Friday, June 5, 2015

Promissory estoppel in loan-modification / foreclosure context


Plaintiffs seek a reliance remedy against JPMC based on the doctrine of promissory estoppel. A cause of action for promissory estoppel requires: (1) a promise by the defendant; (2) foreseeable and actual reliance on the promise by the plaintiff to his detriment; and (3) that enforcement of the promise be necessary to avoid an injustice. See "Moore" Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 937 (Tex. 1972);Ford v. City State Bank of Palacios, 44 S.W.3d 121, 139 (Tex. App.—Corpus Christi 2001, no pet.). "To support a finding of promissory estoppel, the asserted promise must be sufficiently specific and definite that it would be reasonable and justified for the promisee to rely upon it as a commitment to future action." Comiskey v. FH Partners, LLC, 373 S.W.3d 620, 635 (Tex. App.—Houston [14th Dist.] 2012, pet. denied) (internal quotation marks omitted). One federal court applying Texas law has held "that a promise that [a plaintiff's] loan modification was `under consideration' would not trigger the promissory estoppel doctrine." Stolts v. Wells Fargo Bank, NA, No. 1:13-CV-19, 2014 WL 3545464, at *3 n.4 (S.D. Tex. Jan. 16, 2014) (citing Addicks Servs., Inc. v. GGP-Bridgeland, LP, 596 F.3d 286, 300 (5th Cir. 2010)).
According to the Third Amended Complaint, JPMC promised not only that it would consider Plaintiffs' application, but that "there would be no non-judicial foreclosure until the loan modification process was completed and they were given a response and answer." This additional representation makes JPMC's promise sufficiently definite to support a plausible claim for promissory estoppel.
SOURCE: FIFTH CIRCUIT: Guajardo v. JP Morgan Chase Bank, NA, Court of Appeals, 5th Circuit Jan 12, 2015  

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