Riley v. Wells Fargo Bank N.A.

Filing 36

MEMORANDUM OPINION AND ORDER: (1) Dft's 13 MOTION for Judgment on the Pleadings is GRANTED IN PART and DENIED IN PART. (2) Pla's 23 MOTION to Amend 1 Complaint is GRANTED IN PART and DENIED IN PART. (3) The parties 33 JOINT MOTION to Stay All Discovery Deadlines and to Continue the Trial Date in Order to Allow for a Settlement Conference is GRANTED. (4) All deadlines with respect to discovery and pretrial practice, as well as the trial date, are CONTINUED GENERALLY. ( 5) The parties shall contact the Magistrate Judge within 3 days to schedule a settlement conference. (6) The parties shall file a STATUS REPORT NLT 3 days from the date a settlement negotiation is conducted, advising the Court of what matters remain for trial and proposing a schedule for any remaining discovery, motion practice and pretrial matters, as well as a new trial date. Signed by Judge Joseph M. Hood on May 22, 2017. (AWD) cc: COR,D,JC

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON

SALINA RILEY,

)
)
)
)
)
)
)
)
)

Plaintiff,
vs.
WELLS FARGO BANK, N.A.,
Defendant.
**

**

**

Civil No. 16-cv-157-JMH
MEMORANDUM OPINION & ORDER

**

**

This matter is before the Court on Defendant’s Motion for
Judgment on the Pleadings [DE 13, Plaintiff’s Response at DE 19;
Defendant’s Reply at DE 22] as well as Plaintiff’s Motion to Amend
Complaint [DE 23; Defendant’s Response at DE 24]. The Court has
considered these motions alongside one another, for they ask the
Court to consider whether the averments made or proposed are
legally sufficient to proceed toward trial at this point in the
case.
“The court should freely give leave [to amend] when justice
so requires.” Fed.R.Civ.P. 15(a)(2). “[T]he thrust of Rule 15 is
to reinforce the principle that cases ‘should be tried on their
merits rather than the technicalities of pleadings.’“ Moore v.
City of Paducah, 790 F.2d 557, 559 (6th Cir. 1986) (quoting Tefft
v. Seward, 689 F.2d 637, 639 (6th Cir. 1982)). In exercising its
broad discretion with respect to requests for leave to amend, the

trial court may consider such factors as “undue delay, bad faith
or dilatory motive on the part of the movant, repeated failure to
cure

deficiencies

by

amendments

previously

allowed,

undue

prejudice to the opposing party by virtue of allowance of the
amendment, [and] futility of amendment.”1 Foman v. Davis, 371 U.S.
178, 182 (1962); General Elec. Co. v. Sargent & Lundy, 916 F.2d
1119, 1130 (6th Cir. 1990).
“A proposed amendment is futile if the amendment could not
withstand a Rule 12(b)(6) motion to dismiss.” Rose v. Hartford
Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000) (citing
Thiokol Corp. v. Dep't of Treasury, Revenue Div., 987 F.2d 376,
382-83 (6th Cir. 1993)). In determining whether dismissal on the
basis of the legal sufficiency of the complaint is appropriate, a
complaint must be construed in the light most favorable to the
plaintiff, and all well-pleaded facts must be accepted as true.
See Bower v. Fed. Express Corp., 96 F.3d 200, 203 (6th Cir. 1996).
The United States Supreme Court has explained that “once a claim
has been stated adequately, it may be supported by showing any set
of facts consistent with the allegations in the complaint.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 546 (2007). This “requires

1

The Court rejects Defendant’s suggestion that it would be harmed by undue
delay in amending the Complaint because in its Response to the Motion to Amend
it suggests that the original Complaint and the tendered Amended Complaint are
so substantially identical in many ways as to be informed by the Motion to
Dismiss the original Complaint. Those similarities undermine any suggestion
that it will be harmed by this amendment.

2

more than labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do.” Id. at 555. “Factual
allegations must be enough to raise a right to relief above the
speculative

level....”

Id.

Accordingly,

a

complaint

must

be

dismissed—and amending a complaint is futile—if the complaint does
not plead “enough facts to state a claim to relief that is
plausible on its face.” Id. at 570.
With respect to Defendant’s motion,
“For purposes of a motion for judgment on the
pleadings,
all
well-pleaded
material
allegations of the pleadings of the opposing
party must be taken as true, and the motion
may be granted only if the moving party is
nevertheless clearly entitled to judgment.”
Southern Ohio Bank v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 479 F.2d 478, 480 (6th
Cir.1973). But we “need not accept as true
legal conclusions or unwarranted factual
inferences.” Mixon v. Ohio, 193 F.3d 389, 400
(6th Cir. 1999). A Rule 12(c) motion “is
granted when no material issue of fact exists
and the party making the motion is entitled to
judgment as a matter of law.” Paskvan v. City
of Cleveland Civil Serv. Comm'n, 946 F.2d
1233, 1235 (6th Cir. 1991).
JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 566, 581-82 (6th
Cir. 2007).
I.

Factual Averments
In 2012, Riley obtained a mortgage loan from Primelending in

the amount of $168,550.00 with interest at 4.250%

[DE 1, Compl.

at ¶ 10, 11; DE 23-2, Tendered Amended Complaint (hereinafter,
“Amend. Compl.”) at ¶¶ 11, 12], executing a promissory note in
3

favor of Primelending.2

Repayment of the loan was secured by a

Mortgage, dated February 8, 2012, encumbering the real property in
Richmond,

Kentucky.

Shortly

after

origination,

the

loan

was

transferred to Wells Fargo [Compl. at ¶ 12; Answer at ¶ 12; Amend.
Compl. at ¶ 12.]

About a year later, Plaintiff fell behind on her

mortgage payments and entered into a Loan Modification Agreement
with Wells Fargo in June 2013, curing her default, bringing the
loan current, and reducing the interest rate to 3.750% and the
monthly payment to $812.36.

[Compl. at ¶ 13-14; Amend. Compl. at

¶¶ 13-14.]
In relevant part, the mortgage provides in paragraph 9,
If (a) Borrower fails to perform the covenants
and agreements contained in this Security
Agreement . . . or (c) Borrower has abandoned
the Property, then Lender may do and pay for
whatever is reasonable or appropriate to
protect Lender’s interest in the Property and
rights . . . including protecting and/or
assessing the value of the Property, and
securing and/or repairing the Property. . . .
Securing the Property includes, but is not
limited to, entering the Property to make
repairs, change locks, replace or board up
doors and windows, drain water from pipes,
eliminate building or other code violations or
danger conditions, and have utilities turned
on or off.
Riley is a Master Sergeant in the United States Army Reserves
and was called to active duty and deployed to Fort Bliss, Texas,
on March 18, 2015, where she served as the non-commissioned officer

2

Plaintiff’s Complaint and tendered Amended Complaint, tell essentially the
same story.

4

in charge of Operations for Civilians.3

[Id. at ¶¶ 16-17; Amend.

Compl. at¶¶2, 16-17.] During this time, in mid-2015, she struggled
to make her monthly mortgage payments as she maintained her
residence in Richmond, Kentucky, and her residence in Ft. Bliss
[Compl. ¶¶17-19, 21, 60; Amend. Compl. at ¶¶ 18-19]. In late spring
2015, Riley fell victim to identity theft, becoming aware of it in
August 2015, when her automated ACH withdrawals arranged for her
payments

for

her

bi-monthly

mortgage

payments

could

not

be

processed from her USAA account and were returned “NSF.” [Compl.
at ¶¶ 21-22; Amend. Compl. at ¶¶21-22.]

As soon as she realized

that her withdrawals were not being processed, she contacted
Defendant and made a full month (i.e., two bi-monthly) payments on
September 17, 2016 [Compl. at ¶ 23; Amend. Compl. at ¶ 23 .].

She

intended to make another such payment prior within a few weeks,
but was advised by Defendant’s agent when she called that Defendant
was accelerating her loan and would not accept anything but full
payment of all arrearages.
¶¶ 24, 28.]

[Compl. at ¶¶ 24, 28; Amend. Compl. at

Riley was unable to make a large lump-sum payment to

catch up her loan for the month that she had missed and, instead,
applied for another loan modification or forbearance agreement,
which was provided by Defendant in December 2015:

a three-month

forbearance agreement under which she would pay $300/month until

3

Wells Fargo received copies of her Orders and was advised of Plaintiff’s
status on active duty. [Compl. at ¶ 67, Amend. Compl. at ¶ 78.]

5

the end of her deployment in March 2016.

[Compl. at ¶ 31; Amend.

Compl. at ¶ 30.] Plaintiff made these payments in February, March,
and April, renewing her application for permanent modification
upon her return from active duty.

[Compl. at ¶ 49; Amend. Compl.

at ¶ 30, 58.]
Riley

avers

that

Wells

Fargo,

through

its

agent

or

an

independent contractor engaged for such purposes, entered her home
around December 21, 2015, then

again on January 10, 2016, and a

third time in the spring of 2016. [Compl.. at ¶ 31, 41, 50; Amend.
Compl. at ¶ 42, 43, 50.]

In doing so, she avers that Defendant

caused property damage to the doors, plumbing, and appliances when
they forced entry by prying open the doors, changed the locks, and
shut off utilities.

[Compl. at ¶ 36; Amend. Compl. at ¶¶ 43, 45,

50, 63-66.] Wells Fargo’s agent or the independent contractor also
rifled through the personal property in every single room in her
home and posted conspicuous vacancy notices on the front door,
effectively giving notice that she was away to anyone who happened
by the home.

[Compl.. at ¶¶ 36-37; Amend. Compl. at ¶¶ 45-46, 62]

Defendant’s agent or the independent contractor also left the back
door open and unsecured. [Compl. at ¶ 36; Amend. Compl. at ¶45.]
Riley’s family noticed that outside patio items, including a gas
grill and law furniture, began disappearing from her home after
the notices were placed on the doors.

6

[Compl. at ¶ 47; Amend.

Compl. at ¶¶ 4, 53] She later discovered that tools and ammunition
were missing from the home. [Id. at

¶ 58, 68-69.]

Plaintiff avers that she spent many hours on the phone with
Defendant’s agents, explaining that she was on active duty and
that her family and friends were monitoring her home.
39.]

[Id. at ¶

She forbade further entry to Defendant after the first entry

into the home, and her family changed the locks and resecured the
home and removed the notices [Compl. at 39-40; Amend. Compl. at ¶
49.] Defendant’s agents or the indepdent contractor entered the
home at least twice more after the initial intrusion, again
breaking into a secured door and changing the locks.

She returned

home at the end of her active duty service, on March 17, 2016.
She avers that during Wells Fargo’s agent or its independent
contractor’s third entry into her home in the spring of 2016, it
turned the utilities back on, and “un-winteriz[ed]” her home.
[Compl. at ¶ 51; Amend. Compl. at ¶ 59.]

She does not aver that

she was prevented from or had issues with accessing the Property
when she returned to Kentucky in March 2016.
Amend. Compl. at ¶ 61]

[Compl. at ¶¶52-58;

She complains that she experienced “severe

stress and overwhelming anxiety about what was happening at [her]
home . . . while . . . completing her mission unable to do anything
to stop it” and avers in her tendered Amended Complaint that she
would try to hide her tears as she sat in her car on the phone
trying to prevent Defendant from physically interfering with her
7

home, trying to avoid the appearance that she was distracted from
her mission at Ft. Bliss by the events unfolding in Richmond,
Kentucky. [Compl. at ¶ 45; Amend. Compl. at ¶¶ 54, 57.]
II.

Servicemembers Civil Relief Act, 50 U.S.C. § 3953(c)

First,

the

Court

considers

Plaintiff’s

claim

under

the

Servicemembers Civil Relief Act (“SCRA”), which provides that
“seizure of property for a breach of an obligation . . . shall not
be valid if made during, or within one year after, the period of
the servicemember’s military service except (1) upon a court order
. . . or if made pursuant to an agreement as provided in section
3918. . . .”

50 U.S.C. § 3953(c); see 50 U.S.C. § 3918 (providing

for waiver of rights under chapter if in writing and a separate
instrument from obligation or liability to which it applies).
In her tendered Amended Complaint, Plaintiff avers that she
was on active duty [DE 75] and that Defendant was aware of her
deployment [Amend. Compl. at ¶ 76] because she provided them with
a copy of her orders and was in almost daily contact with an agent
regarding the situation with her bank account and a forebearance
agreement.

She

avers

that

Wells

Fargo

“seized”

her

home

in

violation of § 3953(c) when its agent or an independent contractor
engaged to do so entered the home, the locks were changed, and her
utilities were cut off, notwithstanding the fact that her home was
neither in foreclosure nor vacant and over her objection, all
without Court permission to take such action.
8

Wells

Fargo

would

have

this

Court

narrow

§

3593(c)’s

protections for service members on active duty, taking the position
that the “SCRA does not provide relief where there is no actual
institution of proceedings against secured property or actual
repossession,” quoting Rodriguez v. Amer. Express, No. CV F 035949 AWI LJO, 2006 WL 908613, *10 (E.D. Cal. Apr. 7, 2006), and
that, absent some sort of court proceeding, the SCRA only applies
to actual non-judicial foreclosure actions, citing Wilhoit v.
SunTrust Mortgage, No. 12-cv-8386, 2013 WL 1111823 (N.D. Ill. Mar.
18, 2013). The Court finds the situation in Rodriguez, which arose
from a lender’s filing of a judicial foreclosure action while the
borrower was on active duty in Afghanistan, to be inapposite
because there was in fact a judicial foreclosure action from which
the borrower demanded relief which does not exist in this case.
The fact that the borrower did not premise a request for relief on
the fact that the lender also changed the locks to the property
such that the borrower “was unable to gain entrance” when she
returned from service does not mean that a borrower could never
recover on that basis, as Wells Fargo theorizes.

Nor is it

particularly meaningful as Wells Fargo insists, that the Willhoit
court

concluded

that

§

3953(c)

(formerly

50

U.S.C.

App.

§

533(c)(1)) “applies only to non-judicial foreclosures, not to
foreclosures obtained via a court order.” 2013 WL 1111823 at *13-

9

14. Section 3953(c) also applies, by its own terms, to “seizure of
property” as a separate category of forbidden action.
“As in any statutory construction case, ‘[w]e start, of
course,

with

the

statutory

text,’

and

proceed

from

the

understanding that ‘[u]nless otherwise defined, statutory terms
are

generally

interpreted

in

accordance

with

their

ordinary

meaning.’” Sebelius v. Cloer, 133 S. Ct. 1886, 1893 (2013) (quoting
BP America Production Co. v. Burton, 549 U.S. 84, 91 (2006)).
seize

something

is

to

take

possession

of

it.

https://www.merriam-webster.com/dictionary/seize,
(last visited May 16, 2017).

See,

To

e.g.,

definition

2

To take possession of something does

not always require that legal title become vested in the party
which

takes

possession.

For

example,

the

Court

frequently

encounters the concept of seizure in matters involving the Fourth
Amendment to the United States Constitution, which contemplates a
meaningful interference with an individual’s possessory interests
in one’s property.

See, e.g., United States v. Roberts, 603 Fed.

App’x 426, 435-36 (6th Cir. 2015).

Here, changing the locks on

Riley’s home and interfering with her arrangements concerning the
utilities interfered with her possession – her authority as a
homeowner to control access to and to make decisions concerning
the upkeep of the home – for a period of time in 2015 and 2016,
even if Wells Fargo later ceased to do so before her return from
active duty.

As far as this Court is concerned and even in light
10

of the caselaw cited by Wells Fargo, there was a seizure of her
home, no matter how minimal Wells Fargo might believe it to be.
The question of what that is worth is a question for another day.
Amendment of the complaint with respect to this claim will be
permitted as it is not futile, and Defendant’s Motion for Judgment
on the pleadings denied as moot on this claim.
III. Servicemembers Civil Relief Act, 50 U.S.C. § 3937
In Plaintiff’s tendered Amended Complaint, she avers that
Defendant violated the SCRA, 50 U.S. § 3937, the maximum interest
provision, by assessing “miscellaneous fees” such that she was
effectively charged in excess of 6% during the time of her active
duty.

[Amend. Compl. at ¶ 56.]

Wells Fargo counters with an

argument that Plaintiff does not aver that she actually paid the
excess interest or fees while on active duty (or at any time, for
that matter) and that, as a result, her claim fails. The Court
agrees.

See Banaszak v. CitiMortgage, Inc., No. 13-CV-13710, 2014

WL 4489497, at *3 (E.D. Mich. Sept. 10, 2014) (explaining that
courts have uniformly held that if a servicemember never actually
pays more than the 6.000% rate, the statute is not violated, even
if they incur or are charged that rate) (citing Newton v. Bank of
McKenny, Civil No. 3:11cv493-JAG, 2012 WL 1752407, at *9 (E.D.Va.
May 16, 2012); Frazier v. HSBC Mortgage Servs., 401 F. App'x 436,
439 (11th Cir. 2010); Koenig v. Waukesha State Bank, No. 05-C-255,
2006 WL 2334841, at *4 (E.D.Wis. Aug.10, 2006)). Therefore, Riley’s
11

Motion to Amend the Complaint is futile in this regard, and relief
will be denied.
IV.

Usury

KRS 360.020 prohibits the “taking, receiving, reserving, or
charging

a

rate

of

interest

greater

than

is

allowed

by

KRS

360.010,” which provides that “the legal rate of interest is eight
percent (8%) per annum.”

In her proposed amended complaint,

Plaintiff avers that “Wells Fargo is charging fees and expenses on
Ms. Riley’s loan that are causing an interest rate of greater than
6% to be incurred” [Compl. at ¶ 74; Amend. Compl. at ¶¶56, 90.]
Her Tendered Amended Complaint suggests that the 6% interest cap
imposed by the SCRA, 15 U.S.C. § 3937, is coopted into the Kentucky
usury statute.

However, the National Bank Act, 12 U.S.C. § 85

generally preempts application of the state law action against a
national bank, like Wells Fargo, although the “rate of interest is
generally tied to the rate allowed in the state where the bank is
located.”

The parties agree that Wells Fargo is a “national bank”

[Compl. at ¶3; Answer at ¶3; Proposed Amend Compl. at ¶3.]

Wells

Fargo is a national bank chartered in South Dakota, and South
Dakota does not set a maximum interest rate so long as the rate is
set by a written agreement” between the parties.4
4

See Taft v.

The court may take judicial notice of the following information on the FDIC’s
website
regarding
Wells
Fargo’s
bank
information:
https://www5.fdic.gov/idasp/advSearchLanding.asp. See also Pruitt v. Wells
Fargo Bank, N.A., 2015 U.S. Dist. LEXIS 172884, FN. 4 (Dist. Maryland
2015)(taking judicial notice of Wells Fargo’s status as a national bank).

12

Wells Fargo Bank, 828 F. Supp. 2d 1031, 1035 (D. Minn. 2011); S.D.
Codified Laws §§ 54-3-1.1, 54-3-13.
claim would be futile.

It follows that amending this

Accordingly, Plaintiff’s motion to amend

is denied in this regard, and her claim for usury in the original
Complaint is dismissed.
V. Fair Debt Collection Practices Act
Riley’s Fair Debt Collection Practices Act (“FDCPA”) claim
fails,

both

in

her

effort

to

amend

it

and

in

her

original

complaint, because Wells Fargo is Plaintiff’s creditor under the
terms of their Agreement and, thus, is not a debt collector for
the purposes of the Act. “The FDCPA governs the conduct of debt
collectors, the definition of which specifically excludes ‘any
person collecting or attempting to collect any debt owed ... to
the extend such activity ... (ii) concerns a debt which was
originated by such person; [or] (iii) concerns a debt which was
not in default at the time it was obtained by such person.’” Herzig
v. Suntrust Mortg., Inc., No. 3:13-CV-299-S, 2014 WL 1319468, at
*10 (W.D. Ky. Mar. 31, 2014) (quoting 15 U.S.C. § 1692a(6)(F)).
“Thus, a debt collector does not include the consumer's creditors,
a mortgage servicing company, or an assignee of a debt, as long as
the debt was not in default at the time it was assigned.” Id.
(quoting Belin v. Litton Loan Servicing, LP, No. 8:06–cv–760–T–
24EAJ, 2006 WL 1992410, at *2 (M.D.Fla. July 14, 2006); citing
Warren v. Countrywide Home Loans, Inc., 342 F.App'x 458, 460–61
13

(11th Cir. 2009); Foxx v. Ocwen Loan Servicing, LLC, No. 8:11-CV1755-T-17EAK,

2012

WL

2048252,

*9

(D.C.Fla.

June

6,

2012));

MacDermid v. Discover Fin. Servs., 488 F.3d 721, 735 (6th Cir.
2007)). Amendment of her complaint would be futile in this regard,
and judgment on the pleadings with respect to the claim in her
original Complaint is appropriate.

Plaintiff’s motion to amend

will be denied, and her claim in the Complaint will be dismissed.
VI.

Kentucky Consumer Protection Act

The Kentucky Consumer Protection Act (“KCPA”) protects “[a]ny
person who purchases or leases goods or services primarily for
personal, family, or household purposes” from “unfair, false,
misleading, or deceptive acts or practices in the conduct of any
trade or commerce.”

Ky. Rev. Stat. Ann. § 367.220(1), 367.170.

The Court of Appeals of Kentucky has held that the KCPA does not
apply to real estate transactions by an individual homeowner.
Craig v. Keene, 32 S.W.3d 90, 91 (Ky. 2000).

Moreover, it has

defined the term “real estate transaction” as “encompass[ing] any
transaction touching upon or involving real estate.”

Todd v. Ky.

Heartland Mortg., Inc., No. 2002-CA-002038-MR, 2003 WL 21770805,
at *3 (Ky. Ct. App. Aug. 1, 2003). The transaction in question
involves a mortgage loan for Plaintiff’s home, and, thus, the KCPA
is not applicable because this is real estate transaction by an
individual homeowner.

Amendment of the Complaint with respect to

14

this claim would be futile and will be denied.

Additionally, the

claim in the original Complaint will be denied.
VII. Breach of Contract and Trespass
Riley avers that Wells Fargo’s entry into her home and all
that followed with respect to the utilities and damage to the home
and its contents were in violation of Paragraph 9 of the parties’
agreement.

Wells Fargo takes the position, however, that her

breach of contract claim fails as a matter of law because its agent
or independent contractor’s entrance into and efforts to secure
and winterize the property were authorized by and consistent with
the terms of the Mortgage.

Similarly, Wells Fargo argues that

Plaintiff’s trespass claim fails.5

5

Wells Fargo also argues that Plaintiff’s claims fail because she, in her
tendered Amended Complaint, has changed the word “agent” to “independent
contractor” in describing the party that actually came to her house to “secure”
and “winterize” it at Defendant’s request. Defendant argues that it cannot be
held liable for the intentional acts of an independent contractor, citing
Dickinson v. Countrywide Home Loans, Inc., No. 1:10-cv-688, 2012 WL 163883, *6
(W.D. Mich. Jan. 19, 2012) (holding that, under Michigan law, Plaintiff’s claims
for damages arising out of stolen personal property failed because there was no
evidence that the lender could have anticipated the wrongful acts of the
independent contractor sent to secure the borrower’s property after default)
and Nazar v. Branham, 291 S.W.3d 599, 606 (Ky. 2009) (holding that principal
may be held vicariously liable for the negligent acts of his or her agent, but
generally is not held liable for the conduct of an independent contractor and
that, if an individual is free to determine how work is done and the principal
cares only about the end result, then that individual is an independent
contractor). That may be the case, but the Court leaves that for determination
under Kentucky law at a later date. Suffice it to say, at least some portion
of the intentional acts committed by the agent or independent contractor sent
by Wells Fargo to “secure” and “winterize” Plaintiff’s home may have been
anticipated by Defendant – including the damage to doors during the forced entry
into the home and the posting of notices. Whether Wells Fargo can be responsible
for failure to secure the doors by its independent contractor or the specifics
of how its independent contractor “winterized” the home is another story—one to
be told and appreciated on another day.

15

In Kentucky, breach of contract requires “(1) the existence
of a valid contract; (2) breach of the contract; and (3) damages
or loss to plaintiff.”

Johnston v. Robert Bosch Tool Corp., Civil

Action No. 4:11-cv-00009-JHM, 2012 WL 4324934, *3 (W.D.Ky. Sept.
20, 2012) (citing Lenning v. Commercial Union Ins. Co., 260 F.3d
574, 581 (6th Cir. 2001)).

Where a defendant complies with the

terms of a contract, there is no claim for breach of contract.
See Crail v. Best Buy Co., Civil Action No. 2006-227 (WOB), 2007
WL 272602, *3-4 (E.D.Ky. Sept. 17, 2007).
Trespass, under Kentucky law, is actionable where a party
“enter[ed] or remain[ed] upon land in the possession of another
without the possessor’s consent.”

Bradford v. Clifton, 379 S.W.2d

249, 250 (Ky. 1964). The entry must be unauthorized.

Adams’ Adm’r

v. Callis & Hughes, 253 Ky. 382, 386 (Ky. 1934). Thus, for example,
there is no trespass where the owner or person in possession of
real estate has given authority or permission for another to enter
or remain on the land through an easement, see Townsend v. Gulf
Interstate Gas Co., 308 S.W.2d 793, 795 (Ky. 1957), or when an
agreement

authorizes

entry

onto

property

to

remedy

code

violations, see Hyde v. Dayton, Civil Action No. 2008-73 (WOB),
2009 WL 3586423, *6-7 (E.D.Ky. Oct. 28, 2009).

Courts have

dismissed claims for trespass where a mortgage or deed of trust
specifically authorizes access to secure a property once a borrower
is in default or property is abandoned.
16

See, e.g., Bennett v.

Bank of Amer., Civil Action No. 3:12cv34-HEH, 2012 WL 1354546, *10
(E.D. Va. Apr. 18, 2012) (dismissing claim for trespass where
agreement “authorized” lender to enter onto property to “change
locks” only if borrower “fail[ed] to perform the convenants and
agreements contained” in Deed of Trust); Thompson v. JPMorgan Chase
Bank, N.A., Civil No. WDQ-13-1982, 2014 WL 4269060, *20-21 (Dist.
Md. Aug. 27, 2014) (granting motion to dismiss borrowers’ trespass
claim because the deed of trust permitted the lender to enter the
property upon default and do “whatever is reasonable or appropriate
to protect its interest”); PNC Bank, N.A. v. Van Hoornaar, 44
F.Supp.3d 846, 856 (E.D. Wisc. 2014) (granting motion to dismiss
trespass claim since Paragraph 9 of the Mortgage permitted entry
upon default to do what was “reasonable or appropriate to protect
Lender’s interest in the Property[,]” including “entering . . . to
make repairs, change locks, replace or board up doors and windows,
drain water from pipes, eliminate building or other code violations
or dangerous conditions, and have utilities turned on or off” where
judicial foreclosure action had already commenced and property was
considered “abandoned” by lender); but see Kaczmarek v. JPMorgan
Chase Bank, N.A., No. 11-15214, 2012 WL 2115263, *3 (E.D. Mich.
June 11, 2012) (denying motion for judgment on the pleadings and
holding that, on facts as averred, allegations were sufficient to
establish that lender exceeded scope of consent granted in mortgage
agreement to take “reasonable action to protect and preserve . .
17

. vacant or abandoned [p]roperty” when it secured property after
providing only eight days for borrower to confirm that property
was vacant in a letter advising that property would be secured).
In this instance, if Defendant’s entrance onto the property
and its actions with respect to the property were authorized by
the parties’ agreement, Plaintiff’s claims for breach of contract
and trespass would fail. The Court cannot, at this time, determine
as a matter of law whether Wells Fargo “d[id] and pa[id] for
whatever is reasonable or appropriate to protect Lender’s interest
in the Property” (emphasis added) on the facts as pleaded.

There

is no averment, for example, that Riley had failed to secure her
home against intruders or the elements with respect to the locks
on the doors or windows or that there was some clear indication
that she had failed to winterize her home such that it was
reasonable or appropriate to enter her home to “winterize” it upon
her default as Wells Fargo claims – particularly where Wells
Fargo’s agent or independent contractor’s entry and modifications
to Plaintiff’s own provisions to safeguard her home resulted in
damage to the home and left it open for further malfeasance by
others.

Nor can the Court say, as a matter of law, that her

trespass claim lacks merit.

To the extent that Defendant’s

authority to enter onto the premises is controlled by the terms of
the parties’ Agreement, the issue of whether a trespass occurred
must be passed until the merits of the breach of contract claim
18

are determined.

It is not futile to amend the complaint, and her

motion will be granted, and Defendant’s Motion for Judgment on the
pleadings denied as moot.
VIII.

Intentional Infliction of Emotional Distress

Under Kentucky law, “[o]ne who by extreme and outrageous
conduct

intentionally

or

recklessly

causes

severe

emotional

distress to another is subject to liability for such emotional
distress, and if bodily harm to the other results from it, for
such

bodily

harm.”

See

Restatement

(Second)

of

Torts

46.

Outrageous conduct “is a deviation from all reasonable bounds of
decency and is utterly intolerable in a civilized community.”
Craft v. Rice, 671 S.W.2d 247, 250-51 (Ky. 1984) (explaining that
conduct must offend the generally accepted standards of decency
and

morality,

thus,

limiting

frivolous

suits

and

avoiding

litigation in situations where only bad manners and mere hurt
feelings are involved).
In this case, the Plaintiff avers emotional distress arising
from Wells Fargo’s actions with respect to her home, describing
the stress and the emotional response prompted by Defendants’
actions while she was in an active duty situation.

At bar is

whether Defendants’ actions, taken with knowledge of Plaintiff’s
active

duty

“winterize”

status
the

and

house

allegedly
after

a

undertaken
default,

to

were

“secure”

and

“extreme

and

outrageous” or whether Wells Fargo acted either intentionally or
19

recklessly to cause the distress through its agent or independent
contractor.

According to the Complaint and the tendered Amended

Complaint, Defendants’ agents or independent contractors entered
the home without notice to Plaintiff, using a crowbar to open the
door and drilling through the door knobs and locks to remove and
replace them. She avers that, while these individuals were in her
home, someone rifled through Plaintiff’s belongings, some of which
were taken from her home, and left the rear door of her home
unsecured as they exited.

Then, they did it again.

Each time

Wells Fargo was aware that she was on active duty at a distance
from her home, unable to prevent Wells Fargo’s agents or the
independent contractors hired to do so from taking action in the
moment.
It is for the court to decide whether the conduct complained
of can reasonably be regarded to be so extreme and outrageous as
to permit recovery. Goebel v. Arnett, 259 S.W.3d 489, 493-94 (Ky.
Ct. App. 2007) (holding that behavior was outrageous when defendant
represented plaintiff in an adoption matter without disclosing
that she also represented the adoption agency and then falsely
represented to the court that the baby’s father had not asserted
his right to custody of the child and urged plaintiff to falsely
claim that she had been raped by the baby’s father, resulting in
the pregnancy) (citing Whittington v. Whittington, 766 S.W.2d 73
(Ky. Ct. App. 1989)). “Kentucky has previously recognized a cause
20

of action for tortious conduct in cases involving humiliating
methods of debt collection, [. . .] embarrassment caused by an
employer's methods in combatting union organization, [. . .] and
a newspaper's liability for putting a private person in ‘false
light’. . . .” Craft, 671 S.W.3d at 250 (citing Brents v. Morgan,
299 S.W. 967 (Ky. 1927), Wheeler v. P. Sorensen Mfg. Co., 415
S.W.2d 582 (Ky. 1967), McCall v. Courier Journal, 623 S.W.2d 882
(Ky. 1981)). In this case, Wells Fargo’s conduct, as pleaded in
the Complaint and the tendered Amended Complaint, is sufficient to
state a claim under Kentucky law.
Even though Plaintiff was behind in her payments and was
indebted to Wells Fargo on the mortgage before that, Wells Fargo’s
ability to collect that debt was limited by federal law’s provision
for active duty service members.

See, e.g., MacDermid v. Discover

Fin. Servs., 488 F.3d 721, 730-32 (6th Cir. 2007) (holding that
claim of outrageous conduct under Tennessee law were sufficient to
survive motion to dismiss where creditor insinuated that criminal
prosecution could be used to pursue the debtor when it was not, in
fact, available under the law). In other words, Wells Fargo’s
decision to “seize” the property, i.e., deprive Plaintiff of or
interfere with her decision-making power with respect to her home,
during the period of her active duty service, with knowledge of
her active duty status, and with knowledge that she was stationed
away from home was intentional and may be called extreme or
21

outrageous under the circumstances as averred. Time and discovery
will tell more about the methods undertaken to enforce the debt
and secure the property, but the Court concludes that this matter
is best left for a later date on summary judgment or at trial.
Accordingly, amendment of the complaint with respect to this claim
will be permitted, and the motion for judgment on the pleadings
with respect to the claim in the original Complaint is denied s
moot.
Accordingly, for all of the reasons stated above, IT IS
ORDERED:
(1)

that Defendant’s Motion for Judgment on the Pleadings
[DE 13] is GRANTED IN PART and DENIED IN PART;

(2)

that Plaintiff’s Motion to Amend Complaint [DE 23] is
GRANTED IN PART and DENIED IN PART;

IT IS FURTHER ORDERED:
(3)

that the parties joint Motion to Stay All Discovery
Deadlines and to Continue the Trial Date in Order to
permit a settlement conference with Judge Wier to occur
[DE 33] is GRANTED;

(4)

that

all

deadlines

with

respect

to

discovery

and

pretrial practice, as well as the trial date in this
matter, are CONTINUED GENERALLY;

22

(5)

that the parties shall contact the magistrate judge
within three (3) days of entry of this order in order to
schedule a settlement conference;

(6)

that the parties shall file a STATUS REPORT with this
Court no later than three (3) days from the date that a
settlement negotiation is conducted with the magistrate
judge, advising the Court of what matters remain for
trial

and

proposing

a

schedule

for

any

remaining

discovery, motion practice, or pretrial matters, as well
as a new trial date.
This the 22nd day of May, 2017.

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