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Grande v. U.S. Bank National Association

United States District Court, W.D. Washington, Seattle

July 18, 2019

MARY LOU GRANDE, et al., Plaintiffs,


          Marsha J. Pechman United States District Judge.

         THIS MATTER comes before the Court on Defendants' Motion to Dismiss (Dkt. No. 15). Having reviewed the Motion, the Response (Dkt. No. 20), the Reply (Dkt. No. 22), and all related papers, the Court GRANTS in part and DENIES in part Defendants' Motion.


         This case involves a dispute over whether Plaintiffs entered into an agreement with Defendants to modify their loan payments in order to avoid foreclosure. In February 2007 the Plaintiffs, 79 year-old Mary Lou Grande and her son, Mark Grande, along with Ms. Grande's late husband Roderick Grande, borrowed $445, 320.00 to purchase their home in Snohomish County, where Roderick and Mary Lou planned to live out their retirement. (Dkt. No. 1, Ex. A (“Compl.”) at ¶¶ 1-2, 11.) But in November 2014, Roderick Grande died after a prolonged battle with cancer. (Id. at ¶ 21.) Ms. Grande struggled with the medical debt and fell behind on house payments, making her last full payment on March 1, 2015. (Id. at ¶¶ 21-22.)

         In May 2016, Defendant, Nationstar Mortgage LLC (“Nationstar”[1]), acting as attorney-in-fact for Defendant U.S. Bank National Association (“US Bank”), attempted to foreclose on the Property through a non-judicial foreclosure sale. (Id. at ¶¶ 23-24, 28.) In response, Plaintiffs hired an attorney to seek a loan modification and mediation pursuant to the Foreclosure Fairness Act (FFA), RCW 61.24.163. (Id. at ¶ 25.)

         1. The TPP and July Offer

         While the Parties were in mediation, Nationstar extended a trial period plan (“TPP”) offer to the Plaintiffs, requiring them to make three monthly mortgage payments at a modified rate, from April to June 2017, in order to qualify for a permanent loan modification. (Id. at ¶ 29.) The TPP offer included an explanation of the necessary steps for converting the TPP into a permanent loan modification:

Once you have successfully made each of your payments by their due dates, have submitted two signed copies of the modification agreement, and we have signed the modification agreement, our mortgage will be permanently modified in accordance with the terms of the modification agreement.

(Id. at ¶ 31; Dkt. No. 21, Ex. A at 5.) Plaintiffs completed the TPP by making three payments of $3, 264.94 through Nationstar's website. (Id. at ¶¶ 32-34.)

         On July 28, 2017 Nationstar sent the Plaintiffs an offer for a permanent loan modification, which they signed and returned to Nationstar. (Id. at ¶ 35.) Plaintiffs immediately attempted to make payments through Nationstar's website, as they had for the trial period payments, but could not. (Id. at ¶¶ 35-37.) Nationstar told the Plaintiffs that there was an issue with the paperwork on Nationstar's end, a new modification would be necessary, and payments could not be accepted until the modification paperwork was redone. (Id. at ¶¶ 38-39.) Nationstar also told both the Plaintiffs' attorneys and the mediator that “the reason for needing new docs to be generated was an error in the numbers on the new set.” (Id. at ¶ 40.) The following week, after the mediator sought clarification, Nationstar's attorney responded that the error was a typo that “does not impact the fundamental terms of the modification offer, i.e. interest rate, loan term, etc.” (Id. at ¶ 41.) The same day, Nationstar wrote to Plaintiffs:

Nationstar is not accepting payments while the mod[ification] is being booked, the borrower will want to keep the funds available for the September and October payments since the mod[ification] is still expected to book with September 1, 2017 as the start date.

(Id. at ¶ 42 (internal alteration removed).)

         2. The Other Offers

         On September 22, 2017, Nationstar sent Plaintiffs a new offer with the same terms as the July offer, but with a single change: Nationstar now referred to itself as Mr. Cooper. (Id. at ¶¶ 43-44.) The Plaintiffs accepted, signed, and returned the new paperwork. (Id. at ¶ 44.)

         On or about December 15, 2017 Nationstar sent a third modification to Plaintiffs, again with the same terms. (Id. at ¶¶ 48-52.) Both Plaintiffs' attorney and the FFA mediator asked Nationstar why another loan modification was necessary. (Id. at ¶ 54.) Nationstar responded that the modification was necessary because the Plaintiffs returned copies of the September loan modification paperwork, rather than the required “original docs.” (Id. at ¶ 54.) Plaintiffs signed and returned the December Loan Modification to Nationstar on or about January 28, 2018. (Id. at ¶ 57.) Nationstar then denied Plaintiffs' loan modification and closed their case. (Id. at ¶¶ 58-60.) Plaintiffs immediately requested a formal reinstatement of the loan modification. (Id. at ¶ 63.)

         On June 22, 2018, Plaintiffs sent Nationstar another letter, asserting they were willing and able to tender all payments due under the loan modification agreement, and again requesting that Nationstar allow Plaintiffs to reinstate the modification. (Id. at ¶ 66.) On September 28, 2018 Defendants ordered another Notice of Trustee's Sale on the Property, with a non-judicial foreclosure sale set for February 8, 2019. (Id. at ¶¶ 26, 72.)

         Plaintiffs then brought this action against Defendants in Snohomish County Superior Court, alleging claims for breach of contract, breach of good faith and fair dealing, violation of the Washington Consumer Protection Act, negligent misrepresentation, violation of the Equal Credit Opportunity Act (ECOA), and for the tort of outrage. ...

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