United States District Court, D. Oregon
OPINION AND ORDER
ANN AIKEN, District Judge.
Defendant, JP Morgan Chase Bank, moves for partial summary judgment against Plaintiffs pursuant to Fed.R.Civ.P. 56. For the reasons below, Defendant's motion is GRANTED in part and DENIED in part.
Plaintiffs originally held a mortgage for their residential home with Washington Mutual. In 2009, Plaintiffs defaulted on their loan, which had since been transferred to Defendant. The parties entered into a loan modification process with a trial period plan (TPP) to secure a loan modification agreement which, upon execution, would complete a refinancing of their mortgage. Plaintiffs made these TPP payments as required, and Defendant sent Plaintiffs a loan modification agreement with a deadline of November 24, 2009 to sign and return the agreement.
After several months, Defendant realized that its records did not show the agreement had been received from Plaintiffs. In the meantime, Plaintiffs had made mortgage payments in accordance with the modification agreement schedule. In March of 2010, Defendant informed Plaintiffs that its records did not show the agreement as received and sent Plaintiffs another copy of the original modification agreement. However, Defendant determined that the agreement provisions had lapsed and sent Plaintiffs a second loan modification agreement reflecting the terms of the first agreement. However, the loan balance in the second agreement was $7, 706.27 higher. Plaintiffs objected to the increase in balance and attempted to have the agreement reflect the mortgage balance in the first modification agreement. When Defendant declined to reduce the balance, Plaintiffs refused to sign the second agreement.
Between the completion of the TPP and Plaintiffs' refusal to sign the second loan modification, Defendant also requested various documents related to the loan modification process. According to Plaintiffs, at multiple times Defendant informed Plaintiffs that documents they provided were lost, misplaced, incomplete or never received and asked that these documents be resent; Defendant's request included the original loan modification and Plaintiffs' financial statements. Defendant also at one point asserted that Plaintiffs had not fully complied with the terms of the TPP.
In December 2010, Plaintiffs filed an action with this Court. Plaintiffs were granted leave to amend several times. Currently, their second amended complaint alleges: 1) a violation of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2605(f); 2) breach of contract; 3) breach of the implied covenant of good faith and fair dealing; 4) a violation of the Oregon Unlawful Trade Practices Act (UTPA), Or. Rev. Stat. § 646.608; and 5) common law fraud. Defendant now moves for partial summary judgment.
The court must grant summary judgment if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). An issue is "genuine" if a reasonable jury could return a verdict in favor of the non-moving party. Rivera v. Phillip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir. 2005) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A fact is "material" if it could affect the outcome of the case. Id. The court reviews evidence and draws inferences in the light most favorable to the non-moving party. Miller v. Glenn Miller Prods., Inc., 454 F.3d 975, 988 (9th Cir. 2006) (citing Hunt v. Comartie, 526 U.S. 541, 552 (1999)). When the moving party has met its burden, the nonmoving party must present "specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (quoting Fed.R.Civ.P. 56(e)).
Defendant moves for summary judgment on all but Plaintiffs' RESPA claim. Defendant argues that Plaintiffs' contractual claims fail because Plaintiffs cannot establish contract formation regarding the November 2009 modification proposal. Defendant also argues that Plaintiffs' UTPA and fraud claims fail because there is no evidence that Defendant made false or misleading statements to Plaintiffs regarding their loan modification application. Finally, Defendant argues that Plaintiffs' claim for punitive damages fails because Plaintiffs have not produced clear and convincing evidence that Defendant acted with malice or reckless and outrageous indifference as to Plaintiffs' loan. Defendant maintains that the Declaration of Janet Moynihan submitted in support of Plaintiffs' claims is impermissible hearsay and not relevant.
Plaintiffs respond that it is inappropriate for this Court to grant summary judgment as material issues of fact exist. Plaintiffs do not respond to the hearsay argument regarding to the Moynihan Declaration but argue there is a link between the Declaration and this case, thus making it relevant. As the Moynihan Declaration is cited throughout Plaintiffs' opposition, this Court will first decide this issue.
I. Declaration of Janet Moynihan
Courts may disregard evidence supporting a factual allegation if the evidence would not be admissible in court. See Fed.R.Civ.P. 56(c)(2). Ms. Moynihan's declaration essentially states that Chase management encouraged and fostered an atmosphere in which employees were to delay and encumber the loan modification process by losing, destroying or delaying paperwork and by providing misinformation to borrowers. Some declaration statements reflect the personal observations of Ms. Moynihan, such as her statement that the only fax machine in the San Diego office was constantly overloaded, causing delays as thousands of documents were required to be sent to it daily. Moynihan Decl. ¶ 7. Ms. Moynihan's declaration also includes statements from unnamed third parties regarding direct and indirect orders from Chase management. See, e.g., Moynihan Decl. ¶ 5i (Chase management instructed employees "to say whatever it took to make Chase look good").
Hearsay is an out of court statement offered to prove the truth of the matter asserted. Fed.R.Evid. 801(c). Here, the statements in the declaration are offered to prove the truth of the matter asserted by Plaintiffs: that Defendant willfully delayed Plaintiffs' loan modification process in an attempt to foreclose on Plaintiffs' home using these practices. Plaintiff failed to respond to Defendant's characterization of these statements as hearsay and does not assert a hearsay exception to support admission of these statements.
Defendant also argues that Ms. Moynihan's statements are not relevant. Rule 401 states that "[e]vidence is relevant if: (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action." Fed.R.Evid. 401. Ms. Moynihan's declaration is not relevant in this case because it fails to support Plaintiffs' specific allegations. Again, Plaintiffs allege that Defendant used ...