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Adams v. Wells Fargo Bank, N.A.

United States District Court, E.D. Pennsylvania

December 27, 2017

FRANK ADAMS and CHRISTIE A. ADAMS, Ind. & as H/W, Plaintiff,
v.
WELLS FARGO BANK, N.A., and PHELAN, HALLINAN, DIAMOND & JONES LLP, formerly known as PHELAN, HALLINAN & SCHMIEG, LLP, Defendant.

          MEMORANDUM

          SCHMEHL, J. JLS

         Frank and Christie Adams (“Plaintiffs”) moves for leave to amend their Complaint, alleging two additional claims: 1) negligence; and 2) negligent infliction of emotional distress (“NIED”). Defendants Wells Fargo Bank (“Wells Fargo”) and Phelan, Hallinan, Diamond & Jones, LLP (“Phelan”) opposes Plaintiffs' motion to amend because: 1) Wells Fargo does not owe a duty to Plaintiffs; and 2) the gist of the action doctrine precludes pleading tort claims for alleged breaches of duty created by contract. (ECF Docket No. 36, at 5-8.) For the reasons stated below, this Court will deny Plaintiffs' motion.

         A. Facts

         As this Court has already addressed the facts of this case, it will briefly discuss only the pertinent facts relating to the Plaintiffs' Second Amended Complaint. Defendant Wells Fargo extended a loan to Plaintiffs in the amount of $89, 000, in which, to secure repayment of the loan, Plaintiffs executed and delivered to Wells Fargo a mortgage that granted a lien and security interest in certain real property owned by Plaintiffs at 58 Lillian Lane, Bangor, Northampton County, Pennsylvania 18013. (ECF Docket No. 12.) Plaintiffs missed their regular payments for April, June, and July of 2009, and subsequently fell into arrears on the mortgage loan. (ECF Docket No. 9, at ¶ 6.) In or about August 2009, Plaintiffs entered a twelve (12) month “Special Forbearance” plan with Wells Fargo. (Id. at ¶ 8.) Plaintiffs completed the special forbearance plan in September 2010 and resumed regular monthly mortgage payments to Wells Fargo through December 2010. (Id. at ¶¶10-11.) In or about December 2010, Wells Fargo sent Plaintiffs an Act 91 foreclosure notice detailing the four (4) regularly monthly payments Plaintiffs missed between September and December 2010. (Id. at ¶ 12.) In or about October 2011, Defendants brought a foreclosure action against Plaintiffs in the Northampton Court of Common Pleas. (Id. at ¶ 23.) Plaintiffs were then forced to defend the litigation and incur costs and expenses relating to the defense. In December 2015, Wells Fargo voluntarily withdrew its complaint and discontinued the foreclosure action without prejudice. (ECF Docket No. 12.)

         Plaintiffs brought claims against both Defendants for alleged violations of Wrongful Use of Civil Proceedings (“Dragonetti Act”) (Count I), Pa. Act 6 (Count II), Unfair Trade Practices and Consumer Protection Law (Count III), Fair Debt Collection Practices Act (Count IV), and Loss of Consortium (Count V). Defendants moved to dismiss the Complaint. On April 13, 2017, this Court granted in part and denied in part Defendants' motion, dismissing Count I (Wrongful Use of Civil Proceedings) with prejudice. (ECF Docket No. 23.) Following subsequent appeals, Plaintiffs then moved to amend the complaint, adding two additional claims: 1) negligence; and 2) negligent infliction of emotional distress. Defendants moved in opposition.

         B. Standard of Review

         Federal Rule of Civil Procedure 15(a) provides “leave [to amend] shall be freely given when justice so requires. In re Burlington Coat Factory Securities Litigation, 114 F.3d 1410, 1434 (3d Cir. 1997). Specific grounds for denial of leave to amend are undue delay, bad faith, dilatory motive, prejudice, and futility. Id. (citing Lorenz v. CSX Corp., 1 F.3d 1406, 1414 (3rd Cir.1993)). Defendants in our present case argue against amending the Complaint based on futility. Our Circuit defines “Futility” as whether “the complaint, as amended, would fail to state a claim upon which relief could be granted.” Id. (citing Glassman v. Computervision Corp., 90 F.3d 617, 623 (1st Cir. 1996)). “In assessing ‘futility, ' the district court applies the same standard of legal sufficiency as applies under Rule 12(b)(6).” Id. (citing 3 Moore's at ¶ 15.08[4], at 15-81)). Therefore, we must apply Rule 12(b)(6) standard.

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim satisfies the plausibility standard when the facts alleged “allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Burtch v. Millberg Factors, Inc., 662 F.3d 212, 220-21 (3d Cir. 2011) (citing Iqbal, 556 U.S. at 678). While the plausibility standard is not “akin to a ‘probability requirement, '” there nevertheless must be more than a “sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). “Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'” Id. (quoting Twombly, 550 U.S. at 557).

         The Court of Appeals requires us to apply a three-step analysis under a 12(b)(6) motion: (1) “it must ‘tak[e] note of the elements [the] plaintiff must plead to state a claim;'” (2) “it should identify allegations that, ‘because they are no more than conclusions, are not entitled to the assumption of truth;'” and, (3) “[w]hen there are well-pleaded factual allegations, [the] court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.” Connelly v. Lane Construction Corp., 809 F.3d 780, 787 (3d Cir. 2016) (quoting Iqbal, 556 U.S. at 675, 679); see also Burtch, 662 F.3d at 221; Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011); Santiago v. Warminster Township, 629 F.3d 121, 130 (3d Cir. 2010).

         C. Analysis

         Plaintiffs attempt to plead two additional claims of negligence in their amended complaint. Before answering whether Plaintiffs are entitled to amend the complaint, we must first define prima facie negligence. Negligence requires the plaintiff establish four elements: 1) the defendant owed the plaintiff a duty; 2) the defendant breached the duty; 3) the plaintiff suffered actual harm; and 4) a causal relationship existed between the breach of duty and the harm. Freed v. Geisinger Medical Center, 910 A.2d 68, 72 (Pa. Super. Ct. 2006). Accordingly, “[a]ny action in negligence is premised on the existence of a duty owed by one party to another.” Villari Brandes & Giannone, PC v. Wells Fargo Financial Leasing, Inc., 2013 WL 5468497, at *7 (E.D. Pa. 2013) (citing Palumbo v. Connors, No. 95-5526, 1996 WL 243649, at *7 (E.D. Pa. 1996)); see also Merlini ex rel. Merlini v. Gallitzin Water Authority, 934 A.2d 100, 104 (Pa. Super. Ct. 2007). Without a duty, negligence cannot form the basis of a claim.

         Plaintiffs fail to allege Wells Fargo owed them a cognizable pre-existing legal duty. Rather, Plaintiffs contend Wells Fargo owed Plaintiffs a duty “to not act against the advice of its own managerial employees to foreclose on a borrower's home without sound factual basis of an accurate accounting of the borrower's mortgage loan payments.” (ECF Docket No. 35-2, ¶57.) Plaintiffs do not cite any authority supporting this assertion. Accordingly, no such duty exists between Wells Fargo and Plaintiffs as lender-borrower. Moreover, Plaintiffs are precluded from “recasting ordinary breach of contract claims into tort claims” under the gist of the action doctrine. This Court's analysis is below.

         1. Wells Fargo and Phelan did not owe a duty of care to Plaintiffs.

         Plaintiffs' amended complaint fails to identify a legally cognizable duty owed by Defendants Wells Fargo and Phelan. First, Wells Fargo owes no duty to Plaintiffs as their lender. It is well established that “a lender owes no duty of care to his borrower.” Villari, 2013 WL 5468497, at *7 (citing Rousseau v. City of Philadelphia, 514 A.2d 649, 652 (Pa. Commw. Ct. 1986)). Without a duty of care between lender and borrower, there can be no claim for negligence. This lack of ...


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