Holcomb et al v. Wells Fargo Bank, N.A. et al

Filing 89

ORDER granting 60 Motion for postponement; deferring ruling on 71 Motion to Compel; deferring ruling on 75 Motion to Appoint Expert. Signed by Magistrate Judge G. R. Smith on 6/10/13. (bcw)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION
MARIA GOULD HOLCOMB,
and HENRY C. HOLCOMB,
Plaintiff,

)
)
)
)
)

Case No. CV412-111

v.
WELLS FARGO BANK, N.A. and
FEDERAL HOME MORTGAGE
CORPORATION, d/b/a FREDDIE
MAC,
Defendants.

ORDER
Another round of motions has been filed in this slow-grind,
lender-liability case. 1 Docs. 51, 60, 71, 75, 77 & 78. Some background:
Plaintiffs Marla and Henry Holcomb sued defendants Wells Fargo Bank,
N.A. (WFB) and the Federal Home Loan Mortgage Association (Freddie
Mac). See doc. 41, reported at 2013 WL 142703. In essence, they allege
that Marla owned a North Georgia home and was current on its mortgage
1

See Holcomb v. Wells Fargo Bank, N.A ., 2013 WL 435974 at * 1 (S.D. Ga. Feb. 4,
2013) (motions to amend, to strike, for a protective order, and for reconsideration);
Holcomb v. Wells Fargo Bank, N.A ., 2013 WL 142703 at * 7 (S.D. Ga. Jan. 11, 2013)
(other discovery and case management issues).

when she asked WFB to lower her interest rate. 2 Doc. 44 at 2-3 ¶ 10. An
WFB representative told her that WFB would not consider a loan
modification until she first missed three monthly mortgage payments.

Id. So, she did. Id. Holcomb’s default triggered the bank’s mortgage
foreclosure process, but WFB’s attorney assured her that the loan was
approved “for a special repayment program.”
follow-up letters confirmed this.

Id . at 3 ¶ 12. Two

Id. WFB’s attorney later sent

Holcomb a “notice of foreclosure sale,” which WFB told her to disregard,
which she did. Id. at 3-4.
Holcomb next received a WFB letter announcing that it had changed
its mind and would not modify the loan. Just days later -- on January 3,
2012 -- WFB foreclosed on her home. Doc. 44 at 4. But Holcomb was
unaware of that until January 11, 2012, when she received two more WFB
letters. The first invited her to explore her options to avoid foreclosure.
The second was from WFB’s lawyer, informing her that “Freddie Mac now
owns the property . . . as the result of a foreclosure.”

2

Id .

Again, the Court is accepting as true the factual assertions contained in plaintiffs’
complaint (doc. 1-1), as amended, doc. 44, as well as their portion of the Joint Status
Report. Doc. 10.
2

“Nevertheless, communications regarding the modification
continued prior and subsequent to the foreclosure.” Doc. 44 at 5. “No
notice was provided to Ms. Holcomb that the suspension of the foreclosure
would terminate or that she could bring payments current to avoid that
result was received. She could have cured that default. Later in
January, 2012 Mr. and Ms. Holcomb learned they were to be evicted from
the subject property. The home on the land contained many tangible
items of the Plaintiffs. All tangible personal property of the Plaintiffs has
been removed from the subject property.”

Id. (numeration omitted).

Alleging that she had been misled, never received notice of the
foreclosure sale, and could have cured her default, Holcomb sued. Doc.
1-1; doc. 44. She contends that the defendants committed various
lender-liability wrongs. Her husband joins her because “he used the
home with his wife and has been affected by the actions against [her].”
Doc. 10 at 3-4. WFB denies liability and insists that it timely and
consistently communicated with Marla Holcomb but she failed to
transmit required documentation to it in a timely manner. It denies it
ever misled her, too. Doc. 10 at 4; doc. 30-7 at 11-12. And Freddie Mac
3

insists it simply purchased the property at foreclosure, breaching no duty
to the Holcombs. Doc. 4; doc. 10 at 4.
Plaintiffs move for partial summary judgment, doc. 51, for an
extension of time on their briefing, doc. 60, for an extension of time within
which leave to file expert witness reports, doc. 75, and to “dismiss” some
defenses. Doc. 77. Defendants move to compel, doc. 71, as well as for
complete summary judgment. Doc. 78.
The dispositive motions (docs. 51, 77 & 78) are before the district
judge. The extension and compulsion motions (docs. 60, 71 & 75) are
before the undersigned. Defendants do not oppose plaintiffs’ briefing
extension motion (doc. 60), so it is GRANTED . But they do oppose the
plaintiffs’ expert witness extension motion (docs. 75), and move to compel
discovery responses from them. Doc. 71.
The Court has reviewed defendants’ fully briefed summary
judgment motion and finds that it packs enough punch to knock the
extension/compel motions (docs. 71 & 75) into the mootness zone.
Defendants have meticulously retraced every pre- and post-foreclosure
step, doc. 78-1 at 4-6, have shown that the core of plaintiffs’ case is
4

premised on a promise (to forestall foreclosure and review Marla’s loan)
that was never made, and even if it was, Marla Holcomb had notice and
opportunity to make the foreclosure-avoiding payment, yet did not.

Id.

at 10-12.
Plaintiffs’ response brief (doc. 84) fails to rebut much of defendants’
showing, including these assertions, which defendants raised while
negating plaintiffs’ promissory estoppel claim:
In fact, in her final attempt to delay the foreclosure sale, Mrs.
Holcomb still failed to submit all of the information Wells Fargo
needed to consider her request for a modification. On December 30,
2011, Mrs. Holcomb faxed a "Uniform Borrower Assistance Form" to
Wells Fargo that required her to identify her "monthly household
income" and expenses. She understated her monthly household
income by almost $14,000 and even understated her personal
monthly income by more than $3,000. (Ex. C, ¶ 24 and Ex. P.)
Ultimately, Mrs. Holcomb never submitted all of the information
and documents needed for Wells Fargo to process the request.
Doc. 78-1 at 15 (emphasis added); see also doc. 78-2 at 6 ¶ 27; doc. 84 at 6 ¶
27 (plaintiffs insisting that “Mr. Holcomb was not an obligor on the loan,”
but of course, that was not what was being asked; rather, “household
income” was requested; plus, plaintiffs ignore defendants’ assertion that
Marla Holcomb “even understated her personal monthly income by more
than $3,000.”).
5

That smacks of bank fraud, which “is defined as the knowing
execution, or attempted execution, of ‘a scheme or artifice (1) to defraud a
financial institution; or (2) to obtain any of the moneys, funds, credits,
assets, securities, or other property owned by, or under the custody or
control of, a financial institution, by means of false or fraudulent
pretenses, representations , or promises.’ 18 U.S.C. § 1344.”

United

States v. Irvin , 682 F.3d 1254, 1267 (10th Cir. 2012) (emphasis added).
To that end, “a false statement is material if it has a natural tendency to
influence, or is capable of influencing, the decision of the decisionmaking
body to which it was addressed.” Neder v. United States , 527 U.S. 1, 16
(1999) (quotes and alteration omitted); Irvin , 682 F.3d at 1267. 3
It may be that defense counsel here are ethically blocked from
threatening criminal prosecution to obtain an advantage in a civil case, 4

3

“Financial loss is not the only cognizable injury under the bank fraud statute.” 9
C.J.S. BANKS AND BANKING § 793 (Mar. 2013). In fact, “[i]t is not necessary that the
scheme succeed, or that the bank suffer actual loss or actually be defrauded, deceived
or influenced, or that accused personally benefit. It has been held that a risk of loss is
sufficient, including a risk of exposure to civil liability” Id. (footnotes omitted). And
those who knowingly mislead federally insured banks also may be prosecuted for
making false statements. See 18 U.S.C. § 1014; United States v. Seda , 978 F.2d 779,
781-782 (2d Cir. 1992), overruled on other grounds by United States v. Chacko , 169
F.3d 140 (2d Cir. 1999).
4

See Ga. R. Prof. Conduct 3.4(h); see also Boswell v. Gumbaytay , 2009 WL 1515884 at
6

but nothing stops this Court from referring matters to the U.S. Attorney
for criminal investigation. More importantly, no one may engage in
criminal misconduct and then use this Court as part of an ongoing effort
to benefit from it. At bottom, good cause exists to DEFER to the district
the remaining motions (docs. 71 & 75) on probable mootness grounds.
Accordingly, the Court

GRANTS as unopposed plaintiffs’

briefing-extension motion, doc. 60, but DEFERS the remaining
discovery-based motions (docs. 71 & 75) to the district judge.

SO ORDERED this 10th day of June, 2013.

UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF GEORGIA

* 7 (M.D. Ala. June 1, 2009) (quoting Alabama’s ethics code R. 3.10: “[a] lawyer shall
not present, participate in presenting, or threaten to present criminal charges solely to
obtain advantage in a civil matter.”), cited in 6 B US . & C OM . L ITIG . F ED . C TS . § 66:8
(Incivility throughout discovery ) (3d ed. Dec. 2012).
7