Summary
holding that the plaintiffs' allegations that the defendant told them that in order "to qualify for a loan modification they had to be delinquent in their mortgage payments, and instructed them . . . to make four mortgage payments at a reduced rate," was "specific to them" and, thus, not consumer-oriented
Summary of this case from Carrillo v. Wells Fargo BankOpinion
2014-06-12
Daniel SELLER, et al., Plaintiffs–Appellants, v. CITIMORTGAGE, INC., Defendant–Respondent.
Giskan Solotaroff Anderson & Stewart LLP, New York (Catherine E. Anderson of counsel), for appellants. Mayer Brown, LLP, Chicago, IL (Stephen J. Kane of the bar of the State of Illinois, admitted pro hac vice, of counsel), for respondent.
Giskan Solotaroff Anderson & Stewart LLP, New York (Catherine E. Anderson of counsel), for appellants. Mayer Brown, LLP, Chicago, IL (Stephen J. Kane of the bar of the State of Illinois, admitted pro hac vice, of counsel), for respondent.
ACOSTA, J.P., DeGRASSE, RICHTER, MANZANET–DANIELS, JJ.
Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered January 30, 2013, which, to the extent appealed from, granted defendant's motion to dismiss the cause of action alleging a violation of General Business Law § 349, unanimously affirmed, without costs.
The complaint fails to allege any of the elements of a General Business Law § 349 claim in connection with defendant's implementation of its private mortgage loan modification program ( see Lucker v. Bayside Cemetery, 114 A.D.3d 162, 174, 979 N.Y.S.2d 8 [1st Dept.2013] ). It alleges that defendant told plaintiffs that to qualify for a loan modification they had to be delinquent in their mortgage payments, and instructed them, since they were not at that time delinquent, to make four mortgage payments at a reduced rate. In so advising plaintiffs, defendant was not engaging in the requisite “consumer-oriented conduct” ( id.). The conduct was “specific to them” ( see Silverman v. Household Fin. Realty Corp. of New York, 979 F.Supp.2d 313, 318 [E.D.N.Y.2013] ); it had no “broader impact on consumers at large” ( see Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 25, 623 N.Y.S.2d 529, 647 N.E.2d 741 [1995] ).
As to the element of a materially misleading act or practice, plaintiffs allege that defendant told them that to qualify for a loan modification they had to be delinquent, but they do not allege that this representation was false, nor did they submit documentary evidence refuting it. Plaintiffs also allege that defendant said it would block negative credit reporting, but they do not allege that defendant reported their delinquency during the private loan modification application period.
While the adverse consequences of a negative credit report could constitute the requisite injury for a cause of action under General Business Law § 349, as indicated, plaintiffs do not allege that a negative credit report was issued.
The complaint also alleges that defendant violated General Business Law § 349 in connection with its processing of plaintiffs' application for a permanent loan modification under the federal Home Affordable Modification Program (HAMP). Initially, we conclude, as the motion court found, that plaintiffs waived this claim by stating at the hearing on defendant's motion that the cause of action was based on the alleged misrepresentations discussed above ( see e.g. Ward v. City of New York, 89 A.D.3d 532, 932 N.Y.S.2d 689 [1st Dept.2011] ). We note in any event that a cause of action under General Business Law § 349 alleging violations of HAMP rules and directives would constitute an impermissible “end run” around the absence of a private right of action under HAMP ( see Legore v. OneWest Bank, FSB, 898 F.Supp.2d 912, 918 [D.Md.2012];Valtierra v. Wells Fargo Bank, N.A., 2011 WL 590596, *4, 2011 U.S. Dist. LEXIS 18669, *13–14 [E.D.Cal.2011] ). Moreover, plaintiffs' allegations that defendant engaged in misleading practices in connection with HAMP are conclusively refuted by the “Home Affordable Modification Trial Period Plan.”