Fuller v. Mortgage Electronic Registration Systems, Inc. et al
Filing
26
ORDER granting 14 Motion for Summary Judgment (Written Opinion). Signed by Senior Judge David S. Doty on 8/20/2012. (PJM)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 11-1554(DSD/JSM)
Jonathan F. Fuller,
Plaintiff,
ORDER
v.
Mortgage
Systems,
N.A. and
Mortgage
Electronic Registration
Inc., Wells Fargo Bank,
Federal Home Loan
Corporation,
Defendants.
Patrick D. Boyle, Esq., Christopher P. Parrington, Esq.
and Foley & Mansfield, PLLP, 250 Marquette Avenue, Suite
1200, Minneapolis, MN 55401, counsel for plaintiff.
Erin L. Hoffman, Esq., Charles F. Webber, Esq. and Faegre
Baker Daniels, LLP, 90 South Seventh Street, Suite 2200,
Minneapolis, MN 55402, counsel for defendants.
This matter is before the court upon the motion for summary
judgment by defendants.
Based on a review of the file, record and
proceedings herein, and for the following reasons, the motion is
granted.
BACKGROUND
This mortgage-loan dispute arises out of a promissory note and
mortgage executed in June 2001 by plaintiff Jonathan F. Fuller for
property located at 20945 Independence Avenue, Lakeville, Minnesota
55044.
Ver. Compl. ¶¶ 6-7.
In March 2009, Fuller refinanced his
mortgage and signed a new promissory note (Note) for $320,000 with
defendant Mortgage Electronic Registration Systems, Inc. (MERS).
Id. ¶ 11.
MERS later assigned the Note to defendant Wells Fargo
Bank N.A. (Wells Fargo).
Id. ¶ 12.
In April 2008, Fuller contacted Wells Fargo regarding possible
modification programs.
Id. ¶ 19.
In response, Wells Fargo told
Fuller that he was ineligible for a permanent loan modification
unless he were in default on his mortgage.
Id. ¶ 20.
no additional mortgage payments after May 2008.
Fuller made
Id. ¶¶ 18, 21.
In October 2008, Wells Fargo and Fuller executed a permanent
loan modification.
App. 20-23.
The modification reduced Fuller’s
interest rate from 6.25 percent to 4.25 percent and reduced his
monthly payments by roughly $500.
until June 2009.
Id. at 21.
Id. at 22; Ver. Compl. ¶ 36.
made no payments.
Fuller made payments
Thereafter, Fuller
Ver. Compl. ¶ 40.
Wells Fargo purchased the property at a foreclosure sale on
September 29, 2010.
App. 37.
The six-month redemption period
ended on March 29, 2011, and Wells Fargo transferred the property
to defendant Federal Home Loan Mortgage Corporation (Freddie Mac).
Id. at 39-42.
At the close of the redemption period, Fuller
vacated the property.
Ver. Compl. ¶ 48.
On April 9, 2010, Fuller
received a cash-for-keys offer from Freddie Mac.
Id. ¶¶ 49, 50.
Because of this offer, Fuller believed that he could still lawfully
reside at the property, and moved back.
2
Id. ¶¶ 51, 52.
On
June
9,
2011,
Fuller
filed
suit
in
Minnesota
court,
alleging breach of contract, breach of mortgagee duty, fraud,
negligent
misrepresentation,
enrichment.1
promissory
estoppel
and
unjust
Fuller also seeks a declaration that he has fully
performed his obligations and that he is entitled to modification
of the Note and injunctive relief tolling foreclosure. Wells Fargo
timely removed, and moves for summary judgment.
DISCUSSION
I.
Standard of Review
“The 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(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
A fact is material only when its resolution affects the outcome of
the case.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). A dispute is genuine if the evidence is such that it could
cause a reasonable jury to return a verdict for either party.
See
id. at 252.
On a motion for summary judgment, the court views all evidence
and inferences in a light most favorable to the nonmoving party.
See id. at 255.
The nonmoving party, however, may not rest upon
1
Fuller has abandoned his claims for breach of contract,
breach of mortgagee duty and promissory estoppel. See Pl.’s Mem.
Opp’n 3.
3
mere denials or allegations in the pleadings but must set forth
specific facts sufficient to raise a genuine issue for trial.
Celotex, 477 U.S. at 324.
See
A party asserting that a genuine dispute
exists — or cannot exist — about a material fact must cite
“particular parts of materials in the record.”
56(c)(1)(A).
Fed. R. Civ. P.
If a plaintiff cannot support each essential element
of a claim, the court must grant summary judgment because a
complete
failure
of
proof
regarding
an
essential
necessarily renders all other facts immaterial.
element
Celotex, 477 U.S.
at 322-23.
II.
Fraudulent and Negligent Misrepresentation
A claim for fraudulent misrepresentation requires that:
(1) there was a false representation by a
party of a past or existing material fact
susceptible of knowledge; (2) made with
knowledge of the falsity of the representation
or made as of the party’s own knowledge
without knowing whether it was true or false;
(3) with the intention to induce another to
act in reliance thereon; (4) that the
representation caused the other party to act
in reliance thereon; and (5) that the party
suffer[ed] pecuniary damage as a result of the
reliance.
Trooien v. Mansour, 608 F.3d 1020, 1028 (8th Cir. 2010) (quoting
Hoyt Props., Inc. v. Prod. Res. Grp., 736 N.W.2d 313, 318 (Minn.
2007)) (internal quotation marks omitted).
negligent
misrepresentation
claim
differ
“The elements of a
from
fraudulent
misrepresentation only with respect to the required state of mind
... [in that] a plaintiff must show that the defendant ‘supplie[d]
4
false information for the guidance of others in their business
transactions’ and in doing so ‘fail[ed] to exercise reasonable care
or competence in obtaining or communicating the information.’” Id.
(quoting Florenzano v. Olson, 387 N.W.2d 168, 174 n.3 (Minn.
1986)). Fuller alleges that Wells Fargo falsely stated (1) that he
needed to be in default prior to receiving a loan modification and
(2) that he was not allowed to live at the property after the
redemption period ended.
As to the loan modification, Fuller introduced no evidence to
refute the statement that a loan must be in default prior to
modification.
Moreover, Fuller cannot show detrimental reliance.
He contacted Wells Fargo in April 2008 and informed the bank that
“he would be unable to make his upcoming monthly mortgage payment.”
Ver. Compl. ¶ 19.
Fuller cannot argue that he would have continued
making
payments
mortgage
but
for
Wells
Fargo’s
statement.
See Broberg v. Mortg. Elec. Registration Sys., Inc., No. 11-CV1623, 2012 WL 1948763, at *2 (D. Minn. May 30, 2012) (granting
summary judgment when plaintiffs made no mortgage payments after
initial
default
and
“offer[ed]
no
evidence
that,
but
for
[defendant’s] statements, [plaintiffs] would have taken some other
action to avoid foreclosure or bring their loan current.”).
5
Further, Fuller has not shown damages.
Wells
Fargo’s
representation
caused
the
Fuller argues that
foreclosure.2
Upon
entering default, however, Wells Fargo granted Fuller a permanent
loan modification, which was the relief he requested.
Wells Fargo
did not foreclose the original note, rather foreclosure proceedings
were initiated after Fuller failed to make payments following the
permanent loan modification.
Thus, the statement made by Wells
Fargo had no effect on Fuller’s foreclosure, and summary judgment
is warranted as to this claim.
The statement that Fuller could not live at the property once
the
redemption
period
misrepresentation claim.
ended
also
fails
to
The statement is not false.
support
a
See Minn.
Stat. § 504B.285, subdiv. 1(1)(ii) (“The person entitled to the
premises may recover possession by eviction when any person holds
over real property ... after the expiration of the time for
redemption on foreclosure of a mortgage ....”); Fed. Home Loan
Mortg. Corp. v. Nedashkovskiy, 801 N.W.2d 190, 192 (Minn. Ct. App.
2011).
Therefore,
summary
judgment
is
warranted
as
to
the
misrepresentation claims.
2
Fuller also argues damages based on late charges and a
damaged credit score. Pl.’s Mem. Opp’n 13. These allegations are
absent from the verified complaint, and Fuller cannot amend his
complaint with a brief in opposition. See Morgan Distrib. Co. v.
Unidynamic Corp., 868 F.2d 992, 995 (8th Cir. 1989).
6
III.
Unjust Enrichment
To
prove
unjust
enrichment,
a
plaintiff
must
show
that
“another party knowingly received something of value to which he
was not entitled, and that the circumstances are such that it would
be unjust for that person to retain the benefit.”
Schumacher v.
Schumacher, 627 N.W.2d 725, 729 (Minn. Ct. App. 2001).
There can
be no unjust enrichment claim, however, where an express contract
exists.
“[E]quitable relief cannot be granted where the rights of
the parties are governed by a valid contract.”
Pearson v. Bank of
Am. Home Loans, No. 11-2592, 2012 WL 1431386, at *4 (D. Minn. Apr.
25, 2012) (quoting U.S. Fire Ins. v. Minn. State Zoological Bd.,
307 N.W.2d 490, 497 (Minn. 1982)).
The original Note and the
permanent loan modification are contracts, and thus no claim for
unjust enrichment can exist.
Moreover, Wells Fargo was entitled to payments under both the
original note and the permanent loan modification. See Bohnhoff v.
Wells Fargo Bank, N.A., No. 11-3408, 2012 WL 1110585, at *5 (D.
Minn. Apr. 3, 2012) (dismissing unjust enrichment claim when
mortgagor had preexisting duty to make loan payments).
Therefore,
summary judgment is warranted as to the unjust enrichment claim.
IV.
Declaratory and Injunctive Relief
The court has already determined that Fuller did not perform
his payment obligation.
The court further determined that summary
judgement is warranted as to all other claims.
7
As a result,
declaratory judgment is not warranted. Because the court dismisses
the complaint, the request for injunctive relief is moot.
CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that
defendants’ motion for summary judgment [ECF No. 14] is granted.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated:
August 20, 2012
s/David S. Doty
David S. Doty, Judge
United States District Court
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?