Butano v. Wells Fargo Bank, N.A.
OPINION, MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Defendant's Motion for Summary Judgment [Doc. No. 20 ] is GRANTED.An appropriate Judgment will accompany this Opinion, Memorandum and Order. Signed by District Judge Henry Edward Autrey on 08/11/2015. (CLK)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
WELLS FARGO, N.A.,
No. 4:13CV1652 HEA
OPINION, MEMORANDUM AND ORDER
This matter is before the Court on Defendant’s Motion for Summary Judgment. [Doc. No.
20]. Plaintiff has filed a Response in opposition to the Motion. [Doc. No. 25]. Defendant has
filed a Reply. [Doc. No. 28]. For the reasons set forth below, the Motion is granted.
On July 12, 2006, Plaintiff obtained from Wells Fargo a 30-year adjustable rate mortgage
loan for his personal residence at 5203 Shetland Drive in Weldon Spring, Missouri. The initial
interest rate was 8.250%, with initial monthly payments of $2,231.27.
In January 2008, Plaintiff filed for Chapter 13 bankruptcy. Plaintiff alleges that by March
2010, due to increased interest, the monthly payments on his mortgage had risen to $2,804.61.
With leave of the bankruptcy court, Plaintiff entered into a loan modification agreement with
Defendant in July 2010.1 The July 2010 loan modification provided for monthly payments of
$2,282. Plaintiff’s bankruptcy action was discharged on August 19, 2010 for failure to make plan
According to the record before the Court, Plaintiff made no payments between the time
of the July 2010 loan modification agreement and May 2011. Nor does he recall making any
Plaintiff’s Complaint alleged that Defendant proposed, and Plaintiff accepted, a modification on March 29, 2010.
Plaintiff has since admitted that the parties entered into no such agreement. [Doc. No. 24 at ¶ 4].
payments during this period. [Doc. No. 27-1 at 2–5]. By May 2011, Plaintiff alleges that his
monthly mortgage payments had increased to $3,397.14 due to an unpaid mortgage shortage,
unpaid hazard insurance, and unpaid county taxes.
In a May 6, 2011 letter, Defendant offered Plaintiff a “Special Forbearance Agreement,”
which set forth the following schedule of payments (1) a $190 payment due by June 1, 2011; (2)
a $2,119.85 payment due by July 1, 2011; (3) a $2,119.85 payment due by August 1, 2011; and
(4) a $2,119.85 payment due by September 1, 2011. [Doc. No. 22-1 at 61–62]. Plaintiff accepted
Plaintiff made all four of the payments called for in the Special Forbearance Agreement,
though the latter three were, on average, eighteen days late. [Doc. No. 24-2]. He made additional
payments of $2,119.85 in October and December of 2011. [Id.]. Plaintiff claims that he received
a call from a representative of Defendant on December 23, 2011, informing him that he did not
qualify for a modification, but that they would let him try again. [Doc. No. 27-1 at 15, Plaintiff’s
Depo, at 75:11–15]. Plaintiff made another payment, in the amount of $100 on January 18, 2012,
in order to “show a payment on the record.” [Doc. No. 24-1 at 14]. He has not made a payment
Defendant eventually began foreclosure proceedings on the property.
Plaintiff filed this action on August 21, 2013, invoking the Court’s diversity of
citizenship jurisdiction under 28 U.S.C. § 1332(a)(1), and bringing causes of action for 1) breach
of contract, 2) promissory estoppel, and 3) fraudulent misrepresentation. By Opinion,
Memorandum and Order issued on July 10, 2014, the Court denied Defendant’s Motion to
Dismiss for failure to state claim. After conducting discovery, Defendant filed its Motion for
Summary Judgment on April 30, 2015.
Summary Judgment Standard
The standards for summary judgment are well settled. In determining whether summary
judgment should issue, the Court must view the facts and inferences from the facts in the light
most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,
475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986); Woods v. DaimlerChrysler Corp.,
409 F.3d 984, 990 (8th Cir. 2005). The moving party has the burden to establish both the absence
of a genuine dispute of material fact and that it is entitled to judgment as a matter of law. Fed. R.
Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S. Ct. 2505, 91 L. Ed. 2d
202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265
(1986); Enterprise Bank v. Magna Bank, 92 F.3d 743, 747 (8th Cir. 1996).
Once the moving party has met this burden, the nonmoving party may not rest on the
allegations in his pleadings but by affidavit or other evidence must set forth specific facts
showing that a genuine dispute of material fact exists. Fed. R. Civ. P. 56(e); Anderson, 477 U.S.
at 256; Krenik v. Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995). “‘Only disputes over facts that
might affect the outcome of the suit under the governing law will properly preclude the entry of
summary judgment.’” Hitt v. Harsco Corp., 356 F.3d 920, 923 (8th Cir. 2004) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986)). A
dispute of fact is genuine when “a reasonable jury could return a verdict for the nonmoving
party” on the question. Anderson, 477 U.S. at 248; Woods, 409 F.3d at 990.
To survive a motion for summary judgment, the “nonmoving party must ‘substantiate his
allegations with sufficient probative evidence [that] would permit a finding in [his] favor based
on more than mere speculation, conjecture, or fantasy.’” Putman v. Unity Health Sys., 348 F.3d
732, 733–34 (8th Cir. 2003) (quoting Wilson v. Int’l Bus. Machs. Corp., 62 F.3d 237, 241 (8th
Cir. 1995)). “[A] complete failure of proof concerning an essential element of the nonmoving
party’s case necessarily renders all other facts immaterial.” Celotex, 477 U.S. at 323. The Court
will review the facts in this case with the stated standards in mind.
Breach of Contract
Count I of the Complaint is brought for breach of contract. Therein, Plaintiff alleges that,
at his request, Defendant offered to modify the mortgage, Plaintiff accepted the offer, and both
parties gave adequate consideration. Count I further alleges that Defendant refused to abide by
its promise of a permanent modification.
Under Missouri law, a breach of contract action requires a plaintiff to allege the existence
and terms of a valid and enforceable contract between the plaintiff and defendant; the rights of
the plaintiff and the obligations of the defendant under the contract; breach of the contract by the
defendant; and damages suffered by the plaintiff due to the breach. Holmes v. Kansas City Mo.
Bd. of Police Comm’rs, 364 S.W.3d 615, 622 (Mo. Ct. App. 2012); Teets v. American Family
Mut. Ins. Co., 272 S.W.3d 455, 461 (Mo. Ct. App. 2008); see also Cento v. Allstate Prop. & Cas.
Ins. Co., 2013 WL 64752, *3 (E.D. Mo. Jan. 4, 2013); Bakhtiari v. Al–Khaledy, 2011 WL
6945107, *4 (E.D. Mo. Dec. 30, 2011); Midwest Special Surgery, P.C. v. Anthem Ins.
Companies, 2010 WL 716105 at *6 (E.D. Mo. Feb. 24, 2010). A party “fails to state a claim for
breach of contract [if] it does not set out [the claimant’s] rights or [the defendant’s] obligations
under the contract.” Trotter’s Corp. v. Ringleader Restaurants, Inc., 929 S.W.2d 935, 941 (Mo.
Ct. App. 1996). Vague references to unspecified “agreements” are insufficient to state a claim
for breach of contract. Midwest Special Surgery, 2010 WL 716105, at *6.
With regard to Plaintiff’s breach of contract claim, the Court explained in its Opinion
denying Defendant’s Motion to Dismiss for failure to state a claim:
Defendant urges dismissal for failure to state a claim arguing that Plaintiff has
alleged a forbearance agreement which does not equate with a modification of
Plaintiff’s loan. Defendant is in essence arguing that the facts of this case do not
support Plaintiff’s claims. This argument however is in no manner ripe for
consideration. A motion to dismiss for failure to state a claim tests the sufficiency
of the Complaint; the Court’s role at this time is to determine whether Plaintiff’s
Complaint sets out a claim for relief.
While the evidence in this matter may ultimately translate into facts which may
establish that the “loan modification” was realistically a forbearance agreement
which did not entitle Plaintiff to a permanent modification, the Court cannot at
this time so find. Plaintiff has set out the essential allegations for stating a claim
for breach of contract for the purposes of Rule 12(b)(6). He alleges offer,
acceptance and consideration-elementary Hornbook law. Without the actual
documentation setting out the terms of the parties’ agreement, the Court cannot
assume, as Defendant urges, that the modification was not sufficient to modify
Plaintiff’s loan. The motion will be denied at this time.
[Doc. No. 10 at 5–6, 7–8].
The factual record before the Court demonstrates that the May 6, 2011 Special
Forbearance Agreement was not a loan modification. Rather, it was a temporary agreement,
limited in scope, to afford Plaintiff the opportunity to stave off foreclosure while making agreed
upon reduced payments for a set period of time. The two page document, which is bereft of fine
print, proposes the four payments described above.2 The document unambiguously states that it
is “not a waiver of the accrued or future payments that become due, but a period for you to
determine how you will be able to resolve your financial hardship. Any payments received will
be applied to the delinquent payments on the loan.” [Doc. No. 22-1 at 61]. Further, the document
unambiguously states: “This plan is an agreement to temporarily accept reduced payments or
maintain regular monthly payments during the plan specified below. Upon completion of this
plan, the loan must be brought current or an arrangement to satisfy the arrearage must be
executed.” [Id. at 62].
The Special Forbearance Agreement indicates that the parties previously agreed to the terms of the agreement.
[Doc. No. 22-1 at 61] [“As agreed, you have promised to pay the amounts shown below by the dates indicated.”].
Plaintiff alleges that “in its proposed modification that it signed and sent on May 6, 2011,
Wells Fargo represented that if Butano agreed to the terms, Wells Fargo would modify the
mortgage to reduce the monthly payment amount to $2,119.85.” [Doc. No. 1 at ¶ 39]. This is a
complete mischaracterization of the May 2011 Special Forbearance Agreement, but was enough
to stave off dismissal on the pleadings alone. [See also id. at ¶ 12] [“On May 6, 2011, Wells
Fargo again agreed to a modification under forbearance, reducing Butano’s monthly payments to
$2,119.85. But again, when Butano accepted, Wells Fargo did not make the promised
modification, resulting in further ‘deficiencies.’”]. Plaintiff describes the May 2011 Special
Forbearance agreement with more accuracy elsewhere in the Complaint. [Id. at ¶ 3] [“On May 6,
2011, Wells Fargo, servicer on Plaintiff’s home mortgage, offered Plaintiff a “Special
Forbearance Agreement” lowering Plaintiff’s monthly mortgage payments during a time of
temporary financial hardship.”] [emphasis added].
In his Response to Defendant’s Motion for Summary Judgment, Plaintiff takes exception
to “Defendant[’s] argu[ment] that the Special Forbearance Agreement is the only document Mr.
Butano signed and it only entitled him to a temporary reprieve from the Defendant’s inflated
payments and interest rate hikes.” [Doc. No. 25 at 3]. Plaintiff contends that, because he
“testified [at his deposition] that this document was one of a number of documents he signed [on
May 6, 2011 at a ‘home preservation workshop’], and the reason why he signed it was because
he would be receiving a loan modification,” a genuine issue of material fact exists as to the terms
of the Special Forbearance Agreement. [Id.]. However, notwithstanding the fact that Plaintiff
appears to be attempting to amend his Complaint through his deposition testimony and Response
to Defendant’s Motion for Summary Judgment, an assertion that Plaintiff signed other
documents in conjunction with the Special Forbearance Agreement which he “believes”3
[See Doc. No. 24-1, Plaintiff’s Depo at 30:3–8].
promised a loan modification is wholly insufficient to defeat summary judgment, particularly
given the unambiguous terms of the Special Forbearance Agreement. Further, in contrast to the
additional documents Plaintiff allegedly signed, the Special Forbearance Agreement is in the
record before the Court. See Celotex, 477 U.S. at 323; Putman, 348 F.3d at 733–34; Midwest
Special Surgery, 2010 WL 716105, at *6.
Similarly, Plaintiff’s newfound reliance on a purported November 2010 loan
modification—which was never mentioned in his Complaint—is insufficient to defeat summary
judgment given that Plaintiff has failed to submit the alleged modification to the Court or even
describe its terms. [See Doc. No. 22-4 at 3, Plaintiff’s Answers to Defendant’s Interrogatories].
Finally, Plaintiff’s barren assertion to have “communicated” with Defendant numerous times,
“including at least 8/25/10, 9/3/10, 9/27/10, 10/6/10, 11/10/10, 1/19/11, 2/8/11, 2/14/11, [and]
4/12/11” does not create a genuine issue of material fact as to Plaintiff’s claims, given that
Plaintiff does not remember the substance of these “communications.” [Plaintiff’s Depo at
On the record before the Court, the parties entered into the Special Forbearance
Agreement, Plaintiff made the required payments (albeit in an untimely fashion), Plaintiff made
two additional reduced price payments (ostensibly without approval to continue paying at a
reduced rate), Plaintiff made one more payment of $100, and then Plaintiff stopped paying his
mortgage. Foreclosure followed. Plaintiff has failed to demonstrate that a genuine issue of fact
exists to the question of whether Defendant is in breach of the Special Forbearance Agreement,
or any other contract. Accordingly, Defendant is entitled to judgment as a matter of law with
regard to Plaintiff’s breach of contract claim.
Count II of the Complaint is brought under a promissory estoppel theory. It alleges that
Defendant promised Plaintiff that if he agreed to the offered modification and fully complied,
Defendant would accept the reduced payments going forward for the life of the loan.
Under Missouri law, a claim for promissory estoppel allows the courts to enforce a
promise on equitable grounds even if the parties have not entered into a contract. The 1861
Group, LLC v. Wild Oats Markets, Inc., 728 F. Supp. 2d 1052, 1059 (E.D. Mo. 2010) (citing City
of St. Joseph v. SW Bell Tel., 439 F.3d 468, 477 (8th Cir. 2006)). Promissory estoppel requires:
1) a promise; 2) on which a party relies to his or her detriment; 3) in a way the promisor expected
or should have expected; and 4) resulting in an injustice that only enforcement of the promise
could cure. Freitas v. Wells Fargo Home Mortg., Inc., 703 F.3d 436, 440–41 (8th Cir. 2013); The
1861 Group, 728 F. Supp. 2d at 1059; Clevenger v. Oliver Ins. Agency, 237 S.W.3d 588, 590
(Mo. 2007); Glenn, MD v. HealthLink HMO, Inc., 360 S.W.3d 866, 877 (Mo. Ct. App. 2012);
see also Meng v. CitiMortgage, 2013 WL 1319008, at *7 (E.D. Mo. Mar. 29, 2013).
The promise giving rise to the claim for promissory estoppel must be definite and the
promise must be made in a contractual sense. Clevenger, 237 S.W.3d at 590 (citation omitted).
A promise is a manifestation of intention to act or refrain from acting in a specific
way, so made as to justify a promisee in understanding that a commitment has
been made. A promise is the promisor’s expression of an intention to bring about
a specified result in the future. The promise must be definite and made in a
contractual sense. A supposed promise that is wholly illusory or a mere
expression of intention, hope, desire, or opinion, which shows no real
commitment, cannot be expected to induce reliance.
Freitas, 703 F.3d at 440. Finally, “the promise element cannot be based on preliminary
negotiations and discussions or an agreement to negotiate the terms of a future contract.” The
1861 Group, 728 F. Supp. 2d at 1059–60 (citing Prenger v. Baumhoer, 939 S.W.2d 23, 27 (Mo.
Ct. App. 1997)). Missouri law requires “a promise be as definite and delineated as an offer under
contract law.” Freitas, 703 F.3d at 440.
Plaintiff alleges that he was promised a permanent modification, that he relied on the
promise and that he suffered damages as a result of Defendant’s failure to satisfy its promise.
However, for the reasons discussed above, Plaintiff has failed to create a genuine issue of
material fact that he was promised a loan modification. Accordingly, defendant is entitled to
judgment as a matter of law with regard to Plaintiff’s promissory estoppel claim as well.
Count III of the Complaint is a claim for fraudulent misrepresentation, in which Plaintiff
claims that in the proposed modifications that Defendant signed and sent to Plaintiff, Defendant
intentionally misrepresented to Plaintiff that if he agreed to the terms, Defendant would modify
the mortgage to reduce the monthly payment amounts. Plaintiff alleges that defendant had no
intention of modifying Plaintiff’s mortgage.
The elements of fraudulent misrepresentation are: a representation; its falsity; its
materiality; the speaker’s knowledge of its falsity or ignorance of its truth; the intention of the
speaker that it should be acted on by the person in the manner reasonably contemplated; the
hearer’s ignorance of the falsity of the representation; reliance on the representation being true;
the hearer’s right to rely on the representation; and injury that is consequently and proximately
caused thereby. Freitas, 703 F.3d at 438–39.A claim for fraudulent representation must be pled
with particularity, as required by Rule 9(b) of the Federal Rules of Civil Procedure. “‘[R]ule 9(b)
requires plaintiffs to plead the who, what, when, where, and how: the first paragraph of any
newspaper story.’” Id. (quoting Summerhill v. Terminix, Inc., 637 F.3d 877, 880 (8th Cir. 2011).
As with Plaintiff’s other claims, he has failed to create a genuine issue of material fact
that he was promised a loan modification. Thus, there is no false representation in the record
before the Court. There are not only required elements for a fraudulent misrepresentation claim,
but are elements which must be pled with particularity. Id. Accordingly, Defendant is entitled to
judgment as a matter of law as to Plaintiff’s fraudulent misrepresentation claim.
Based on the foregoing analysis, the Court will grant Defendant’s Motion for Summary
Judgment and enter judgment in Defendant’s favor.
IT IS HEREBY ORDERED that Defendant’s Motion for Summary Judgment [Doc. No.
20] is GRANTED.
An appropriate Judgment will accompany this Opinion, Memorandum and Order.
Dated this 11th day of August, 2015.
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE
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