United States District Court, Western District of Pennsylvania
MARY E. GLOVER, Plaintiff,
MARK J. UDREN, UDREN LAW OFFICES, P.C., WELLS FARGO HOME MORTGAGE, GOLDMAN SACHS MORTGAGE COMPANY Defendants.
Donetta W. Ambrose District Judge
REPORT AND RECOMMENDATION
ROBERT C. MITCHELL, United States Magistrate Judge.
The instant case was removed to this Court on July 14, 2008. After approximately six years of litigation, multiple failed interlocutory appeals, the dismissal of all other parties, and the denial of class certification, on February 18, 2014, the remaining Defendant in this case, Wells Fargo Home Mortgage (“Wells Fargo”), filed a motion for summary judgment [ECF No. 652]. Plaintiff, Mary Glover (“Glover”), submitted her response on March 27, 2014 [ECF No. 677]. Wells Fargo submitted its reply on April 30, 2014. [ECF No. 697].
After careful review of Wells Fargo’s motion for summary judgment, brief in support, Glover’s response, and Wells Fargo’s reply, upon independent review of the evidence of record, and supplemental authority submitted by both parties, for the following reasons, it is respectfully recommended that Wells Fargo’s motion for summary judgment [ECF No. 652] be granted in all respects except for the limited issue surrounding the FDCPA claim arising after June 7, 2007 for which further briefing should be ordered.
Due to the protracted state of this litigation, the Court will only discuss the facts and procedural history necessary for the disposition of the present motion.
On or about August 2, 2002, Plaintiff executed a promissory note and mortgage to borrow $9, 997.00 secured by her residential property from Washington Mutual Bank (“WaMu”). Pursuant to her note and mortgage, Plaintiff agreed to make monthly payments for principal and interest, in addition to monthly escrow payments for taxes and insurance. Approximately one year later, on or about July 29, 2003, WaMu sold its ownership interest in Plaintiff’s note and mortgage to Goldman Sachs Mortgage Company (“Goldman”), but it retained its servicing rights to the loan.
In March 2005, Plaintiff was injured in an automobile accident and suffered a loss of income. As a consequence, Plaintiff defaulted on her loan by failing to make loan payments as required under her note and mortgage. At that time, Goldman was Plaintiff’s lender and WaMu serviced the loan. Plaintiff contacted WaMu and requested a loan modification to reduce and/or forebear her monthly payments. WaMu agreed to postpone Plaintiff’s loan payments for December 2005, January 2006, February 2006 and March 2006 and agreed to reevaluate Plaintiff’s application for financial assistance in April 2006. Ultimately, before that time, on March 14, 2006, WaMu denied Plaintiff’s request for a loan modification, accelerated the entire unpaid principal balance due, and initiated foreclosure proceedings in the Allegheny Court of Common Pleas on or around April 10, 2006 through Udren Law Offices. WaMu, through Udren, sought $12, 652.36 in the foreclosure action.
Two months after the foreclosure complaint was filed, in June 2006, WaMu essentially flip-flopped and offered Plaintiff loan modification terms that increased her monthly principal and interest payments and informed Plaintiff that she owed approximately $3, 696 for foreclosure fees and costs. Plaintiff claims that the proposed loan modification contradicted itself by instructing her to remit payment in the amount of $3, 696 while simultaneously indicating that the amount due was $0.00. Plaintiff never remitted the payment and WaMu never demanded payment of that amount. Plaintiff began to make payments pursuant to the terms set forth in the proposed loan modification, however WaMu did not recognize the terms set forth in the proposal as a loan modification agreement and did not modify Plaintiff’s loan to these terms.
In December 2006, WaMu transferred its servicing rights and obligations to Defendant, Wells Fargo and Wells Fargo became the servicer of Plaintiff’s loan. Under the servicing agreement, Wells Fargo, as the servicer, was to be compensated by a “Servicing Fee for each Mortgage Loan serviced hereunder[, ]” and such servicing fee was “payable solely from, the interest portion of the Monthly Payments and Late Collections with respect to the related Mortgage Loan.” Def.’s Concise Statement of Material Facts [ECF No. 654] at ¶ 8. After Wells Fargo became Plaintiff’s loan servicer, Plaintiff remitted payments less than the amount required under her Note and Mortgage and did not cure her outstanding loan balance deficiency. Plaintiff was therefore considered in default on her Note and Mortgage.
On January 4, 2008, Plaintiff and Wells Fargo negotiated a loan modification agreement that allowed Plaintiff to cure her default, the operative document for purposes of the present motion. Wells Fargo was permitted to negotiate such a loan modification on behalf of Goldman based upon the servicing agreement between the two entities. The loan modification agreement set forth five specific modified terms: (1) Plaintiff’s first loan payment was due on March 1, 2008; (2) Plaintiff’s loan maturity date became February 1, 2038; (3) Plaintiff capitalized $784.34 in interest; (4) Plaintiff’s unpaid principal balance became $12, 152.02; and (5) Plaintiff’s monthly payments of principal and interest became $81.87, at a yearly rate of 7.125%, not including escrow deposit. See Loan Modification Agreement [ECF No. 655-7] at 1. The loan modification also provided that: “except as otherwise specifically provided in this Agreement, the Note and Mortgage will remain unchanged, and Borrower and Lender will be bound by, and shall comply with, all of the terms and provisions thereof, as amended by this Agreement.” Id. at 3. In setting forth these provisions, the loan modification agreement increased Plaintiff’s principal balance by $2, 643.66, including $784.34 for delinquent interest and $1, 859.32 in delinquent escrow. The loan modification agreement also required an upfront contribution of $1, 571.02 which was allocated to a line item referred to as “Corp Recov/Title/Mod Fees/Atty/FC/BPO/Appraisal.” Id. At the time of the loan modification, Plaintiff had a credit of $78.63 in her suspense account, therefore she owed $1, 492.39 in arrearages as consideration for the loan modification. Plaintiff tendered a check in the amount of $1, 092.39 instead of $1, 492.39 required under the loan modification and separately remitted her new monthly payment of $196.72. The $1, 092.39 payment was applied to the arrearages. At that time, Plaintiff had a delinquent escrow account of $1, 859.32 which was capitalized into her principal balance. On March 17, 2008, Wells Fargo issued a check to Plaintiff in the amount of $1, 169.45, refunding an escrow surplus. Plaintiff brought her loan current and out of default on March 5, 2008, after her loan modification settled. Since that date, Plaintiff has been current on her loan and has made monthly loan payments required by the note and mortgage.
Plaintiff claims that while Wells Fargo acted as the servicer of her loan, it did not honor the terms of the mortgage and loan modification agreement by failing to correctly apply monthly payments during the time period of June 20, 2006 to March 4, 2008 to her escrow, interest and principal balance accounts and overstated her unpaid principal balance and misallocated her payments to non-interest bearing suspense and other unauthorized accounts. The foreclosure complaint was withdrawn on March 25, 2009. Sec. Am. Compl. [ECF No. 109] at ¶ 58.
Plaintiff filed her original complaint in the Allegheny Court of Common Pleas in the Commonwealth of Pennsylvania on June 9, 2008, which defendants removed to this court on July 14, 2008, alleging nine counts against multiple defendants in a purported class action. This court granted Plaintiff leave to amend her complaint four times, and on June 9, 2010, she filed her Second Amended Complaint, the operative complaint here. See Sec. Am. Compl. [ECF No. 109]. Wells Fargo moved to dismiss the Second Amended Complaint, which the court granted in part and denied in part, dismissing approximately half of the claims brought against Wells Fargo by Plaintiff. Rep. and Rec. [ECF No. 166] adopted by Memo. Order [ECF No. 199]. After briefing and an evidentiary hearing, Plaintiff’s subsequent motion for class certification was denied on December 3, 2013. See 12/03/2013 Order [ECF No. 624].
The remaining claims against Wells Fargo are as follows: (1) breach of Plaintiff’s loan modification agreement (Count I); (2) unjust enrichment (Count IX); (3) violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692e(2)(A) and 1692f(1) (Count XI); (4) violation of the Pennsylvania Loan Interest and Protection Law (“Act 6”), 41 P.S. § 502 (Count XVI); and (5) violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”) “catch-all” provision, 73 P.S. § 201-2(4)(xxi) (Count XVII).
Wells Fargo filed a motion for summary judgment on February 18, 2014 arguing that it is entitled to summary judgment on all remaining claims because there is no dispute as to any material fact and it is entitled to judgment as a matter of law. Specifically, Wells Fargo advances the following arguments in support of its motion: (1) as to the breach of contract claim based upon the loan modification agreement, Wells Fargo as the loan servicer is not a party to any contract with Plaintiff and alternatively never breached the loan modification agreement; (2) as to the unjust enrichment claim, Wells Fargo was not unjustly enriched in handling Plaintiff’s escrow payments and account; (3) alternatively, the breach of contract and unjust enrichment claims fail because they are barred by the voluntary payment doctrine; (4) as to the Act 6 claim, Wells Fargo never collected attorney’s fees; (5) as to the UTPCPL claim, Wells Fargo did not engage in any deceptive activity in connection with Plaintiff’s loan modification; and (6) as to the FDCPA claim, Wells Fargo did not make any false representations to Plaintiff, nor did it collect any amounts from Plaintiff that were not due.
B. Standard of Review
Under Federal Rule of Civil Procedure 56, summary judgment is appropriate if “there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). A moving party is entitled to summary judgment if he demonstrates that “the nonmoving party has failed to make a sufficient showing of an essential element of [his] case.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The nonmoving party bears the burden of adducing palpable evidence “establishing that there is a genuine factual dispute for trial” and may not merely rely upon “bare assertions or conclusory allegations” to survive summary judgment. Hogan v. Twp. of Haddon, 278 Fed.App’x 98, 101 (3d Cir. 2008) (citing Fireman’s Ins. Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982)). “A motion for summary judgment will not be defeated by ‘the mere existence’ of some disputed facts, but will be denied [only] when there is a genuine issue of material fact.” Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)). “Speculation, conclusory allegations, and mere denials are insufficient to raise genuine issues of material fact.” Boykins v. Lucent Techs., Inc., 78 F.Supp.2d 402, 407 (E.D.Pa. 2000). The court should draw inferences “in the light most favorable to the non-moving party, and where the non-moving party’s evidence contradicts the movant’s, then the non-movant’s must be taken as true.” Big Apple BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992) cert. denied 507 U.S. 912 (1993).
1. Count I: Breach of Contract The elements to establish a breach of contract are quite simple; the plaintiff must show that a contract existed and its essential terms, that defendant breached the contract, and that plaintiff suffered damages from the breach. McShea v. City of Philadelphia, 995 A.2d 334, 340 (Pa. 2010) (citations omitted).
Here, the remaining breach of contract claim is whether Wells Fargo breached the Loan Modification Agreement entered into between Plaintiff and Wells Fargo on behalf of Goldman. This court has previously held that the Loan Modification Agreement is a contract between Plaintiff and Wells Fargo. Rep. and Rec. [ECF No. 166] at 7-10 adopted by Memo. Order [ECF No. 199]. Therefore, the court must address whether Plaintiff, as the non-moving party, has presented sufficient evidence to maintain her claim that Wells Fargo breached the Loan Modification Agreement. Wells Fargo argues that it is entitled to summary judgment because (1) a contract was never formed between it and Plaintiff; or (2) if a contract was formed, Wells Fargo has not breached it. See Def.’s Br. in Supp. of Mot. for Summ. J. [ECF No. 653] at 8. For the following reasons, the Court finds that Plaintiff has not met her burden, there is no factual dispute as to any material evidence, and Wells Fargo should be entitled to summary judgment on this claim.
i. Existence of a Contract
Wells Fargo argues that it is entitled to summary judgment because the loan modification agreement “did not create a contract between Plaintiff and Wells Fargo, but only modified Plaintiff’s Note and Mortgage, upon which Goldman bears the contractual obligation[, ]” and as the servicer of Plaintiff’s mortgage, the loan modification agreement “created no independent contractual relationship between Plaintiff and Wells Fargo.” Id. at 6.
Plaintiff responds that it is the law of the case that Wells Fargo is a party to the loan modification agreement and is liable for its breach. Pl.’s Op. Br. [ECF No. 666] at 12.
The Court has previously held that Wells Fargo is a party to the loan modification and can be held liable for its breach. See Rep. and Rec. [ECF No. 166] at 7-10 adopted by Memo. Order [ECF No. 199].
In so finding, the court stated:
The January 4, 2008 loan modification document identifies the parties to the agreement as Glover, the “Borrower” and Wells Fargo, the “Lender.” The agreement then recites that, in exchange for valuable consideration, the parties agreed to modify, inter alia, the loan principal and the terms of the payment. While the loan modification makes clear that the Borrower remains obligated under the original mortgage and note, except as so amended, the agreement clearly delineates new contractual responsibilities between Glover and Wells Fargo. Thus, to the extent that count I [breach of contract] alleges that Wells Fargo breached contractual obligations arising out of the January 4, 2008 loan modification agreement, the Court should deny Wells Fargo[’s] motion to dismiss.
Rep. and Rec. [ECF No. 166] at 8 (citations to record omitted) adopted by Memo. Order [ECF No. 199].
The court disagrees with Wells Fargo’s contention that it was not a party to the loan modification agreement because it negotiated terms on behalf of Goldman. To the extent that Wells Fargo and Plaintiff entered into the provisions set forth in the loan modification agreement, that is a valid contract between the parties and this court will not disturb its previous holding that Wells Fargo can be held responsible for a breach of the loan modification agreement. To the extent that Wells Fargo argues that the law of the case doctrine does not preclude a court from entering summary judgment in favor of a defendant whose motion to dismiss was denied on the same issue, and that the court should do so here, such an argument is unavailing. See Def.’s Reply to Mot. for Summ. J. [ECF No. 697] (citing Rouse v. II-IV Inc., 2008 WL 2914796, at *7 (W.D.Pa. July 24, 3008) aff’d 2009 WL 1337144 (3d Cir. 2009)). The Court in making its determination regarding the motion to dismiss reviewed a copy of the loan modification agreement and relied on it in making its decision. The complete record, as it now stands, does not negate that the loan modification agreement is the operative document, nor does it negate that it was entered into by Wells Fargo. Therefore, Wells Fargo’s argument that it is not a party to the loan modification agreement is rejected.
Accordingly, the loan modification agreement is a contract between Plaintiff and Wells Fargo as to the explicit terms set forth therein. Specifically, the loan modification agreement modified Plaintiff’s loan as follows: (1) Plaintiff’s first loan payment was due on March 1, 2008; (2) Plaintiff’s loan maturity date became February 1, 2038; (3) Plaintiff capitalized $784.34 in interest; (4) Plaintiff’s unpaid principal balance became $12, 152.02; and (5) Plaintiff’s monthly payments of principal and interest became $81.87, at a yearly rate of 7.125%, not including escrow deposit. See Loan Modification Agreement [ECF No. 655-7] at 1. The loan modification also provides that: “except as otherwise specifically provided in this Agreement, ...