Adams v. Wells Fargo Bank

Filing 43

Judge F. Dennis Saylor, IV: MEMORANDUM AND ORDER entered denying 39 Motion to Amend; granting 31 Motion to Dismiss for Failure to State a Claim (Halley, Taylor)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
_______________________________________
)
CHRISTINE M. ADAMS,
)
)
Plaintiff,
)
)
v.
)
)
WELLS FARGO BANK,
)
)
Defendant.
)
_______________________________________)

Civil Action No.
17-12092-FDS

MEMORANDUM AND ORDER ON PLAINTIFF’S MOTION FOR LEAVE
TO AMEND AND DEFENDANT’S MOTION TO DISMISS
This is an action concerning a possible foreclosure on the property of plaintiff Christine
M. Adams. The amended complaint asserts two claims under Massachusetts law against the
mortgage holder, defendant Wells Fargo Bank.
I.

Factual Background
The facts appear as alleged in the proposed amended complaint, except as otherwise

indicated.1
In November 2007, Christine Adams entered into a “pick-a-payment” mortgage loan with
World Savings Bank. In return, World Savings Bank was granted a mortgage on Adams’s
property located at 136 Oak Hill Avenue in Seekonk, Massachusetts. (Proposed Am. Compl. ¶
4). Wells Fargo Bank is the successor, through merger with Wachovia Corporation, to World
Savings Bank.
In December 2010, Wells Fargo reached a settlement agreement with a class of Wachovia

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The proposed amended complaint, although more definite than Adams’s previous complaint, offers only a
bare-bones description of the alleged facts.

borrowers who had entered into “pick-a-payment” mortgages. See In re Wachovia Corp. “Picka-Payment” Mortgage Marketing & Sales Practices Litigation, No. 09-CV-2015-JF (N.D. Cal.
Dec. 10, 2010). Adams was a class member whose claim was covered by the settlement
agreement. (Proposed Am. Compl. ¶ 5). The settlement agreement divided the class of
borrowers itself into three “classes” (A, B, and C), each of which was entitled to a different type
of recovery. (Opp. to Mot. for Leave to File Am. Compl., Ex. A at 30-31). The settlement
agreement also provided that Wells Fargo would make “loan modifications available” for Class
B and Class C borrowers between December 18, 2010, and June 30, 2013. (Opp. to Mot. for
Leave to File Am. Compl., Ex. A at 35).
At some point—the pleadings do not indicate when—Adams defaulted on her loan.
According to Wells Fargo, Adams has attempted to delay foreclosure in a variety of ways,
including the filing of eight different bankruptcy petitions. (Mem. in Supp. at 2 & n.2).
According to Adams, following her default, “in and around 2015,” she sought a mortgage
modification from Wells Fargo. (Proposed Am. Compl. ¶ 9).
Adams contends that on December 3, 2015, a Wells Fargo representative e-mailed her
and told her that a “short sale offer of $375,000” had been approved for her property. (Proposed
Am. Compl. ¶ 10; Response to Mot. for More Definite Statement, Ex. A at 45). Later that
month, Wells Fargo sent her a letter titled “Mortgage Modification Options” that, among other
things, allowed her to “check” a “box” to “request a loan modification.” (Proposed Am. Compl.
¶ 10; Response to Mot. for More Definite Statement, Ex. A at 44).
Adams contends that the two communications from Wells Fargo left her “unclear” as to
her obligations, but that she tried to go forward with the short sale. (Proposed Am. Compl. ¶¶
10, 11). A letter apparently sent to Adams on December 3 stated that the short sale had to close

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before January 15, 2016. (Proposed Am. Compl. ¶ 11; Response to Mot. for More Definite
Statement, Ex. A at 46-49 ). At some point, Wells Fargo extended the approval date for the short
sale until March. (Proposed Am. Compl. ¶ 11). Adams scheduled a closing for January 19,
2016, but (according to her) it could not go forward because Wells Fargo had made a
typographical error in its letter granting the extension. (Id.). Adams requested new approval
letters from Wells Fargo, but the bank allegedly “withheld” sending them. (Id.).
In April 2016, Wells Fargo sent Adams a letter indicating that “the short sale process
could not be completed” because the deadline of March 2016 had passed. (Proposed Am.
Compl. ¶ 12). Adams alleges that as a consequence the buyer of her property “lost funding and
no short sale could be completed.” (Id.).
Adams alleges that on May 15, 2017, Wells Fargo advised her that she had various
options to “keep her home,” including “a loan modification,” and various options to “leave her
home,” including a short sale or deed in lieu of foreclosure. (Proposed Am. Compl. ¶ 14;
Response to Mot. for More Definite Statement, Ex. A at 5-8).
Adams apparently responded with a “request for mortgage assistance.” (Proposed Am.
Compl. ¶ 15; Response to Mot. for More Definite Statement, Ex. A at 9). On June 22, 2017,
Wells Fargo informed her that the bank would not be “moving forward with a review of [her]
mortgage for assistance” in light of her “mortgage history, [] recent information you provided
[to] us, and the current circumstances surrounding your mortgage.” (Response to Mot. for More
Definite Statement, Ex. A at 9).
On June 28, 2017, Adams received a notice from Wells Fargo “to assist [her] in
competing a short sale.” (Proposed Am. Compl. ¶ 16).
On July 21, 2017, Wells Fargo sent her another letter stating that she should contact the

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bank “for short sale assistance when you receive a purchase contract to sell your home.”
(Proposed Am. Compl. ¶ 17). It also stated that she would need to sign a “purchase contract”
before the bank would “work with [her] to complete a short sale again.” (Response to Mot. for
More Definite Statement, Ex. A at 11).
At some later point, Adams received a letter from Wells Fargo’s counsel indicating that a
foreclosure sale on her property would take place on September 21, 2017.2 However, Adams
contends that she was also sent a different notice that identified the foreclosure sale as scheduled
for September 20, 2017.
On September 12, 2017, Wells Fargo sent a letter stating that “your concerns were
previously addressed by us, and we didn’t find you had enclosed any new information or
significantly different details which would change our response.” (Proposed Am. Compl. ¶ 18;
Response to Mot. for More Definite Statement, Ex. A at 13).
On September 20, 2017, Wells Fargo sent a letter stating that the bank was “unable to
find a solution and prevent a foreclosure sale before the scheduled sale date.” (Proposed Am.
Compl. ¶ 19). The foreclosure did not, however, occur in September 2017.
Between September and October 2017, Adams “repeatedly requested accurate pay-off
and or reinstatement figures from Wells Fargo.” Wells Fargo “failed to provide” this
information to Adams in a “timely” manner. (Proposed Am. Compl. ¶ 20).
At some point, Adams sought the “assistance of Massachusetts regulators.” (Proposed
Am. Compl. ¶ 23). In response, a Wells Fargo employee named Tiffany Bates told Adams that
she had informed state regulators that Wells Fargo would be postponing the foreclosure sale of

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The proposed amended complaint alleges that Adams received the letter on August 22, 2018. (Proposed
Am. Compl. ¶ 21). Adams filed the initial complaint in this matter on October 25, 2017; the 2018 letter apparently
refers to a 2017 closing date as being in the future.

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the property and that Wells Fargo would review Adams for a loan modification. Allegedly,
however, Bates told Adams that “she was never going to review [her] for” a loan modification.
(Proposed Am. Compl. ¶ 23).
II.

Procedural History
On October 25, 2017, Adams filed a pro se complaint and a motion for a temporary

restraining order that sought to stop Wells Fargo from foreclosing on her home. The complaint
included various unspecific allegations. After Wells Fargo filed a motion for a more definite
statement on June 18, 2018, the Court directed Adams to file an amended complaint.
On August 3, 2018, Adams filed a “response” to Wells Fargo’s motion for a more
definite statement that included a paragraph-long “amended statement to support [the]
complaint.” The response also included 62 pages of unexplained documents.
On August 15, Wells Fargo filed a motion to dismiss for failure to state a claim. On
October 16, Adams, who by then was represented by an attorney, filed a motion for leave to
amend the complaint. The motion also includes a proposed amended complaint that seeks to
assert two counts: (1) a claim that Wells Fargo violated Mass. Gen. Laws ch. 93A and (2) a
claim that Wells Fargo breached its duty of good faith, fair dealing, and reasonable diligence in
the foreclosure and mortgage modification process.
For the following reasons, the motion for leave to amend the complaint will be denied
and the motion to dismiss will be granted.
III.

Standard of Review
Under Fed. R. Civ. P. 15(a), leave to amend is generally freely given when justice so

requires. However, the Court may deny a motion for leave to amend if “the amendment would
be futile.” Abraham v. Woods Hole Oceanographic Inst., 553 F.3d 114, 117 (1st Cir. 2009). An

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amendment is futile if the proposed complaint would not survive a motion to dismiss.
Accordingly, “[i]n reviewing for ‘futility,’ the district court applies the same standard of legal
sufficiency as applies to a Rule 12(b)(6) motion.” Glassman v. Computervision Corp., 90 F.3d
617, 623 (1st Cir. 1996).
IV.

Analysis
A.

Motion for Leave to Amend Complaint
1.

Chapter 93A Claim

Count One of the proposed amended complaint alleges that Wells Fargo engaged in
unfair and deceptive trade practices in violation of Mass. Gen. Laws. Ch. 93A.
When bringing a claim for a violation of Chapter 93A, the party seeking relief must
present the other party with a “written demand for relief, identifying the claimant and reasonably
describing the unfair or deceptive act or practice relied upon.” Mass. Gen. Laws ch. 93A, § 9(3).
Adams contends that her “multiple communications, letters, and e-mails to [Wells Fargo]
seeking relief in the form of a modification” satisfy Chapter 93A’s requirement of a written
demand.
A written demand under Chapter 93A “must make clear that the claim arises under that
statute, either through: (1) any express reference to c. 93A; (2) any express reference to the
consumer protection act; (3) any assertion that the rights of the claimants as consumers have
been violated; (4) any assertion that the defendant has acted in an unfair or deceptive manner
(G.L. c. 93A, § 2[a ] ); (5) any reference that the claimants anticipate a settlement offer within
thirty days . . . or (6) any assertion that the claimant will pursue multiple damages and legal
expenses, should relief be denied.” Costello v. Bank of America, N.A., 2014 WL 293665, at *4
(D. Mass. Jan. 27, 2014) (quoting Cassano v. Gogos, 20 Mass. App. Ct. 348, 350 (1985)). In

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other words, “to qualify as a written demand under [Chapter] 93A, a letter must, in addition to
defining the injury suffered and the relief sought . . . contain some other signal which will alert a
reasonably perceptive recipient . . . that the claimant intends to invoke the heavy artillery of
[Chapter] 93A.” Cassano, 20 Mass. App. Ct. at 350-51.
The proposed amended complaint does not attach or refer to a Chapter 93A demand
letter. Nor does it provide any evidence that her communications to Wells Fargo contained any
signal that she intended to invoke Chapter 93A. Accordingly, because “a failure to send [a]
required demand letter is . . . fatal to a claim brought under [Chapter 93A],” the proposed
amended complaint does not state a Chapter 93A claim, and the amendment would therefore be
futile. Murphy v. Bank of America, N.A., 2012 WL 4764591, at *2-3 (D. Mass. Oct. 5, 2012)
(citing City of Boston v. Aetna Life Ins. Co., 399 Mass. 569, 574 (1987)).
2.

Breach of Duties

Count Two of the proposed amended complaint alleges that Wells Fargo violated its
duties to exercise good faith, fair dealing, and reasonable diligence in both the foreclosure and
mortgage modification process.
a.

Duties Concerning Foreclosure

Under Massachusetts law, mortgagees “must act in good faith and must use reasonable
diligence to protect the interests of the mortgagor” when “exercising a power of sale” in a
foreclosure. Mackenzie v. Flagstar Bank FSB, 2013 WL 139738, at *10 (D. Mass. Jan. 9, 2013).
“[I]t is not possible,” however, for a mortgagee to “breach” these duties “before a foreclosure
sale has . . . taken place.” Id. Because no foreclosure sale has yet taken place on the property,
Wells Fargo cannot have yet breached any duty it may owe Adams. Accordingly, the proposed
amended complaint does not state a claim for breach of duty in connection with a foreclosure

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sale.
b.

Duties to Modify Mortgage

After a mortgagor defaults, a mortgagee has “no duty” under Massachusetts law “to
negotiate for loan modification” unless there is “an explicit provision in the mortgage contract”
or such an obligation is otherwise created by contract or law. See Peterson v. GMAC Mortg.,
LLC, 2011 WL 5075613, at *6 (D. Mass. Oct. 25, 2011).
Adams contends that Wells Fargo had a duty to consider her for a mortgage loan
modification under the “terms of the class action settlement” Wells Fargo reached with its “picka-payment” borrowers in 2010. Adams further contends that Wells Fargo “never considered” her
for such a modification. However, the class action settlement, in a section titled “Settlement
Benefits,” states as follows: “Loan Modification Program. Commencing on December 18, 2010
and continuing until June 30, 2013, the Defendants shall make loan modifications
available . . . .” (Opp. to Mot. for Leave to File Am. Compl., Ex. A at 35) (emphasis added).
Because the proposed amended complaint contends that Adams did not “[seek] a modification of
her mortgage” until “in and around 2015,” any duty Wells Fargo may have owed under the class
action settlement to consider modifying Adams’s mortgage had since long expired. Accordingly,
the proposed amended complaint does not state a claim as to a failure to consider modifying her
mortgage.
Because all of the claims under the proposed amended complaint would be subject to
dismissal for failure to state a claim, the Court will deny the motion for leave to amend as futile.
B.

Motion to Dismiss

Wells Fargo has moved to dismiss the existing complaint for failure to state a claim. As
noted, on July 12, 2018, the Court directed Adams to file an amended complaint setting forth a

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more definite statement of her claims by August 2, 2018. On August 3, Adams filed a
“response.” The response included the following paragraph-long “amended statement to
support [the] complaint”3:
Defendant engaged in unfair lending practices under the “Pick-A-Payment”
Mortgage Loan Program on or about November of 2007 and continuing to date.
Plaintiff was making her mortgage payments on time monthly and received a
letter from Wachovia Bank, who then sold plaintiff’s loan to defendant, stating
that the “Pick-A-Payment” program was considered predatory lending practices.
Wachovia thereafter stated they would modify plaintiff’s loan with a modified
balance $450,000.00 and with an interest rate of 4.125%. Plaintiff executed the
application for modification and sent it to Wachovia Bank who informed that her
mortgage was “sold” to Wells Fargo and she would have to redo the application.
Plaintiff called Wells Fargo repeatedly and was in constant communication
through letters and emails only to be informed “we do not have the paperwork”
and we have superior loan modification programs from the federal government
that would “better suit your needs” . Plaintiff has received no less than twentyfive (25) responses from defendant and their assigns addressing her loan and loan
modification request with different amounts owed and various proposals, but after
she filed this pending suit, defendant engaged in retaliatory practices by stating
since she filed suit, they [defendant] would no longer offer her the loan
modification and would seek foreclosure and violating 42 USC s3601-19 of the
Fair Housing Act.
The statement appears to allege two claims: (1) that Wells Fargo engaged in “unfair
lending practices” and (2) that Wells Fargo violated the Fair Housing Act by refusing to modify
the mortgage in retaliation for the fact that Adams had sued it.
As to the first claim, that Wells Fargo engaged in “unfair lending practices,” the
amended statement does not contain “sufficient factual matter” to “state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). Although the statement describes various communications
between Adams and Wells Fargo, it does not identify any “lending practice” of Wells Fargo, let

3

Because Adams was still proceeding pro se in August, the Court will overlook the tardiness of the

response.

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alone any “lending practice” that could be deemed “unfair.” Furthermore, none of the 62 pages
of attached documents appear to contain any support for the statement’s allegation that
Wachovia “stated they would modify plaintiff’s loan” or for the allegation that Wachovia sent
Adams a letter referring to the “Pick-A-Payment” program as a “predatory lending practice.”
Indeed, the attached documents are left completely unexplained and thus provide insufficient
support to consider the statement’s first claim as anything other than a “mere conclusory
statement[].” Iqbal, 556 U.S. at 678.
The second claim alleges that Wells Fargo violated the Fair Housing Act by refusing to
modify the loan in retaliation for the lawsuit. The Fair Housing Act provides that “[i]t shall be
unlawful for any person or other entity whose business includes engaging in residential real
estate-related transactions to discriminate against any person in making available such a
transaction, or in the terms or conditions of such a transaction, because of race, color, religion,
sex, handicap, familial status, or national origin.” 42 U.S.C. § 3605(a).
To establish a prima facie case of discrimination under the Fair Housing Act, a claimant
must demonstrate first that she is a member of a class protected by the statute. Pina v. Town of
Plympton, 529 F. Supp. 2d 151, 156 (D. Mass. Oct. 31, 2007). The amended statement does not
specifically allege that Adams is a member of a protected class and fails to identify any facts
from which the Court could conclude that she is a member of such a class. The amended
statement therefore does not state sufficient facts to allege a claim for a violation of the FHA.
Accordingly, the complaint, as amended by Adams’s response filed on August 3, 2018,
fails to state a claim upon which relief can be granted. The motion to dismiss will therefore be
granted.

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V.

Conclusion
For the foregoing reasons, the motion of plaintiff Christine Adams for leave to amend the

complaint is DENIED. The motion of defendant Wells Fargo Bank to dismiss for failure to state
a claim is GRANTED.
So Ordered.
/s/ F. Dennis Saylor
F. Dennis Saylor, IV
United States District Judge

Dated: November 20, 2018

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