July 18, 2019

This morning, a Palm Beach County, Florida Circuit Judge denied a Motion to Dismiss filed by Citibank, N.A. as trustee of a securitization trust which sought to dismiss the homeowners’ Counterclaim for Declaratory Relief sounding in unilateral modification of contract. Jeff Barnes, Esq. of W. J. Barnes, P.A. represents the homeowners. Mr. Barnes filed the Counterclaim as part of the homeowners’ Answer and Affirmative Defenses to Cit’s Complaint for Foreclosure. He also briefed the matter and argued it in open court this morning.

In denying Citi’s Motion to Dismiss, the Judge stated that the Counterclaim “smacks of factual issues” relating to the acts undertaken by Citi which resulted in the unilateral modification of the loan contract without prior notice to or consent of the homeowners..

The homeowners have alleged in the Counterclaim that in connection with their loan being the subject of a securitization that the loan was converted from a regulated, residential mortgage loan transaction to an unregulated commercial investment contract, and that numerous matters in connection therewith were never disclosed to the homeowners and thus they did not consent to these changes which modified the loan contract. The Counterclaim also alleges that the “your loan may be sold” language in the loan contract is vague and misleading, and does not properly disclose numerous material matters which, if they had been disclosed to the homeowners pre-contract, would have resulted in the homeowners not agreeing to sign the loan documents.

Mr. Barnes, who developed this theory and argument, is currently advancing it in numerous foreclosure actions across the United States. A Tennessee Judge also previously denied a Motion to Dismiss the unilateral modification of contract claim which Motion was filed by Bank of New York Mellon. The Judge found that the Complaint, filed by the homeowner, stated a cause of action for unilateral modification of contract.

Almost all states have established case law which consistently holds that a contract which is unilaterally modified without consent, without knowledge of the other party, without any “meeting of the minds”, and without any additional consideration for the modification is unenforceable.

Jeff Barnes, Esq.,