Njema v. Wells Fargo Bank, N.A.
Filing
230
ORDER adopting Report and Recommendation 220 granting in part and denying in part 188 Motion for Summary Judgment. IT IS HEREBY ORDERED THAT Wells Fargo's motion for summary judgment 188 is GRANTED IN PART AND DENIED IN PART as follows : 1. Wells Fargo's motion for summary judgment is DENIED as to Njema's claim for trespass. 2. Wells Fargo's motion for summary judgment is GRANTED as to all other claims in the complaint. (Written Opinion) Signed by Judge Patrick J. Schiltz on August 18, 2015. (CLG)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
KENNETH M. NJEMA,
Case No. 13‐CV‐0519 (PJS/JSM)
Plaintiff,
ORDER
v.
WELLS FARGO BANK, N.A.,
Defendant.
Jonathan L.R. Drewes, DREWES LAW, PLLC, for plaintiff.
Charles F. Webber and Jessica Z. Savran, FAEGRE BAKER DANIELS LLP,
for defendant.
This matter is before the Court on plaintiff Kenneth Njema’s objection to the
July 7, 2015 Report and Recommendation (“R&R”) of Magistrate Judge Janie S.
Mayeron.1 Judge Mayeron recommends that the motion for summary judgment by
defendant Wells Fargo Bank, N.A. (“Wells Fargo”) be granted in part and denied in part
and that all of Njema’s claims against Wells Fargo—with the exception of his claim for
1
Njema also filed a pro se “Notice of Error and Preservation of a Claim of Error.”
ECF No. 229. Njema is represented by counsel, however, and therefore Njema must
communicate with the Court through that counsel; the Court will not consider any
pro se filings from Njema. See United States v. Pate, 754 F.3d 550, 553 (8th Cir. 2014);
Kessler v. Crichton, 221 F.3d 1342 (8th Cir. 2000) (per curiam, unpublished); United States
v. Agofsky, 20 F.3d 866, 872 (8th Cir. 1994). Moreover, even if the Court did consider
Njema’s filing, that filing would not change the Court’s decision. Much of Njema’s
filing is difficult to understand—and, to the extent that it is understandable, the filing
reflects misunderstandings of the law or raises matters that are irrelevant to the
disposition of Wells Fargo’s motion.
trespass—be dismissed. The Court has conducted a de novo review. See 28 U.S.C.
§ 636(b)(1); Fed. R. Civ. P. 72(b). Based on that review, the Court agrees with
Judge Mayeron’s analysis and adopts her R&R.2
Only one issue needs to be addressed, and, in light of the fact that
Judge Mayeron thoroughly described the relevant facts, the Court need only briefly
summarize those facts here. Njema borrowed more than $178,000 to purchase a house
in Cottage Grove, Minnesota, and pledged the house as security for the loan. Wells
Fargo acquired the mortgage loan, which was insured by the United States Department
of Housing and Urban Development (“HUD”). The mortgage agreement “does not
authorize acceleration or foreclosure if not permitted by regulations of [HUD].” ECF
No. 1‐1 ¶ 9(d). HUD regulations, in turn, require the mortgagee to “make a reasonable
effort to arrange” a “face‐to‐face interview with the mortgagor” after default, 24 C.F.R.
§ 203.604(b), and express the “intent” that “no mortgagee shall commence foreclosure or
acquire title to a property until the requirements of [the regulations] have been
followed,” id. § 203.500.
Njema fell behind on his payments. After Njema and Wells Fargo discussed,
explored, and even attempted alternatives to foreclosure (including a loan modification
2
Njema contends that the R&R contains “several factual errors,” but the
purported errors that he identifies—such as errors about the precise number of times
that Wells Fargo inspected his home and the precise amount that he was behind in his
payments—are immaterial to the Court’s disposition of Wells Fargo’s motion.
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and a “short sale” at a lower price), Wells Fargo eventually foreclosed on the mortgage.
Although it communicated with Njema by telephone and letter, Wells Fargo did not
“make a reasonable effort to arrange” a “face‐to‐face interview with [Njema]” before
foreclosing on his house. 24 C.F.R. § 203.604(b).
Njema sued Wells Fargo, claiming (among other things) that Wells Fargo
breached the mortgage agreement by failing to arrange a face‐to‐face meeting before
foreclosing. Wells Fargo conceded that it breached the mortgage agreement, but argued
that it was not liable to Njema because he suffered no injury on account of the breach.
Judge Mayeron agreed, finding that Njema had not established that he had been
damaged by Wells Fargo’s failure to arrange a face‐to‐face meeting, given that there
was no evidence that, had such a meeting been held, the outcome would have been
different. ECF No. 220 at 15‐20.
In his objection to the R&R, Njema asserts that Judge Mayeron mischaracterized
his breach‐of‐contract claim. Njema says that Wells Fargo’s breach was not failing to
conduct the meeting, but instead foreclosing without first conducting the meeting.
Thus, he says, the question is not whether he was damaged by the lack of a meeting, but
instead whether he was damaged by the foreclosure. ECF No. 226 at 3‐6.
Njema’s argument is clever, but ultimately the Court agrees with
Judge Mayeron. Under Minnesota law, the measure of damages for breach of contract
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is generally the amount of money necessary to put the plaintiff in the position in which
he would have been if the defendant had complied with the contract. See Paine v.
Sherwood, 21 Minn. 225, 232 (1875); Kellogg v. Woods, 720 N.W.2d 845, 853 (Minn. Ct.
App. 2006); Peters v. Mut. Benefit Life Ins. Co., 420 N.W.2d 908, 915 (Minn. Ct. App. 1988).
In other words, to determine whether the plaintiff has been damaged by a breach of
contract, the Court compares what actually happened with what would have happened
if the defendant had not breached the contract. If there is no difference between the two
scenarios, then the plaintiff was not damaged by the breach.
The evidence in the record leaves no doubt that, had Wells Fargo complied with
the contract, it would have (1) arranged a face‐to‐face meeting with Njema and then
(2) foreclosed on the mortgage. It is uncontested that Njema pledged his home as
security for his loan, and it is uncontested that Njema failed to make loan payments as
required. There is simply no reason to believe that Wells Fargo would not have
pursued foreclosure or that a face‐to‐face meeting would have made any difference.
The bottom line is that Njema has not been able to make his loan payments for many
years, and his estrangement from his co‐mortgagor (his sister, who used to share the
house and responsibility for the mortgage payments, but moved out of the house long
ago) has made his precarious financial situation even worse. No alternative to
foreclosure—not another refinancing, not a short sale, not Wells Fargo deciding to allow
Njema to continue to live in the home for free—is realistic, and no face‐to‐face meeting
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would have changed that fact. On this record, a reasonable jury could not conclude
that, had Wells Fargo not breached the contract, Njema would be in a better situation.
The Court notes that federal district courts in other jurisdictions have reached
similar conclusions when presented with similar claims. See, e.g., Covarrubias v.
CitiMortgage, Inc., Civil No. 3:14‐cv‐157, 2014 WL 6968035, at *3 (E.D. Va. Dec. 8, 2014)
(“The failure to follow the regulations, however, had no role in any losses suffered by
the plaintiff. Rather, Covarrubias’s own actions caused the foreclosure and any
resulting damages. . . . In light of [borrower’s repeated defaults, unemployment, and
heroin use], no reasonable jury could find that CitiMortgage’s violations of HUD
regulations requiring a face to face meeting proximately caused Covarrubias’s
damages.”); Rourk v. Bank of Am. Nat’l Ass’n, No. 4:12‐CV‐42 (CDL), 2013 WL 5595964,
at *6 (M.D. Ga. Oct. 11, 2013) (“Even if Defendant had not substantially complied with
the requirement that it make a reasonable effort to arrange a face‐to‐face meeting with
Plaintiff, it was Plaintiff’s failure to tender a single payment for nearly two years that
caused her default status and the foreclosure. Therefore, even if Plaintiff had
demonstrated that Defendant failed to make a reasonable effort to arrange a face‐to‐face
meeting with her, she has not established that such a failure caused her any damages.”).
True, these courts did not apply Minnesota law, but the legal principles that they
applied were consistent with Minnesota law.
For these reasons, Njema’s objection to the R&R is overruled.
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ORDER
Based on the foregoing, and on all of the files, records, and proceedings herein,
the Court OVERRULES Njema’s objection [ECF No. 226] and ADOPTS the July 7, 2015
R&R [ECF No. 220]. IT IS HEREBY ORDERED THAT Wells Fargo’s motion for
summary judgment [ECF No. 188] is GRANTED IN PART AND DENIED IN PART as
follows:
1.
Wells Fargo’s motion for summary judgment is DENIED as to Njema’s
claim for trespass.
2.
Wells Fargo’s motion for summary judgment is GRANTED as to all other
claims in the complaint.
Dated: August 18, 2015
s/Patrick J. Schiltz
Patrick J. Schiltz
United States District Judge
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