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Marie Gaudin v. Saxon Mortgage Services

November 17, 2011

MARIE GAUDIN,
PLAINTIFF,
v.
SAXON MORTGAGE SERVICES, INC.
DEFENDANTS.



The opinion of the court was delivered by: Richard Seeborg United States District Judge

*E-Filed 11/17/11*

ORDER DENYING MOTION TO DISMISS AMENDED COMPLAINT

In this putative class action, named plaintiff Marie Gaudin alleges that she and defendant Saxon Mortgage Services, Inc. entered into a written "Home Affordable Modification Trial Period 19

Plan" ("the TPP"). Gaudin contends the TPP constituted a binding contract under which Saxon had 20 the duty to evaluate her under the Homeowners Affordable Modification Program ("HAMP") and to 21 offer her a permanent modification of the terms of her home mortgage agreement, in the event all 22 the conditions of the TPP were satisfied. Gaudin contends that after she relied on the TPP to make 23 reduced monthly payments during the trial period, Saxon wrongfully rejected her for a permanent 24 modification, declared her loan in default, and initiated foreclosure proceedings. 25

Saxon moved to dismiss Gaudin's original complaint, contending, among other things, that

26 the TPP gave rise to no legally enforceable obligations on its part, or at least to no obligation that 27

Gaudin has alleged was breached. The motion was granted on the narrow ground that Gaudin had 28 not averred that all of the conditions under the TPP had been satisfied, even assuming it otherwise was an enforceable contract. Gaudin then filed an amended complaint, expressly alleging 2 satisfaction of the TPP conditions. Saxon again moves to dismiss, reasserting its contentions that 3 the TPP was not a binding contract, and arguing that the amendment is insufficient to cure the defect 4 identified in the prior order. Because the amendment adequately addresses the defects identified in 5 the prior order, the motion to dismiss will be denied. 6

1. The TPP provisions

Modification Trial Period Plan." Immediately below the title is a parenthetical stating, "Step One of 10 am in compliance with this Trial Period Plan (the "Plan") and my representations in Section 1 continue to be true in all material respects, then the Lender will provide me with a Home Affordable Modification Agreement . . . ." (Emphasis added.) The second paragraph continues, "I understand that after I sign and return two copies of this Plan to the Lender, the Lender will send me a signed 15 copy of this Plan, if I qualify for the Offer or will send me written notice that I do not qualify for the Offer. This plan will not take effect unless and until both I and the Lender sign it and Lender provides me with a copy of this Plan with the Lender's signature." (Emphasis added.) The TPP is 18 in fact signed by both Gaudin and the lender, thereby implying that the lender found Gaudin to be 19 qualified for a permanent loan modification. 20

21 provides: 22

Gaudin's TPP bears an "effective date" of June 1, 2009, and is titled, "Home Affordable Two-Step Documentation process." The first full paragraph of text provides, in relevant part, "if I

Paragraph 2 G of the TPP is also relevant to evaluating Saxon's potential obligations. It

I understand that the Plan is not a modification of the Loan Documents and that the

Loan Documents will not be modified unless and until (i) I meet all of the conditions required for modification, (ii) I receive a fully executed copy of the a Modification

agreement, and (iii) the Modification Effective Date has passed. I further understand and agree that the Lender will not be obligated ...


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