that he was delinquent on his account. Plaintiff called defendant and was again reassured that everything was okay. Plaintiff placed his June and July mortgage payments into his savings account. On July 19, 2011, plaintiff again contacted defendant to inquire about his new interest rate and was told that his loan modification had been denied because he was delinquent on his account. Plaintiff requested that they ensure the delinquency did not impact his credit as defendant had requested he not make the loan payments.

Plaintiff again requested a loan modification and was repeatedly told that he had not submitted all documents, despite his having submitted them numerous times. His applications were again rejected. On April 7, 2012, plaintiff was told that he had submitted sufficient documentation and that his requested modification was in the final stages of review. On May 21, 2012, plaintiff received a letter stating that his modification request had been denied because defendant had sold his loan to U.S. Bank.

Since initiating this lawsuit, plaintiffs house was foreclosed upon by U.S. Bank. While attempting to secure a loan modification with U.S. Bank, he was told that he was ineligible for a modification because he had been delinquent on his account with defendant.


Plaintiff now pursues eight claims for relief against defendant. Plaintiff asserts claims for common law indemnity, breach of contract, conspiracy, fraud, estoppel, negligence, negligent misrepresentation, and intentional misrepresentation. Defendant moves to dismiss all claims and requests dismissal with prejudice. Plaintiff acknowledges that with respect to many of his claims, he has failed to properly plead the necessary elements for a successful claim. Plaintiff requests leave to file an amended complaint curing ...

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