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Ridenour v. Bank of America, N.A.

United States District Court, D. Idaho

March 25, 2015



B. LYNN WINMILL, Chief District Judge.


The Court has before it a motion to dismiss filed by the defendant Bank of America, motions to take judicial notice filed by both parties, and a motion to substitute a party filed by plaintiffs Stephen and Vickey Ridenour. The motions are fully briefed and at issue. For the reasons explained below, the Court will deny the motion to dismiss, grant the motions for judicial notice, and grant in part the motion to substitute.


The Ridenours allege that the Bank breached its agreement to modify their home mortgage loan, strung them along with false promises, destroyed their credit, and caused them emotional distress. The Bank denies these charges and seeks to dismiss this action.

In July 2005, the Ridenours took out a home loan, secured by a deed of trust, to finance the purchase of their house on the Spokane River near Post Falls, Idaho. By 2008, the Ridenours were experiencing financial difficulty. When Stephen Ridenour contacted the Bank regarding the trouble, he was advised by a Bank representative to stop making payments on his loan so that the Ridenours could be considered for a loan modification. The Ridenours followed that advice.

The Ridenours filed the necessary paperwork, and on June 8, 2009, they received from the Bank a loan modification agreement. The loan modification agreement contained an unpaid principal balance of $572, 230.52, set monthly payments at $3, 755.10, fixed the interest rate at 6.375%, and assigned a maturity date of August 1, 2035. The Ridenours noticed that their names were misspelled on the loan modification agreement, so they corrected the misspelling and returned the loan modification agreement otherwise unchanged.

Days later, the Ridenours received a letter from the Bank claiming that the Ridenours had impermissibly altered the loan modification agreement by correcting the misspelling and that the Bank was therefore "rescinding the agreement." See First Amended Complaint (docket no. 22) at ΒΆ 21. Confused by the rejection, Stephen Ridenour contacted the Bank, and a representative promised Stephen that the Bank would expedite a new loan modification agreement with the correct spelling of "Ridenour" in time for the Ridenours to return the agreement before the deadline for accepting the loan modification offer, July 5, 2009. But the Bank failed to do anything despite the Ridenours' repeated attempts to prompt some action. The deadline passed with the Bank never having sent the corrected loan modification agreement. On July 29, 2009, the Ridenours filed a voluntary petition for Chapter 7 bankruptcy.[1] In their petition, the Ridenours listed their home as an asset and disclosed that the Bank was the secured creditor of the home. On December 5, 2009, the bankruptcy court discharged the Ridenours from bankruptcy. The bankruptcy did not discharge the debt owed by the Ridenours to the Bank.

Following the Bank's rejection in June of 2009 of the original loan modification agreement, the Bank negotiated over either a resurrection of that agreement or a new one - it is not clear which was the case from the allegations in the First Amended Complaint. At any rate, over the next several months, the Ridenours were shuttled between innumerable Bank representatives who gave conflicting accounts of the modification's status but were united in demanding that the Ridenours provide more information. Finally, on November 30, 2010, the Bank denied the Ridenours' request for a new loan modification agreement. The Bank stated that the request was denied due to a negative net present value ("NPV") for the home, and informed the Ridenours that they had thirty days to request the data the Bank used to calculate the NPV.

The Ridenours promptly sent a written request for the NPV data so that they could appeal the denial. Six months later, the Ridenours received the NPV data, riddled with errors. The Ridenours wrote to correct the NPV data and continue the loan modification appeal process. The Bank denied the Ridenours' appeal. The Bank again cited the NPV as a reason for the denial, and the Ridenours again challenged the accuracy of the NPV data. While the Ridenours' second challenge to the NPV value was pending, the Bank notified the Ridenours that their home was scheduled to be sold at a trustee's sale.

On October 27, 2011, the Ridenours sued the Bank on various contract and tort theories for the Bank's alleged mishandling of a home loan modification, and obtained an injunction enjoining the pending foreclosure. That suit was later dismissed by stipulation as the parties agreed to pursue loss mitigation efforts.

When those efforts failed, the Ridenours filed this action on July 19, 2013. After the Bank moved to dismiss the complaint, Judge Tallman - sitting by designation from the Circuit - issued an opinion in which he: (1) took judicial notice of documents filed in other courts and county recorders' offices; (2) dismissed all defendants except the Bank and BAC Home Loans, and held that they are a single entity; (3) dismissed without prejudice the fraud and promissory estoppel claims, granting the Ridenours' leave to amend those claims; (4) barred recovery on the negligent infliction of emotional distress claim for any act occurring before October 27, 2009, and held that the Ridenours alleged an act within that time frame by asserting that the bank foreclosed on their home on September 17, 2010; (5) held that the negligent infliction claim could not be based on a violation of the certain guidelines, but also held that the Ridenours "could rely on the general duty to avoid foreseeable risks of harm" and allowed them to so amend their complaint; (6) held that by correcting their names on the loan modification agreement, the Ridenours did not turn their acceptance into a counteroffer; and (7) held that the Ridenours have properly pled damages by alleging that they lost the benefit of the agreement's lower interest rate. Ridenour v. Bank of Am., N.A., 23 F.Supp.3d 1201, 1206 (D. Idaho 2014).

Judge Tallman allowed the Ridenours to file a First Amended Complaint to address deficiencies, and after that was filed, the Bank filed its second motion to dismiss, which is the motion now before the Court. The Bank argues that (1) the Ridenours claims are precluded by their discharge in bankruptcy; (2) their claims for fraud and negligent infliction of emotional distress are time-barred; (3) their claim for promissory estoppel fails for ...

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