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Barbera v. TD Bank

May 14, 2010

GARY BARBERA, PLAINTIFF,
v.
TD BANK, N.A., DEFENDANT.



The opinion of the court was delivered by: Rufe, J.

MEMORANDUM OPINION AND ORDER

Plaintiff filed a one count complaint against TD Bank for breach of contract when TD Bank denied his loan application after issuing a Conditional Approval Letter ("the Letter"). TD Bank filed an answer with affirmative defenses. Thereafter, Plaintiff filed a Motion for Leave to File an Amended Complaint, seeking to add a second Plaintiff, Barbera's business entity Gary Barbera Enterprises, Inc. ("GBE"), and to add a second count alleging breach of contract on behalf of GBE as a third-party beneficiary of the alleged contract. Defendant thereafter filed a Motion for Judgment on the Pleadings pursuant to Federal Rule of Civil Procedure 12(c), which also included its response to Plaintiff's Motion to Amend. For the reasons that follow, Plaintiff's Motion to Amend the Complaint is denied and Defendant's Motion for Judgment on the Pleadings is granted.

I. Factual Background

Plaintiff Gary Barbera owns automobile dealerships in the Philadelphia area through his business, GBE. In March 2009, GBE required $1.2 million to meet its obligations to Chrysler Financial. To raise these funds, Barbera applied to TD Bank for a mortgage on his second home in Margate, N.J. He explained to TD Bank that he needed to close quickly to meet a pay-off deadline to Chrysler. TD Bank issued the Letter, pre-approving a $1.2 million mortgage on May 19, 2009. The Letter set forth the amount and term of the loan, the interest rate, and the projected monthly payments.

The Letter also stated TD Bank's requirement for two appraisals, among many other conditions, for final approval of the mortgage. On the same day the Letter was issued, Barbera orally proposed reducing the loan amount from $1.2 million to $999,000 to avoid the need for a second appraisal. Two e-mails concerning this proposed change to the loan amount were sent between TD Bank employees late in the day on May 19, 2009. The second e-mail included the statement "I will change the loan amount to $999,000, to avoid the second appraisal order."

Both the Letter and the subsequent e-mail stated that Barbera needed to submit certain documentation before underwriting could review the "loan request". For the purposes of resolving the Motion for Judgment on the Pleadings, the Court will assume that Barbera provided the required documentation, as he alleges. Nevertheless, approximately three weeks later, on June 10, 2009, TD Bank rejected Barbera's loan application.

Barbera filed the instant one-count complaint suing TD Bank for breach of contract, alleging that TD Bank breached its contractual obligation to provide the loan described in the Letter (as modified by the e-mail) and that Barbera was financially injured by the breach.

II. Standard of Review

The standard applicable to a motion for judgment on the pleadings and a motion for leave to amend the complaint is the same standard that governs a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6).*fn1 To survive a motion to dismiss, a plaintiff "must show that the allegations in his or her complaint are plausible."*fn2 For this breach of contract case to survive Defendant's Motion, Plaintiff needs to sufficiently plead factual content that allows the Court to infer that defendant breached an enforceable contract.*fn3 For purposes of these Motions, the Court accepts all allegations in the Complaint and proposed Amended Complaint as true, and construes the Complaints in the light most favorable to Plaintiff.*fn4 However, the Court need not accept Plaintiff's legal conclusions as true.*fn5 If "Plaintiff can prove no set of facts in support of his claim which would warrant relief,"*fn6 the case must be dismissed.

III. Discussion

A. Motion for Judgment on the Pleadings

Since both the Complaint and the proposed Amended Complaint state claims for breach of contract, the only issue in the Motion for Judgment on the Pleadings is whether the Letter created an enforceable contract between the parties. "Whether an undisputed set of facts establishes a contract is a question of law."*fn7 For the purpose of these motions, the Defendant does not dispute the facts set forth in Plaintiff's complaint. TD Bank's Motion for Judgment on the Pleadings urges the Court to find that the Letter 1) was not a contract, as it does not establish mutual assent to be bound; and 2) does not satisfy the Statute of Frauds, and therefore is unenforceable even if it is a contract.

1. Mutual Assent

In order to form a contract, there must be manifested mutual assent to the terms of a bargain. "Under Pennsylvania law, the test for enforceability of an agreement is whether both parties have manifested an intention to be bound by its terms and whether the terms are sufficiently definite to be specifically enforced."*fn8 In this case, the Court must determine, based upon the pleadings, whether it is plausible that there was an agreement to provide a ...


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