Rehbein v. CitiMortgage et al, No. 2:2013cv00065 - Document 22 (E.D. Va. 2013)

Court Description: MEMORANDUM OPINION AND ORDER that Rehbein's 10 Motion to Remand is DENIED and the Defendants' Motions to Dismiss, ECF Nos. 4 & 8, are GRANTED. Rehbein's Complaint is DISMISSED. Signed by Chief U.S. District Judge Rebecca Beach Smith and filed on 4/4/2013. (rsim, )

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FILED UNITED STATES DISTRICT COURT EASTERN DISTRICT OF VIRGINIA APR Norfolk Division 4 2013 CLERK,U.S. DISTRICT COURT NORFOLK, VA NORMA REHBEIN, Plaintiff, ACTION NO. v. CITIMORTGAGE, 2:13cv65 INC. and SHAPIRO BROWN & ALT, LLP, Defendants. MEMORANDUM OPINION AND ORDER Defendant CitiMortgage, Brown & Alt Memoranda ("SBA") in filed Support February 15, 2013, ("Citi") Motions on to Norma Rehbein to Court and On ("Rehbein"), an Dismiss Dismiss the Motion accompanying 13, filed accompanying to Remand and February a 2013, 22, and 2013, Motion Memorandum These Motions are now ripe for review.1 forth below, and Defendant Shapiro February respectively. Plaintiff, State Inc. to in the Remand Support. For the reasons set is DENIED and the Motions to are GRANTED. 1 On February 14, 2013, Citi requested a hearing on its Motion to Dismiss. After full examination of the briefs and the record, the court has determined that a hearing is unnecessary, as the facts and legal arguments are adequately presented, and the decisional process would not be aided significantly by oral argument. See Fed. R. Civ. P. 78(b); Local Civ. R. 7(J). I. Rehbein Court in is Factual and Procedural History the Virginia resides. Compl. owner Beach 51 1. of a home located ("Oaklawn Court On June 10, 2008, at 2132 Property'7), Oaklawn where she Rehbein entered into a mortgage loan contract with Citi; she executed a Promissory Note secured Compl. by SISI household a Deed 4-5. of In income, mortgage payments. Trust 2008, which Compl. on the Rehbein caused SI 8. Oaklawn Court experienced her to fall a Property. reduction behind least 11. initially, As review of for a initiated denied a final modification. January 11, 2013, Rehbein's loan modification. Compl. foreclosure proceedings; scheduled for January 16, 2013. On Circuit January 11, 2013, Court for the the but was, SI 15. SISI 9, remained under Meanwhile, loan Compl. Citi foreclosure auction was Compl. SISI 18, 34.2 Rehbein City her She applied to Citi for a loan modification and was granted a temporary modification, at on in of commenced an action Virginia Beach, in seeking the a preliminary injunction enjoining the Defendants from instituting forfeiture proceedings prior to proper loan modification review 2 Rehbein does not allege that the foreclosure sale has occurred. SBA claims that "[t]he Chesapeake Circuit Court granted a stay of 60 days of the sale upon posting of a bond." SBA's Mem. However, the Complaint was filed in Supp. Mot. Dismiss at 2. the Circuit Court for the City of Virginia Beach, not Chesapeake. Notice of Removal at 1. Thus, the court is hesitant to rely on Defendant SBA's statement. and requesting compensatory damages. removed the case to federal court, On February 7, 2012, Citi with the consent of SBA. On February 13, 2013, Citi filed a Motion to Dismiss for Failure to State a Claim. SBA February 15, 2013. to Remand the Virginia filed separate Beach, to to the Circuit which now Motions to Dismiss on for Citi the City responded of on Rehbein did not file a reply to Defendant Citi's lapsed. to Court Defendant response to her Motion to Remand, has Motion On February 22, 2013, Rehbein filed a Motion action March 5, 2013. a Rehbein Dismiss on filed and the time for her to do so a response March 8, 2013, replied on March 29, 2013.3 to to which These Motions the Defendants' Defendant are now ripe Citi for review. II. Before Motions, it jurisdiction 312, 316 the court must over (4th Cir. Motion can reach determine the claims. 2006) ("It is to Remand the merits that it See Miller well of has v. the Defendants' subject Brown, matter 462 F.3d established that before a 3 Rehbein's response was untimely, and she did not seek leave of the court before filing it. On March 14, 2013, the court entered an Order notifying the parties that Rehbein's Memorandum in Opposition to stricken from the the Defendants' Motions to record, absent a motion for Dismiss would be extension of time by Rehbein. Rehbein filed a Motion for Extension of Time, and on March 28, 2013, the court granted her leave to file an untimely response. The court simultaneously granted Defendant Citi's motion for extension of time to file its reply. federal court can decide the merits of a claim, invoke the jurisdiction of the court."). Motion to Remand, has under the at claim must Rehbein has filed a alleging that this court lacks subject matter jurisdiction over her claims. court the subject matter The Defendants contend that this jurisdiction diversity statute, 28 U.S.C. over the instant § 1332. claims Removal Notice 2-5. Under 28 U.S.C. § 1332(a), jurisdiction of civil actions district where the courts amount have in controversy exceeds $75,000 and the parties are completely diverse, that the citizenship of every plaintiff must the citizenship of every defendant." Mt. State Carbon, LLC, 636 F.3d 101, A. Defendants 103 "meaning be different from W. Va. Energy Co. v. (4th Cir. 2011). Amount in Controversy In her Complaint, The Cent. original Rehbein seeks only $29,000 in damages.4 contend that because the cost to Citi in complying with the injunction Rehbein seeks exceeds $75,000, the jurisdictional minimum is met. Removal Notice SI 19. xx[T]he test for determining the amount in controversy in a diversity proceeding which judgment would produce.'" [a] is *the pecuniary result Dixon v. to either Edwards, party 290 F.3d 4 This amount consists of $25,000 in compensatory damages from Citi and $4,000 from SBA. 699, 710 (4th Cir. 327 F.2d 568, In 569 suits 2002) (4th Cir. involving controversy is amount damages of the No. *10 Aug. Va. of the to the real real plaintiff 2:llcv678, 20, Ins. Co. v. Lally, the amount 1964)). claims value Servicing Co., (E.D. (quoting Gov't Emps. 2012 2012) property, property, seeks. U.S. (Davis, present value of the plaintiffs' simply the Monton Dist. J.) not v. LEXIS (the in Am.'s 117259, at that the fact real property exceeded $75,000 "by itself, appears sufficient to demonstrate that the amount in controversy is exceeded in this Servicing, amount 796 F. Supp. case"); 2d 753, 766 Sherman v. Litton Loan (E.D. Va. 2011) in controversy was met based on (finding the "the manifest fact that the value of the Property exceeds $75,000"). Where injunctive controversy litigation." is relief measured by Hunt v. Wash. 333, 347 (1977) . "an appropriate the is sought, value of "the the State Apple Adver. object Comm'n, see also consideration 2010) v. Kucan, JTH Tax, ("[L]ike of in the 432 U.S. The cost of complying with the injunction is when determining amount-in-controversy requirement has been met." & Trust Co. amount 245 F. App'x 308, Inc. v. requests Frashier, for 624 money injunctive relief must be valued."). 314-15 the Republic Bank (4th Cir. F.3d 635, damages, whether 639 2007); (4th Cir. requests for In this exceeds amount case, the $400,000. of value Resp. Rehbein's of Mot. home the Remand mortgage Oaklawn Ex. loan Court 8. was The Ex. indicates I.5 The that, as uncontested of the date evidence of SI 4. Thus, balance the on Moreover, value Rehbein's the cost of the loan to Citi before Resp. property in complying the court the amount Mot Remand Ex. 7 and unquestionably as Citi's Mot. removal, outstanding on the loan was $316,249.19. principal $292,450.00, reflected in the Promissory Note Rehbein executed. Dismiss Property the outstanding exceed with an $75,000. injunction enjoining foreclosure sale of the property could exceed $75,000. Accordingly, this case. Sherman, the amount Monton, in 2012 diversity completely diverse. Virginia, is statute 28 U.S. LEXIS Dist. is 117259 met at in *10; Diversity also U.S.C. requires § 1332. that the Rehbein, a parties be citizen of indisputably diverse from Defendant Citi, a New York corporation with Missouri. requirement 796 F. Supp. 2d at 766. B. The controversy its Removal Notice SI 6-7. principal place of which is business SBA is a Virginia citizen, in and 5 While the Promissory Note was not attached to the Complaint, the court may consider it because it is integral to the Complaint and its authenticity is not contested. See Sec'y of State for Defence v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007). thus not diverse from Rehbein. This apparently diversity would ordinarily preclude federal Supp. of Mot. Remand at 3. this district, is doctrine fraudulent Dist. of LEXIS 2:llcv477, 2, 2012) 2011 2012 U.S. (Jackson, U.S. (Allen, immaterial 117259, Dist. the to the Dist. J.); court Mem. Correll Kenny v. v. Monton, 2012 U.S. of Am., No. (E.D. Va. Feb. at Bank at *16-17 Bank *6-10 of SBA's under e.g., LEXIS 12960, that analysis See, *13; 139168, finds diversity joinder. at LEXIS jurisdiction. In keeping with many recent decisions however, citizenship incomplete Am., (E.D. No. Va. the 4:llcvl20, Dec. 5, 2011) J.). The doctrine "disregard, for of fraudulent certain nondiverse defendants, dismiss the jurisdiction." 1999).6 nondiverse Mayes v. allows purposes, jurisdictional joinder the assume court to citizenship of jurisdiction over a case, defendants, Rapoport, the 198 and thereby F.3d 457, 461 retain (4th Cir. "[T]he party seeking removal bears the Aheavy' burden of demonstrating would be able Athat to there is establish no a possibility that cause of action the against plaintiff the in- 6 As the Fourth Circuit has explained, "[t]he term ^fraudulent joinder' is a bit misleading, inasmuch as the doctrine requires neither a showing of fraud, nor joinder. In fact, it is irrelevant whether the defendants were ^joined' to the case or originally included as defendants; rather, the doctrine is potentially applicable to each defendant named by the plaintiff either in the original complaint or anytime prior to removal." Mayes, 198 F.3d at 461 n.8 (internal citations omitted). 7 state U.S. defendant.'" Dist. Mayes, In Bennett Bank of at *7 LEXIS 54725, v. (E.D. Am., Va. No. Apr. 18, 2012) the instant case, there is (quoting undisputed evidence that SBA Professional Foreclosure Corporation not SBA,7 is the substitute trustee. of ECF No. Virginia Id. Mot. Remand at 2.8 allege any facts of at action against all fraudulent joinder, the of SBA analysis. Mayes, 198 citizenship of for Defendant 7 Rehbein the F.3d Mem. Supp. at a Indeed, it does Therefore, under the court will not consider purposes Citi, principal place of business SBA. concerning SBA. the doctrine of of Virginia, ("PFCV"), The Complaint does not allege any facts that would support a cause citizenship 12, Att. Rehbein admits that her Complaint "improperly named" SBA as a defendant. not 2012 198 F.3d at 464). is a misidentified party to these proceedings. 1. 3:12cv34, of 461. New its jurisdictional Considering York in Missouri, only corporation and Rehbein, the with a a citizen there is complete diversity in this case. does not contest, and offers no evidence to the contrary, that "SBA is a law firm retained to assist Citi and its substitute trustee," PFVS, in performing foreclosure sales. SBA's Mem. Supp. Mot. Dismiss at 1. See infra note 8 and accompanying text. 8 Notwithstanding the court's previous warning that until Rehbein amended the Complaint to add PFCV as a defendant, PFCV is not a party to the suit, Rehbein did not amend her Complaint to name the correct party. See Order, March 13, 2013, at 1 n.l. 8 Accordingly, jurisdiction are because met, the requirements Rehbein's Motion to for Remand diversity for lack of jurisdiction is DENIED. Ill. Each Defendant Motions separately to Dismiss filed a Motion to Dismiss the Complaint for failure to state a claim upon which relief can be granted. Rehbein filed a reply.9 responded For the to these reasons Motions; Defendant discussed below, Citi Rehbein's Complaint fails to state a claim on which relief can be granted. Consequently, the court GRANTS the Defendants' Motions to Dismiss. A. Standard of Review Federal Rule of Civil Procedure 8 (a) provides, part, "[a] in pertinent pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is detailed labels entitled factual and to relief." allegations, The but conclusions .... [A] complaint Rule 8 Twombly, 550 dismiss, a accepted as U.S. 544, complaint true, to 555 must (2007). contain "requires formulaic elements of a cause of action will not do." "To need not have more than recitation Bell Atl. survive sufficient a of the Corp. v. motion to factual matter, ^state a claim to relief that is plausible See supra note 3 and accompanying text. 9 on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). The in Twombly and Supreme Court, Iqbal, offered guidance to courts evaluating motions to dismiss: keeping with these principles a court In considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Iqbal, 556 U.S. at 679. That alleged in the complaint is, as true the and views light most favorable to the plaintiff. 417 F.3d whether 418, a 420 (4th complaint . . . be a court to draw Iqbal, 556 U.S. Cir. states context-specific on its judicial facts those facts in the Overall, plausible task accepts Venkatraman v. REI Sys., 2005). a court claim that "[determining for requires experience and relief the will reviewing common sense." at 679. B. No Allegations Against SBA SBA has produced evidence, that PFVC, 1; supra admits Mem. not SBA, notes that Supp. 7 & SBA was Mot. which Rehbein does not contest, is the substitute trustee. ECF No. 8 In and accompanying improperly Remand at named 2. The 10 text. as a fact, party to Complaint 12, Att. Rehbein this levels suit. factual allegations against the substitute trustee, not SBA, and so does not state a plausible claim for relief against SBA. Accordingly, SBA's Motion to Dismiss is GRANTED. C. The Plaintiff Has No Enforcement Rights Under the National Mortgage Settlement On March 12, 2012, the United States and the attorneys general of of Columbia servicers, Compl. filed a 5 19; Citi's complaint Supp. Mot. filed, (the "National Mortgage Settlement"), Consent Judgment April 4, 2012, District The of Consent by United Columbia. Judgment Citi's sets protecting homeowners. these standards. third-party Compl. beneficiary judgments enforcement purposes ITT Baking Cont. Thompson v. U.S. Pep't at 3. Shortly which was memorialized by Judgment") States Mem. forth District Supp. entered Court Mot. servicing for Dismiss, standards on the Ex.5. aimed at SI 19. Rehbein alleges that she is of Consent Judgment and, as such, the Br. Opp. and decrees basically as Co., mortgage The mortgage servicers must comply with has a right to enforce it. Consent five the parties reached a settlement ("Consent the Justice foreclosure abuses. Dismiss after the complaint was a against alleging various Mem. of forty-nine states and the District joint including Citi, Department 420 U.S. of Housing 11 a Mot. are Dismiss at 5. "to contract." 223, a 238 & Urban be construed for United States (1975); Dev. , 404 v. see also F.3d 821, 821, 832 (4th enforcement Cir. of a 2005) ("Issues consent decree of interpretation typically traditional rules of contract interpretation Countrywide at *7-8 Bank, 2:llcv271, (D. Utah July 26, 2012) Settlement as that No. "[a] a contract). nonparty promised in a contract intend." 1347 Astra USA, (2011). enforceable are not As benefited by U.S. 723, to 750 v. in it it." is LEXIS entitled Santa Clara Cnty., matter, to 104728, a benefit even 1975). consent 131 S. Ct. decrees collateral proceedings though Blue Chip Stamps (U.S. Dist. Bell v. a basic tenet of contract law legally general directly or parties . . . ."); to . . . only if the contracting parties so Inc. a U.S. subject (analyzing the National Mortgage It becomes 2012 are and they were v. Manor 1342, are "not by those intended to Drug Stores, who be 421 In order to have enforcement rights, third parties to a consent decree must demonstrate that they are intended beneficiaries, beneficiaries. Cir. SEC v. as opposed Prudential Sec, to 136 merely F.3d incidental 153, 158 (D.C. 1998). "[B]ecause the government public interest, third parties government] presumed intended Contracts are beneficiaries. § 313 cmt. to Id. ; a usually acts in the general [to consent decrees involving the be incidental see (1981) 12 also beneficiaries," Restatement ("Government (Second) contracts not of often benefit the treated as public, but individual members incidental beneficiaries unless is manifested."). of the public a different are intention To overcome this presumption and qualify as an intended beneficiary, the third party must demonstrate that the contracting parties "intended the third party to be able to sue to protect third party; parties Sec, [the] benefit" the consent judgment conferred on the it is had some not intent sufficient to benefit to show simply that the third party. the Prudential 136 F.3d at 159. Although the National Mortgage Settlement certainly aims to benefit to individual borrowers through more stringent servicing standards, from which intended the court could beneficiaries beneficiaries. The implementation of Rehbein has alleged no facts conclude rather language of the that these than the merely Consent that the parties to the agreement did not borrowers are incidental Judgment indicates intend the individual borrowers to be able to sue to protect the benefits the consent judgment confers. Citi's Mem. Supp. 1-16; see also Prudential Sec, The Consent Judgment Mot. Dismiss Ex.5, Ex. E at 136 F.3d at 159. expressly provides a mechanism by which its terms are to be enforced, and appoints an independent monitor to oversee the servicers' compliance with the servicing standards. Dismiss Citi's Mem. Supp. Mot. 13 Ex.5, Ex. E at 1-16. The Consent Judgment specifies that "[a]ny enforcement action under this Consent Judgment may be brought by any Party to this Consent Judgment or the Monitoring Committee." Id., Ex. 5 at 15. Third party borrowers are conspicuously absent from this list. Under the principle of expressio unius est exclusio alterius, follows that, individual pursuant borrowers actions. See Smith F.3d 861 (4th 858, to the are not Barney, Cir. Consent eligible Inc. 2000) unius est exclusio alterius to v. Judgment's own to enforcement Critical (using it bring Health principle of terms, Sys., 212 expressio interpret a contract's choice of forum clause) .10 Moreover, not all failures to meet the Consent Judgment's servicing standards constitute violations of the agreement; only where the the servicer particular Mot. has metric Dismiss Ex.5, Ex. exceeded in a the given E at ll.11 threshold error quarter. rate Citi's set Mem. for Supp. The servicer would then have 10 Rehbein erroneously cites this principle of construction for the proposition "that what included." Br. Opp. Mot. is not excluded ... is therefore Dismiss at 6. In fact, the maxim roughly translates as "the expression of one thing implies the exclusion of another." Ayes v. U.S. Dep't Veterans Affairs, 473 F.3d 104, 110-111 (4th Cir. 2006). When the principle is afforded its proper meaning, it unquestionably weighs against interpreting the Consent Judgment to provide individual borrowers enforcement rights. 11 For example, only when the number of loans referred to foreclosure in violation of dual-track provisions exceeds five percent in the quarter would a potential violation occur. Citi's Mem. Supp. Mot. Dismiss Ex. 5, Ex. El at 13. 14 the right to cure the potential violation before any further enforcement action may be taken. Id. , Ex. E at 11. Permitting individual borrowers to sue to enforce any failure by a servicer to meet the servicing standards would be incongruous with the definition of "potential violation" to which the parties to the consent judgment agreed. Rehbein has failed individual borrowers National Mortgage third-party suits See Id., Ex. El at 13. are to overcome the presumption that merely incidental beneficiaries of the Settlement, and to the enforce so have Consent no right Judgment. to bring Thus, any claims that allege a violation of the Consent Judgment should be dismissed.12 alleges Accordingly, that the Count "Defendants IV of the have violated Complaint, the terms which of the Settlement Agreement by dual tracking Plaintiff for both a home loan modification while continuing to pursue foreclosure," is DISMISSED. D. In the remaining State Law Claims claims of the Complaint, it appears that Rehbein may be attempting to couch National Mortgage Settlement 12 Even if the court were to find that individual borrowers had enforcement rights under the Consent Judgment, any claims seeking to enforce the Consent Judgment's terms could not move forward in this court because the Consent Judgment provides that the servicer's obligations under the Consent Judgment are only enforceable of Columbia. in the United Citi's Mem. States Supp. District Mot. 15. 15 Court for Dismiss Ex.5, the District Ex. E at 14- violation claims as claims advanced under state law. the court is skeptical of such characterizations, proceed to assess individually. 2012 U.S. of Rehbein's the court will state law See Monton v. Am.'s Servicing Co., Dist. (analyzing each LEXIS 117259, state law claims at *19-23 predicated (E.D. Va. on the Although claims No. 2:llcv68, Aug. Home 20, 2012) Affordable Modification Program ("HAMP")). i. Breach of Contract Arising from the Implied Covenant of Good Faith and Fair Dealing Rehbein alleges that the Defendants breached the covenant of good faith and fair dealing found in the Promissory Note and the Deed of Trust "by [sic] for properly a (i) modification review failing to properly review Plaintiffs of their Plaintiffs [sic] [sic] loan for (ii) the failing to alternative modification programs such as a repayment plan or the Department of Justice modification loan [and] service Plaintiffs' [sic] loan." (iii) failing to properly Compl. $ 26.13 13 At times, Rehbein appears to suggest that her cause of action arises from Citi's breach of the duty of good faith and dealing under the National Mortgage Settlement. See Compl. ("Defendant Bank is in breach of contract as a matter fair 1 26 of Virginia Law by failing to conduct themselves [sic] with the principles embodied by the Settlement Agreement's covenant of good faith and fair dealing as defined by the Settlement."). To the extent that Rehbein' s claim is so based, her claim must fail because she was not a party to the National Mortgage Settlement and does not have enforcement rights under that agreement. See supra Part III.e. 16 The Fourth Circuit has held that contracts governed by Virginia law contain an implied covenant of good faith and fair dealing. 4300 Wolf v. (4th Adventures, Cir. Feb. Ltd., 624 Vermiculite, Cir. Ltd. 1998). in solely that However, binding v. bad W.R. 11-2419, 2013) F. Supp. "a 2d 443, party even party." a implied covenant Am., 493 S.E.2d 516 156 (Va. Space 541-42 is F.3d vested at 542. valid and and fair faith Ward's Equip, 1997). (4th contractual create good dealing is inapplicable to those rights." Holland N. v. discretion contract of LEXIS 2009)); Va. exercise Vermiculite, to Va. 156 F.3d 535, not App. Enomoto (E.D. such parties an 450 may when Va. 2013 U.S. (citing Grace & Co., faith, "when rights, No. 28, Moreover, discretion in Fannie Mae, v. New Simply put, "the duty of good faith does not prevent a party from exercising its explicit contractual rights." Thus, Va. Vermiculite, 156 F.3d at 542. "the covenant does not compel a party to take affirmative action not otherwise required establish independent parties, and cannot contractual duties be rights." not invoked Monton, under the contract, otherwise agreed to undercut 2012 U.S. does upon a party's Dist. LEXIS not by the express 117259, at *21. Here, creates a neither duty the on Promissory the part 17 of Note nor Citi the to Deed of Trust facilitate loan modification. The terms of the Promissory Note and the Deed of Trust expressly allow Citi to foreclose upon the property if the borrower defaults on the loan. The undisputed evidence demonstrates that Rehbein fell into arrears on the loan payments and defaulted on Mot. Dismiss her mortgage. property. 1. right contractual at to Mem. As Compl. a result, accelerate Supp. Mot. St 8; Citi payment Dismiss Citi's and 1 f Ex. had 6. Mem. the Supp. express foreclose on the Because a party does not breach the implied duty of good faith when it exercises express rights under the contract, Va. Vermiculite, 156 F.3d at 542, Citi's decision to accelerate payment and start foreclosure proceedings does not constitute a breach of any duty created by the Promissory Note or the Deed of Trust. Moreover, contains neither the Promissory Note nor the Deed of Trust provisions modification in payments. short, covenant In of good obliging the Citi to event Rehbein failed Rehbein's claim arising faith and fair dealing fails facilitate loan to make timely from the implied because she has alleged no facts demonstrating any "discretion" under either the Promissory Note or the Deed of Trust that Citi exercised in bad faith. 18 ii. Breach of Contract Arising from Alleged Violations of the National Mortgage Settlement's Servicing Standards Rehbein alleges modification standards that by application set forth in failing in the to review accordance National breached the express terms of Rehbein's with Mortgage the loan servicing Settlement, the Deed of Trust. Compl. Citi 5 25. She argues that the Defendants "had an obligation under the Deed of Trust to follow all Federal and State law," and they breached this obligation deliberate servicing are a party." It "when is they chose standards in Br. Opp. Mot. a basic at the time of the ignore the clear and agreement to which they Dismiss at 9-10. tenant generally understood to to of contract law that "contracts are incorporate only those laws which exist formation." Condel v. Bank of Am., Dist. LEXIS 93206, at *24 (E.D. Va. July 5, 2012) 2012 U.S. (citing Gazale v. Gazale, 250 S.E.2d 365 (Va. 1979)). "[A]bsent clear language to interpret the contrary, courts should not incorporate future changes to the law." LEXIS 93206, Here, obligations Condel, contracts to 2012 U.S. Dist. at *24 . the are Deed of subject Trust to provides requirements that of all rights "Applicable and Law," which is defined as "all controlling applicable federal, state, and local statutes ... as well as all applicable final, non appealable judicial opinions." Citi's 19 Mem. Supp. Mot. Dismiss Ex. 2 at 3 & II 16. This provision "refers to the then-existing body of law question [;]" that it applies does already applicable directly not "incorporate to the laws contract in [were] not which (even if otherwise relevant) to the parties or their agreement" at the time they entered into the contract. Condel, the 2012 U.S. Dist. Deed of Settlement, Trust as on LEXIS 93206, June 10, reflected in at *23. 2008. the Rehbein executed The Consent National Mortgage Judgment, was not entered by the District Court for the District of Columbia until April 4, 2012, signed. nearly four years after Deed of Trust was Consequently, it does not qualify as "Applicable Law" under the Deed of Trust. See id.14 Citi's the purported Settlement's Thus, Rehbein cannot rely on violations servicing of standards the as National grounds for Mortgage breach of contract. iii. Duty to Mitigate Damages Finally, Rehbein alleges that the "Defendants are required by law and have a duty to mitigate their damages," and they have 14 Even if the court were to interpret "Applicable Law" to include future changes to the law, the National Mortgage Settlement Agreement is not an "applicable" judicial opinion because Rehbein has no right to sue to enforce the Consent Judgment. See supra Part III.C; see also Lubitz v. Wells Fargo Bank, No. CL12-3800, 2012 Va. Cir. LEXIS 97, at *3 (Sept. 20, 2012) (finding that HUD regulations "applicable law" under a deed of trust because they provide the plaintiff with a private right of action). 20 are did not not breached this duty by initiating the foreclosure process Rehbein claims she is eligible for a loan modification. f 37-38. Citi Rehbein will avoided contends incur if Citi that significant modifies The Virginia Compl. foreclosing on her property economic her Rehbein to repay Citi fully. by when loan, losses thereby that could allegedly be enabling Id. SI 37. Supreme Court has '^long recognized the obligation of an injured party to mitigate damages,'" but "an assertion that damages an injured party has is an affirmative defense," not an Monton, 2012 v. Rapp, U.S. Dist. Here, foreclose Defendant on her loan. at *23-25 (quoting Forbes 595-96 (Va. 2005)). Citi Rehbein's independent cause of action. LEXIS 117259, 611 S.E.2d 592, failed to mitigate had an property express once contractual she fell into right to arrears on There is no common law noncontractual duty regarding loan modification that would to exercise this right. require Citi Id. at *24-25. to forego As a result, its option Rehbein's claim for breach of duty to mitigate damages is DISMISSED. D. Injunctive Relief Rehbein foreclosure loan Compl. has at seeks a proceedings been 7. "properly She preliminary on injunction Rehbein's considered" argues that 21 property for without a enjoining until loan an the Rehbein's modification. injunction, her property will be sold at a foreclosure sale and Rehbein "will suffer serious detriment to her credit score." Id. SI 45. Before a preliminary injunction may be granted, must establish that 1) 2) "he is likely to preliminary his interest." and on the 3) 4) has To foregoing NRDC, not the merits. "that "that Winter v. Rehbein "he is likely to succeed on the merits"; suffer irreparable harm in the relief"; favor"; the an balance 555 U.S. Inc., 20 analysis contrary, that she the Rehbein Rehbein's request 7, is court has absence of equities is established that the of injunction claim upon which relief can be granted. Consequently, a plaintiff in tips the in public (2008). likely to has failed succeed concluded upon to state any See supra Part III.A-D. for a preliminary injunction is DENIED. IV. For ECF reasons 10, ECF No. the is Nos. 4 DISMISSED. & stated DENIED 8, The and Conclusion above, Rehbein's the Defendants' are GRANTED. Rehbein's court DIRECTS the Clerk Motion Motions to to Complaint to forward Remand, Dismiss, is a hereby copy of this Memorandum Opinion and Order to counsel for all parties. IT IS SO ORDERED. ,. Rebecca Beach Smith United States District Judge^W" Norfolk, April lA Virginia , 2013 REBECCA BEACH SMITH CHIEF UNITED STATES DISTRICT JUDGE 22

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