Opinion ID: 4024319
Heading Depth: 2
Heading Rank: 1

Heading: The plaintiffs sufficiently allege a promise.

Text: A plaintiff asserting promissory estoppel must ultimately establish that the defendant made a “clear and unambiguous” promise. G & A Land, LLC v. City of Brighton, 233 P.3d 701, 704 (Colo. App. 2010) (quoting Hansen v. GAB Bus. Servs., Inc., 876 P.2d 112, 114 (Colo App. 1994)). Here, the plaintiffs allege that BOA clearly and unambiguously promised, on its website and in TPP documents, that it would provide permanent HAMP loan modifications to eligible borrowers who complied with TPPs. Specifically, the plaintiffs allege that BOA’s website indicated, “If you successfully make your payments during the 3-month trial period, and the documentation provided supports the initial review, we will sign off and your modification will become permanent.” App. 93 (emphasis omitted).7 7 The plaintiffs incorporate screenshots of the BOA website and refer in the first amended complaint to TPP document provisions, but the plaintiffs don’t attach 28 Further, the plaintiffs allege BOA made the same promises to George in June 2010 and to the Leavitts in March 2012, when BOA sent them TPP documents. Specifically, the plaintiffs assert that BOA sent George a cover letter promising, After you successfully complete your [TPP] by making timely payments and returning the [TPP] Agreement, we will send you additional documents. These documents will include a Partial Claim and FHA-Home Affordable Modification Agreement that you will need to sign and return before your loan will be permanently modified. Id. at 137. The plaintiffs allege BOA sent the Leavitts a similar cover letter promising, “After you successfully complete your [TPP] by making timely payments and returning the Trial Period Plan Agreement, we will send you documentation that describes all of the terms of your permanent loan modification.” Id. at 131. BOA also sent George and the Leavitts TPP agreements which indicated in Section 1, If I am in compliance with this [TPP] (the “Plan”) and my representations in Section 1 continue to be true and correct in all material respects, then the Servicer will provide me with a Partial Claim and FHA-Home Affordable Modification Agreement (“Modification Agreement”), as set forth in Section 3, that would bring my loan current and amend and supplement (1) the Mortgage or Deed of Trust on the Property, and (2) the Note secured by the Mortgage or Deed of Trust. Id. at 186, 194. In turn, Section 3 of both TPP agreements stated, in part: any TPP documents to the complaint. But because those documents are included in the appellate record and BOA doesn’t dispute their authenticity, we may consider them. See Toone v. Wells Fargo Bank, N.A., 716 F.3d 516, 521 (10th Cir. 2013) (pointing out that the court may consider, in evaluating a Rule 12(b)(6) motion, “documents referred to in the complaint [and] central to the plaintiff’s claim [if] the parties do not dispute the documents’ authenticity” (quoting Gee v. Pacheo, 627 F.3d 1178, 1186 (10th Cir. 2010))). 29 If I comply with the requirements in Section 2 and my representations in Section 1 continue to be true and correct and fulfill all my obligations in Section 4, the Servicer will send me a Partial Claim, which will cure my default, and Modification Agreement for my signature, which will modify my Loan Documents as necessary to reflect this new payment amount and waive any unpaid late charges accrued to date. Id. at 188, 196. At least three of our sister circuits have found nearly identical language in TPP documents sufficiently clear to constitute an enforceable promise. See, e.g., Corvello v. Wells Fargo Bank, N.A., 728 F.3d 878, 880-85 (9th Cir. 2013) (reversing Rule 12(b)(6) dismissal of promissory estoppel and breach of contract claims); Young v. Wells Fargo Bank, N.A., 717 F.3d 224, 234, 242 (1st Cir. 2013) (vacating Rule 12(b)(6) dismissal of breach of contract claim); Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 554, 558, 561-63 (7th Cir. 2012) (reversing Rule 12(b)(6) dismissal of promissory estoppel and breach of contract claims). The district court acknowledged Wigod, Corvello, and Young. But it suggested that other circuits have reached the opposite conclusion, generating a circuit split. See App. 266-68 (citing Bloch v. Wells Fargo Home Mortg., Inc., 755 F.3d 886 (11th Cir. 2014); Freitas v. Wells Fargo Home Mortg., Inc., 703 F.3d 436 (8th Cir. 2013); DeLuca v. CitiMortgage, 543 F. App’x 194 (3d Cir. 2013) (unpublished); Miller v. Chase Home Fin., LLC, 677 F.3d 1113 (11th Cir. 2012); Pennington v. HSBC Bank USA, N.A., 493 F. App’x 548 (5th Cir. 2012) (unpublished)). Relying on some of these cases, the district court interpreted the TPP documents here as conditional because they contain language indicating that the TPP 30 itself did not modify the loan, that BOA retained discretion to decline the plaintiffs’ requests for modifications if they failed to comply with the TPPs, and that BOA alternatively retained discretion to determine whether the plaintiffs complied with the TPPs. The district court reasoned that this qualifying language undermined the plaintiffs’ allegations that the TPP documents contain clear and unambiguous promises to provide permanent loan modifications. Initially, we agree with the plaintiffs that the district court erred in suggesting the existence of a circuit split on this issue.8 Instead, our examination of the cases the district court relied on reveals that other circuits have declined to find clear and unambiguous promises when considering documents or circumstances that differ significantly from those present in Wigod, Corvello, and Young. See Bloch, 755 F.3d at 889 (concluding that letter stating plaintiffs “might be eligible for trial modification under HAMP” was not a binding promise to provide permanent HAMP loan modification); Freitas, 703 F.3d at 440-41 (affirming dismissal of promissory estoppel claim without citing or analyzing any specific TPP language when plaintiff admitted that bank never provided a consistent answer regarding loan modification); Miller, 677 F.3d at 1116-17 (rejecting promissory estoppel claim based on defendant’s alleged promise to permanently modify loan because plaintiff’s allegations suggested defendant only promised to temporarily modify terms of loan); 8 That being said, the district court’s rationale is consistent with that of several other district courts. See Sutcliffe v. Wells Fargo Bank, N.A., 283 F.R.D. 533, 549-50 (N.D. Cal. 2012) (collecting cases and noting split of authority among district courts as to whether TPP documents create an enforceable contract for a permanent loan modification). 31 Pennington, 493 F. App’x at 551, 556 (affirming dismissal of promissory estoppel claim because bank conditioned statement that plaintiff would be approved on her inability to make loan payments; noting that plaintiff’s reliance on conditional promise was “especially improper” because she admitted in her complaint that she had the financial ability to make her payments). And while the remaining case the district court relied on generally supports the district court’s rationale, the opinion also expressly disavows that it has any precedential value. See DeLuca, 543 F. App’x at 196-97 (relying on qualifying language in TPP documents to reject promissory estoppel claim but explicitly stating in body of opinion that opinion lacks any precedential value and was written “only for the parties”). In sum, the cases the district court characterized as reaching the opposite conclusion regarding the existence of a promise rely on decidedly different facts than those in Wigod, Corvello, and Young. Moreover, we find the reasoning of Wigod, Corvello, and Young persuasive. Notably, in all three of those cases the courts analyzed language nearly identical to language in the TPP documents that BOA sent to the Leavitts and George. And all three courts rejected the specific argument BOA makes here—that it made no clear and unambiguous promises in TPP documents because conditional language in the TPP documents provided that BOA “remained free to decline to offer permanent modifications” (1) if the plaintiffs failed to satisfy TPP requirements or (2) if the plaintiffs’ representations concerning their eligibility didn’t remain “true and correct in all material respects.” BOA Br. 35. See Corvello, 728 F.3d at 883 (rejecting defendant’s argument that conditional language in TPP 32 document could “convert a purported agreement setting forth clear obligations into a decision left to the unfettered discretion of the loan servicer”); Young, 717 F.3d at 235 (rejecting defendants’ interpretation of TPP agreement as conditional because that interpretation “would permit [defendants] to exercise an unfettered right to withhold a permanent modification offer for an uncertain period of time after the modification effective date has passed, thereby erasing the benefits to the plaintiff of her compliance with the TPP”); Wigod, 673 F.3d at 565 (stating that while bank may have retained “some limited discretion to set the precise terms of an offered permanent modification, it was certainly required to offer some sort of good-faith permanent modification”). Similarly, we conclude that the language in BOA’s TPP documents clearly and unambiguously promises to provide permanent HAMP loan modifications to borrowers who comply with the terms of their TPPs. And this is true regardless of whether those TPP documents state that promise inversely—i.e., that if the borrowers fail to comply with TPP terms, BOA will not modify the loan. Moreover, the fact that the TPP further requires the borrower to sign a modification agreement before BOA will permanently modify the loan does not render BOA’s promise to modify the loan if the borrower complies with all other TPP terms any less clear. Thus, we conclude the plaintiffs plausibly allege that BOA made clear and unambiguous promises—in TPP documents and on its website—to provide permanent HAMP loan modifications for eligible borrowers who complied with TPPs. 33 B. The plaintiffs sufficiently allege reasonable and detrimental reliance. Because it found no clear and unambiguous promises in TPP documents, the district court didn’t consider BOA’s arguments that the plaintiffs’ factual allegations failed to support the remaining elements of their promissory estoppel claim. On appeal, BOA renews only its argument that the plaintiffs didn’t sufficiently plead reasonable and detrimental reliance. Exercising de novo review, we consider this argument to determine whether we can affirm the district court’s dismissal of the promissory estoppel claim on a ground other than the one cited by the district court. See GF Gaming Corp., 405 F.3d at 881-82 (noting we may affirm a district court’s Rule 12(b)(6) dismissal on any ground sufficiently supported by the record). The plaintiffs allege they reasonably relied to their detriment on BOA’s promise to provide a permanent loan modification and that BOA could reasonably foresee their reliance. Specifically, the plaintiffs allege the Leavitts and George complied with the terms of their TPPs by making lower mortgage payments and by fulfilling other requirements. And they point out that BOA eventually sent permanent loan modification offers to the Leavitts and George. According to the plaintiffs, this indicates BOA determined that (1) the plaintiffs were eligible for permanent modifications and (2) they complied with the terms of their respective TPPs. Nevertheless, BOA didn’t permanently modify the plaintiffs’ loans. Instead, according to the plaintiffs, after the Leavitts returned their signed and notarized modification documents, BOA sold the Leavitts’ loan to another servicer in 34 November 2012 without reflecting any modification. Similarly, George returned his signed and notarized modification documents in March 2013. But the plaintiffs allege that as of August 2013, BOA continued to send George “false and often conflicting information . . . regarding the status of [his] loan, and any modification.” App. 141. Because BOA never permanently modified their loans, the plaintiffs allege the lower payments they made in reliance on BOA’s promise and in compliance with their obligations under the TPPs resulted in longer payoff times, higher principal balances, increased accrued interest, and additional charges and fees related to delinquency and default.9 Relying on Pennington v. HSBC Bank USA, N.A., 493 F. App’x 548 (5th Cir. 2012) (unpublished), BOA reasserts that even if it made promises in TPP documents, it “expressly conditioned [those promises] upon [plaintiffs’] compliance with TPP requirements and [plaintiffs’] representations remaining true and correct throughout the trial period.” BOA Br. 40-41. Thus, BOA maintains, it was unreasonable for the plaintiffs to rely on those conditional promises. But we’ve rejected BOA’s argument that it made no clear and unambiguous promises. And, in any event, Pennington doesn’t support BOA’s argument. There, the court found it unreasonable for the 9 Based on the plaintiffs’ first amended complaint, it doesn’t appear that BOA sent the same TPP documents to the fourth plaintiff, Darrell Dalton. But the plaintiffs allege BOA made similar promises to Dalton, both orally and in writing, and that Dalton repeatedly entered into and complied with the terms of his TPPs in his attempt to obtain an “internal modification” rather than a HAMP loan modification. App. 146. They further allege Dalton relied on BOA’s promises and suffered the same injuries as the other plaintiffs. Despite some distinctions between Dalton’s and the other plaintiffs’ interactions with BOA, our analysis and conclusions regarding the promissory estoppel claim apply equally to all of the plaintiffs. 35 plaintiff to rely on any bank promise to modify her loan because she admitted in her complaint that she never fell behind on mortgage payments before applying for a permanent HAMP loan modification. Consequently, she wasn’t eligible for modification. Id. at 551, 556. Even if we agreed with that rationale, it wouldn’t apply here; the plaintiffs allege that BOA sent them modification agreements after the plaintiffs complied with the terms of their TPPs, thereby confirming the plaintiffs’ eligibility for permanent loan modifications. Relying again on Pennington, BOA argues that the plaintiffs can’t show detrimental reliance simply by asserting they made payments under their TPPs because the plaintiffs already were obligated to make even higher payments under their original mortgage terms. See Pennington, 493 F. App’x at 557 (concluding that plaintiff’s payment of lower TPP payments didn’t demonstrate detrimental reliance because those payments “were just applied to the loan”). But even if we were to find persuasive Pennington’s conclusion that it is insufficient for plaintiffs to claim detrimental reliance based on making lower payments to comply with TPPs, the plaintiffs allege more than that here. As noted, the plaintiffs allege that their decision to comply with their TPP obligations by submitting lower payments also resulted in “longer loan payoff times, higher principal balances, improper negative reporting to credit bureaus,” and various improperly assessed and unnecessary fees, charges, and costs. App. 166. Again, we find Wigod’s reasoning persuasive. Like the plaintiffs here, the plaintiff in Wigod alleged that her mortgage servicer unambiguously promised to 36 permanently modify her loan if she complied with the terms of her TPP. And, like the plaintiffs here, the plaintiff in Wigod also alleged “that she relied on that promise to her detriment by foregoing the opportunity to use other remedies to save her home . . . and by devoting her resources to making the lower monthly payments under the TPP Agreement rather than attempting to sell her home or simply defaulting.” Wigod, 673 F.3d at 566. The Seventh Circuit found the plaintiff’s allegations sufficiently alleged reasonable and detrimental reliance, reasoning, “A lost opportunity can constitute a sufficient detriment to support a promissory estoppel claim.” Id. We agree. Taking all of their allegations as true, we conclude that the plaintiffs sufficiently allege that they reasonably relied on BOA’s unambiguous promises and consequently lost opportunities to pursue other remedies. Ultimately, the plaintiffs allege their compliance with their individual TPPs, along with BOA’s failure to follow through on its promises to permanently modify their loans, left plaintiffs in worse financial positions relative to their mortgages. Under these circumstances, we further conclude that the plaintiffs sufficiently allege reasonable and detrimental reliance and that their allegations, as a whole, “present a facially plausible claim of promissory estoppel.” Wigod, 673 F.3d at 566. Accordingly, we reverse the district court’s dismissal of that claim.