WELLS FARGO BANK, N.A.v. YUNG et al
Filing
22
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE EDUARDO C. ROBRENO ON 06/11/2018. 06/12/2018 ENTERED AND COPIES E-MAILED.(nds)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
WELLS FARGO BANK, N.A.,
Plaintiff,
v.
CHUN CHIN YUNG, et al.,
Defendants.
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CIVIL ACTION
NO. 17-1863
M E M O R A N D U M
EDUARDO C. ROBRENO, J.
June 11, 2018
This is a breach of contract action brought by
Plaintiff Wells Fargo Bank, N.A. (“Wells Fargo”), the trustee
for the holders of a commercial mortgage loan, against
Defendants Chun Chin Yung (“Yung”) and Chao Hong Weng (“Weng,”
and together with Yung, “Defendants”), the borrowers.
Wells
Fargo alleges that Defendants breached their obligation to pay
the loan and are now in default under the terms of the
agreement.
Following the close of discovery, Wells Fargo filed
a motion for summary judgment, which Defendants oppose.
For the reasons that follow, the Court will grant in
part and deny in part Wells Fargo’s motion for summary judgment.
The Court will grant Wells Fargo’s motion with respect to
liability, and award damages consisting of the principal,
interest, and certain fees, charges, and costs.
However, the
Court will deny Wells Fargo’s motion to the extent it seeks
additional damages, including four disputed fees.
I.
FACTUAL BACKGROUND1
On June 30, 2006, Yung and Weng obtained a commercial
mortgage loan from Column Financial, Inc. (“the Original
Lender”), with a principal amount of $2,725,000.00 (“the Loan”)
and a fixed interest rate of 6.73% per annum.
Note at 1, Compl. Ex. A, ECF No. 1-1.
See Promissory
The Loan was secured by a
mortgage on a property located at 700-742 Adams Avenue,
Philadelphia, Pennsylvania (“the Mortgage”).
See Open-End
Mortgage, Security Agreement, and Assignment of Leases and
Rents, Compl. Ex. B, ECF No. 1-2.
The promissory note for the loan (“the Note”) provided
that Defendants were responsible for making monthly payments of
$17,638.09 for a ten-year period from August 11, 2006 until July
11, 2016 (“the Maturity Date”).
See Note § 1.01.
The Note
further stated that, on the Maturity Date, the outstanding
principal balance, along with the accrued but unpaid interest,
would be due and payable in full.
See id.
Although the loan
had a ten-year term, the monthly payment amounts were calculated
1
The facts are presented in the light most favorable to
Defendants, the nonmoving party.
2
based upon a thirty-year term.
Therefore, under the terms of
the Note, a very large payment would be due on the Maturity
Date.
Under the Note, a default occurs when, among other
things, Defendants fail to make a monthly payment on or before
the monthly payment due date, or fail to pay the outstanding
amount due on the Maturity Date.
Mortgage § 2.1.
See Note § 1.04; see also
The failure to pay on time also results in a
late charge of five percent (5.0%) of the overdue payment
amount, an additional four percent (4.0%) interest on the
outstanding principal balance, and costs of collection, such as
attorney’s fees.
See Note § 1.04.
On the closing date, Defendants signed the Note, the
Mortgage, and various other documents related to the Loan (“the
Loan Documents”).
The Note contains an integration clause,
which states that “[t]his Note and the other Loan Documents
contain the entire agreements between the parties hereto
relating to the subject matter hereof and thereof and all prior
agreements relative hereto and thereto which are not contained
herein or therein are terminated.”
See Note § 2.08.
At his deposition, Yung testified that he personally
signed the Note, and no one else explained or reviewed the loan
documents on his behalf.
See Tr. of Dep. of Chun Chin Yung
(“Yung Dep.”), 38:10-14, 39:3-5, Oct. 25, 2017, Pl.’s Mot. Summ.
3
J. Ex. C, ECF No. 20-4.
Yung also stated that there was nothing
in particular that he did not understand at the time of signing.
See id. at 39:6-13.
Regarding default, Yung testified that he construed
the terms of the Note as an obligation to pay the monthly bill
on time, and that his understanding was that a default would
only occur if he made late payments on the monthly bill.
id. at 49:7-24.
See
He also testified that he did not understand
the consequences of not paying the remainder of the loan on the
Maturity Date.
Id. at 50:16-20.
Yung testified that he understood that he had signed a
ten-year fixed loan.
See id. at 44:2-4.
However, he also
testified that someone, who he believes is a realtor, told him
that it could later change to a thirty-year term.
45:6.
Id. at 44:24-
Yung admits that he signed the Note without any
modifications to the language for the original ten-year term.
Id. at 47:1-3.
However, according to Yung, he assumed that if
he had been paying on time, the bank would refinance the loan to
a thirty-year term at the Maturity Date.
Id. at 53:11-20.
Yung
also testified that he did not ask to negotiate the terms of the
Note because he believed that the terms were fixed for every
client.
Id. at 62:1-4.
He did not share his assumption
regarding the potential change to a thirty-year term before he
signed the Loan Documents.
Id. at 53:21-24.
4
In her deposition, Weng also confirmed that she
personally signed the Note.
See Tr. of Dep. of Chao Hong Weng
(“Weng Dep.”) at 7:22-24, Oct. 25, 2017, Pl.’s Mot. Summ. J. Ex.
D, ECF No. 20-4.
In addition, Weng also stated that she
understood why she was signing the Note and that she and Yung
were the borrowers.
See id. at 9:5-16.
Following the execution of the loan documents, the
Original Lender sold the loan to Credit Suisse First Boston
Mortgage Securities Corp. (“Credit Suisse”) to be securitized
into a commercial mortgage-backed security: Credit Suisse First
Boston Mortgage Securities Corporation Commercial Mortgage PassThrough Certificates, Series 2006-C5 (“CSFB 2006-C5”).
See
Pl.’s Mot. Summ. J. Ex. F, ECF No. 20-4 (“Note Allonge”); see
also Tr. of Dep. of Aaron Guillotte (“Guillotte Dep.”) 22:5-7;
22:19-22, Oct. 27, 2017, Pl.’s Mot. Summ. J. Ex. G, ECF No. 204.
Wells Fargo is the trustee for the holders of CSFB 2006-C5
certificates.
See id. 23:1.
According to Yung, approximately six months prior to
the Maturity Date, he requested a modification extending the
ten-year term to thirty years.
See Yung Dep. at 69:14-22.
However, Wells Fargo did not agree to the modification.
See id.
at 75:11-17.
On July 11, 2016, the Maturity Date for the Note, Yung
failed to pay the remaining outstanding loan balance.
5
See id.
at 77:2-5.
Wells Fargo did not accept Yung’s offer to continue
making regular payments after the Maturity Date, and as a
result, Defendants have not made any payments since that date.
Id. at 77:6-15.
II.
PROCEDURAL HISTORY
Wells Fargo filed this action on April 24, 2017,
bringing one breach of contract claim against Defendants.
Compl., ECF No. 1.
See
Wells Fargo alleges that Defendants breached
and defaulted on their contractual obligations under the Note by
failing to pay in full the outstanding principal balance of the
Note on the Maturity Date.
See id. ¶ 28.
Wells Fargo asks that
judgment be entered in its favor and against Defendants in the
amount of $2,757,390.68, together with additional and accruing
interest, fees, charges, and costs recoverable under the Loan
Documents.
See id. at 7.
On October 31, 2017, following the close of discovery,
Wells Fargo filed a motion for summary judgment.
ECF No. 20.
Defendants filed a response in opposition to the motion on
November 14, 2017.
ECF No. 21.
The motion is now ripe for
disposition.
6
III. LEGAL STANDARD
Summary judgment is awarded under Federal Rule of
Civil Procedure 56 when “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); Liberty Mut. Ins. Co. v.
Sweeney, 689 F.3d 288, 292 (3d Cir. 2012).
“A motion for
summary judgment will not be defeated by ‘the mere existence’ of
some disputed facts, but will be denied when there is a genuine
issue of material fact.”
Am. Eagle Outfitters v. Lyle & Scott
Ltd., 584 F.3d 575, 581 (3d Cir. 2009) (quoting Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)).
A fact is
“material” if proof of its existence or non-existence might
affect the outcome of the litigation, and a dispute is “genuine”
if “the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.”
Anderson, 477 U.S. at 248.
In undertaking this analysis, the Court views all
facts in the light most favorable to the non-moving party.
“After making all reasonable inferences in the nonmoving party’s
favor, there is a genuine issue of material fact if a reasonable
jury could find for the nonmoving party.”
Pignataro v. Port
Auth. of N.Y. & N.J., 593 F.3d 265, 268 (3d Cir. 2010) (citing
Reliance Ins. Co. v. Moessner, 121 F.3d 895, 900 (3d Cir.
1997)).
While the moving party bears the initial burden of
showing the absence of a genuine issue of material fact, meeting
7
this obligation shifts the burden to the non-moving party, who
must “set forth specific facts showing there is a genuine issue
for trial.”
IV.
Anderson, 477 U.S. at 250.
DISCUSSION
Wells Fargo argues that it is entitled to summary
judgment because Defendants admitted to having negotiated and
signed the Note, and admit to failing to pay the outstanding
principal and interest on the Maturity Date.
9, ECF No. 20-2.
See Pl.’s Br. at
In response, Defendants argue that genuine
issues of material fact exist regarding (1) whether a valid,
enforceable contract was created by the parties; (2) whether
Wells Fargo has behaved in a reasonable manner and/or exercised
its discretion in a reasonable manner; and (3) the amount of the
alleged indebtedness.
See Defs.’ Mem. Law, ECF No. 21-2.
For the reasons set forth below, Wells Fargo has met
its initial burden to show the absence of a genuine issue of
material fact regarding liability and the majority of its
claimed damages, and Defendants have failed to identify any
facts showing that there is a genuine issue for trial with
respect to those issues.
Wells Fargo has also shown that under
the applicable substantive law it is entitled to judgment as a
matter of law as to liability and the majority of its claimed
8
damages.
However, there is a genuine issue of material fact
with respect to the remainder of the damages.
A.
Wells Fargo’s Initial Burden to Show the Absence of a
Genuine Issue of Material Fact
The Court must first determine whether Wells Fargo has
met its initial burden to show the absence of a genuine issue of
material fact.
See Anderson, 477 U.S. at 250.
Summary judgment is appropriate on a lender’s breach
of contract claim against a debtor when the debtor admits that a
promissory note existed and is in default.
See U.S. Bank, Nat’l
Ass’n v. Zimmer, 649 F. App’x 250, 252-53 (3d. Cir. 2016)
(quoting Cunningham v. McWilliams, 714 A.2d 1054, 1057 (Pa.
Super. Ct. 1998)).
In an action regarding a note secured by a
mortgage, the lender “presents a prima facie case by showing
‘the execution and delivery of the [note] and its nonpayment.’”
CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1056 (Pa.
Super. Ct. 1999) (quoting Phila. Workingmen’s Sav. Loan & Bldg.
Ass’n v. Wurzel, 49 A.2d 55, 57 (Pa. 1946)).
If the borrower
does not dispute failing to make payments under the terms of the
note, then the material facts are not in dispute.
See id.
Wells Fargo refers to § 1.01 of the Note, which
requires Defendants to pay the entire outstanding principal
balance, together with all accrued but unpaid interest thereon,
9
at the Maturity Date.
See Pl.’s Br. at 9 (citing Note § 1.01).
Based on the explicit language of the Note and Defendants’
admission that they failed to pay the outstanding balance at the
Maturity Date, Wells Fargo argues there is no genuine issue of
material fact regarding whether Defendants defaulted on the Note
and owe damages.
As a result, Wells Fargo claims, it is
entitled to summary judgment.
See id.
In Pennsylvania, “[a] contract is ambiguous if it is
reasonably susceptible of different constructions and capable of
being understood in more than one sense.”
Allegheny Int’l, Inc.
v. Allegheny Ludlum Steel Corp., 40 F.3d 1416, 1424 (3d Cir.
1994) (quoting Hutchison v. Sunbeam Coal Corp., 519 A.2d 385,
390 (Pa. 1986)).
The Supreme Court of Pennsylvania recognizes
two types of ambiguity: (1) patent ambiguity, which occurs when
“defective, obscure, or insensible” language causes the contract
to be unclear on its face and (2) latent ambiguity, which is
clear and unambiguous on its face but extraneous facts make the
meaning of the language ambiguous.
Id.
Here, there is no patent or latent ambiguity in the
language of the Note regarding default.
The Note clearly states
on its face that “any sum payable under this Note [] not paid on
or before the date such payment is due” results in a default,
which would include the failure to make payment on the Maturity
Date.
See Note § 1.04.
There are also no relevant extraneous
10
facts that render the language ambiguous because the contract
contained an integration clause.
See id. § 2.08.
Defendants admit that they signed the Note and
understood its terms, and they do not dispute their failure to
pay the full balance due on the Maturity Date.
39:6-13, 77:2-5; see also Weng Dep. 9:5-16.
See Yung Dep.
Defendants’ failure
to pay the full amount due on the Maturity Date constitutes a
default under the unambiguous terms of the Note.
See Note
§§ 1.01, 1.04.
As Wells Fargo has established the existence and
execution of the Note and that Defendants defaulted, Wells Fargo
has met its initial burden to demonstrate the absence of a
genuine issue of material fact with respect to its breach of
contract claim.
B.
Defendants’ Response
In response, Defendants argue that (1) there was not a
valid, enforceable contract because there was no meeting of the
minds; (2) Wells Fargo has not behaved in a reasonable manner or
exercised its discretion in a reasonable manner; and (3) Wells
Fargo has not established the amount of the alleged
indebtedness.
11
1.
The Validity and Enforceability of the Note
Defendants first argue that the Note is not valid or
enforceable because (1) Yung had an understanding of the terms
of the agreement that differed from the written language; and
(2) the Original Lender failed to ascertain Defendants’
understanding of the contractual language even though Defendants
lacked full command of the English language and had limited
business experience.
See Defs.’ Mem. Law at 9.
As a result,
according to Defendants, there was no meeting of the minds and
therefore no valid contract.
a.
See id.
Yung’s understanding of the ten-year term
Under Pennsylvania law, objective language
memorialized in writing by the parties creates a valid and
enforceable contract.
See Mellon Bank, N.A. v. Aetna Bus.
Credit, Inc., 619 F.2d 1001, 1009 (3d Cir. 1980) (citing Nat’l
Cash Register Co. v. Modern Transfer Co., Inc., 302 A.2d 486,
488 (Pa. Super. Ct. 1973)).
“Absent illegality,
unconscionableness, fraud, duress, or mistake[,] the parties are
bound by the terms of their contract.”
Id.
The primary goal of contract interpretation is to
determine the intent of the parties.
See id.
Courts determine
the intent of the parties by looking at external, objective
indications of the parties’ intent –- such as the language
12
memorialized in the contract –- and not any extraneous
subjective meanings that may be attached by a party.
See id.
Thus, a valid and enforceable contract does not depend “on the
agreement of two minds . . . but on the agreement of two sets of
external signs.”
Id. (quoting Oliver Wendell Holmes, The Path
of Law, 10 Harv. L.Rev. 457, 463 (1897)).
The language within a written contract is “the
strongest external sign of agreement between contracting
parties.”
Id.
Indeed, it is “firmly settled” under
Pennsylvania law that “the intent of the parties to a written
contract is contained in the writing itself.”
Bohler-Uddeholm
America, Inc. v. Ellwood Group, Inc., 247 F.3d 79, 92 (3d Cir.
2001) (quoting Krizonvensky v. Krizovensky, 624 A.2d 638, 642
(Pa. Super. Ct. 1993)).
When the parties’ intent is clear from
the four corners of a clear and unequivocal written contract, a
court will determine the meaning of the contract “by its
contents alone.”
Id. (quoting Steuart v. McChesney, 444 A.2d
659, 661 (Pa. 1982)).
In other words, “[w]here the language is
clear and unambiguous, the focus of the interpretation is upon
the terms of the agreement as manifestly expressed, rather than,
as, perhaps, silently intended.”
Id. at 92-93 (emphasis
original) (quoting Steuart, 444 A.2d at 661).
Here, although the language of the Note clearly states
that it was a ten-year term, Defendants argue that there was not
13
a meeting of the minds regarding the loan term because Yung
believed that the Loan could continue beyond the ten years or be
refinanced into a thirty-year term later.
See Defs.’ Mem. Law
at 8.
Yung’s subjective beliefs that he could choose not to
make the balloon payment on the Maturity Date and that the loan
would be modified into a thirty-year term are irrelevant,
because the clear and unambiguous language of the Note –- which
reflects the intent of the parties -- includes a ten-year term
with a balloon payment at maturity.
F.3d at 92-93.
See Bohler-Uddeholm, 247
As a result, a valid and enforceable contract
existed, and Defendants are bound by the language of the Note,
including the ten-year term.
b.
Defendants’ alleged lack of understanding of
the terms of the agreement
Defendants also argue that a valid contract was not
formed because the lenders failed to ascertain Defendants’
understanding of the contractual language even though Defendants
lacked full command of the English language and had limited
business experience.
Defs.’ Mem. Law at 8-9.
Defendants assert
that there is a genuine issue of material fact for trial because
Wells Fargo has failed to offer any evidence that the Original
Lender “did any due diligence in the this transaction,”
14
including ensuring that Defendants understood the terms of the
Loan.2
Id. at 9.
According to Defendants, “[l]ike so many
unwitting borrowers at closing, Mr. Yung merely signed the many
documents that were presented to him.”
Id. at 9 n.1.
Under Pennsylvania law, a party who signs a contract
is responsible for reading the contract.
See Schillachi v.
Flying Dutchman Motorcycle Club, 751 F. Supp. 1169, 1174-75
(E.D. Pa. 1990) (citing Bessen Bros., Inc. v. Brooks, 107 A.3d
623 (Pa. Super. Ct. 1954)).
In the absence of fraud, ignorance
of the contract’s contents does not excuse the signing party
from performing the obligations of the contract.
See id. at
1175.
Here, contrary to Defendants’ assertions in their
papers, at their depositions, Defendants each admitted that they
understood the terms of the contract.
also Weng Dep. 9:5-16.
See Yung Dep. 39:6-8; see
However, even if they did not understand
the contract’s content, their lack of understanding would not
void the contract.
See Schillachi, 751 F. Supp. at 1174.
Under
Pennsylvania law, Defendants alone were responsible for
understanding and reading the contract prior to signing it.
id.
See
As this responsibility belonged to Defendants and not the
2
Defendants also note that the loan was executed during
the “height of the real estate bubble,” and that the Original
Lender had “no incentive” to perform even minimal due diligence
because it knew the loan would be transferred to another entity
for securitization. Id.
15
lender, the Original Lender was not obligated to ensure
Defendants understood the terms of the loan.
Accordingly, the
Court rejects Defendants’ argument that there was a genuine
dispute of material fact as to whether the Note was valid and
enforceable because the Original Lender failed to confirm that
Defendants understood its terms.
2.
Implied Duty of Good Faith and Fair Dealing
Defendants next argue that Wells Fargo did not act in
good faith because it repeatedly rejected Defendants’ request to
modify the Note by extending its ten-year term to thirty years.
Defs.’ Mem. Law at 11.
Defendants cite Bedrock Stone & Stuff,
Inc. v. Mfrs. & Traders Trust Co., No. 04-2101, 2005 WL 1279148
(May 25, 2005), in which the court noted that the covenant of
good faith “may be breached when a party unreasonably exercises
discretion authorized in a contract.”
Id. at *8 (denying
lender’s motion for summary judgment in an action brought by a
borrower for breach of the implied duty of good faith and fair
dealing on the basis that there were disputed issues of material
fact regarding, inter alia, “the facts surrounding an agreement
to refinance the existing debt”).
According to Defendants,
Wells Fargo breached the duty of good faith by “unreasonably”
refusing Yung’s request to modify the loan.
12-13.
16
See Def.’s Mem. at
In Pennsylvania, any party to a contract is required
to exercise a duty of good faith and fair dealing in performing
and enforcing the contract.
See Donahue v. Fed. Exp. Corp., 753
A.2d 238, 242 (Pa. Super. Ct. 2000).
limitations to this duty.
However, there are
In particular, the implied duty of
good faith and fair dealing “does not impose obligations on
parties that contradict those included in the contract,” nor can
it compel a lender “to surrender rights which it has been given
by statute or by the terms of its contract.”
Tanenbaum v. Chase
Home Fin. LLC, No. 13–4132, 2014 WL 4063358 at *7 (E.D. Pa. Aug.
18, 2014) (quoting Creeger Brick & Bldg. Supply Inc. v. MidState Bank & Trust Co., 560 A.2d 151, 154 (Pa. Super. Ct.
1989)).
In other words, “[i]mplied duties cannot trump express
provisions in contract.”
Stamerro v. Stamerro, 889 A.2d 1251,
1259 (Pa. Super. Ct. 2005) (quoting John B. Conomos, Inc. v. Sun
Co., Inc. (R & M), 831 A.2d 696, 706 (Pa. Super. Ct. 2003)).
Although the court in Bedrock Stone found that there
was a disputed issue of material fact regarding a breach of the
convent of good faith in connection with a lender’s refusal to
extend additional financing and refinance a loan, the facts of
that case are distinguishable.
There, the lender sent a letter
to the borrower stating that it would extend additional
financing if the borrower met certain conditions, which the
borrower alleges were met.
See Bedrock Stone, 2005 WL 1279148,
17
at *3-5.
In addition, the lender allegedly made multiple
specific verbal representations to the borrower regarding
providing additional financing and refinancing the outstanding
loans, and then retracted those verbal commitments before they
were reduced to a writing.
See id. at *4-5.
The potential
breach of the duty of good faith was not the lender’s ultimate
refusal to refinance the loan –- as the lender was not required
to agree to do so -- but instead the lender’s other conduct
during the negotiations regarding refinancing.
Here, the Note included a ten-year term, and there is
no allegation that any representative of the Original Lender,
Wells Fargo, or the servicer made any representations to
Defendants regarding modifying the loan term.
Instead,
Defendants contend only that Wells Fargo unreasonably denied the
modification.
As the implied duty of good faith and fair
dealing did not impose any obligations on Wells Fargo beyond the
written contractual language, Wells Fargo was not required to
accept Defendants’ request to modify the original ten-year term
of the Loan.
See Tanenbaum, 2014 WL 4063358 at *7.
Therefore,
Wells Fargo did not violate the implied duty of good faith and
fair dealing by rejecting Defendants’ request for a
modification.
18
3.
The Amount of the Debt
Finally, Defendants argue that a genuine issue of
material fact exists as to the alleged amount owed.
Mem. Law at 13-14.
See Defs.’
In particular, Defendants challenge certain
fees that Wells Fargo claims are owed.
See id.
Wells Fargo asserts that the total amount due as of
September 29, 2017 was $2,526,275.09.
See Pl.’s Mem. Law at 7.
This total consists of the principal balance, note rate
interest, default interest, late fees, prior default interest,
and other operational fees, such as processing fees, appraisal
fees, and legal fees.
Id.
Wells Fargo bases this number on a
computerized statement iteming the amounts due that they
received from the loan servicer, LNR Partners, LLC (“LNR”),
which is dated September 29, 2017 (“the Payoff Statement”).
See
id. at 6-7; see also Payoff Statement, Pl.’s Mot. Ex. H, ECF No.
20-4.
At his deposition, Aaron Guillotte, a representative of
LNR, confirmed that the Payoff Statement was the last one that
LNR issued.
See Guillotte Dep. at 40:22-23.
In their motion
for summary judgment, Wells Fargo requests that the Court enter
judgment in their favor in the amount of $2,526,275.09, together
with any additional interest accruing at the default rate and
recoverable fees and expenses from September 30, 2017, the day
after the Payoff Statement.
See Pl.’s Br. at 12.
19
Defendants argue that there is a genuine issue of
material fact regarding the total amount of damages, because
Wells Fargo has not identified any facts supporting four of the
fees listed on the Payoff Statement: (1) a “Title Expense” of
$14,882.49; (2) an “LNR Admin Fee” of $125.00; (3) an “NSF Fee”
of $100.00; and (4) a “Satisfaction of Mortgage” fee of $480.00.
Defs.’ Mem. Law, ECF No. 21-2 at 14-15.
In particular,
Defendants point to Guillotte’s admission that he did not know
what any of these four items were, or whether they were
authorized by the Note.
See id. at 15 (citing Guillotte Dep.
47:7-48-1, 50:6-7).
In light of the admission of the servicer’s
representative that he was not aware of the source of the four
fees Defendants identify, Wells Fargo is not entitled to
judgment as a matter of law with respect to those four line
items.
However, given that Defendants do not challenge Wells
Fargo’s calculation of the principal, interest, or any other
fees, Wells Fargo has met its burden to demonstrate the absence
of a genuine issue of material fact with respect to those
amounts, which total $2,510,687.60.
See Payoff Statement at 1.
Summary judgment with respect to liability is
appropriate when there is no dispute about a default on the loan
despite a dispute on the exact amount owed.
See Chemical Bank
v. Bruestle, No. 95-0228, 1995 WL 459002 at *1 (E.D. Pa. July
20
31, 1995) (granting summary judgment in favor of the plaintiff
lender with respect to liability where the defendant
acknowledged that a default occurred but disputed the amount
due).
Here, although there is a disputed issue of material fact
regarding some aspects of the damages calculation, there is no
dispute that Defendants defaulted on the loan, or that Wells
Fargo correctly calculated the principal, interest, and the
remainder of the fees.
Therefore, the Court will grant Wells
Fargo’s motion for summary judgment with respect to liability,
grant the motion in part and deny it in part with respect to
damages, and award Wells Fargo damages based upon the undisputed
amounts.
Defendants are entitled to a jury trial regarding the
four remaining disputed fees.
V.
CONCLUSION
For the reasons stated above, the Court will grant in
part and deny in part Wells Fargo’s motion for summary judgment.
The Court will grant the motion for summary judgment with
respect to liability, and with respect to damages in the amount
of $2,510,687.60, consisting of the principal, interest, and
certain additional fees, plus pre-judgment interest accruing at
the Default Interest Rate from September 30, 2017.
However, the
Court will deny the motion with respect to additional costs and
fees.
21
An appropriate order follows.
22
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