Letke v. Wells Fargo Home Mortgage et al
Filing
86
MEMORANDUM OPINION. Signed by Judge Richard D Bennett on 10/19/2015. (c/m 10/19/2015 ca2s, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
KIMBERLY LETKE,
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Plaintiff,
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v.
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WELLS FARGO
HOME MORTGAGE, INC.,
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Defendant.
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Civil Action No. RDB-12-3799
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MEMORANDUM OPINION
Plaintiff Kimberly Letke (“Plaintiff” or “Letke”), proceeding pro se, brings this action
against Wells Fargo Home Mortgage, Inc. (“Wells Fargo”), alleging breach of contract under
the Home Affordable Modification Program (“HAMP”), 12
U.S.C. § 5219(a), et. seq.1 Essentially, Letke claims that Wells Fargo, by offering Letke a Trial
Payment Plan (“TPP”), breached its alleged obligation to extend her a permanent loan
modification.
Presently pending is Defendant Wells Fargo Home Mortgage Inc.’s Motion for
Summary Judgment (ECF No. 76). The Court has reviewed the parties’ submissions and
finds that no hearing is necessary. See Local Rule 105.6 (D. Md. 2014). For the reasons that
follow, Defendant Wells Fargo Home Mortgage Inc.’s Motion for Summary Judgment (ECF
1 In her Complaint (ECF No. 1), Letke also asserted a claim under the Fair Housing Act (“FHA”), 42 U.S.C.
§ 3601, et seq. After Wells Fargo filed a Motion to Dismiss the Amended Complaint (ECF No. 31), this Court
granted Wells Fargo’s Motion as to the FHA claim, but allowed the HAMP breach of contract claim to
proceed. See Mem. Op., ECF No. 42; Order, ECF No. 43.
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No. 76) is GRANTED. Accordingly, judgment is entered in favor of the Defendant as a
matter of law.
BACKGROUND
In ruling on a motion for summary judgment, this Court reviews the facts and all
reasonable inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550
U.S. 372, 378 (2007); see also Hardwick ex rel. Hardwick v. Heyward, 711 F.3d 426, 433 (4th Cir.
2013). Yet, this Court also notes that Letke, in attempting to create a genuine issue of
material fact, submitted hundreds of pages of exhibits with varying degrees of relevance to
the pending Motion for Summary Judgment. See Pl.’s Resp. in Opp’n Ex. 1, ECF No. 80-1.
She does not coherently identify any facts or portions of the submitted documents that could
create a dispute of material fact, essentially leaving to this Court “the unenviable task of
poring over [voluminous] pages of . . . exhibits in search of bits of evidence that could
preclude summary judgment[.]” Johnson v. U.S., 861 F. Supp. 2d 629, 635 (D. Md. 2012)
(quoting Cray Commc’ns, Inc. v. Novatel Computer Sys., Inc., 33 F.3d 390, 395 (4th Cir. 1994)).
The background facts of this action were fully set forth in this Court’s Memorandum
Opinion of March 27, 2015 (ECF No. 42). After a period of discovery, the undisputed facts
are as follows:2 Plaintiff purchased a property located at 1607 Bridewells Court, Joppa,
Maryland 21085 (the “Property”) for $380,000 in 2006. Am. Compl. 13, ECF No. 21. She
made a $130,000 down payment and mortgaged the $250,000 balance through Wells Fargo.
2 Indeed, this Court may grant summary judgment in favor of Defendant on this ground alone. See Johnson,
861 F. Supp. 2d at 635 (quoting Cray Commc’ns, 33 F.3d at 395-96) (a court is “well within its discretion in
refusing to ferret out the facts that [the party] ha[s] not bothered to excavate”); see also Fed. R. Civ. P. 56(e)
(“If a party fails to properly support an assertion of fact or fails to properly address another party’s assertion
of fact as required by Rule 56(c), the court may . . . (2) consider the fact undisputed for purposes of the
motion; [or] (3) grant summary judgment if the motion and supporting materials . . . show that the movant is
entitled to it . . .”).
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Id.; see also Kruse Aff. ¶ 3, ECF No. 76-2.3 Plaintiff committed to $2,568 in monthly
mortgage payments. Id. In early 2009, Letke defaulted on her loan payment obligation. Id. ¶
4. Although Wells Fargo reviewed her circumstances on several occasions throughout 2009,
she was not approved for a Trial Payment Plan (“TPP”) under HAMP4 until March 29,
2010. Id. ¶ 8; see also Kruse Aff. Ex. D, ECF No. 76-6 (TPP Documents).
Under the terms of the TPP, Letke was required to submit: (1) “Two copies of the
enclosed Trial Period Plan signed by all borrowers; (2) her “first month’s trial period
payment set forth in the” TPP; (3) “The enclosed Hardship Affidavit completed and signed
by all borrowers[;]” (4) “A signed and dated copy of the IRS Form 4506T (Request for
Transcript of Tax Return) for each borrower[;]” and (5) “Documentation to verify all of the
income of each borrower.” Kruse Aff. Ex. D., at 5. If Letke was unable to provide the
requested documents by May 1, 2010, then the TPP required that she apply for an extension.
Id. On April 20, 2010, Wells Fargo sent a Request for Additional Information to Letke due
to her failure to provide the requisite documentation. Kruse Aff. ¶ 9; Kruse Aff. Ex. E, ECF
No. 76-7. The Request for Additional Information extended the submission deadline to May
20, 2010. Kruse Aff. Ex. E.
The following day, Wells Fargo received an undated copy of the TPP signed by
Letke. Kruse Aff. ¶ 10; Kruse Aff. Ex. F, ECF No. 76-8. In addition to signing the TPP,
3 Andrea Kruse is a Vice President, Loan Modification at Wells Fargo. Kruse Aff. ¶ 2.
4 As this Court explained: in its Memorandum Opinion (ECF No. 42), the Home Affordable Modification
Program allows homeowners who are in default or face an imminent risk of default to avoid foreclosure by
obtaining permanent loan modifications that reduce monthly payments. The Trial Payment Plan is a ninetyday period during which individuals interested in loan modification may pay the modified mortgage price. If
the mortgagor fulfills the conditions of the TPP, the loan modification may become permanent. See Allen v.
CitiMortgage, Inc., Civ. A. No. CCB-10-2740, 2011 WL 345665, at *1 (D. Md. Aug. 4, 2011) (discussing the
purpose and requirements of HAMP).
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Letke had crossed out and initialed certain paragraphs. Kruse Aff. Ex. F, at 3. Wells Fargo
did not execute the modified TPP copy. Kruse Aff. ¶ 10. Apart from a letter dated April 13,
2010,5 and trial payments for May, June, and July 2010, Letke did not provide any further
TPP-required documentation by the May 20, 2010 deadline. Kruse Aff. ¶ 10.
On September 1, 2010, Wells Fargo sent Plaintiff a letter denying a permanent
modification under HAMP due to her failure to provide the requested documentation.
Kruse Aff. ¶ 13; Kruse Aff. Ex. H, ECF No. 76-10. Two days later, Wells Fargo sent
Plaintiff a second letter in which it requested certain documents by September 18, 2010 in
order to determine her eligibility for a non-HAMP loan modification.6 Kruse Aff. ¶ 14;
Kruse Aff. Ex. I, ECF No. 76-11. On September 17, 2010, Wells Fargo received a copy of
Letke’s 2009 tax returns, a letter discussing a pending lawsuit, and an incomplete, unexecuted
“Financial Worksheet.” Kruse Aff. ¶ 15; Kruse Aff. Ex. J, ECF No. 76-12 (September 17,
2010 submissions). Due to Letke’s failure to provide the requisite documentation, Wells
Fargo denied the non-HAMP modification on September 20, 2010. Kruse Aff. ¶ 16; Kruse
Aff. Ex. K, ECF No. 76-13.
After the denial of the non-HAMP modification, Plaintiff continued to seek a
permanent loan modification. Kruse Aff. ¶ 17. Finally, in March 2013, Wells Fargo approved
Letke for a permanent modification plan. Kruse Aff. ¶ 18; see also Kruse Aff. Ex. L, ECF No.
5 In the April 13, 2010 letter, Letke appears to discuss the TPP offer and certain issues related to the
Property, but makes no reference to the outstanding TPP documents. Kruse Aff. Ex. G, ECF No. 76-9.
6 The requested documents were:
1. Financial Worksheet
2. Tax Return for 2009
3. Proof of Income (paystub, SSI, child support)
4. Profit & Loss Statement, if self-employed
5. Hardship Explanation
Kruse Aff. Ex. I, at 2.
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76-14. The loan modification took effect on April 23, 2013. See Kruse Aff. ¶ 18; Kruse Aff.
Ex. L. Prior to the execution of this modification plan, Plaintiff filed the instant action on
December 27, 2012 against Defendants Wells Fargo, John Stumpf (“Stumpf”), and Adam
Velde (“Velde”).7 See generally Compl. While the present action was pending in this Court,
Letke filed a Voluntary Petition pursuant to Chapter 7 of the Bankruptcy Code, 11 U.S.C. §
701, et seq., in the United States Bankruptcy Court for the District of Maryland on June 5,
2013.8 See Def.’s Mot. for Summ. J. Ex. 2, ECF No. 76-15 (Bankruptcy Docket Sheet). Letke
did not list this pending action and claims in her bankruptcy filings. See Def.’s Mot. for
Summ. J. Ex. 3, ECF No. 76-16 (Petition Schedules). The Bankruptcy Court issued an Order
Discharging the Debtor on September 16, 2013, and then a final decree closing Letke’s
bankruptcy estate on October 7, 2013. See Def.’s Mot. for Summ. J. Ex. 2. Letke
subsequently moved to reopen the bankruptcy case on July 15, 2015, but the Bankruptcy
Court denied her motion without prejudice. See id.
Defendant subsequently filed the pending Motion for Summary Judgment (ECF No.
76) on the sole remaining breach of contract claim.
STANDARD OF REVIEW
Rule 56 of the Federal Rules of Civil Procedure provides that a court “shall grant
summary judgment if the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). A
material fact is one that “might affect the outcome of the suit under the governing law.”
7 By Order dated November 23, 2013 (ECF No. 20), this Court dismissed all claims against Velde and
Stumpf.
8 Letke was represented by counsel in her bankruptcy action. See id.
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Libertarian Party of Va. v. Judd, 718 F.3d 308, 313 (4th Cir. 2013) (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)). A genuine issue over a material fact exists “if the
evidence is such that a reasonable jury could return a verdict for the nonmoving party.”
Anderson, 477 U.S. at 248. When considering a motion for summary judgment, a judge’s
function is limited to determining whether sufficient evidence exists on a claimed factual
dispute to warrant submission of the matter to a jury for resolution at trial. Id. at 249.
In undertaking this inquiry, this Court must consider the facts and all reasonable
inferences in the light most favorable to the nonmoving party. Libertarian Party of Va., 718
F.3d at 312; see also Scott v. Harris, 550 U.S. 372, 378 (2007). In so doing, this Court “must
not weigh evidence or make credibility determinations.” Foster v. University of Md.-Eastern
Shore, 787 F.3d 243, 248 (4th Cir. 2015) (citing Mercantile Peninsula Bank v. French, 499 F.3d
345, 352 (4th Cir. 2007)); see also Jacobs v. N.C. Administrative Office of the Courts, 780 F.3d 562,
569 (4th Cir. 2015) (explaining that the trial court may not make credibility determinations at
the summary judgment stage). Indeed, it is the function of the fact-finder to resolve factual
disputes, including issues of witness credibility. See Tolan v. Cotton, --- U.S. ----, 134 S. Ct.
1861, 1866-68 (2014) (per curiam). However, this Court must also abide by its affirmative
obligation to prevent factually unsupported claims and defenses from going to trial. Drewitt
v. Pratt, 999 F.2d 774, 778-79 (4th Cir. 1993). If the evidence presented by the nonmoving
party is merely colorable, or is not significantly probative, summary judgment must be
granted. Anderson, 477 U.S. at 249-50. On the other hand, a party opposing summary
judgment must “do more than simply show that there is some metaphysical doubt as to the
material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); see
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also In re Apex Express Corp., 190 F.3d 624, 633 (4th Cir. 1999). As this Court has previously
explained, a “party cannot create a genuine dispute of material fact through mere speculation
or compilation of inferences.” Shin v. Shalala, 166 F. Supp. 2d 373, 375 (D. Md. 2001)
(citations omitted).
ANALYSIS
In moving for judgment as a matter of law on the remaining claim for breach of
contract, Wells Fargo asserts three arguments for this Court’s consideration. First, Wells
Fargo contends that, as Letke did not comply with the TPP documentation request, she
either did not accept the TPP offer, or accepted the offer, but did not perform under the
contract. Second, Wells Fargo argues that Letke waived the subject breach of contract claim
when she executed a permanent loan modification agreement with Wells Fargo on April 23,
2013. Finally, Wells Fargo asserts that judicial estoppel bars Letke’s claim, as she did not
identify the present action and constituent claims in her bankruptcy action. This Court will
address each argument in turn.
A. Failure to Comply With TPP Conditions
First, Wells Fargo argues that Letke’s failure to submit the requisite documents under
the TPP obviated any obligation of Wells Fargo to extend her a permanent loan
modification. Wells Fargo contends that Letke’s failure may be construed as a lack of
acceptance of the TPP offer or a failure to perform under the contract created by the TPP.
Under either construction, Wells Fargo owed Letke no contractual obligation to modify
permanently her loan. As Plaintiff never accepted the TPP offer, no contract was formed.
Thus, this Court need not address whether she performed under the TPP contract.
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In Maryland, the “formation of a contract requires mutual assent (offer and
acceptance), an agreement definite in its terms, and sufficient consideration.” CTI/DC, Inc. v.
Selective Ins. Co. of Am., 392 F.3d 114, 123 (4th Cir. 2004) (internal citation omitted). To be
effective, Maryland law “requires unqualified acceptance.” Montage Furniture Servs., LLC v.
Regency Furniture, Inc., 966 F. Supp. 2d 519, 524 (D. Md. 2013); see also Fraley v. Null, Inc., 244
Md. 567, 572, 224 A.2d 448 (1966); Post v. Gillespie, 219 Md. 378, 385, 149 A.2d 391 (1959).
Indeed, an acceptance that modifies or alters the terms of performance is a counteroffer, and
not unqualified acceptance. See Ebline v. Campbell, 209 Md. 584, 121 A.2d 828 (1956).
Given Maryland’s strict construction of acceptance, it is clear as a matter of law that
Letke never accepted the TPP offer. The TPP clearly states that, “[t]o accept this offer,”
Letke had to return certain documents to Wells Fargo. A review of the undisputed facts,
however, reveals that Letke clearly failed to provide the requisite TPP documents. She
submitted the trial period payments, but she provided no Hardship Affidavit, copy of the
IRS Form 4506T, nor any documentation verifying her income.9 Kruse Aff. ¶¶ 10-12.
Although Plaintiff did sign the TPP, she also modified the offer by crossing out certain
language in the offer. Kruse Aff. Ex. F, at 3. Her April 13, 2010 letter added additional
conditions, as she represented that she “[did] not waiver any rights.” Kruse Aff. Ex. G, at 2.
In fact, she specifically asked Wells Fargo to “[l]et [her] know what your offer is . . .” Id. At
best, her correspondence and executed TPP are a conditional acceptance, and thus a
counteroffer.
9 As Letke was self-employed, this documentation consisted of her 2009 federal tax return with all schedules,
and the most recent quarterly or yearly profit/loss statement for her business. Kruse Aff. Ex. D, at 5.
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Moreover, Plaintiff identifies no facts to refute Andrea Kruse’s declaration that Wells
Fargo never received the requisite documentation. Yet, it is the Plaintiff’s obligation to
provide such facts, and not this Court’s duty to scour Plaintiff’s submissions. Johnson, 861 F.
Supp. 2d at 635. As there is no genuine issue of material fact that Letke did not accept the
TPP offer, Wells Fargo is absolved of any obligation to modify permanently her loan.
B. Contractual Waiver
Second, Wells Fargo contends that Letke waived the breach of contract claim when
she ultimately entered into a permanent loan modification agreement in April 2013. In
Maryland, a party “waives a contractual right by intentionally relinquishing the right or
engaging in conduct that warrants the inference that the right has been relinquished.” La
Belle Epoque, LLC v. Old Europe Antique Manor, LLC, 406 Md. 194, 213, 958 A.2d 269 (Md.
2008). Despite the “highly factual nature of the waiver inquiry,” situations “[o]casionally”
arise where “the waiver is so obvious that a ruling can be made as a matter of law.”
Hovnanian Land Investment Group, LLC v. Annapolis Towne Centre at Parole, LLC, --- Md. ----,
No. 71, Sept. Term 2010, slip op. at 30-31 (filed July 20, 2011). As this Court explained,
“[o]ne such situation is where the parties have entered into a new contractual relationship,
replacing the agreement that allegedly was breached, with knowledge of the prior breaches.”
Adam v. Wells Fargo Bank, N.A., Civ. A. No. ELH-09-2387, 2011 WL 3841547, at *15 (D.
Md. Aug. 26, 2011) (citing, inter alia, Edelstein v. Nationwide Mut. Ins. Co., 252 Md. 455, 461,
250 A.2d 241 (1969)).
The permanent modification agreement took effect on April 23, 2013. In executing
the 2013 permanent modification, Letke necessarily agreed that “this Agreement shall
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supersede the terms of any medication, forbearance, trial period plan or workout plan that
[Letke] previously entered into with [Wells Fargo].” Kruse Aff. Ex. L, at 5. Despite this
language, the present action is Letke’s attempt to recover for an alleged breach of the earlier
TPP. The 2013 modification agreement, however, explicitly bars such recovery. Letke has
thus waived any claim for breach of contract under the TPP.
C. Judicial Estoppel
On June 5, 2013, Letke filed a petition pursuant to Chapter 7 of the Bankruptcy
Code, 11 U.S.C. § 701, et seq. The Bankruptcy Court issued a discharge on September 16,
2013, and then a final decree closing the bankruptcy estate on October 7, 2013. Wells Fargo
argues that Letke failed to disclose the present action and claims in her bankruptcy petition.
Accordingly, she is judicially estopped from asserting the omitted claim.
Judicial estoppel is “an equitable doctrine that exists to prevent litigants from playing
‘fast and loose’ with the courts—to deter improper manipulation of the judiciary.”10 Folio v.
City of Clarksburg, W. Va., 134 F.3d 1211, 1217 (4th Cir. 1998) (quoting John S. Clark Co. v.
Faggert & Frieden, P.C., 65 F.3d 26, 28-29 (4th Cir. 1995)). As this Court has previously
noted,
In order for judicial estoppel to apply, (1) the party to be
estopped must be advancing an assertion that is inconsistent
with a position taken during previous litigation; (2) the position
must be one of fact, rather than law or legal theory; (3) the prior
position must have been accepted by the court in the first
10 Likewise, under Maryland law, judicial estoppel “looks to the connection between the litigant and the
judicial system while equitable estoppel focuses on the relationship between the parties to the prior litigation.”
WinMark, L.P. v. Miles & Stockbridge, 345 Md. 614, 623, 693 A.2d 824 (1997) (quoting Oneida Motor Freight, Inc.
v. United Jersey Bank, 848 F.3d 414, 419 (3d Cir. 1988) (holding that debtor’s “failure to list its claim against the
bank worked in opposition to preservation of the integrity of the system which the doctrine of judicial
estoppel seeks to protect.”)).
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proceeding; and (4) the party must have acted intentionally, not
inadvertently.
Calafiore v. Werner Enters., Inc., 418 F. Supp. 2d 795, 797 (D. Md. 2006) (holding that debtor
was judicially estopped from seeking certain damages stemming from claim intentionally not
disclosed in bankruptcy petition) (quoting Havird Oil Co. v. Marathon Oil Co., 149 F.3d 283,
292 (4th Cir. 1998)). The United States Court of Appeals for the Fourth Circuit has also
recognized, in line with the other Courts of Appeals to consider the question, that “[j]udicial
estoppel has often been applied to bar a civil lawsuit brought by a plaintiff who concealed
the existence of the legal claim from creditors by omitting the lawsuit from his bankruptcy
petition.” See Whitten v. Fred’s, Inc., 601 F.3d 231, 241-42 (4th Cir. 2010) (holding that
plaintiff was not barred from bringing suit where she disclosed potential claims), abrogated in
part on other grounds by Vance v. Ball State Univ., --- U.S. ----, 133 S. Ct. 2434, 2443 (2013).
In a petition for personal bankruptcy, a debtor is required to list a “schedule of
assets,” including “all personal property of the debtor of whatever kind,” and property of a
bankruptcy estate is broadly defined to include “all legal or equitable interests of the debtor
in property as of the commencement of the case.” 11 U.S.C. §§ 521(1), 541(a)(1). This
definition includes “all causes of action that could be brought by a debtor,” and the duty to
disclose such claims continues for the duration of the bankruptcy proceeding. Calafiore, 418
F. Supp. 2d at 797 (quoting USinternetworking, Inc. v. Gen. Growth Mgmt., Inc. (In re
USinterntetworking), 310 B.R. 274, 281 (Bankr. D. Md. 2004)).
In this case, the first three factors identified by this Court in Calafiore, 418 F. Supp. 2d
at 797, are easily satisfied. As Letke filed for bankruptcy after initiating the subject action, she
certainly knew of this action’s constituent claims. Yet, she did not list these potential claims
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as assets in her Voluntary Petition. Def.’s Mot. for Summ. J. Ex. 3. Moreover, when listing
Wells Fargo’s claim with respect to the mortgage as $286,000, she did not label this claim as
“contingent” or “disputed.” Id. She thus took the factual position that she possessed no
claims with respect to the Wells Fargo mortgage, in direct contradiction to the posture of the
present action. The Bankruptcy Court, in issuing a final decree closing Letke’s bankruptcy
estate, necessarily accepted her representations in the Voluntary Petition.
Regarding the fourth factor, this Court has explained that intent in this context is
shown when a plaintiff “intentionally misled the court to gain unfair advantage.” Calafiore,
418 F. Supp. 2d at 798. In the “absence of direct evidence of intent,” a court may “infer[]
whether a debtor acted intentionally or inadvertently in omitting a potential claim from a
bankruptcy petition.” Id. Indeed, a “debtor’s failure to satisfy [his] statutory duty to disclose
is ‘inadvertent’ only when, in general, the debtor lacks knowledge of the undisclosed claims
or has no motive for its concealment.” Id. (quoting Kamont v. West, 258 F. Supp. 2d 495, 500
(S.D. Miss. 2003)); accord Watson v. Bank of America, N.A., Civ. A. No. PJM-14-1335, 2015
WL 1517405, at *3 (D. Md. Mar. 30, 2015). When the debtor’s “undisclosed claim would
have added assets to the bankruptcy estate,” then the debtor “will usually be deemed to have
had a motive to conceal those claims.” Calafiore, 418 F. Supp. 2d at 798.
As noted supra, Letke clearly knew of the existence of her claims against Wells Fargo
as she filed the present action nearly six months before she filed for bankruptcy. Any
recovery on her claims would add value to her bankruptcy estate. As the undisclosed claims
are certainly assets, this Court may infer that Letke acted intentionally in concealing her
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claims. She is thus judicially estopped from asserting any and all challenges to the alleged
permanent loan modification arising from the TPP.
CONCLUSION
For the reasons stated above, Defendant Wells Fargo Home Mortgage, Inc.’s Motion
for Summary Judgment (ECF No. 76) is GRANTED. Accordingly, judgment is entered in
favor of the Defendant as a matter of law.
A separate Order follows.
Dated: October 19, 2015
/s/
Richard D. Bennett
United States District Judge
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