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Drena v. Bank of America, N.A.

United States District Court, D. Connecticut

December 27, 2017

BANK OF AMERICA, N.A. Defendant.



         Michael Drena (“Plaintiff” or “Mr. Drena”), acting pro se, filed a seven-count Complaint against his mortgagee, Bank of America, N.A. (“Defendant” or “Bank of America”) for allegedly improperly (i) increasing his mortgage payments and (ii) delaying review of his applications for modification of his home mortgage. Compl., ECF No. 1. The Court dismissed two of his claims-a breach of the covenant of good faith and fair dealing claim and a claim under the Fair Credit Reporting Act, 15 U.S.C. § 1681s-2(b). ECF No. 30.

         Bank of America has moved for summary judgment on Mr. Drena's remaining claims: violation of the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen. Stat. § 42-110a et seq. (count one); the Connecticut Creditor's Collection Practices Act (“CCPA”), Conn. Gen. Stat. § 36a-645 et seq. (count two); innocent misrepresentation (count three); negligent misrepresentation (count four); and negligent infliction of emotional distress (count six). Mot. Summ. J., ECF No. 39.

         For the following reasons, Bank of America's motion for summary judgment is GRANTED in part and DENIED in part. The motion is granted as to the CCPA claim (count two), the innocent misrepresentation claim (count three), the negligent misrepresentation claim (count four), and the negligent infliction of emotional distress claim (count six), and denied as to the CUTPA claim (count one).


         A. The Mortgage

         On February 6, 2008, Mr. Drena and his wife, Mrs. Janine Drena (the “Drenas”), obtained a $260, 000 home mortgage loan from Bank of America in exchange for a promissory note in favor of Bank of America. Def.'s L.R. 56(a)(1) Stmt. (“SMF”) ¶ 1, ECF No. 39-35.[1] To secure the obligations under the promissory note, the Drenas executed a loan on the property at 84 Duncaster Road, in Bloomfield, Connecticut, in favor of Bank of America. Id. ¶ 2. The monthly installments due on the loan were $1, 476.26. Id. ¶ 5. Because Bank of America had waived payments for an escrow account, [2] the monthly installments did not include property taxes, assessments, and insurance premiums.[3] Id. ¶ 6. On February 29, 2008, the Drenas provided Bank of America permission to automatically debit their checking account, beginning with the installment due on April 1, 2008. Id. ¶ 9. Consistent with the Drenas' instruction, Bank of America began debiting the monthly installment due on April 1, 2008, and all monthly installments thereafter, until October 2010. Id. ¶ 10. Bank of America has serviced the mortgage loan since origination and continues to do so. Id. ¶ 4.

         In 2009, Mr. Drena “suffered a substantial loss of income.” Def.'s Br., Ex. C at 3, ECF No. 39-32. His business was reeling from an economic recession that contracted the business by twenty percent. Id. His income was further limited by prospective alimony payments as a result of his impending divorce from his wife. Id. at 3-4.

         B. Discussions Around Mortgage Modification

         In November 2009, in light of his economic difficulties, Mr. Drena contacted Bank of America to inquire about options to modify his home mortgage loan. Def.'s SMF at ¶ 14; see also Def.'s Br., Ex. C at 5. In December 2009, Bank of America sent Mr. Drena a loan modification application. Def.'s Br., Ex. C at 6. Upon receiving the application, Mr. Drena reviewed it but “decided not to participate due to the fact that a[n] escrow account was being added in.” Id. With declining business opportunities, newly imposed alimony payments, and the seasonal nature of his work, Mr. Drena thought he could not support the additional payments that an escrow would require. Id. He “did not sign any documents or send in any application.” Id.

         After its December 2009 offer, Bank of America extended another opportunity to the Drenas to modify their loan. In a letter dated January 14, 2010, Bank of America informed the Drenas that their home mortgage loan potentially qualified for a four-month trial period plan under the Home Affordable Modification Program (“HAMP”).[4] Def.'s Br., Ex. A-3 at 2, ECF No. 39-5. Under HAMP, instead of making their existing mortgage payment, the Drenas would pay a trial period mortgage payment of $1, 859.99. Id. at 2. The trial period payment included payments for escrow items, “including real estate taxes, insurances premiums, and other fees.” Id. at 8. To confirm their eligibility for HAMP, Bank of America attached to its letter documents for the Drenas to complete and return to Bank of America.[5] The Drenas did not accept the offer. Def.'s SMF ¶ 17.

         On January 22, 2010, Bank of America claims to have completed an “escrow analysis” on the Drenas' loan and provided the results to the Drenas along with the monthly statement for the February 2010 monthly instalment. Id. ¶ 18. Bank of America claims that the statement and analysis put the Drenas on notice that, beginning with the March 10, 2010, installment, the monthly amount due would increase to $2, 332.21, $855.95 of which was for escrow payments. Id.

         Later that month, on January 29, 2010, Mr. Drena and Mrs. Drena divorced, and Mrs. Drena subsequently transferred her interest in the home to Mr. Drena by quit claim deed on March 15, 2010. Def.'s Br. Ex. D at 2-3, ECF No. 39-33; Def.'s Br. Ex. E at 2-3, ECF No. 39-34.

         On March 5, 2010, Mr. Drena called Bank of America after noticing overdraft charges on his checking account. Def.'s Br. Ex. C at 7. Bank of America had charged his account for $830. Id. Bank of America informed Mr. Drena that the MHAP required an $830 escrow fee. Id.; see also Def.'s SMF ¶ 24. But, according to Mr. Drena, he had never signed up to participate in the MHAP. Def.'s Br. Ex. C at 7.

         Around the same time, Mr. Drena went to the Bank of America branch in Bloomfield, Connecticut, and spoke with the branch's Vice President, Ms. Vera Lembrecht, concerning his situation. Id. at 7-8. Ms. Lembrecht called Bank of America's modification department, and the modification team member explained that Mr. had been placed in HAMP upon his verbal authorization. Id. at 8. Further, according to Mr. Drena, the Bank of America modification team member explained that, if Mr. Drena failed to apply for the program, he could not reapply. Id. Therefore, according to Mr. Drena, he executed the application and submitted the required information to be considered for the program. Id.

         About two weeks later, on March 20, 2010, Bank of America sent the Drenas a letter informing them that Bank of America required additional information to verify whether they could participate in HAMP. Def.'s Br. Ex. A-5 at 2, ECF No. 39-7. The letter instructed the Drenas to send the requested information by March 30, 2010. Id.

         The Drenas' loan history statement includes transaction details on the Drenas' mortgage, beginning in February 2008 and ending in November 2016. Def.'s Br. Ex. A-2, ECF No. 39-4. From April 1, 2008, through and including February 1, 2010, the report shows that the Drenas made monthly payments of $1, 476.27. Id. at 3‒4. The report also shows a $.00 escrow balance and $.00 in late charges and the unapplied total.[6] Id. For the March 1, 2010, payment, the report showed a monthly payment of $2, 332.21, and an escrow balance of $855.96. Id. at 4. Beginning in April 2010, the escrow balance fluctuated, going as high as $22, 888.26 in March 2014. Id. at 4-7. Similarly, beginning in April 2010, unapplied totals fluctuated, reaching $7, 270.25 in March 2014, and late fees assessed against the account begin to accrue. Id. at 4‒8.

         In a letter dated November 16, 2010, Bank of America sent the Drenas a notice of intent to accelerate the mortgage. Def.'s Br. Ex. A-7 at 3-8, ECF No. 39-9. The notice provided that the home mortgage loan was “in serious default because the required payments have not been made.” Id. at 3. The letter explained that “[i]f the default is not cured on or before December 16, 2010, the mortgage payments will be accelerated with the full amount remaining accelerated and becoming due and payable in full, and foreclosure proceeding will be initiated at that time.” Id. The letter further stated that, if the Drenas were unable to cure the default, Bank of America “want[ed] [them] to be aware of various options that may be available . . . to prevent foreclosure sale of the property.” Id. Those options included:

Repayment Plan: It is possible that you may be eligible for some form of payment assistance through [Bank of America]. [Bank of America's] basic plan requires that [Bank of America] receive, up front, at least ½ of the amount necessary to bring the account current, and that the balance of the overdue amount be paid, along with the regular monthly payment, over a defined period of time. Other repayment plans also are available.
Loan Modification: Or, it is possible that the regular monthly payments can be lowered through a modification of the loan by reducing the interest rate and then adding the delinquent payments to the current loan balance. This foreclosure alternative, however, is limited to certain loan types.
Sale of Your Property: Or, if you are willing to sell your home in order to avoid foreclosure, it is possible that the sale of your home can be approved through [Bank of America] even if your home is worth less than what is owed on it.
Deed-In Lieu: Or, if your property is free from other liens or encumbrances, and if the default is due to a serious financial hardship which is beyond your control, you may be eligible to deed your property directly to [Bank of America] and avoid the foreclosure sale.

Id. at 4.

         Less than one month after sending its notice of intent to accelerate, on December 10, 2010, Bank of America denied Mr. Drena's request for a HAMP modification. Def.'s Br. Ex. A-8 at 2, ECF No. 39-10. In that letter, Bank of America explained to the Drenas that it had “reviewed [their] financial information to identify any additional modification options and unfortunately, [the Drenas'] loan [was] not eligible for a modification.” Id. Bank of America stated it “[knew] it was a difficult time for [the Drenas] and [it] want[ed] to help [them] avoid the negative consequences of a foreclosure.” Id. To that end, Bank of America explained the “next step to help [them] avoid foreclosure is a short sale or a deed in lieu of foreclosure.” Id. The letter explained those options:

Short Sale: With this program, you agree to sell your home and the proceeds of the sale are used to pay your mortgage debt, even if the proceeds are less than the outstanding balance on you mortgage;
Deed in lieu of foreclosure: With this program, you transfer the title of your home to [Bank of America] instead of paying your mortgage debt, even if the value of the property is less than the outstanding balance on your mortgage;
The Fannie Mae Deed-for-Lease program: With this program, you agree to a deed in lieu of foreclosure and transfer the title of your property to Fannie Mae instead of paying your mortgage debt, even if the value of the property is less than the outstanding balance on your mortgage. You then lease the property back from Fannie Mae at a current rental rate.


         The Drenas appealed the December 2010 decision. Def.'s Br., Ex. A ¶ 28, ECF No. 39-2. On February 10, 2011, Bank of America informed the Drenas of its decision concerning their appeal. Def's Br., Ex. A-9 at 2, ECF No. 39-11. Bank of America explained that, based on the HAMP guidelines, the Drenas were “not eligible for a loan modification based on the information in [their] original application; therefore, [their] original application [had] been closed.” Id. at 2. Bank of America advised the Drenas that because they indicated that their financial information had changed, Bank of America invited them to reapply for the program by sending a new application with the supporting documents by March 12, 2011. Id. Bank of America sent another letter to the Drenas on February 28, 2011, explaining that they were not eligible for the HAMP modification based on the information they had submitted but invited them to reapply. Id. at 12.

         On March 2, 2011, Mr. Drena submitted another HAMP modification request to Bank of America. Def.'s Br., Ex. A-10, ECF No. 39-12. Bank of America responded on April 2, 2011, indicating that Mr. Drena's application was deficient because it did not contain all the required information and therefore, it could not complete its eligibility review. Def.'s Br., Ex. A-11 at 2, ECF No. 39-13. Bank of America requested the Drenas send the missing documents by May 2, 2011. Id. On May 4, 2011, Bank of America sent another letter to the Drenas stating that it was still missing information from them necessary to conduct its review. Def.'s Br., Ex. A-12 at 2, ECF No. 39-14. Bank of America gave the Drenas until May 19, 2011, to submit the missing information. Id.

         On June 4, 2011, Bank of America informed the Drenas that they were not eligible for a HAMP modification because they had failed to provide it the requisite information. Def.'s Br., Ex. A-13 at 2-3, ECF No. 39-15. The letter also stated that Bank of America was reviewing the Drenas' financial information to determine whether they qualified for other options including (i) “[a] different modification program;” (ii) “a forbearance program” that would allow them to “receive lower payments or no payments for a limited number of months to either give [them] time to resolve [their] financial difficulties or give [Bank of America] time to work together with [him] on a more permanent solution;” (iii) “a short sale;” (iv) “[a] deed in lieu of foreclosure;” (v) “[t]he Fannie Mae Deed-for-Lease program.” Id.

         After the June 4 denial, and after Mr. Drena had submitted an additional HAMP modification request, Def.'s Br., Ex. A-14, ECF No. 39-16, Bank of America informed the Drenas that they had been approved for a trial period plan under the Fannie Mae Modification program, Def.'s Br., A-15 at 2-3, ECF No. 39-17. The Drenas declined to participate in the program but did submit an application for an additional HAMP modification. Def.'s Br., Ex. A ¶ 36.

         On April 6, 2012, Bank of America offered the Drenas a permanent loan modification. Def.'s Br., A-17, ECF No. 39-19. The proposed modification reduced the Drenas' home mortgage loan's interest, monthly installments, and capitalized delinquent interest and delinquent escrow. Id. at 2-5. As with Bank of America's other offers, the Drenas rejected the offer. Def.'s Br., Ex. A ¶ 38. Instead, the Drenas submitted another HAMP modification request on May 15, 2012. Def.'s Br., Ex. A-18. Less than a month later, on June 13, 2012, Bank of America informed the Drenas that their “mortgage [was] seriously delinquent.” Def.'s Br., Ex. A-19 at 2, ECF No. 39-21. The letter stated that Bank of America “tried to contact [the Drenas] to discuss foreclosure prevention options that [were] available, but time [was] running out.” Id. The letter further provided that the Drenas had been approved to participate in a trial period plan to assist the Drenas in making “affordable and sustainable mortgage payments.” Id. The Drenas declined to participate in this program. Def.'s SMF ¶ 46.

         Following a national settlement between Bank of America and U.S. Department of Justice (“DOJ”), on March 22, 2013, Bank of America invited the Drenas to apply for another modification program-the DOJ Modification Program. Def.'s Br., Ex. A-20 at 2, ECF No. 39- 22. The DOJ Modification program “included a principal forgiveness component in addition to modified loan terms.” Def.'s L.R. SMF ¶ 50. Bank of America contacted the Drenas through their attorney about the program multiple times in June 2013. Def.'s Br., Ex. A-22 at 2, 11, 20, 29, 38, ECF No. 39-24. Following those invitations, Mr. Drena submitted two additional HAMP modification requests. Def.'s Br., Ex. A-21, ECF No. 39-23; Def.'s Br., Ex. A-27, ECF No. 39-25. Bank of America then sent the Drenas two additional invitations to apply to the DOJ Modification program. Def.'s Br., Ex. A-24 at 2-4, ECF No. 39-26; id. 5-6.

         C. ...

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