Foley v. Wells Fargo Bank, N.A.

Filing

OPINION issued by Sandra L. Lynch, Appellate Judge; David H. Souter, Associate Supreme Court Justice* and William J. Kayatta, Jr., Appellate Judge. Unpublished. *Hon. David H. Souter, Associate Justice (Ret.) of the Supreme Court of the United States, sitting by designation. [17-1631]

Case: 17-1631

Document: 00117317517

Page: 1

Date Filed: 07/24/2018

Entry ID: 6185787

Not for Publication in West's Federal Reporter

United States Court of Appeals
For the First Circuit
No. 17-1631
JONATHAN FOLEY,
Plaintiff, Appellant,
v.
WELLS FARGO BANK, N.A., s/b/m Wells Fargo Bank Southwest, N.A.,
f/k/a Wachovia Mortgage FSB, f/k/a World Savings Bank FSB,
Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Leo T. Sorokin, U.S. District Judge]

Before
Lynch, Circuit Judge,
Souter, Associate Justice,
and Kayatta, Circuit Judge.

David Hadas, with whom Drohan, Hitt & Hadas, LLC was on
brief, for appellant.
David M. Bizar, with whom Dallin R. Wilson, Robert J.
Carty, Jr., and Seyfarth Shaw LLP were on brief, for appellee.

July 24, 2018



Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.

Case: 17-1631

Document: 00117317517

SOUTER,

Page: 2

Date Filed: 07/24/2018

Associate Justice.

Entry ID: 6185787

The plaintiff, Jonathan

Foley, appeals from summary judgment entered for Wells Fargo
Bank, N.A., in an action seeking to enjoin the bank's threatened
foreclosure under Foley's existing mortgage, and alleging that
the bank was in breach of contract in denying his application to
rewrite the mortgage contract.

We affirm.

This is the second plaintiff's appeal in this action,
the first having been for dismissing the case by treating the
bank's motion to dismiss under FRCP Rule 12(b)(6) as one for
summary judgment under Rule 56, but without affording Foley the
full

opportunity

motion allows.

to

adduce

evidence

that

a

summary

judgment

See Foley v. Wells Fargo, 772 F.3d 63, 71-75

(1st Cir. 2014).

On remand the required Rule 56 procedure was

observed, but with the same result.

Our earlier opinion remains

useful in providing a detailed recitation of procedural history,
and our factual account this time will be limited to what is
strictly

necessary

to

understand

the

case

in

its

present

posture.
Over

a

decade

ago,

Foley

obtained

money

for

a

Massachusetts real estate purchase from a predecessor of Wells
Fargo under a "Pick-a-Payment" plan, providing for a variablerate mortgage allowing the borrower to choose from a range of
payment options.

As the financial climate worsened, an action

was brought in California against the bank by a class including

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Foley upon a claim that the plan violated the federal Truth-inLending

Act,

eventuated,
consider

15

U.S.C.

which

defaulting

§

1601

provided

et

that

borrowers

seq.
the

for

A

class

defendant

substitute

settlement
bank

terms

would

under

a

federal scheme with a name abbreviated as HAMP and under another
alternative devised specifically for purposes of the settlement
and known as MAP2R.

One feature common to the criteria for each

was a limit on the percentage that a new monthly payment or
payments could bear to the borrower's monthly gross income: 42%
under HAMP, 31% under MAP2R.
bank

was

required

to

If an application was denied, the

provide

the

borrower

with

a

"written

explanation."
When Foley defaulted on his mortgage payments in 2010,
the bank gave notice of foreclosure and furnished materials to
apply

for

a

superseding

mortgage.

What

followed

was

a

complicated exchange of letters, including duplicate letters,
re-submitted
intervention

applications,
by

the

telephone

Attorney

conversations,

and

General

Massachusetts.

But

of

there is no evidence or evidentiary proffer inconsistent with
the conclusion that, by the time the sequence of communications
was over, Foley had been told in writing that the bank had
considered

and

denied

relief

under

both

schemes.

Foley,

dissatisfied, began this litigation in the Massachusetts courts,
from which it was removed to federal district court.

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The full

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Entry ID: 6185787

details of the sequence of its procedural events need not be set
out here, for this appeal is limited to a claim that there is a
triable

issue

whether

Wells

Fargo's

denial

of

Foley's

application for relief under the MAP2R scheme was a breach of
the

settlement

member.

agreement,

Foley

being

undisputedly

a

class

Because the case was decided on a motion for summary

judgment, we review de novo the district court's conclusion that
there was no genuine issue of fact that could have been found in
Foley's favor that would have stood in the way of concluding
that the bank was entitled to judgment as a matter of law.

See

Prescott v. Higgins, 538 F.3d 32, 39-40 (1st Cir. 2008).
Throughout the course of this litigation, Foley has
charged that the bank has not complied with its obligations
under

the

claims.

settlement
First,

he

agreement,
says

that

an
the

argument
bank

that

failed

covers

to

two

provide

a

sufficiently clear "written explanation" specific to the MAP2R
application that went beyond a merely general and conclusory
statement that the application was denied.

The second is an

argument that he satisfied the MAP2R criteria on the merits and
was

thus

entitled

to

relief.

We

find

no

genuine

issue

of

material fact on these points and agree with the district court
that the bank is entitled to judgment.
The controversy about adequacy of detail as raised in
the first claim risks submerging it in a dispute about whether a

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required explanation for denying relief must be "clear," as our
earlier opinion assumed in passing that it must be.
772 F.3d at 69, 76.

See Foley,

If clarity of explanation is required, so

Foley's argument implicitly goes, a failure to mention "MAP2R"
in the first denial letter and a subsequent letter's reference
to

excessive

monthly

debt

obligations,

obligation-income ratio, could not suffice.
argues

that

in

drafting

the

settlement

or

an

excessive

In reply, the bank

agreement

a

proposed

express clarity requirement was dropped, resulting in the final,
unadorned

"written

explanation"

standard of explanation.

term,

implying

a

relaxed

Foley counters that by arguing that

California's parol evidence rule would bar the bank's argument
based on drafting history.

We find the controversy irrelevant

to this case.
As for the bank's failure to refer expressly to the
MAP2R application in a denial letter, we have already held that
such express labeling is unnecessary so long as the reason for
the denial is conveyed, see Foley, 772 F.3d at 76, and Foley
offers no evidence raising a genuine doubt that it was.1

1

Indeed,

In the district court Foley presented a more general
argument for the inadequacy of the "written explanation," in
characterizing the first and subsequent letters as "vague" and
"contradictory."
Although we do not see self-contradiction in
the cycle of notification letters, we agree that some of them
that were meant to refer to MAP2R were opaque on their face, and
we will be candid to say that the months spent by the two
parties arguing over the "written explanation" requirement tend
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the letter accurately stated that the bank was unable to offer a
loan

modification

obligations."

because

Foley

had

"excessive

financial

In any event, a further denial letter some five

months later did make reference to each plan expressly.
As

for

the

failure

to

specify

more

than

debt

obligations, when the bank spoke of unacceptably high liability
for payment on debt, it could be understood only as referring to
the basis for calculating the percentage of monthly obligations
compared with monthly income.
thus

informed

the

borrower

There can be no doubt that it
of

the

underlying

facts

and

computations he must revisit if he wished to appeal the bank's
denial.
In

his

submission

to

this

court,

Foley

of

course

recognizes this, as is clear from his final challenge to the
adequacy of the bank's explanation, in which he attacks the

to confirm the criticism of other courts that have expressed
doubts about Wells Fargo's capacity or willingness to rewrite
mortgage loans under the terms of the settlement. See, e.g., In
re Wachovia Corp."Pick-a-Payment" Mortg. Mktg. & Sales Practices
Litig., 2014 WL 2905056, at *4 (N.D. Cal. June 26, 2014); In re
Wachovia Corp. "Pick-A-Payment" Mortg. Mktg. & Sales Practices
Litig., 2013 WL 5424963, at *5-6 (N.D. Cal. Sept. 25, 2013).
But Foley's citations to these cases are beside the point in
this case, and in any event the explanatory cycle ended with a
letter that made it abundantly clear that Foley's applications
were denied for failure to show that the revised monthly
payments would be within the percentages of the borrower's
monthly gross income necessary to qualify under the two schemes
in question, HAMP and MAP2R.
The time required to reach this
elementary degree of clarity has not been claimed as an
independent basis for awarding any relief to Foley.

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Case: 17-1631

Document: 00117317517

underlying

figures

used

Page: 7

to

Date Filed: 07/24/2018

compute

income percentage calculation.

the

ultimate

Entry ID: 6185787

obligation-

If the figures he presented to

the district court were accepted, his monthly installment under
the new mortgage agreement would indeed be no more than 31% of
monthly gross income as allowed under the MAP2R plan.

But one

of his numbers was patently wrong under the plan's terms, as the
district

court

came

to

realize

in

performing

determination of the crucial percentage.

its

own

As to monthly income,

the court gave Foley the benefit of some doubt and used his
number, but Foley's monthly installment obligation figure was
too egregiously inaccurate to indulge.
that

monthly

association

obligation

fee

and

included

homeowners'

The MAP2R definition of
the

monthly

insurance

homeowners'

premium

mortgaged property, each of which Foley had omitted.
were

added,

the

resulting

installment

came

out

for

the

When they
above

the

allowable 31%, thus mandating a finding of ineligibility.
We are unable to find any basis to dispute the court's
correction; Foley has not responded on the record by challenging
the

definition

as

the

court

understood

it

or

the

factual

correctness of the two numbers added to the figure Foley himself
had used.
assumptions,

The consequence is that by accepting Foley's own
subject

to

the

undisputed

correction,

Foley

is

shown to be ineligible for MAP2R relief, based on a computation
about which there is no genuine dispute.

Affirmed.

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