By Mike LaSusa

Law360 (May 1, 2020, 8:20 PM EDT) -- A Seventh Circuit judge split with two of his colleagues in a case accusing JPMorgan Chase of breaking a promise to modify a homeowner's mortgage in the wake of the 2008 financial meltdown, calling the bank an "intransigent" participant in post-crisis government aid programs.

The majority opinion issued Thursday by U.S. Circuit Judges Michael Y. Scudder Jr. and Diane S. Sykes said homeowner Anthony Taylor's case against JPMorgan Chase Bank NA doesn't pass legal muster because the bank never actually agreed to modify Taylor's mortgage in connection with the Home Affordable Mortgage Program.

Chase told Taylor to send in paperwork seeking a mortgage modification under HAMP, and he did — multiple times — but the bank never sent the paperwork back with the countersignature required to make the modification final, the majority said.

However, U.S. Circuit Judge David F. Hamilton disagreed with his colleagues' conclusion that "one sentence in the fine print of the HAMP documents nullified Chase's obligations and promises."

Judge Hamilton said the point of HAMP was to help avoid foreclosures for homeowners struggling with their mortgages, but he called Chase "a particularly intransigent, or perhaps incompetent, HAMP participant."

"The inference most generous to Chase here is that Taylor was eligible for HAMP relief and that Chase just failed to process his case correctly," the judge said.

Judge Hamilton said Taylor's case shouldn't be doomed by the mere lack of a countersignature.

"That conclusion is premature and requires resolving factual uncertainties in Chase's favor," the judge said, adding, "Not even Chase agrees with the majority that the countersignature requirement gave it a pocket veto over modifications for qualified homeowners."

The majority ruling Thursday backed the decision of an Indiana federal judge, who threw out Taylor's claims for breach of contract, fraud and intentional infliction of emotional distress. The lower court judge also said Taylor failed to adequately allege the existence of an agreement between him and Chase.

Counsel for Chase did not respond Friday to a request for comment. Counsel for Taylor declined to comment.

U.S. Circuit Judges Diane S. Sykes, David F. Hamilton and Michael Y. Scudder Jr. sat on the panel for the Seventh Circuit.

Taylor was represented at oral argument by Bradley Girard of the Georgetown Law Appellate Courts Immersion Clinic.

Chase was represented at oral argument by Jill Wheaton of Dykema Gossett PLLC.

The case is Anthony Taylor v. J.P. Morgan Chase Bank NA, case number 17-3019, in the U.S. Court of Appeals for the Seventh Circuit.

--Editing by Breda Lund.

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