ORDER GRANTING DEFENDANTS' RENEWED MOTION TO DISMISS

TERRENCE G. BERG, District Judge.

I. Introduction

Plaintiff Cynthia Harris claims that when she fell behind on her mortgage, Defendant Flagstar Bank offered her a Trial Payment Program ("TPP") to allow her to demonstrate her ability to meet the terms of a loan modification. But after Plaintiff made some payments, Defendant failed to follow through with a permanent loan modification. Eventually, Plaintiff alleges, Defendant's failure to enter into a loan modification lead to an unlawful foreclosure and breach of contract, and so she brings this lawsuit for damages. Defendant seeks to dismiss Plaintiff's Complaint under Federal Rule of Civil Procedure 12(b)(6) because it fails to state a claim upon which relief can be granted. For the reasons discussed below, the Court finds that Plaintiff has not stated a claim and therefore GRANTS Defendant's Motion to Dismiss.

II. Background

On November 4, 2011, Plaintiff purchased real property at 111 Illinois Avenue, Pontiac, Michigan ("Property"). ECF No. 18 PageID.415. At the same time, Plaintiff executed a mortgage loan for $68,225.00. Id. The mortgage was executed from Mortgage Electronic Registration Systems, Inc. ("MERS") solely as nominee for Gold Star Mortgage Financial Group ("Gold Star"). Id. The mortgage was subsequently assigned to Matrix Financial Services Corporation ("Matrix") on September 26, 2014. Id. Matrix then assigned the mortgage to Lakeview Loan Servicing (one of the Defendants in this case) on February 9, 2017. Id. at PageID.416. Flagstar was the servicer of the mortgage at all relevant times. Id. Plaintiff fell two payments behind on the mortgage, and, on October 13, 2015, Defendant Flagstar suggested that she apply for a loan modification. ECF No. 1-2 PageID.84. Plaintiff completed the application and returned it to Defendant Flagstar on February 25, 2016. Id. Plaintiff alleges that she was then accepted into the Trial Payment Program and made four payments under the Trial Payment Program agreement. Id. After these four payments, Defendant Flagstar failed to execute the Loan Modification Agreement. Id.

Plaintiff apparently made no additional mortgage payments during 2016, but she resumed loan modification discussions in August 2016. Id. During the loan modification negotiations in August 2016, Plaintiff alleges that she attempted to reinstate the loan—to bring her payments up to current—but that Defendant Flagstar refused the reinstatement. Id. Instead, Defendant Flagstar proceeded with foreclosure. Id.

After Defendant gave notice that it intended to foreclose and the Sheriff's sale was scheduled, on May 5, 2017, Plaintiff filed a quiet title action in Oakland County Court, and on May 8, 2017 a Motion for a Temporary Restraining Order to stop the Sheriff's sale. Id. at PageID.85. The motion for a TRO was denied, and Defendant Flagstar held the Sheriff's sale on May 9, 2017. Id. Plaintiff filed her Amended Complaint on May 26, 2017, alleging nine counts: (I) Quiet Title; (II) Breach of TPP Agreement; (III) Specific Performance; (IV) Promissory Estoppel; (V) Equitable Estoppel; (VI) Wrongful Foreclosure by Advertisement; (VII) Breach of Duty of Good Faith and Fair Dealing; (VIII) Violation of the Fair Credit Reporting Act; and (IX) Injunction and Other Relief. Defendants removed the case to federal court on June 28, 2017. ECF No. 1. On July 20, 2017, Defendants filed a Motion to Dismiss. ECF No. 4. In her Response to the motion, Plaintiff requested facilitation rather than an order on the motion. ECF No. 8 PageID.251-52. In the meantime, on or about October 13, 2017, Plaintiff was able to redeem the property. ECF No. 26 PageID.608. The Court granted the request for facilitation on January 23, 2018. Facilitation did not resolve the case, but as a result of the redemption, Plaintiff dismissed three counts of the complaint (Quiet Title, Specific Performance, and Injunctive Relief). ECF No. 13.

On May 21, 2018, Defendant renewed its Motion to Dismiss. ECF No. 18. Plaintiff responded on June 12, 2018, ECF No. 20, and Defendant replied on June 20, 2018, ECF No. 21.

During a status conference with the Court on October 1, 2018, parties indicated that the property had been redeemed, and that this changed the nature of the relief sought from the Amended Complaint. The Court determined that the facts in the record related to the redemption were inadequate to permit the Court to render a decision on Defendant's Motion to Dismiss and requested supplemental briefing on the impact of the redemption on Plaintiff's claims. ECF No. 25. Plaintiff provided that briefing on October 22, 2018, ECF No. 26, and Defendant responded on October 29, 2018, ECF No. 27.

III. Standard of Review

A party may move to dismiss under Federal Rule of Civil Procedure 12(b)(6) for "failure to state a claim upon which relief can be granted." Rule 12(b)(6) is read in conjunction with the pleading standard set forth in Rule 8(a), which requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Rule 8(a)(2); see Ashcroft v. Iqbal, 556 U.S. 662, 677-68 (2009). This standard does not require detailed factual allegations. Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). However, a party's "obligation to provide the `grounds' of his `entitle[ment]' to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (internal citations omitted). To survive a Rule 12(b)(6) motion, the complaint and any other matters properly considered must contain "sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570).

A claim has facial plausibility when the pleaded factual content allows the court, drawing upon its "judicial experience and common sense," to reasonably infer that the defendant is liable for the misconduct alleged. Id. at 678 (citing Twombly, 550 U.S. at 556), 679. "But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not `show[n]'—`that the pleader is entitled to relief.'" Id. at 679 (quoting Rule 8(a)(2)).

IV. Analysis

Plaintiff's remaining claims are for Breach of TPP Agreement (Count II), Promissory Estoppel (Count IV), Equitable Estoppel (Count V), Wrongful Foreclosure by Advertisement (Count VI), Breach of Duty of Good Faith and Fair Dealing (Count VII), and Violation of the Fair Credit Reporting Act (Count VIII). For each of the claims, Defendant alleges that Plaintiff has not stated a claim upon which relief can be granted. The Court discusses each in turn below.

a. Count II — Breach of TPP Agreement

Plaintiff's first claim is that Defendants breached the TPP agreement by failing to offer her a permanent loan modification after she made three payments in accordance with the agreement. To allege breach of contract under Michigan law, "a plaintiff must allege (1) the existence of a contract, (2) the terms of the contract, (3) breach of the contract by the defendant, and (4) that the breach caused the plaintiff's injury." Haviland v. Metropolitan Life Ins. Co., 876 F.Supp.2d 946, 957 (E.D. Mich. 2012) (citing Webster v. Edward D. Jones & Co., 197 F.3d 815, 819 (6th Cir. 1999)).

Construing the pleadings in the light most favorable to Plaintiff, Plaintiff has alleged that the TPP agreement was a contract. ECF No. 1-2 PageID.10. Plaintiff alleges that Defendant failed to offer her a permanent loan modification, and that this failure caused her to suffer damages. ECF No. 1-2 PageID.11. But Plaintiff does not allege that the TPP agreement contained a term requiring Defendant to offer a permanent loan modification. An essential element of a breach of contract cause of action is missing: the term of the contract Plaintiff claims Defendant breached. Without this bridge between the contract and the damages, Plaintiff has not adequately stated a claim upon which relief can be granted.

Plaintiff cites two cases for the proposition that unsigned TPP agreements bind lenders to offer permanent loan modifications. In Darcy v. Citifinancial, Inc., No. 1:2010cv00848 (W.D. Mich. Aug. 25, 2010),1 the TPP agreement at issue was produced pursuant to a federal program, the Home Affordability Modification Program (HAMP). Under the written TPP, which was analyzed by the court, the lender was obligated either to return a copy of the agreement to the borrower with the lender's signature or to send written notice that the borrower did not qualify for the offer. The lender did neither. Both sides argued as to the operation of the written terms of the agreement, but the court found that its terms were ambiguous enough that dismissal was precluded. Here, there is no written TPP for the court to interpret.

Similarly, in the other case Plaintiff cites, Belyea v. Litton Loan Servicing, LLP, No. 10-10931, 2011 WL 2885964 (D. Mass. Jul. 15, 2011), the TPP at issue was written and signed by at least the borrower. Id. at *3. It also contained a provision obligating the lender to extend a permanent loan modification if the borrower met the conditions of the TPP. Id. In this case, the Court does not know what, if anything, the TPP "Agreement" promised because there is no written TPP Agreement, and moreover, Plaintiff has not specifically alleged the terms of any oral contract. As stated, the elements of a contract claim include pleading the existence of a contract, the terms of the contract, breach of the terms of the contract, and that the breach caused damages. Here, Plaintiff states that there was a TPP and Defendant offered Plaintiff a "permanent loan modification" if Plaintiff complied with the terms of the TPP. However, the complaint does not allege what the terms of the TPP were. Without knowing the terms, there is no plausible allegation as to how Defendant violated the TPP by not offering a loan modification. Therefore, Plaintiff has failed to state a claim with respect to Count II of her Complaint.2

b. Count IV — Promissory Estoppel

Count IV of Plaintiff's Complaint raises a claim of promissory estoppel. This Count alleges that "Flagstar Bank made innocent and/or negligent and/or intentional representations of material facts by promising or representing that the Plaintiff would obtain a TPP and permanent Loan Modification." ECF No. 1-2 PageID.14.

Defendant argues that a Plaintiff must allege three elements to make a claim of promissory estoppel: "(1) a promise, (2) that the promisor should reasonably have expected to induce action of a definite and substantial character on the part of the promisee, and (3) that in fact produced reliance or forbearance of that nature in circumstances such that the promise must be enforced if injustice is to be avoided." Novak v. Nationwide Mut. Ins. Co., 599 N.W.2d 546, 552 (Mich. Ct. App. 1999). The Michigan Supreme Court has consistently chosen a different phrasing of the elements of a promissory estoppel claim: "A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise." State Bank of Standish v. Curry, 500 N.W.2d 104, 107 (Mich. 1993) (quoting 1 Restatement Contracts 2d § 90 at 242); see also North Am. Brokers, LLC v. Howell Public Schools, 913 N.W.2d 638, 639 (Mich. 2018) (using the same definition).

It its Motion to Dismiss, Defendants first raise the statute of frauds argument that the Court addressed above, in footnote 2. Second, Defendants argue that any agreement reduced to a written contract is not grounds for a promissory estoppel claim.3 Plaintiff does not respond to this argument, beyond stating, "See argument above." ECF No. 20 PageID.496. It unclear which argument "above" Plaintiff intends to reference, because Plaintiff made no previous argument addressing Defendants' point that breach of a written contract cannot support a claim for promissory estoppel. But regardless, it is clear that Plaintiff has failed to adequately plead a claim of promissory estoppel.

Plaintiff claims that Defendant promised both a TPP and a permanent loan modification. ECF No. 1-2 PageID.89. But Plaintiff does not specifically allege that Defendant knew or should have known that its promise would induce Plaintiff's reliance. Instead, Plaintiff states that Defendant could reasonably foresee the damages that breaching the TPP Agreement would cause. ECF No. 1-2 PageID.89. Indeed, not only does Plaintiff fail to allege Defendant's knowledge of her reliance on the promise of a loan modification, the Court cannot infer Plaintiff's reliance based on the pleadings. Plaintiff's interest in entering the TPP was to avoid foreclosure—the alternative to the TPP. Under these circumstances, the Court could infer that the bank knew that it was not the promise of a permanent loan modification that induced Plaintiff's agreement to enter the TPP. Rather, Plaintiff chose to enter the TPP as the only alternative to immediate foreclosure.

Moreover, Plaintiff does not specifically allege that Defendant's promise ought to be enforced to avoid injustice.4 ECF No. 1-2 PageID.89. Instead, Plaintiff states that she would not have entered into the TPP Agreement if she had known Defendant would still proceed with foreclosure and that she suffered damages because of Defendants' actions. ECF No. 1-2 PageID.89. As the Court noted above, this is a dubious claim. Plaintiff likely would have entered into the TPP Agreement even if she knew Defendants would proceed with foreclosure eventually—that outcome is still preferable to the immediate foreclosure that was ostensibly the alternative to the TPP Agreement.

Plaintiff asks the Court to read between the lines and extract the required elements as implications of her pled facts. This strategy does not satisfy the requirement that Plaintiff set forth a short and plain statement showing that she is entitled to relief. It does not even rise to a "threadbare recital[] of a cause of action's elements," that courts have found to be inadequate. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The pleaded facts allow the Court to infer only the "mere possibility of misconduct," as Iqbal, 556 U.S. at 679, puts it— therefore, Defendants' Motion to Dismiss Count IV is granted.

c. Count V — Equitable Estoppel

Plaintiff's Complaint claiming equitable estoppel repeats her promissory estoppel claim word-for-word. ECF No. 1-2 PageID.91. Defendants argue that no relief can be granted on the equitable estoppel claim because equitable estoppel is a defense that a plaintiff can raise in response to a defendant's affirmative defense. ECF No. 18 PageID.427. Plaintiff offers no specific response, simply directing the Court to "[s]ee argument above." ECF No. 20 PageID.496.

Although Michigan law is not entirely clear on the question of whether equitable estoppel ought to be pled in a complaint, a review of the case law suggests that Defendants' position is correct. "[E]quitable estoppel . . . is available as protection from a defense raised by the defendant. It is not available to the plaintiff in stating a cause of action." Hoye v. Westfield Ins. Co, 487 N.W.2d 838, 842 (Mich. Ct. App. 1992) (quoting Harrison Twp. v. Calisi, 329 N.W.2d 488 (internal citation omitted)). At the same time, the Hoye court noted that "our Courts have apparently allowed plaintiffs to avail themselves of the doctrine." Id. (citing 1 Michigan Pleading & Practice, § 8.33 at 426) (ultimately concluding that, despite the apparent allowance of equitable estoppel in complaints, the correct view is that equitable estoppel is solely a plaintiff's defense).

A survey of the equitable estoppel case law reveals that Hoye was correct to hold that equitable estoppel is a plaintiff's defense. Michigan Court of Appeals and Michigan Supreme Court cases have considered equitable estoppel as a defense to defendants' affirmative defense that a claim is outside the statute of limitations. See, e.g., Doe v. Racette, 800 N.W.2d 332, 334 (Mich. Ct. App. 2015) ("Equitable estoppel is a judicially created exception to the general rule which provides that statutes of limitation run without interruption." (citation and quotation marks omitted)); see also Lothian v. City of Detroit, 324 N.W.2d 9, 17-18 (1982) ("Equitable estoppel may be introduced to counter a statute of limitations defense so as `to accomplish the prevention of results contrary to good conscience and fair dealing.'" (quoting McLearn v. Hill, 177 N.E. 617 (1931))). Case law after 1992 approvingly cites Hoye's pronouncement that equitable estoppel is not a cause of action. E.g. Lathrup Investment Co. v. West Am. Ins. Co., No. 212269, 2000 WL 33391105, at *1 (Mich. Ct. App. Dec. 15, 2000).

Because equitable estoppel is a defense to a defendant's affirmative defense, not a cause of action, it cannot be advanced as a claim upon which relief can be granted. Defendant's Motion to Dismiss Count V is therefore granted.

d. Count VI — Wrongful Foreclosure by Advertisement

Count VI of Plaintiff's Complaint alleges that Defendant violated M.C.L. 600.3204. The statute reads:

M.C.L. 600.3204.

As the basis for Count VI, Plaintiff states that "the Defendant[s] knew or should have known that Plaintiff was attempting to enter into a Loan Modification" and to reinstate the loan to keep possession of her home but proceeded with foreclosure anyway. ECF No. 1-2 PageID.92. Even accepting that statement as true, Plaintiff has not plausibly alleged that Defendants violated M.C.L. 600.3204.5 The statute does not prohibit proceeding with foreclosure when a lender knows a homeowner is "attempting" to keep her home. In her Response, Plaintiff misguidedly focuses on establishing prejudice that a party must show in order "[t]o set aside a foreclosure-by-advertisement sale on the basis of a failure to follow the foreclosure requirements set forth in MCL §600.3204." ECF No. 20 PageID.497. Plaintiff skips right to her remedy, glossing over the fact that she has not shown a failure to follow the foreclosure requirements in the first instance.

Because Plaintiff has not alleged any specific provision of M.C.L. § 600.3204 that Defendants breached, and because the conduct she does allege does not appear to violate the statute, Defendants' Motion to Dismiss Count VI is granted.

e. Count VII — Breach of Duty of Good Faith and Fair Dealing

Count VII of Plaintiff's Complaint alleges breach of the implied covenant of good faith and fair dealing. The factual allegations supporting this Count are that Defendants failed or refused to provide a permanent loan modification after Plaintiff met the conditions of the TPP Agreement, and that Defendants "unfairly interfered with Plaintiff's right to receive the benefits of the TPP and permanent Loan Modification and to reinstate the loan." ECF No. 1-2 PageID.93.

Defendants argue that Michigan courts only recognize the independent tort of breach of the duty of good faith and fair dealing where the allegedly breaching party has some discretion to act under the contract. ECF No. 18 PageID.428. In Response, Plaintiff simply repeats this point, implying (though not specifically admitting) that Defendant did have discretion to offer—or not offer—a loan modification under the TPP Agreement. ECF No. 20 PageID.499 ("[E]very contract in which performance is left to party's discretion is subject to an implied covenant of good faith."). Plaintiff weaves a web of contradiction here that undermines her other claims. If Defendants had discretion under the TPP Agreement, their failure to offer a permanent loan modification is no breach at all, torpedoing Plaintiff's Counts II, IV, and V. If Defendants had no discretion, Plaintiff has not stated a claim for breach of duty of good faith and fair dealing.

In considering a motion to dismiss we must read the words of the complaint. Here, that Complaint does not allege that Defendants had discretion under the TPP. Without such an allegation, the pleading of Count VII is inadequate. For that reason, she has not stated a claim upon which relief can be granted and Defendants' Motion to Dismiss this Count is granted.

f. Count VIII — Violation of the Fair Credit Reporting Act

Plaintiff's final claim is violation of the Fair Credit Reporting Act, § 1681s-2(b).6 ECF No. 1-2 PageID.94. Defendants argue that § 1681s-2(b) creates a private right of action only where the furnisher of information alleged to have violated the statute received notice from a consumer reporting agency that the consumer disputed the information. ECF No. 18 PageID.430. Indeed, the text of subsection (b) begins "Duties of furnishers of information upon notice of dispute." 15 U.S.C. § 1681s-2(b). Subsection (b) includes a cross-reference to 15 U.S.C. § 1681i(a)(2), which indicates that this notice of dispute is statutorily required to come from a consumer reporting agency (rather from the individual claiming violation of the statute). The Sixth Circuit has affirmed this reading of the statute. Boggio v. USAA Fed. Sav. Bank, 696 F.3d 611, 617 (6th Cir. 2012) ("how thorough an investigation must be to be `reasonable' turns on what relevant information was provided to a furnisher by the [Consumer Reporting Agency] giving notice of the dispute."). A reading of the statute and case law therefore indicates that, unless a consumer reporting agency has notified a furnisher of information that the consumer has disputed some information, the furnisher has not violated § 1618s-2(b).

Because Plaintiff has not alleged that she reported a dispute to a consumer reporting agency and that that agency reported it to Defendants, she has not stated a claim on Count VIII. Defendants' Motion to Dismiss Count VIII is therefore granted.

V. Conclusion

For the foregoing reasons, Defendants' Motion to Dismiss is GRANTED. The Complaint is therefore DISMISSED WITH PREJUDICE, because it appears that any amendments would be futile.

SO ORDERED.

OPINION

Plaintiff, Sheila Darcy, is a homeowner seeking damages and injunctive relief from her mortgage holder, CitiFinancial, Inc., and its agent, CitiMortgage, Inc. (Defendants). This matter is before this Court on Defendants' Motion for Summary Judgment/Dismissal (Dkt 45). Plaintiff filed a response to Defendants' motion (Dkt 50), and Defendants filed a reply (Dkt 51). Having fully considered the written briefs and accompanying exhibits, the Court finds that the relevant facts and arguments are adequately presented in these materials and that oral argument would not aid the decisional process. See W.D. Mich. LCivR 7.2(d). For the reasons that follow, the Court concludes that Defendants' motion is properly denied.

I. BACKGROUND

Plaintiff, who owns and resides at a home at 746 Princeton Ave., Lansing, Michigan, (Dkt 28, Am. Compl., ¶¶ 5, 17, 18), was laid off from her job of approximately ten years in the midst of the 2008 financial downturn (id., ¶ 20). She subsequently sought to prevent foreclosure via modification of her home loan under HAMP, the Home Affordable Modification Program, which was created pursuant to the October 3, 2008, Emergency Economic Stabilization Act, (EESA), 12 U.S.C. §§ 5201 et seq. (2008). The centerpiece of EESA is the Troubled Asset Relief Program (TARP), through which Congress delegated broad powers to the Secretary of the Department of Treasury to mitigate the financial impact of the foreclosure crisis and preserve homeownership. Stagikas v. Saxon Mortgage Servs., Inc., No. 10-40164-FDS, 2011 WL 2652445, at *1 (D. Mass. July 5,2011) (citing 12 U.S.C. §§ 5201, 5211-5241). Under TARP, the Secretary is directed to "implement a plan that seeks to maximize assistance for homeowners" and "facilitate loan modifications to prevent avoidable foreclosures." 12 U.S.C. § 5219(a); see also Stagikas, supra.

In seeking a mortgage modification under HAMP, Plaintiff submitted financial information and a hardship affidavit to CitiMortgage (Am. Compl., ¶¶ 27, 31, 38). CitiMortgage responded by offering Plaintiff a HAMP Trial Period Plan (TPP), effective September 1, 2009, which reduced Plaintiff's mortgage payment for the three-month trial period from $595.01 to $324.89 per month (id., ¶¶ 25, 28, 29). Plaintiff executed the TPP agreement on August 17, 2009 (id., ¶ 31; Defs. Br., Ex. C).

Immediately under the heading, on the first page of the TPP, is the definition of Effective Date, which states: "Trial Period Plan Effective Date (Beginning of Trial Period): 9/1/09" (Defs. Br., Ex. C at 1). The first full sentence of the TPP agreement states: "If I 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 (`Modification Agreement'), as set forth in Section 3, that would amend and supplement (1) the Mortgage on the Property, and (2) the Note secured by the Mortgage" (id.). The second paragraph of the TPP defines Offer as "the offer described in this Plan" and concludes: "I understand that after I sign and return two copies of this Plan to the Lender, the Lender will send me a signed 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" (id.).

Section 2 of the TPP sets forth the amount and due date of each monthly payment and defines the "Trial Period" as "commencing on the Trial Period Effective Date" and ending the earlier of: the first day of the month following the last required payment or on termination of the Plan (id. at 2). It states that "TIME IS OF THE ESSENCE under this Plan" and, in § 2(F), identifies three conditions under which the TPP would not result in a permanent modification: "[i]f prior to the Modification Effective Date, (i) the Lender does not provide me a fully executed copy of this Plan and the Modification Agreement; (ii) I have not made the Trial Period payments required under Section 2 of this Plan; or (iii) the Lender determines that my representations in Section 1 are no longer true and correct" (id.).

Section 3 explains how the permanent loan modification will be calculated. It then provides: "If I comply with the requirements in Section 2 and my representations in Section 1 continue to be true in all material respects, the Lender will send me a Modification Agreement for my signature which will modify my Loan Documents as necessary to reflect this new payment amount and waive any unpaid late charges accrued to date" (id. at 3).

Plaintiff alleges that she complied with the TPP requirements, including the required payments, which she continued to make until July 2010, eight months beyond the three-month TPP period, and that her representations in Section 1 continued to be true in all material respects (Am. Compl., ¶¶ 27-41, 52), but that Defendants did not comply with their obligations, in that they did not send her either a signed copy of the Plan, written notice that she did not qualify, or a mortgage modification under the HAMP program (id., ¶¶ 30, 32, 35, 52). Defendants assert that Plaintiff received a notification letter and was informed that there were verification issues regarding her income in December 2009 (Defs. Br. at 2 and Ex. K; Defs. Reply at 8 and Ex. C). The verification issue appears to be related to a tuition grant (Am. Compl., ¶¶ 34-37). Plaintiff alleges that, after she was laid off, she enrolled in Lansing Community College to obtain the training required for a more stable occupation (id. ¶ 23). On August 27, 2009, she received a Pell Grant for tuition, which was credited to her credit union savings account (id., ¶ 34), and which she explained to Defendants (id., ¶¶ 37-38). Plaintiff alleges that she received verbal communication that she no longer qualified for HAMP on December 2, 2009, when she attempted to make a monthly payment, and that Defendants accepted her payment and subsequent payments until July 2010 (id., ¶¶ 36, 39-41). Plaintiff received a notice of foreclosure around July 1, 2010 (id., ¶ 56).

Plaintiff filed a complaint in a Michigan circuit court in July 2010, and Defendants removed it to this Court on August 25, 2010, claiming federal question jurisdiction pursuant to 28 U.S.C. § 1331 (Dkt 1). Defendants later filed a Confirmation of Jurisdictional Amount (Dkt 26), which establishes that this Court has diversity jurisdiction under 28 U.S.C. § 1332.

Plaintiff filed an Amended Complaint on January 20, 2011, that claims breach of contract, breach of the duty of good faith and fair dealing, and, in the alternative, promissory estoppel (Dkt 28). On February 7, 2011, she filed an Emergency Motion for Temporary Restraining Order and Preliminary Injunction, seeking to enjoin a sheriff's sale scheduled for February 10, 2011 (Dkt 29). This Court granted a temporary restraining order (Dkt 32) and, after further briefing, granted Plaintiff's motion for preliminary injunction on March 1, 2011 (Dkt 39).

Defendants' Motion for Summary Judgment/Dismissal followed (Dkt 45). Defendants maintain that Plaintiff's claims fail as a matter of law under Federal Rule of Civil Procedure 12(b)(6) and 56(a). They argue that Plaintiff has no right of action under HAMP (Defs. Reply at 3-6), that the language of the TPP agreement defeats Plaintiff's breach of contract claim (Defs. Mot., ¶¶ 3, 7), that Defendants were under no covenant of good faith and fair dealing because they were not required "to undertake obligations they did not agree to contractually under HAMP" (id., ¶ 8). Defendants also argue that Plaintiff's promissory estoppel claim fails because it is barred by the statute of frauds and any claimed reliance was unreasonable (id., ¶ 9).

II. MOTION STANDARD

When evaluating a Rule 12(b)(6) motion to dismiss for failure to state a claim, the Court must accept all well-pled allegations of the complaint as true and construe them in the light most favorable to Plaintiff. See Bishop v. Lucent Techs., Inc., 520 F.3d 516, 519 (6th Cir. 2008). As the Supreme Court stated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), a motion to dismiss will be denied only where the "[f]actual allegations [are] enough to raise a right for relief above the speculative level" on the assumption that all of the complaint's allegations are true. Id. at 555. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570).

A motion for summary judgment is properly granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). In considering a motion for summary judgment, the court must draw all reasonable inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The central issue is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

Because we are exercising diversity jurisdiction in this case, the substantive law of Michigan applies. Wonderland Shopping Ctr. Venture Ltd. P'ship v. CDC Mortg. Capital, Inc., 274 F.3d 1085, 1092 (6th Cir. 2001). In construing a contract document, this Court "must follow and apply Michigan law in accordance with the controlling decisions of the Supreme Court of Michigan." Id. The primary responsibility of a court construing a Michigan contract "is to ascertain and enforce the intent of the parties." Id. (citing Rasheed v. Chrysler Corp., 517 N.W.2d 19, 29 n.28 (Mich. 1994); Sobczak v. Kotwicki, 79 N.W.2d 471, 475 (Mich. 1956)). The contract must be examined "as a whole, giving effect to all parts and language of a written agreement according to their `ordinary and natural meaning.'" Id. (quoting City of Wyandotte v. Consol. Rail Corp., 262 F.3d 581, 585 (6th Cir. 2001)). If contract terms or clauses appear to conflict, the court must strive to harmonize them. Id. (citing Fresard v. Mich. Millers Mut. Ins. Co., 327 N.W.2d 286, 289 (Mich. 1982)). The court must "give effect to every word, phrase, and clause in a contract and avoid an interpretation that would render any part of the contract surplusage or nugatory." Klapp v. United Ins. Group Agency, Inc., 663 N.W.2d 447, 453 (Mich. 2003). If the provisions of a contract cannot be read "in reasonable harmony, the language of the contract is ambiguous." Id. Interpretation of an ambiguous contract is a question of fact for a jury to decide. Id. at 453. "[I]f, after the jury has considered all conventional means of contract interpretation and all relevant extrinsic evidence, it is still unable to determine what the parties intended, the jury should then construe the ambiguity against the drafter." Id. at 460.

III. ANALYSIS

A. Preemption and Breach of Contract

Defendants seek to dismiss Plaintiff's breach of contract claim on the grounds that (1) there is no private right of action under HAMP, (2) the TPP is not a binding contract for loan modification, and (3) Defendants complied with the TPP in that they sent Plaintiff written notification that a modification would not be offered.

1. Private Right of Action/Preemption

Defendants argue that Plaintiff cannot bring an action because the EESA provides only a limited private right of action for challenges to actions by the Secretary of the Treasury, that HAMP vests compliance enforcement in Freddie Mac, and additional remedies should not be added by the courts (Defs. Reply at 4-6). Plaintiff's Amended Complaint does not, however seek enforcement of the HAMP statutes against Defendants but instead is based on state contract claims concerning the TPP document Plaintiff received from Defendants. Plaintiff's action is not similar, despite Defendants' contention, to the action that resulted in dismissal in Hart v. Countrywide Home Loans, Inc., 735 F.Supp.2d 741 (E.D. Mich. 2010). In Hart, the claim focused on the lender's alleged duties under the HAMP statutes, and the court held that the lending statutes did not impose a duty on the lenders to modify loans. Id. at 748. Here, Plaintiff is alleging that the TPP agreement is a contract and that Defendants breached duties contained within the contract itself.

Defendants do not argue that a claim for breach of the TPP contract under state law is expressly preempted by the statutes that established the HAMP program. Rather, without any acknowledgment that preemption is at issue, they suggest an implied preemption, arguing that Plaintiff's case is inexorably tied to interpretation of the HAMP guidelines (Defs. Reply at 3). This is insufficient grounds for preemption.

The Court of Appeals for the Seventh Circuit considered whether common-law state claims are preempted by the Home Owner's Loan Act, which regulates federal savings associations, preempts state regulation of federal savings associations, and, like HAMP, provides no private right of action for enforcement of the statute. In re Ocwen Loan Servicing, LLC Mortg. Servicing Litig., 491 F.3d 638, 642-44 (7th Cir. 2007). Noting that "[i]t would be surprising for a federal regulation" to bar state actions for breach of contract or fraud, the court determined that the "assertion of plenary regulatory authority does not deprive persons harmed by the wrongful acts of savings and loan associations of their basic state common-law-type remedies." Id. at 643-44.

A recent federal district court decision applied the In re Ocwen decision to a TPP agreement and held that a state-law breach of contract claim was not preempted or otherwise generally precluded by HAMP. Fletcher v. OneWest Bank, FSB, No. 10 C 4682, 2011 WL 2648606, at * 4 (N.D. Ill. June 30, 2011) (citing In re Ocwen, 491 F.3d at 643-44). The Fletcher court explained, "without some explicit direction from Congress that it intended programs such as HAMP to have such preemptive force, the Court will not preclude Fletcher from pursuing her basic state common law remedies" Id.; see also Bosque v. Wells Fargo Bank, N.A., 762 F.Supp.2d 342, 351 (D. Mass. 2011) (TPP's relationship to federal statute and regulations does not require dismissal of any state-law claims that arise under TPP). In accordance with the analysis in these cases, we conclude that Plaintiff's contract action is not preempted or otherwise precluded by HAMP.

2. Binding Contract

Defendants also argue that Plaintiff cannot claim breach of contract because the TPP was not a binding contract as a matter of law. They characterize the TPP as step one of a two-step process and claim that it did not result in an executed contract (Defs. Mot., ¶ 7; Defs. Br. at 21). Plaintiff responds by referring to several cases in which a TPP is recognized as a contract (Pl. Br. at 16). In Bosque, supra, the court noted that the TPP agreement at issue in that case was based on a form of agreement created by the government, cited language like that present in the TPP at issue here, and described it as a document with the appearance of a contract. 762 F. Supp. 2d at 348.

The forms and process here were similar. CitiMortgage offered Plaintiff a TPP as step one in the HAMP program, and then sent the form agreement to Plaintiff for her signature (Am. Compl., ¶¶ 28-31). Plaintiff alleged that she accepted the terms both by making the payments required by the TPP and by signing it and returning two copies to CitiMortgage (id., ¶¶ 31, 33). Defendants argue that the procedure followed with Plaintiff differed from that in the Bosque case in that the lender in Bosque signed the plaintiffs' TPP's. Other courts, however, have recognized as contracts TPP agreements that were not signed by the lender. See Belyea v. Litton Loan Servicing, LLP, Civ. Action No. 10-10931-DJC, 2011 WL 2884964 (D. Mass July 15, 2011). Defendants do not raise the statute of frauds against Plaintiff's contract claim. Moreover, Defendants acknowledge that the TPP was in effect for the three-month period and state in their pleadings that Plaintiff's TPP started in September 2009 ((Dkt 45, Defs. Mot., ¶ 5). This understanding is consistent with the definition of the TPP Effective Date as September 1, 2009 (Defs. Br., Ex. C). We conclude that the TPP is a contract between the parties, subject to the terms and conditions stated in the document that Plaintiff accepted by signing on August 17, 2009.

Many of Defendants' arguments for dismissal of Plaintiff's contract claims are based on the terms of the TPP agreement. Defendants argue that her claim fails under clear and unambiguous terms of the contract and because Defendants complied with the terms of the TPP and terminated it by sending notice to Plaintiff. Plaintiff, in turn, argues that the contract promises a loan modification if she complied with the payments and income verification requirements, that she complied with all the terms of the contract, and that Defendants failed to perform their duties. Some of Plaintiff's arguments for her claims stray to rights and duties under the HAMP statute rather than under the terms of the TPP agreement. Such arguments are not relevant to the viability of her Amended Complaint, which pleads state common-law claims, and will not be given weight in these considerations.

Plaintiff maintains that she complied with the terms of the TPP and that Defendants therefore had a contractual obligation to provide her with a Modification Agreement (Am. Compl., ¶¶ 31-38, 59-67; Pl. Br. at 4-17). Defendants claim that the language of the TPP on which she relies is taken out of context and that clear, unambiguous language in the TPP requires judgment in their favor (Defs. Reply at 6). Defendants point to language in § 2 of the TPP and argue that these terms and others in the TPP (Defs. Br., Ex. C) make it clear that they have no obligation to proceed to Step Two and can let the TPP expire without doing anything. The key sections on which Defendants rely provide in relevant part:

Defendant also calls attention to the portion of § 2 that provides that the TPP expires at the end of the three month trial period.

Plaintiff claims that the language of the TPP promised her a modification of her mortgage if she complied with the terms of the TPP. As noted above, the first full sentence of the TPP states:

Defendants argue that this sentence does not obligate them to provide a Modification Agreement because it is qualified by § 3, which is subject, in turn, to § 2. But § 3 can be read to condition Plaintiff's receipt of a Modification Agreement only on Plaintiff's compliance with the requirements that place duties on her in § 2. The only references to § 2 in § 3 are a mention of payment procedures in § 2D and a statement of Plaintiff's duties that provides:

It is clear in the TPP that "I" refers only to Plaintiff and not to Defendants, the "Lender." The requirements of § 2 that impose a duty on Plaintiff are those requiring timely payment of the TPP payment amounts.

While both parties try to isolate the terms that support their interpretation, when read as a whole, the TPP document is far from clear. The parties' attempts to support their positions with references to portions of the agreement highlight the fact that some of the terms conflict with others. While this Court is mindful that it should strive to harmonize the terms of the TPP, Wonderland, 274 F.3d at 1092, the Court must "give effect to every word, phrase, and clause in a contract and avoid an interpretation that would render any part of the contract surplusage or nugatory." Klapp, 663 N.W.2d at 453. The terms of the TPP cannot be read "in reasonable harmony" and its language is, thus, ambiguous. See id.1 Plaintiff's breach of contract claim hinges on ambiguities in the contract and precludes dismissal as a matter of law.

3. Written Notification

The parties also contest whether summary judgment should be entered on Plaintiff's breach of contract claim based on Defendants' evidence that they sent written notice to Plaintiff that she did not qualify for a mortgage modification, as referenced in § 1 of the TPP. Plaintiff claims that she fulfilled all of the requirements for a loan modification, and that, although she was informed by telephone in December 2009 that she no longer qualified for a HAMP modification, she never received written notice (Am. Compl., ¶¶ 36-39). Defendants do not provide any evidence to counter Plaintiff's claim that she was in compliance with the TPP in that her financial representations were true and she made the required payments.

Defendants do, however, assert in their motion that they sent written notice that her request for a modification was denied, and they support this claim with a file copy of a 12/10/09 notice letter (Dkt 45, Defs. Mot., ¶¶ 5-6 and Ex. K). Defendants have also submitted an affidavit attesting that the file copy was a true and accurate copy of the correspondence sent, except that the copy sent would have been on letterhead (Dkt 51, Defs. Reply, Ex. C). Plaintiff's only evidence of nonreceipt is her affidavit, attesting that she did not see or receive the 12/10/09 letter (Am. Compl., Ex. A, ¶¶ 32-33). Defendants' evidence may well be sufficient to establish that Defendants provided the written notice referenced in § 1 of the TPP. In light of the ambiguities in the TPP as to the promises and responsibilities of the parties, however, this evidence is insufficient to support summary judgment for Defendants because it does not resolve all of the issues raised by Plaintiff's claim of breach of contract.

B. Breach of Duty of Good Faith and Fair Dealing

While Michigan does not recognize an independent tort claim for breach of the implied covenant of good faith and fair dealing, every contract in which performance is left to a party's discretion is subject to an implied covenant of good faith. McLiechey v. Bristol West Ins. Co., 408 F.Supp.2d 516, 522 (W.D. Mich. 2006); Lowe's Home Centers, Inc. v. LL & 127, LLC, 147 Fed App'x 516, 523 (6th Cir. 2005). "[W]here the manner of performance under a contract is left to the discretion of a party, that party may breach the contract by exercising its discretion in bad faith." Lowe's, 147 Fed. App'x at 523-24.

Plaintiff alleges that Defendants breached their duty of good faith and fair dealing by inaction, lack of timely verification that she qualified under the TPP, and failure to timely provide her with a Modification Agreement (Am. Compl., ¶¶ 69-74). Defendants provide no evidence to support a claim that they acted in good faith or made any effort at all to verify the information Plaintiff submitted during the three-month TPP period. Defendants simply say that verification of her income "became problematical" in December 2009 (Defs. Br. at 18), which was after the three-month TPP period, and that they fulfilled any duty by sending written notice that Plaintiff was not qualified for modification.

Plaintiff's claim of breach of the duty of good faith and fair dealing is dependent on the existence of contract duties, which is, in turn, dependent on resolution of ambiguities in the TPP contract. Defendants' motion is thus denied, and this claim is permitted to proceed in conjunction with Plaintiff's breach of contract claim.

C. Promissory Estoppel

Defendants contend that Plaintiff cannot prevail on her third count, a promissory estoppel claim, pled in the alternative, because her claim of reliance is based on isolated language in the TPP and her claim of a promise is barred by the statute of frauds (Defs. Mot., ¶ 9). Defendants cite Michigan's statute of frauds, which provides that an action cannot be brought against certain financial institutions unless the contract or promise is in writing and signed. MICH. COMP. LAWS ANN. § 566.132(2)(b) and (3). Plaintiff counters that her claim is not subject to dismissal under the statute of frauds because it is based on a writing, the TPP, and that Defendants' signature was waived and Defendants are estopped by her performance of the terms (Pl. Br. at 20-21). Defendants, in reply, characterize Plaintiff's argument as "absurd" but do not cite any support for their contention that Plaintiff's allegations are insufficient under Michigan law to avoid dismissal under the statute of frauds (Defs. Reply at 9). The issue of Plaintiff's reliance is subject to analysis of the ambiguous TPP provision and is not ripe for dismissal. For these reasons, Defendants' motion is denied on the promissory estoppel claim.

IV. CONCLUSION

For the reasons stated above, Defendants' Motion for Summary Judgment/Dismissal (Dkt 45) is DENIED. An Order will be entered consistent with this Opinion.