Kelly et al v. Wells Fargo Bank, N.A.

Filing 26

ORDER ADOPTING REPORT of Magistrate Judge Schwab 20 , GRANTING Wells Fargo's motion 5 to dismiss the Kellys' complaint, DISMISSING Count II of the Kellys' complaint w/ prejudice w/out objection, DISMISSING Counts I & III w/out prejudice, & noting if the Kellys fail to file curative amended pleading w/in 14 days of date of this order Clrk of Ct will be directed to CLOSE case. (See order for complete details.) Signed by Chief Judge Christopher C. Conner on 7/10/14. (ki)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

DAVID W. KELLY and JOAN. L. KELLY, :
:
Plaintiffs,
:
:
v.
:
:
WELLS FARGO BANK, N.A.,
:
:
Defendant.
:

CIVIL ACTION NO. 1:13-CV-2298
(Chief Judge Conner)

ORDER
AND NOW, this 10th day of July, 2014, upon consideration of the report (Doc. 20)
of Magistrate Judge Susan E. Schwab, recommending the court grant the motion to
dismiss (Doc. 5) filed by defendant Wells Fargo Bank, N.A. (“Wells Fargo”), wherein the
magistrate judge concludes that plaintiff David and Joan Kellys’ (the “Kellys”) claims in
Counts I and II for wrongful foreclosure and fraud are barred absolutely by the gist of
the action doctrine and should be dismissed with prejudice, and that the Kellys’ claim in
Count III for negligence is also barred but potentially curable and should be dismissed
with leave to amend, (see Doc. 20 at 10-16), and, after an independent review of the
record, and noting that the Kellys filed an objection1 (Doc. 21) to the report on June 9,

1

Where objections to a magistrate judge’s report and recommendation are
filed, the court must perform a de novo review of the contested portions of the
report. Supinski v. United Parcel Serv., Civ. A. No. 06-0793, 2009 WL 113796, at *3
(M.D. Pa. Jan. 16, 2009) (citing Sample v. Diecks, 885 F.2d 1099, 1106 n. 3 (3d Cir.
1989); 28 U.S.C. § 636(b)(1)(c)). “In this regard, Local Rule of Court 72.3 requires
‘written objections which . . . specifically identify the portions of the proposed
findings, recommendations or report to which objection is made and the basis for
those objections.’” Id. (citing Shields v. Astrue, Civ. A. No. 07-417, 2008 WL
4186951, at *6 (M.D. Pa. Sept. 8, 2008)).

2014, and that Wells Fargo filed a response (Doc. 25) to the Kellys’ objections on June 26,
2014, and the court finding Judge Schwab’s analysis to be thorough, well-reasoned, and
fully supported by the record, and the court further finding the Kellys’ objections to be
without merit,2 except to the limited extent that the Kellys request that dismissal of
Count I be without prejudice, and squarely addressed by Judge Schwab’s report, it is
hereby ORDERED that:

2

The Kellys object to the magistrate judge’s determination that their
wrongful foreclosure claim in Count I is barred by the gist of the action doctrine.
Magistrate Judge Schwab determined, correctly, that the claim as currently stated
sounds in tort and is derived entirely from the mortgage documents between the
parties and thus barred by the gist of the action doctrine. (Doc. 20 at 10-14 (citing
eToll, Inc. v. Elias/Savion Advert., Inc., 811 A.2d 10, 14 (Pa. Super. Ct. 2002)). In
their objection, the Kellys contend that the magistrate judge erroneously construed
Count I as a tort claim rather than a breach of contract claim. (Doc. 21 ¶¶ 11-18
(contending inter alia that the “gravamen of Count I is a breach of contract that
resulted in Wells’ wrongful foreclosure”)). The court observes that the Kellys’
current position is diametrically inconsistent with its brief in opposition to Wells
Fargo’s motion to dismiss. At that stage of the litigation, the Kellys resolutely
maintained that: “Plaintiffs are not seeking both claims under breach of contract,
as well as claims that could be classified under tort. Plaintiffs’ Complaint is limited
solely to tort claims. . . . Plaintiff is in no way seeking breach of contract by Wells
Fargo. Nor is [sic] the causes of action alleged in the Complaint dependent on the
outcome of a breach of contract determination.” (Doc. 11 at 8) (emphasis added).
Consequently, the magistrate judge was quite correct to construe Count I as a cause
of action sounding not in contract but in tort. However, given the court’s leave to
amend Count III of the complaint, and the Third Circuit’s mandate that leave to
amend be liberally granted, see Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d
Cir. 2008) (observing that “a district court must permit curative amendment, unless
an amendment would be inequitable or futile”), the court will also grant leave to
amend Count I to the extent the Kellys intended that Count to state a claim for
breach of contract. Nothing in this opinion should be construed as addressing the
ultimate merit of any such contract claim.
2

1.

The report (Doc. 20) of Magistrate Judge Schwab is ADOPTED.

2.

Wells Fargo’s motion (Doc. 5) to dismiss the Kellys’ complaint (Doc. 1-2) is
GRANTED. The Kellys’ complaint (Doc. 1-2) is DISMISSED in its entirety.

3.

Count II of the Kellys’ complaint (Doc. 1-2) is dismissed with prejudice,
without objection. Counts I and III are dismissed without prejudice. If the
Kellys fail to file a curative amended pleading within fourteen (14) days of
the date of this order, the Clerk of Court will be directed to close this case.

/S/ CHRISTOPHER C. CONNER
Christopher C. Conner, Chief Judge
United States District Court
Middle District of Pennsylvania