NOT RECOMMENDED FOR FULL
- TEXT PUBLICATION 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

. ) ) ) ) ) ) ) ) ) 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, t he Neffs fell behind in their mortgage payments and requested a loan modification from Flagstar

. Compounding th ese financial difficulties , Tim Neff injured his back at work the following month and began recei ving workers’ compensation benefits at a fraction of his regular salary

.

* The Ho norable 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 document s from the Neffs in support of the ir modi fication application, which they supplied

. The Neffs offer evidence th at 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 w as] receiving temporary total as opposed to a permanent disability payment.” T he Neffs owed over $150,000 on the loan, and Flagstar offered them a temporary forbearance on the c ondition 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 inform ation 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 Ne ff asserts that he ph oned the bank in response to the letter and that an employee assured him h e 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 t o hire an attorney or answer the complaint. In June, the state court granted Flagstar’s motion for a default judgment and sche duled the sheriff’s sale for early December. The Neffs state that , despite the letter rejecting their application for a modification, the ba nk continued to assure them it was still working diligently on a modification throug hout this period.Case No. 14

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- A few weeks before the sale date, Flagstar sent a letter denying the Neffs’ updated application, citing a nother failure to provid e the necessary documentation. At roughly the same time, the Neffs learned of the sheriff’s sale and sought legal counsel. Through their attorney , t he Neffs moved for relief from the default judgment. But t he sale proceeded as scheduled, and the state court issued a one

- sentence order overruling the Neffs’ motion sever al 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 T he 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 summar y judgment on the fraud and promissory estoppel claims , which the court granted. The court found the Neffs’ c laims precluded by the
state

- court default judgment and the Neffs’ failure to appeal the denial of the ir 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, Matsushi ta Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587 (19 86) , 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)

.

1 Although 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 a dvance d that claim in any briefing. The Neffs do not challenge this ruling on appeal

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- Alth ough 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 m odify the loan as well as the Neffs’ need for an attorney in the foreclosure action. The y reason that , absent these misrepresentations, they w ould have prevented the sale of their home by defend ing the foreclosure action or paying the outstanding balance on their loan

. First, t his argument presumes that the Neffs could have successfully defended the foreclosure action with the assistance of counsel , a presumption the ir 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 an d 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 T elxon Corp. v. Smart Media of Del., Inc. , Nos. 22098, 22099, 2005Case No. 14

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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, t he 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 insubsta ntial 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 pr oximate cause of their alleged injury

. See Roark v. Rydell , 881 N.E.2d at 343. The same rationale applies to the promissory estoppel claim. T he 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.