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File Name: 15a0441n.06

Case No. 14-3837

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

TIM L. NEFF; BOBBIE K. NEFF,

Plaintiffs-Appellants,

v.

FLAGSTAR BANK, FSB,

Defendant-Appellee.

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ON APPEAL FROM THE UNITED 

STATES DISTRICT COURT FOR 

THE SOUTHERN DISTRICT OF 

OHIO

BEFORE: MOORE and COOK, Circuit Judges; COHN, District Judge.*

COOK, Circuit Judge. This is the second appeal stemming from Flagstar Bank, FSB’s 

foreclosure of Tim and Bobbie Neff’s home. See Neff v. Flagstar Bank, FSB, 520 F. App’x 323 

(6th Cir. 2013). The Neffs allege that Flagstar induced them to forgo hiring counsel to defend 

against foreclosure by repeatedly promising them it would modify their loan. The district court 

granted summary judgment to Flagstar, and we AFFIRM.

In September 2009, the Neffs fell behind in their mortgage payments and requested a 

loan modification from Flagstar. Compounding these financial difficulties, Tim Neff injured his 

back at work the following month and began receiving workers’ compensation benefits at a 

fraction of his regular salary.

 

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The Honorable Avern L. Cohn, Senior United States District Judge for the Eastern

District of Michigan, sitting by designation.
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During the next year and a half, Flagstar solicited financial documents from the Neffs in 

support of their modification application, which they supplied. The Neffs offer evidence that the 

bank led them to believe it would modify their loan to a payment structure they could afford. 

Flagstar counters that it never guaranteed the Neffs a modification. Tim Neff acknowledged in 

his deposition that a representative told him “that one of the issues that [the bank] was having 

with modification . . . [was] that [he was] receiving temporary total as opposed to a permanent 

disability payment.” The Neffs owed over $150,000 on the loan, and Flagstar offered them a 

temporary forbearance on the condition they make four reduced payments and supply all 

requested documentation.

In December 2010, the Neffs failed to send a tax document required under the

forbearance agreement, and the bank told them it would not modify their loan based on the 

information they supplied. The Neffs executed the forms and sent them to Flagstar. Soon after, 

Flagstar’s attorney sent a letter warning the Neffs that they were in default and the bank intended 

to commence foreclosure proceedings. Tim Neff asserts that he phoned the bank in response to 

the letter and that an employee assured him he would not need legal counsel for the impending 

foreclosure action because Flagstar could “do everything an attorney could do” at no cost and 

that foreclosure was “a formality.”

In January 2011, Flagstar filed a foreclosure action in the Knox County Court of 

Common Pleas, and the Neffs—allegedly relying on Flagstar’s assurances—declined to hire an 

attorney or answer the complaint. In June, the state court granted Flagstar’s motion for a default 

judgment and scheduled the sheriff’s sale for early December. The Neffs state that, despite the 

letter rejecting their application for a modification, the bank continued to assure them it was still 

working diligently on a modification throughout this period. 
Case No. 14-3837

Neff, et al. v. Flagstar Bank, FSB

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A few weeks before the sale date, Flagstar sent a letter denying the Neffs’ updated 

application, citing another failure to provide the necessary documentation. At roughly the same 

time, the Neffs learned of the sheriff’s sale and sought legal counsel. Through their attorney, the 

Neffs moved for relief from the default judgment. But the sale proceeded as scheduled, and the 

state court issued a one-sentence order overruling the Neffs’ motion several months later. 

After the sale but before the denial of their Rule 60(B) motion, the Neffs sued Flagstar in 

federal district court, alleging violations of the Fair Debt Collection Practices Act, fraudulent 

misrepresentation, and promissory estoppel.1 The court dismissed the FDCPA claim under Rule 

12(b)(6) of the Federal Rules of Civil Procedure, but permitted discovery on the state-law claims. 

The Neffs do not challenge the dismissal of their FDCPA claim.

Following discovery, Flagstar moved for summary judgment on the fraud and promissory 

estoppel claims, which the court granted. The court found the Neffs’ claims precluded by the 

state-court default judgment and the Neffs’ failure to appeal the denial of their Rule 60(B) 

motion. The Neffs timely appeal.

We review the district court’s grant of summary judgment de novo. Gargallo v. Merrill 

Lynch, Pierce, Fenner & Smith, Inc., 918 F.2d 658, 660 (6th Cir. 1990). We construe all 

reasonable inferences in favor of the nonmoving party, Matsushita Elec. Indus. Co. v. Zenith 

Radio Corp., 475 U.S. 574, 587 (1986), and uphold the grant of summary judgment if “there is 

no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of 

law,” Fed. R. Civ. P. 56(a). 

 

1Although the complaint includes a claim for “Breach of Contract and Promissory 

Estoppel,” the district court construed this as a claim only for promissory estoppel because it 

found the Neffs neither alleged facts supporting a breach of contract nor advanced that claim in 

any briefing. The Neffs do not challenge this ruling on appeal.
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Although the district court judged the Neffs’ claims precluded, Flagstar presses us to 

affirm because the Neffs offer no evidence that they suffered any harm as a result of the bank’s 

conduct. See Olympic Holding Co. v. ACE Ltd., 909 N.E.2d 93, 101 (Ohio 2009) (“[T]he party 

claiming the [promissory] estoppel must have relied on conduct of an adversary in such a manner 

as to change his position for the worse.” (citation omitted)); Roark v. Rydell, 881 N.E.2d 333, 

343 (Ohio Ct. App. 2007) (listing causation and harm as elements of fraud). We agree and 

affirm on this alternative ground. See Airline Prof’ls Ass’n of Int’l Bhd. of Teamsters v. 

Airborne, Inc., 332 F.3d 983, 986 n.3 (6th Cir. 2003) (“It is well-established that a prevailing 

party may assert in a reviewing court any ground in support of his judgment, whether or not that 

ground was relied upon or even considered by the trial court.” (citation and internal quotation 

marks omitted)).

The Neffs allege that Flagstar misrepresented its willingness to modify the loan as well as 

the Neffs’ need for an attorney in the foreclosure action. They reason that, absent these 

misrepresentations, they would have prevented the sale of their home by defending the

foreclosure action or paying the outstanding balance on their loan. First, this argument presumes 

that the Neffs could have successfully defended the foreclosure action with the assistance of 

counsel, a presumption their own evidence undermines. When asked how an attorney would 

have improved their lot, Tim Neff cited the many solicitations he received from attorneys 

promising to save his home and speculated that one of these “could have worked with Flagstar 

and got a remodification of the loan.” But the Neffs identify no legal defense or other leverage 

to bargain with; they entered default before requesting a modification, they had no way to make 

their payments without a modification, and they recognized that Flagstar’s best offer might still 

prove unaffordable. See Telxon Corp. v. Smart Media of Del., Inc., Nos. 22098, 22099, 2005 
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WL 2292800, at *36 (Ohio Ct. App. Sept. 21, 2005) (“[C]onsequential damages are severely 

limited by concepts such as proximate cause, foreseeability, mitigation, remoteness and 

speculation.”).

Alternatively, the Neffs suggest that they “could have used their tax refunds to cure the 

default” or “applied for state or federal funds to reinstate or modify their loan.” But the evidence 

they point to shows that their tax refunds were too insubstantial to cure the default. And they 

offer no evidence of their ability to obtain state or federal funding. If the Neffs could not assert a 

colorable defense in the state court or otherwise stave off foreclosure, then Flagstar’s statements 

were not the proximate cause of their alleged injury. See Roark v. Rydell, 881 N.E.2d at 343.

The same rationale applies to the promissory estoppel claim. The Neffs argue that they 

detrimentally relied on Flagstar’s promise to provide a modification or a second temporary 

forbearance plan. But as the facts above show, the Neffs had no alternative to a modification or 

forbearance and therefore did not “change [their] position for the worse” due to Flagstar’s 

promise. Olympic, 909 N.E.2d at 101. Thus, the Neffs failed to demonstrate that there exists a 

genuine dispute of fact as to whether they suffered any harm as a result of Flagstar’s conduct. 

See Fed. R. Civ. P. 56(c)(1).

We AFFIRM the judgment.