GLOVER v. WASHINGTON MUTUAL BANK, F.A. et al

Filing 166

REPORT AND RECOMMENDATION re 129 MOTION to Dismiss Plaintiff's Second Amended Complaint filed by WELLS FARGO HOME MORTGAGE recommending that the Motion be Granted in part and Denied in part. Objections to R&R due by 11/8/2010. Signed by Magistrate Judge Robert C. Mitchell on 10/21/2010. (cms)

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

MARY E. GLOVER,
individually and on behalf
of other similarly situated
former and current
homeowners in Pennsylvania,
Plaintiffs,
v.
MARK J. UDREN, UDREN LAW
OFFICES, P.C., WELLS FARGO
HOME MORTGAGE,
Defendants.

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Civil No. 08-990

REPORT AND RECOMMENDATION
I. Recommendation
Presently before the Court is Defendant‟s, Wells Fargo
Home Mortgage, motion to dismiss the second amended complaint
under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon
which relief can be granted.

It is respectfully recommended

that the district court grant in part and deny in part the
motion to dismiss (Docket No. 129).
II. Discussion
A.

Facts
1

On or about August 2, 2002, the Plaintiff, Mary Glover
(AGlover@),

entered

into

a

mortgage

Washington Mutual Bank (AWalMu@).

loan

transaction

with

Glover executed a note in the

principal amount of $9,997 in favor of WalMu and agreed to make
monthly

payments

for

principal

and

interest,

in

addition

to

monthly escrow payments for taxes and insurance.
On or about July 29, 2003, WalMu sold Glover‟s loan,
among

others,

Sachs”)

under

to
a

Goldman
Purchase

Sachs
and

Mortgage

Company

Servicing

(“Goldman

Agreement.

WalMu

retained the servicing rights on Glover‟s loan.
In

March

2005,

Glover

was

injured

accident and suffered a loss of income.
and

requested

payments.

a

loan

modification

an

automobile

Glover contacted WalMu
to

reduce

her

monthly

Effective December 1, 2005, Glover entered into a

Special Forbearance Agreement with WalMu.
the

in

Agreement,

WalMu

agreed

to

postpone

Under the terms of
certain

of

monthly payments and not to charge attorneys= fees.

Glover=s
It also

agreed to reevaluate Glover=s request for financial assistance on
April 1, 2006.
Prior to that time, however, on March 14, 2006, WalMu
informed Glover by letter that her application for a loan workout had been denied.

WalMu then authorized Udren Law Offices to
2

commence foreclosure proceedings against Glover. Udren filed a
mortgage foreclosure complaint on April 10, 2006 in the Court of
Common Pleas of Allegheny County.

The amount due was calculated

at $12,652.36.
Although the foreclosure complaint had been filed,
and despite WalMu‟s earlier denial of a loan workout, on June 7,
2006, WalMu offered Glover a loan modification agreement.
letter

accompanying

the

loan

modification

agreement

The

informed

Glover that her principal balance had increased by $2,237.73 $806.45

for

delinquent

Advance/Set-up.
directives

The

concerning

foreclosure

fees

and

interest

letter
her

and

then

$1431.19

gave

Glover

responsibility

costs.

In

one

for

to

pay

AEscrow/

conflicting
$3,696.00

sentence,

the

in

letter

instructed Glover to remit a certified check in that amount to
WalMu, but, a later sentence indicated the amount due as $0.00.
In any event, Glover did not pay the $3.696.00, nor did WalMu
subsequently request payment.
On November 15, 2006, WalMu informed Glover that the
servicing

of

her

mortgage

loan

was

being

assigned,

transferred to Wells Fargo Bank, N.A. (AWells Fargo@).

sold,

or

From that

date on, Glover dealt with Wells Fargo concerning her mortgage
payments, including a loan modification agreement entered into on
3

January 4, 2008.

As of the filing of the amended complaint on

October 14, 2009, Glover has made payments in accordance with the
terms of the loan modification agreement.
On

June

9,

2008,

Glover

commenced

a

putative

class

action in the Court of Common Pleas of Allegheny County alleging,
inter

alia,

illegal

lending

and

servicing

practices

WalMu, Wells Fargo, Mark Udren, and Udren Law Offices.
was

removed

to

this

jurisdiction

and

was

1

against
The case

eventually

stayed

pending exhaustion of administrative proceedings before the FDIC.
When the administrative proceedings concluded, Glover filed an
amended complaint.

On January 4, 2010, Wells Fargo filed an

answer to the amended complaint and, on February 5, 2010, that
same defendant filed a Motion for Judgment on the Pleadings to
which Glover filed a response.

On April 26, 2010, before the

motion was adjudicated, the Court held a status conference.

At

that conference, counsel for Glover informed the Court that he
intended to file a second amended complaint to add Goldman Sachs
Mortgage Company as a party.

Wells Fargo then agreed to withdraw

its pending motion for judgment on the pleadings.
1

Although Plaintiff was ordered to define the
parameters of the class by April 12, 2010, and the
parties were ordered to submit their proposed class
definition by April 22, 2010 (Doc. # 97), there has
been no activity concerning class certification.

4

On
complaint.

June

9,

Relevant

2010,
to

Glover

the

instant

filed

a

matter,

second
the

amended

allegations

against Wells Fargo include claims of breach of contract (counts
I-IV), unjust enrichment (count IX), violations of the Fair Debt
Collections Practices Act (AFDCPA@), 15 U.S.C. ' 1692, et seq.,
(count XI), Pennsylvania=s Fair Credit Extension Uniformity Act
(AFECUA@), 73 P.S. '2270.4(a)(counts XIV and XV), Pennsylvania=s
Loan Interest and Protection Act (AAct 6") 41 P.S. ' 101, et seq.
(count

XVI),

and

Pennsylvania=s

Unfair

Trade

Practices

and

Consumer Protection Law (AUTPCPL@), 73 P.S. '201-2 (count XVII).
On July 21, 2010 Wells Fargo filed a partial motion to dismiss
counts I, II, III, IV, IX, XIV, XVI, and XVII of the second
amended complaint with prejudice for failure to state a claim
upon which relief can be granted.
B.
The

Standard of Review
United

States

Supreme

Court

opinions

in

Bell

Atlantic Corporation v. Twombly, 550 U.S. 544 (2007) and, more
recently,

in

Ashcroft

v.

Iqbal,

129

S.Ct.

1937

(2009),

have

shifted pleading standards from simple notice pleading to a more
heightened form of pleading, requiring a plaintiff to plead more
than the possibility of relief to survive a motion to dismiss.
With the Supreme Court instruction in mind, the Court of Appeals
5

for

the

courts

Third
should

Circuit

outlined

a

two-part

when

utilize

has

deciding

a

motion

failure to state a claim.

analysis

to

dismiss

that
for

First, the factual and legal elements

of a claim should be separated.

In other words, while courts

must accept all of the complaint's well-pleaded facts as true,
they may disregard any legal conclusions.

Second, courts then

decide whether the facts alleged in the complaint are sufficient
to demonstrate that the plaintiff has a "plausible claim for
relief."

Iqbal, 129 S. Ct. at 1950.

That is, a complaint must

do more than allege the entitlement to relief; its facts must
show such an entitlement.

Fowler v. UPMC Shadyside, 578 F.3d

203, 210-211 (3d Cir. 2009).
C.

Legal Claims

1.

Breach of Contract

Counts I-IV of the complaint allege that Wells Fargo
breached

contractual

specifically

complains

misallocated

her

unauthorized

escrow

provisions

obligations

of

the

the

monthly
charges
Real

it

Wells

owed

Fargo

payments
(count
Estate

to

overcharged

(count

II),

Glover.

I),

breached

Settlement

Glover
her

and

collected
the

escrow

Procedures

Act

(“RESPA”), 12 U.S.C. § 2601-2617 (count III), and charged and/or
collected

unauthorized

attorney‟s
6

fees

and

costs

(count

IV).

Wells Fargo‟s response to these allegations is straightforward Glover‟s breach of contract claims against it fail as a matter of
law because it was not a party to the note and mortgage.
To maintain a cause of action for breach of contract
the plaintiff must establish:

(1) the existence of a contract,

including its essential terms, (2) a breach of a duty imposed by
the

contract,

and

(3)

damages

resulting

from

the

breach.

McShea v. City of Philadelphia, 995 A.2d 334, 340 (Pa. 2010).
person

who

liability

is

not

when

a

one

party
of

to

the

a

contract

parties

is

not

breaches

the

subject

A
to

agreement.

Fleetway Leasing Company v. Wright, 697 A.2d 1000, 1003 (Pa.
Super. 1997).
The Court agrees that Wells Fargo cannot be held liable
for

breaches

mortgage

and

arising
note,

from

the

between

original

Walmu

and

contract,

Glover.

i.e.,

See

Ruff

the
v.

America‟s Servicing Company, Civil Action No. 07-0489, 2008 WL
1830182, at *4 (W.D.Pa. April 23, 2008)(loan servicer not a party
to

the

mortgage

contract).

and

cannot

be

held

liable

for

breach

of

However, to the extent that the allegations of the

complaint concern Wells Fargo‟s contractual obligations arising
from the January 4, 2008 loan modification agreement, Glover has
pled a cognizable breach of contract claim under count I.
7

In Pennsylvania, “ „[a] contract is formed when the
parties

to

it

1)

reach

a

mutual

understanding,

2)

exchange

consideration, and 3) delineate the terms of their bargain with
sufficient clarity.‟”

Forest Glen

Condominium Association v.

Forest Green Common Ltd. Partnership, 900 A.2d 859, 863-64 2006
PA Super 99 (2006)(quoting Weavertown Transport Leasing, Inc. v.
Moran, 834 A.2d 1169, 1172, 2003 PA Super 385 (2003)).

The

January 4, 2008 loan modification document identifies the parties
to the agreement as Glover, the “Borrower” and Wells Fargo, the
“Lender.”

Sec. Am. Compl., Ex. R.

The agreement then recites

that, in exchange for valuable consideration, the parties agreed
to

modify,

payment.

inter
While

alia,
the

the

loan

loan

principal

modification

and

makes

the

clear

terms
that

of
the

Borrower remains obligated under the original mortgage and note,
except

as

so

contractual
Thus,

to

amended,

the

responsibilities

the

extent

that

agreement
between
count

I

clearly
Glover

alleges

delineates

and
that

Wells
Wells

new

Fargo.
Fargo

breached contractual obligations arising out of the January 4,
2008 loan modification agreement, the Court should deny Wells
Fargo motion to dismiss.
In count II, Glover contends that Wells Fargo breached
a contractual obligation regarding unauthorized collection and
8

handling of escrow charges.

According to the complaint, the

mortgage governed the manner in which the lender could charge
interest when it advanced escrow payments owed by the borrower to
third parties.
comply

with

Additionally, the mortgage required lenders to

RESPA

and

notify

borrowers

if

escrow

shortages

occurred and provide an opportunity for the borrower to make up
the shortage.
charged

The complaint alleges that Wells Fargo improperly

interest

disbursement

to

on
the

escrow

advances

prior

third

parties

and,

complaint

make

relevant

to

their

actual

therefore,

breached the contract.
As
contractual

the

paragraphs

obligations

at

of

the

issue

in

count

II

clear,

arise

from

the
the

language in the mortgage, a contract entered into between WalMu
and Glover.

As Wells Fargo is not a party to that contract, it

cannot be held liable for a breach of its terms.

Accordingly,

the motion to dismiss count II should be granted with prejudice.
This same reasoning compels dismissal of count III of
the complaint which alleges that Wells Fargo breached the escrow
contractual RESPA provisions in the mortgage.

Wells Fargo is not

bound by Walmu‟s agreement in the mortgage to adhere to the RESPA
escrow requirements, thus, count III should likewise be dismissed
with prejudice.
9

Count IV of the complaint alleges that a contract
breach

occurred

unauthorized

when

attorney‟s

homeowners
fees

and

were

costs.

charged
This

and

count

paid

includes

“Homeowners who paid attorney‟s fees and costs as a result of a
proposed

state

judgment

never

signed,

or

signed

Prothonotary or its deputy.” Sec. Am. Compl. ¶ 135.

by

the

Glover does

not allege any facts showing that she is included in this group
of homeowners nor do the docket entries related to foreclosure
action filed against her in Allegheny County reveal that her case
involved either an unsigned proposed state judgment or a judgment
signed

by

the

Prothonotary

or

its

deputy.

Id.

at

Therefore, count IV should be dismissed with prejudice.

Ex.

F-1.

See In

re Flonase Antitrust Litigation, 610 F.Supp.2d 409, 414 (E.D.Pa.
2009)(it is uncontested that “to be a class representative on a
particular claim, the plaintiff himself must have a cause of
action on that claim.”)(citing Zimmerman v. HBO Affiliate Group,
834 F.2d. 1163, 1169 (3d Cir. 1987)).
2.

Unjust Enrichment

In count IX, Glover urges that, in the event Wells
Fargo is determined not to be a party to the mortgage and note,
then it was unjustly enriched when it collected and retained
unauthorized fees, costs, and expenses as set forth in the breach
10

of contract claims.

Glover additionally claims that Wells Fargo

was unjustly enriched when it retained a percentage of unpaid
debt

balance

as

such

payments

were

improperly

inflated

as

a

result of those fees, costs, and expenses not authorized by the
loan agreement.
The
on

conferred
benefits

elements
defendant

by

of

defendant,

unjust

by
and

enrichment

plaintiff,

are:

appreciation

acceptance

and

retention

“benefits
of

such

of

such

benefits under such circumstances that it would be inequitable
for defendant to retain the benefit without payment of value.”
Northeast Fence & Iron Works, Inc. v. Murphy Quigley Company,
Inc. ,

933

A.2d

664,

668-69,

2007

PA

Super

287(2007)(quoting

AmeriPro Search, Inc. v. Fleming Steel Company, 787 A.2d 988,
991, 2001 PA Super 325 (2001)).

“To sustain a claim of unjust

enrichment, a claimant must show that the party against whom
recovery

is

sought

either

wrongfully

secured

or

passively

received a benefit that it would be unconscionable for her to
retain.”

Torchia v. Torchia, 499 A.2d 581, 582 (Pa. Super.

1985)(quotation omitted).
is

The critical element of the doctrine

the injustice of the enrichment and

requires more than a

showing that the defendant may have benefited in some way from
the disputed conduct.

Lackner v. Glosser, 892 A.2d 21, 34, 2006
11

PA Super 287 (2006)(quotation omitted); Sovereign Bank v. BJ's
Wholesale Club, Inc.,

533 F.3d 162, 180-81 (3d Cir. 2008) (claim

for unjust enrichment requires more than showing defendant may
have benefited from disputed conduct).
Wells Fargo urges that Glover has failed to state a
claim for unjust enrichment because the contested fees, expenses,
and costs upon which she bases her claim were not paid to and
retained by Wells Fargo, rather it only collected those fees in
its capacity as Glover‟s loan servicer.

It further contends that

any alleged benefit it did receive from collection of those fees
was derived from its servicing agreement with Goldman Sachs and
that it is inconsequential that Goldman Sachs compensated Wells
Fargo from Plaintiff‟s loan payments.
The Court concludes that Glover has sufficiently stated
a

claim

for

dismissal.

unjust

enrichment

to

survive

a

Rule

12(b)(6)

Despite Wells Fargo‟s attempt to shield itself from

liability because it only collected funds from Glover on behalf
of Goldman Sachs, it is undisputed that Goldman Sachs met its
contractual
agreement

obligation
from

loan

to

Wells

payment

Fargo

proceeds

under
paid

the
by

servicing

Glover.

The

plaintiff has thus sufficiently alleged that her payments to
Goldman Sachs conferred a benefit that Wells Fargo appreciated.
12

Then, accepting as true Glover‟s allegation that certain amounts
paid by her were not contractually authorized, she has stated a
plausible claim for unjust enrichment as it would be inequitable
for

Wells

charges.

Fargo‟s

to

retain

a

percentage

of

these

illicit

Accordingly, for those allegations in the complaint

for which Wells Fargo cannot be held liable under a breach of
contract
escrow

theory,

charges

namely,
(count

improper

II)

and

collection

failure

to

and

handling

adhere

to

of

RESPA

provisions count III), Wells Fargo motion to dismiss count IX
should be denied.
3.

Fair Credit Extension Uniformity Act (“FCEUA”)

Glover

alleges

that

Wells

Fargo

violated

73

P.S.

2270.4(a) of the FCEUA, because its debt collection activities
violated the Fair Debt Collection Practices Act (count XIV) and
because Wells Fargo, as a creditor, misrepresented amounts owed
by homeowners and improperly charged and/or collected improper
amounts

in

violation

of

73

P.S.

§§

2270.4(b)(5)(ii),

2740.4(b)(6)(i)(count XV).
Wells Fargo urges dismissal of the FCEUA Counts for
two reasons: it is not a creditor as that term is defined by the
statute

and

transaction

the

statute

because

the

does
FCEUA

not

apply

specifically
13

to

Glover‟s

excludes

loan

purchase

money mortgages from its purview.
The definitional section of the FCEUA, informs that the
word “debt” does not include “money which is owed or alleged to
be

owed

as

a

result

of

a

loan

mortgage on real estate. . . . ”

secured

by

a

purchase

73 P.S. § 2270.3.

money

The statute

does not specifically define “purchase money mortgage.”
It is undisputed that Glover borrowed money from WalMu
to acquire title to a property at 709 Henry Street, Clairton
Pennsylvania.

Sec. Am. Compl., Ex. B.

contains the statement:

The mortgage agreement

“If any of the debt secured by this

[Mortgage] is lent to Borrower to acquire title to the property,
this [Mortgage] shall be a purchase money mortgage.”
B, ¶ 22.

Id. at Ex.

Despite this language, Glover argues that her loan is

not a purchase money mortgage, as that term has been described in
common law.

Under common law, a purchase money mortgage resulted

when the vendor of the property accepted a mortgage from the
property buyer as part of the purchase price. Glover urges that,
in the absence of an FCEUA definition of the term, Pennsylvania
rules

of

statutory

construction

compel

a

conclusion

that

the

common law definition endures.
The goal in interpreting statutes is to determine and
give effect to the legislative intent.
14

1 Pa.C.S. § 1921(a).

Statutory

language

is

construed

according

to

its

“common

and

approved usage,” but “technical” phrases are “construed according
to

such

peculiar

and

Pa.C.S. § 1903(a).
explicit,

the

through

number

a

appropriate

or

definition.”

1

Also, if the words of a statute are not

General
of

meaning

Assembly's

factors,

intent

including,

statutes on similar subjects.

can

be

ascertained

examination

of

other

In re 2003 General Election for

Office of Prothonotary, 849 A.2d 230, 237 (2004)(citing 1 Pa.
C.S. § 1921)).
Inc.

v.

See also General Electric Environmental Services,

Envirotech

Corporation, 763

F.Supp.

113,

119 (M.D.Pa.

1991) (under Pennsylvania law, courts may consider interpretation
of similar statutes to interpret Pennsylvania statute).
The term “purchase money mortgage” is not one within
the common parlance, therefore, rules of construction regarding
technical terms are applicable.

As such, the Court looks to

whether the term has been given a particular meaning.

In United

States v. Davoli, Civil Action No. 04-1035, 2006 WL 4491443, at
*4 (W.D. Pa. November 22, 2006), this Court stated that, in
Pennsylvania, a purchase money mortgage is one:
(i)
taken
by
the
seller
of
the
mortgaged property to secure the payment of
all or part of the purchase price; or

15

(ii) taken by a mortgagee other than
the seller to secure the repayment of money
actually advanced by such person to or on
behalf of the mortgagor at the time the
mortgagor acquires title to the property and
used by the mortgagor at that time to pay
all or part of the purchase price, except
that a mortgage other than to the seller of
the property shall not be a purchase money
mortgage within the meaning of this section
unless expressly stated so to be.
42 Pa.C.S. § 8141 (1)(i), (ii).
While
Pennsylvania‟s

this
Lien

definition
Priority

involved

Law,

it

analysis

clearly

of

represents

legislative intent on the meaning of the term “purchase money
mortgage.”

The Court

is not aware that the legislature has

ascribed a different meaning to the phrase and cannot perceive of
a reason why the term should be construed differently in the
context of the FCEUA.

Accordingly, because the debt at issue

here falls within the definition of a purchase money mortgage and
the mortgage specifically declares it as this type of mortgage,
the FCEUA does not apply here.
Action

Pearson v. LaSalle Bank, Civil

No. 08-2306, 2009 WL 1636037, at *4 (E.D.Pa. June 9,

2009)(purchase money mortgage excluded from FCEUA).
motion

to

dismiss

counts

XIV

and

16

XV

should,

Wells Fargo

therefore,

be

dismissed with prejudice.2
4.

Loan Interest and Protection Act (“LIPL”)

Count XVI claims that Wells Fargo violated the LIPL by
collecting

foreclosure–related

attorney‟s

fees

in

a

manner

inconsistent with and unauthorized by sections 404 and 406 of the
Act and by adding and collecting unauthorized amounts to Glover‟s
unpaid debt balance which are recoverable under sections 501 and
502 of the LIPL.
Wells Fargo urges dismissal of the LIPL allegations
because it is not a “residential mortgage lender” as that term is
defined by the statute, it never collected foreclosure-related
attorney‟s fees from Glover, and Glover has not alleged any facts
establishing that she paid any attorney‟s fees to Wells Fargo
that

violated

the

LIPL

as

part

of

her

loan

modification

agreement.
Under

the

statutory

scheme

of

the

LIPL,

no

legal

expenses may be charged by a residential mortgage lender before
it commences, inter alia, a mortgage foreclosure action.
' 403.
who

41 P.S.

A Aresidential mortgage lender@ is defined as: Aany person

lends

money

or

extends

or

grants

credit

and

obtains

2
Glover‟s FCEUA claim should be dismissed for the
additional reason that she has failed to plead a cognizable claim
under the FDCPA. See discussion, infra.

17

a

residential mortgage to assure payment of the debt. . . . @ 41
P.S. ' 101.
Section 404 provides the debtor with a right to cure
the default after receiving the notice of intent to foreclose
from the residential mortgage lender.
the

type

and

amount

of

attorney=s

Section 406 then details
fees

that

a

residential

mortgage lender shall contract for or receive with regard to
residential mortgages.
The statute also provides for a treble-damage recovery
of both excess interest and charges against any person who has
collected such excess interest or charges:
A person who has paid . . . charges
prohibited or in excess of those allowed by this
act . . . may recover triple the amount of such .
. . charges in a suit of law against the person
who has collected such excess . . . charges.
Provided, That no action to recover such excess
shall
be
sustained
in
any
court
of
this
Commonwealth unless the same shall have been
commenced within four years from and after the
time of such payment. Recovery of triple the
amount of such excess interest or charges, but
not the actual amount of such excess interest or
charges, shall be limited to a four-year period
of the contract.
41 P.S. ' 502 (emphasis added).
Aan

individual,

corporation,

The statute defines Aperson@ as
business

trust,

estate

trust,

partnership or association or any other legal entity, and shall
18

include but not be limited to residential mortgage lenders.@

41

P.S. ' 101.
While no Pennsylvania legislative history accompanies
Section 502, see Matter of Grigsby, 127 B.R. 759, 762 (E.D.Pa.
1991), A[w]here words of a later statute differ from those of a
previous one on the same subject, they presumably are intended to
have a different construction.@

CSC Enterprises, Inc. v. State

Police, Bureau of Liquor Control Enforcement, 782 A.2d 57, 63
(Pa. Commw. Ct. 2001)(citing Walton Estate, 409 Pa. 225, 186 A.2d
32 (1962)).

With this precept of statutory construction in mind,

the Court must ascribe significance to the language of ' 502
which specifically provides for recovery of excessive charges
against any person collecting such charges, wording not included
in prior 41 P.S. ' 4.

If the legislature intended to limit

recovery under '502 against only residential mortgage lenders, it
would not have utilized the word Aperson@, a term specifically
defined by the statute as Anot . . . limited to residential
mortgage lenders.@ 41 P.S. ' 101.
The Court acknowledges that Wells Fargo never collected
foreclosure-related attorney‟s fees from Glover as it did not
become

Glover‟s

loan

servicer

complaint had been filed.

until

after

the

foreclosure

The Court also agrees that sections
19

404 and 406 of the LIPL would not apply to Wells Fargo in its
capacity as a loan servicer because it does not fall within the
definition of a residential mortgage lender.

Since Wells Fargo

did not obtain a mortgage from Glover to guarantee repayment of
any debt, it is not a residential mortgage lender and cannot be
held liable for violations of 404 or 406 of the LIPL.
Glover‟s

allegation

that

it

can

recover

for

unauthorized amounts added to her unpaid debt balance under 41
P.S.

§

502,

however,

survives

dismissal.

Glover‟s

complaint

alleges that Wells Fargo collected excessive and/or unauthorized
escrow, interest, and late charges and unilaterally increased her
debt by adding these unauthorized amounts to her balance. Sec.
Am. Compl. ¶¶ 59, 209.

Accepting these allegations as true,

Glover has pled a cognizable claim the she is entitled to recover
damages for these illegal charges under section 502 of the LIPL.
5.) Pennsylvania Unfair Trade Practices and Consumer
Protection Law (“UTPCPL”)
The UTPCPL “protects consumers of goods and services
from unfair or deceptive trade practices or acts.”

Smith v.

Commercial Banking Corporation, 866 F.2d 576, 581 (3d Cir. 1989).
Under 73 P.S. § 201-9.2(a), violations of the Act can be remedied
through private action:
20

Any person who purchases or leases
goods or services primarily for personal,
family or household purposes and thereby
suffers any ascertainable loss of money or
property, real or personal, as a result of
the use or employment by any person of a
method, act or practice declared unlawful by
section 3 of this act, may bring a private
action to recover actual damages or one
hundred
dollars
($100),
whichever
is
greater. The court may, in its discretion,
award up to three times the actual damages
sustained, but not less than one hundred
dollars
($100),
and
may
provide
such
additional relief as it deems necessary or
proper.
The
court
may
award
to
the
plaintiff, in addition to other relief
provided
in
this
section,
costs
and
reasonable attorney fees.
73 P.S. § 201-9.2(a).
To bring a private cause of action under the UTPCPL a
plaintiff must establish:

(1) he is a purchaser or lessee; (2)

of a transaction dealing with goods or services; (3) primarily
for

personal,

arising

from

family,
the

or

household

purchase

of

goods

services;
or

and

services.

(4)

damages

Keller

v.

Volkswagen of America, Inc., 733 A.2d 642, 646 (Pa.Super.1999).
In count XVII, Glover avers that Wells Fargo violated
the UTPCPL by misrepresenting and overcharging the amount she
owed and that she relied upon these misrepresentations when she
made her mortgage payments.

Glover specifically asserts that
21

Wells Fargo violated provisions of the UTPCPL prohibiting:
(v) Representing that goods or services have
sponsorship,
approval,
characteristics,
ingredients, uses, benefits or quantities that
they do not have or that a person has a
sponsorship, approval, status, affiliation or
connection that he does not have;
. . .
(xxi) Engaging in any other fraudulent or
deceptive conduct which creates a likelihood of
confusion or of misunderstanding.
73 P.S. ' 201-2(v), (xxi).
Wells Fargo first argues Glover does not have standing
to bring the UTPPCPL claim because she never purchased goods or
services from Wells Fargo.

Wells Fargo‟s position is that the

absence of a contractual relationship between it and Glover is
fatal to litigation of this claim.
The Court, however, has already decided that a contract
was

formed

between

Glover

and

Wells

Fargo

when

the

parties

entered into the loan modification agreement on January 4, 2008.
Therefore, Glover has standing to assert a UTPCPL claim arising
out

of

payments

made

in

compliance

with

the

modification

agreement.
Wells Fargo also argues that the UTPCPL count should be
dismissed because Glover failed to allege that it engaged in
22

fraudulent or deceptive activity or that she justifiably relied
on any fraudulent or deceptive act.
In

the

misrepresented

complaint,

the

amount

Glover
she

claims

owed

and

that
that

misrepresented amounts and other overcharges.

Wells
she

Fargo

paid

the

These facts, taken

as true, fail to state a claim for relief under 73 P.S. § 2012(4)(v) because they do not demonstrate that Wells Fargo made
false

or

deceptive

representations

about

the

characteristics,

uses, or benefits of the loan modification agreement.

However,

Glover has stated a plausible claim for relief under the “catchall”

provision

of

the

UTPCPL,

73

P.S.

'

201-2(xxi).

Wells

Fargo‟s alleged misrepresentation of the amounts due under the
loan modification agreement could be considered deceptive conduct
as it gave a false impression of the amount owed.
deceptive

if

it

has

to

“capacity

or

tendency

to

An act is
deceive.”

Christopher v. First Mutual Corporation, Civil Action Nos. 050115,

05-1149,

2008

WL

1815300,

at

*11

(E.D.Pa.

April

22,

that

she

2008)(quotation omitted).
Glover

has

likewise

sufficiently

alleged

relied on Wells Fargo‟s alleged deceptive conduct when she made
payments in accordance with Wells Fargo‟s calculations of the
amount she owed.

Accordingly, Wells Fargo‟s motion to dismiss
23

the subsection 201-2(4)(v) UTPCPL claim should be granted with
prejudice and the motion to dismiss the subsection 201-2(xxi)
UTPCPL claim should be denied.
6.

Fair Debt Collection Practices Act (“FDCPA”)

Count
violated

XI

of

subsection

§1692e(11).

by

the

complaint

§1692e(11)

“failing

to

of

alleges
the

correctly

that

Wells
15

FDCPA,

notify

Fargo
U.S.C.

homeowners

in

subsequent communications that the communication is from a debt
collector.”

Sec.

Am.

Compl.

¶171.

The

paragraph

then

specifically identifies a December 19, 2006 mortgage statement
from Wells Fargo as an example of an offending communication and
charges that the statement buried the required debt collector
notice on its reverse side and did not inform the debtor that the
back of the statement included important information.
Wells Fargo counters that its notice complied with the
statutory requirements and, in any event, the claim is barred by
the FDCPA one–year statute of limitations.

15 U.S.C. § 1692k(d).

Wells Fargo notes that Glover‟s original complaint was filed in
the Allegheny County Court of Common Pleas on June 9, 2008, more
than one year beyond the December 19, 2006 mortgage statement.
While

the

statute

of

limitations

for

FDCPA

claims

expires one year from the date of violation, the limitations
24

period may be tolled when a claim charges a continuing violation.
Lennon v. Penn Waste, Inc., Civil Action No. 1:09-CV-0180, 2009
WL 3255238, at *1, n.1 (M.D. Pa. October 7, 2009).
that

she

has

pled

such

a

continuing

Glover argues

violation

because

the

December 17, 2006 mortgage statement is only one example of Wells
Fargo‟s

insufficient

portion

of

continued

the
its

communication

complaint

and

adequately

FDCP-offending

the

non-time

infers

practice

that

within

the

specific

Wells

Fargo

limitations

period.
Glover‟s

general

subsequent

communications

homeowners

that

sufficient

factual

allegation

it

was
matter

to
a
to

that

homeowners

debt

failed

collector

support

an

Wells

does

inference

Fargo violated the FDCPA‟s disclosure requirements.
conclusory

statement

asserts,

but

does

not

Fargo‟s

to

notify

not

contain

that

Wells

Because her
demonstrate,

entitlement to relief, Glover has not met her pleading burden
under Iqbal, 129 S. Ct. at 1949.

For this reason, count XI

should be dismissed with prejudice.
III. Conclusion
For the reasons stated, it is respectfully recommended
that the

court: 1) dismiss with prejudice counts II, III, IV

(breach of contract), XIV and XV (FCEUA), and XI (FDCPA) of the
25

complaint; 2) deny the motion as to count IX (unjust enrichment
with respect to improper handling of escrow charges and failure
to conform to RESPA allegations); 3) dismiss count XVI (LIPA)
with prejudice to the extent it seeks recovery under 41 P.S. §§
401 and 406, but deny the motion with respect to recovery under
41 P.S. § 502; and, 5) dismiss count XVII (UTPCPL) with prejudice
with respect to a claim under 73 P.S. § 201-9.2(v), but, deny the
motion as to the claim under 73 P.S. § 201-9.2 (xxi).
Within the time limits set forth in the attached notice
of

electronic

filing,

any

party

may

serve

objections to the Report and Recommendation.

and

file

written

Any party opposing

the objections shall have fourteen (14) days from the date of
service of the objections to respond thereto.

Failure to file

timely objections may constitute waiver of any appellate rights.

Respectfully submitted,
s/Robert C. Mitchell
Robert C. Mitchell
United States Magistrate Judge

Entered:

October 21, 2010

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