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Deutsch v. Wells Fargo Bank N.A.

United States District Court, E.D. Pennsylvania

June 22, 2015

WELLS FARGO BANK, N.A., Defendant.



On January 21, 2015, Plaintiff filed an Amended Complaint against Defendant. (Dkt No. 16 [hereinafter AC].) Plaintiff alleged six claims: (1) breach of written contract, (2) libel, (3) violation of the Fair Credit Reporting Act, (4) injunctive relief, (5) violation of the Pennsylvania Uniform Commercial Code, and (6) violation of the Electronic Fund Transfer Act. These claims all relate to Plaintiff’s assertion that Defendant failed to honor an extension option in a contract between Plaintiff and Defendant.

Upon consideration of the Amended Complaint, its attachments, including the Home Equity Line of Credit agreement (the “HELOC”), (Dkt No. 16, Ex. A [hereinafter HELOC]), the thirty-year, open-end mortgage (the “Mortgage”), (Dkt No. 16, Ex. B [hereinafter Mortgage]), the disputed check (“Disputed Check”), (Dkt No. 16, Ex. B [hereinafter Disputed Check]), the transaction history for the HELOC account (the “Transaction History”), (Dkt No. 16, Ex. D [hereinafter Transaction History]), Defendant’s Motion to Dismiss and Memorandum in Support thereof, (Dkt No. 19; Dkt No. 19-2 [hereinafter MTD]), and Plaintiff’s Response to Defendant’s Motion to Dismiss, (Dkt No. 25-2, [hereinafter Resp.]), the Court DISMISSES WITH PREJUDICE claims I, II, III, IV, and VI and DISMISSES WITHOUT PREJUDICE claim V. Plaintiff shall have thirty (30) days from the date of the attached order to file a Second Amended Complaint as to claim V only.

I. Standard of Review

In deciding a motion to dismiss pursuant to Rule 12(b)(6), courts must “accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips v. Cnty. of Alleghany, 515 F.3d 224, 233 (3d Cir. 2008) (internal quotation and citation omitted). After the Supreme Court’s decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007), “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678 (citing Twombly, 550 U.S. at 556). This standard, which applies to all civil cases, “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. at 678; accord Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (“[A]ll civil complaints must contain more than an unadorned, the-defendant-unlawfully-harmed-me accusation.”) (internal quotation marks omitted).

II. Statement of Facts

When deciding a motion to dismiss under 12(b)(6), the “court must consider only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant’s claims are based upon these documents.” Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010). In this case, Plaintiff has attached the HELOC, the relevant Mortgage, the Transaction History, and the Disputed Check to her Amended Complaint. For the purpose of deciding the instant Motion, the Court must take all alleged facts as true. Phillips, 515 F.3d at 233 (internal quotation and citation omitted).

In 2000, Plaintiff purchased a house with her husband at 1400 River Road, New Hope, Pennsylvania 18938. (AC ¶ 6.) Plaintiff secured a mortgage with Country Wide Home Mortgage for $780, 000 and began to make timely payments. (AC ¶ 6.)

On or around February 15, 2002, Plaintiff applied for a HELOC with Defendant. (AC ¶ 7; HELOC at 1.) The HELOC made a $1, 000, 000 credit limit available to Plaintiff. (HELOC at 1.) The HELOC’s Maturity Date was February 20, 2012. (AC ¶¶ 8, 15; HELOC at 1.)

The HELOC states:

“I understand and agree that my unpaid loan balance, together with any unpaid finance charges and other charges, shall be payable to you in full on the Maturity Date, unless you agree to renew this agreement or refinance my loan balance, subject to my credit qualification at the Maturity Date.”

(HELOC at 1.) The HELOC also provides that: “[t]he terms of this agreement replaces the terms of any prior oral or written agreements.” (HELOC at 2.) As a “Security Instrument” for the HELOC, on or around February 15, 2002, Plaintiff entered into a thirty (30) year, open-end Mortgage with Defendant for $1, 000, 000. (AC ¶ 12; Mortgage ¶¶ 1, 3, 4A.) The maturity date of the Mortgage was also February 20, 2012. (AC ¶ 12; Mortgage ¶ 4.)

The Mortgage provides that: “[The] Mortgagor agrees that all payments under the Secured Debt will be paid when due and in accordance with the terms of the Secured Debt and this Security Instrument.” (Mortgage ¶ 5.) The Mortgage states in part that “[n]othing in this Security Instrument shall constitute a commitment to make additional or future loans or advances in any amount. Any such commitment must be agreed to in a separate writing.” (Mortgage ¶ 4B.) The Mortgage “may not be amended or modified by oral agreement.” (Mortgage ¶ 14.)

At the same time that Defendant gave Plaintiff the HELOC and the Mortgage agreements, Plaintiff also received certain other paperwork from Defendant. (AC ¶¶ 8-11.) Included among this paperwork “was a document prepared by the Defendant that stated that at the 10-year [M]aturity [D]ate of the HELOC, [Plaintiff] could make one of two possible elections” to extend the HELOC repayment. (the “disclosure forms”). (AC ¶ 9.) “The language setting forth the extension options contained in the disclosure forms provided to [Plaintiff] was not a term of the HELOC agreement.” (AC ¶ 10.)

Despite her efforts, Plaintiff has not been able to locate the “disclosure forms containing the extension options.” (AC ¶ 13.) A month or two before the Maturity Date of the HELOC, her representative informed Defendant of Plaintiff’s intention to exercise one of the purported extension options set forth in the disclosure forms. (AC ¶ 15.) Defendant accepted monthly, interest-only payments on the loan from Plaintiff for eight months (February 2012-September 2012). (AC ¶¶ 16-18.) These payments were executed through two different payment methods. (AC ¶¶ 19-20.)

During this eight month span, Defendant’s representatives spoke with Plaintiff’s representative. (AC ¶¶ 18-20.) The two parties discussed what paperwork was necessary, if any, to keep the “status quo.” (AC ¶ 18.)

In June 2012, Defendant reported to a Credit Reporting Agency (“CRA”) that Plaintiff’s HELOC was delinquent. (AC ¶ 26.) In or about September 2012, Plaintiff’s representative contacted the CRA and informed it that the reports of delinquency were false. (AC ¶ 27.) The CRA told Plaintiff’s representatives that they would inform Defendant about this dispute. (AC ¶ 27.) As a result of this reporting, Plaintiff’s “credit was effectively ...

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