Martinez v. Cenlar, FSB

On March 7, 2008, Maria Martinez (plaintiff) bought a house. In 2010 Martinez lost her job and began to struggle making her mortgage payments. On August 26, 2011, Cenlar, FSB (Cenlar) (defendant), Martinez’s loan servicer, signed a contract with the Arizona Department of Housing, agreeing to participate in the Arizona Hardest Hit Fund program (HHF). HHF helped eligible homeowners with mortgage payments. The HHF contract required Cenlar, upon notification that a borrower was approved for HHF, to delay any planned foreclosure sale for 45 days. Martinez became unable to make any mortgage payments, and in April 2012, Cenlar began foreclosure proceedings. In response, Martinez applied to HHF. HHF approved Martinez for assistance and, on June 26, 2012, notified Cenlar of Martinez’s participation in the program. Nevertheless, the foreclosure process continued, and Martinez’s house was sold at auction on July 3, 2012. Martinez sued Cenlar, alleging that it breached its HHF contract by failing to delay the foreclosure sale for 45 days after it received notice of Martinez’s participation in HHF. Cenlar filed a motion to dismiss, arguing that Martinez did not have standing to bring a breach-of-contract action based on Cenlar’s contract with the state government. Martinez acknowledged the lack of an express private right of action under HHF but argued that she was an intended beneficiary of the contract.