United States District Court, E.D. Michigan, Southern Division
OPINION & ORDER DENYING DEFENDANT CITIMORTGAGE,
INC.'S MOTION TO DISMISS (DKT. 19)
A. GOLDSMITH United States District Judge.
a breach of contract case arising out of Defendant
CitiMortgage, Inc.'s (“CMI”) foreclosure of
Plaintiff Dominick Gray's home. Gray filed an amended
complaint on September 16, 2016 (Dkt. 18), and CMI filed a
motion to dismiss in lieu of an answer (Dkt. 19). For the
reasons discussed below, CMI's motion is denied.
defaulted on his mortgage in 2010. In August 2013, Gray filed
his first lawsuit in connection with his mortgage, see
Gray v. CitiMortgage, 13-13415 (E.D. Mich.), alleging
violations of RESPA, breach of contract, defamation of title,
fraud, and other state-law claims. That case settled. In
November 2014, Gray filed his second lawsuit in connection
with his mortgage, see Gray v. CitiMortgage,
14-14306 (E.D. Mich.), alleging breach of contract and
seeking injunctive relief. In that lawsuit, Gray claimed that
CMI had breached the terms of the settlement agreement in the
2013 case by failing to negotiate a loan modification - as
required by the 2013 settlement agreement - in good faith.
That case, too, settled, and, again, a settlement agreement
(the “Agreement”) required Defendant to (i)
review Plaintiff for a loan modification and, if Plaintiff
qualified, (ii) modify the loan. See Am. Compl.
¶ 6 (Dkt. 18). The Agreement appears in the record as an
exhibit to Gray's state-court motion for a temporary
restraining order, which motion is CMI's Exhibit C to its
Notice of Removal. See Pl. State Ct. Mot. for TRO,
Ex. C to Notice of Removal, at 13-17 (cm/ecf pages) (Dkt.
to the November 20, 2015 execution of the Agreement,
Gray's property was sold at a sheriff's sale on
January 13, 2015. See Def. Br. at 1.
instant case alleges breach of contract and requests
injunctive relief and specific performance in addition to
money damages. That settlement agreement contained the
Borrower understands and acknowledges that a loan
modification review may result in a denial even if Borrower
returns all required documents timely and in a completed
form. If the modification review results in a denial, a
denial letter will be generated and foreclosure and/or
eviction proceedings will resume. Borrower understands and
acknowledges that a denial due to Borrower's failure to
qualify for a loan modification and the resumption of
foreclosure and/or eviction proceedings is not a breach of
See Def. Br. at 2. Gray submitted his loan
modification application package. On March 9, 2016, CMI
informed Gray that he had been denied a loan modification
because (i) his current monthly household expenses -
including the principle plus interest, plus property taxes,
insurance premiums, and “homeowner's dues” -
was less than or equal to 31% of his gross monthly income;
and (ii) Gray's loan had become “60 or more days
delinquent and was modified within the last 12 months.”
Am. Compl. ¶ 9. Gray filed this lawsuit in Oakland
Circuit Court on March 25, 2016, and Defendants removed to
this Court on April 8, 2016 (Dkt. 1).
STANDARD OF DECISION
motion to dismiss pursuant to Rule 12(b)(6), “[t]he
defendant has the burden of showing that the plaintiff has
failed to state a claim for relief.” Directv, Inc.
v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (citing
Carver v. Bunch, 946 F.2d 451, 454-455 (6th Cir.
1991)). Such a motion “should not be granted unless it
appears beyond doubt that the plaintiff can prove no set of
facts in support of his claim which would entitle him to
relief.” Id. The plausibility standard
requires courts to assume that all the alleged facts are
true, even when their truth is doubtful, and to make all
reasonable inferences in favor of the plaintiff.
Twombly, 550 U.S. 544, 555-556 (2007); In re NM
Holdings Co., LLC, 622 F.3d 613, 618 (6th Cir. 2010).
The complaint “does not need detailed factual
allegations.” Twombly, 550 U.S. at 555;
see also Erickson v. Pardus, 551 U.S. 89, 93 (2007)
(“specific facts are not necessary”). It needs
only enough facts to suggest that discovery may reveal
evidence of illegality, even if the likelihood of finding
such evidence is remote. Twombly, 550 U.S. at 556.
Evaluating a complaint's plausibility is a
“context-specific task that requires the reviewing
court to draw on its judicial experience and common
sense.” Ashcroft v. Iqbal, 556 U.S. 662, 679
chief argument is that Gray conceded that a proper loan
modification review had taken place, and that, under the
disclaimer in the Agreement quoted above, no modification was
guaranteed. See Def. Br. at 6 (“[i]t is
undisputed that CMI reviewed [Gray] for a loan
application”). Gray did not concede this, however. In
support of this assertion, CMI cites paragraph 9 of the
amended complaint, but that paragraph merely recounts some
contents of the rejection letter that CMI sent to Gray.
See Am. Compl. ¶ 9. Gray's claims are that
the Agreement required a modification to be considered, in
good faith, according to CitiMortgage's standard
procedures and that whatever “review” occurred
resulted in a denial due to either bad faith or incompetence.
The amended complaint cannot be fairly read to concede that
CMI conducted the loan modification review that was promised
by the Agreement.
CMI's two alternative reasons for denying Gray's loan
modification application was that his housing debt did not
exceed 31% of his gross income. See Am. Compl.
¶ 9(a). On this point, Gray alleges that his monthly
housing expense in fact exceeded 31% of his gross income,
id. ¶ 10; that CMI “knowingly
inflated” his income “for the sole purpose of
denying him a loan modification, ” id. ¶
11; that CMI “knowingly lowered [his] monthly payment
by approximately $300.00 for the sole purpose of denying him
a loan modification, ” id. ¶ 13; that CMI
“knowingly considered data that was false, which
inflated [his] gross income and lowered [his] monthly
payment, ” id. ¶ 16; and, finally, that
he did, in fact, qualify for a loan modification under
CMI's criteria, id. ¶ 18.
argues that these pleadings are insufficient because Gray
fails to identify his specific monthly income, his exact
monthly housing expenses, or how CMI's calculations are
incorrect. See Def. Br at 7-8. This, claims CMI, is
an insufficient, “unadorned,
Id. (quoting Twombly, 550 U.S. at 555). But
CMI did not provide any case law relating to the context