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

Filing 728

ORDER granting 652 Motion for Summary Judgment in all respects except for the limited issue surrounding the FDCPA claim arising after June 7, 2007, for which further briefing is ordered; and adopting 713 Report and Recommendation. Signed by Judge Donetta W. Ambrose on 9/2/14. (sps)

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

MARY E. GLOVER,
Plaintiff,

v.
MARKJ. UDREN, UDREN LAW
OFFICES, P .C., WELLS FARGO
HOME MORTGAGE, GOLDMAN
SACHS MORTGAGE COMPANY
Defendants.

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Civil No. 08-990
District Judge Donetta W. Ambrose/
Magistrate Judge Robert C. Mitchell

MEMORANDUM ORDER
DONETTA W. AMBROSE, United States District Judge.
This action was removed to this Court on July 14, 2008 and referred to United States
Magistrate Judge Robert C. Mitchell for pretrial proceedings in accordance with Magistrate
Judges Act, 28 U.S.C. § 636(b)(l) and Local Rule of Court

n.c and n.D.

The remaining claims in the present action against Wells Fargo are as follows: (1) breach
of contract (Count J); (2) unjust enrichment (Count IX); (3) violation of the Fair Debt Collection
Practices Act ("FDCPA"), 15 U.S.C. §§ 1692e(2)(a) and 1692f(1) (Count XI); (4) violation of
the Pennsylvania Loan Interest and Protection Law ("Act 6"), 41 P.S. § 502 (Count XVI); and
(5) violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law
("UTPCPL") "catch-all" provision, 73 P .S. § 20 1-2(4 )(xxi) (Count XVII).
Defendant, Wells Fargo Home Mortgage ("Wells Fargo"), filed a motion for summary
judgment on February 18, 2014. See Def.'s Mot. for Summ. J. [ECF No. 652]; Def.'s Br. in
Supp. of Mot. for Summ. J. [ECF No. 653]. Plaintiff, Mary

Glover, submitted her response on

March 27, 2014 [ECF No. 666] and Wells Fargo submitted its reply on April 30, 2014. [ECF No.

697].

The Magistrate Judge issued a Report and Recommendation ("R&R") on May 22, 2014,
and recommended that Wells Fargo's motion for summary judgment be granted in all respects
"except for the limited issue surrounding Plaintiff s FDCPA claim arising after June 7, 2007,"
for which the magistrate suggested that issue be further briefed by the parties. See R&R [ECF
No. 713] at 1-2. The factual and procedural background of this case and pertinent legal analysis
are set forth at length in the Report and Recommendation and will not be repeated here; only the
objections presently before the Court will be addressed.
accordance with the Magistrate Judges

~ct,

The parties were informed that in

28 U.S.C. § 636(b)(1)(B) and (C), and Local Rule of

Court 72.D.2, the parties had fourteen (14) days, by June 5, 2014, to file any objections to the
R&R. After a series of motions for extensions of time to file objections and responses to the
R&R, on June 12, 2012, Plaintiff submitted objections to the R&R [ECF No. 716], to which
Wells Fargo responded to on July 18,2014. [ECF No. 721]. Plaintiff was granted leave to file a
reply, and did so on July 30, 2014. [ECF No. 727].
Plaintiff objects to the R&R for the following reasons: (l) the Magistrate Judge erred in
finding the Wells Fargo was "bound only by paragraph 2 [sic] of the LMA [Loan Modification
Agreement] (which binds the contractually defined lender to the modified terms), but not
paragraph 3 [sic] (which binds the contractually defined lender to the unmodified terms of the
original loan contracts)[;]" (2) the Magistrate Judge reversed "its earlier finding in determining
that the relevant Note and Mortgage obligations with respect to servicing were never assigned to
Goldman, were initially retained by WaMu, and were subsequently assigned to Wells Fargo[;]"
(3) the Magistrate Judge failed to recognize a material issue of fact on Plaintiffs unjust
enrichment claim; (4) the Magistrate Judge failed to recognize that, with respect to Plaintiffs

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UTPCPL claim, Plaintiff "provided evidence for the proposition that Wells Fargo deceptively
billed and collected liquidated charges that were not contractually authorized or legally due[;]"
(5) the Magistrate Judge erred in relying upon the Pennsylvania Superior Court's decision in
Glover v. Udren Law Offices, P.c., 92 A.3d 24 (Pa. Super. 2014) ("Udren" or "Pennsylvania

Superior Court decision") to grant summary judgment in favor of Wells Fargo on her Act 6
claim; and (6) Plaintiff s FDCPA claims do not require a showing of loss or damage, therefore,
Wells Fargo's billing of foreclosure charges was a violation of Act 6 and the loan contracts and
therefore is a violation of § 1692e of the FDCPA. See PI.' s Obj. [ECF No. 716].
The Court will address each objection in conjunction with its related claim.
i.

Breach ofContract

Plaintiff objects to the Magistrate Judge's recommendation that summary judgment be
granted as to her breach of contract claim because Wells Fargo should be bound by the terms set
forth in the note and mortgage. !d. at 30-31. The Magistrate Judge found that because this Court
previously held that Wells Fargo could not be held responsible for breaches arising from the note
and mortgage, plaintiff could not raise this legal theory again, as it has been previously rejected.
See R&R [ECF No. 713] at 8-14.

First, I reject Plaintiffs argument that Wells Fargo is bound by the terms of the note and
mortgage because, as rejected by the Magistrate Judge, this legal theory has been previously
rejected and will not be revisited here. See R&R [ECF No. 166] at 7-10 adopted by Memo. Order
[ECF No. 199] ("Wells Fargo cannot be held liable for breaches arising from the original
contract, i.e., the mortgage and note, between [WaMu] and Glover. ... 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

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contract claim[. ]").
Plaintiff also argues that this holding was superseded by the Court's opinion granting
summary judgment in favor of Goldman, but provides no legal basis for this contention. As set
forth by the Magistrate Judge, while a servicer and lender may operate within the confines of the
same legal documents, the legal implications and obligations that these entities owe to the loan
borrower are distinct.

It is undisputed that Wells Fargo always operated as Plaintiff's loan

servicer, not as Plaintiffs lender. See id. at 12.
Next, I reject Plaintiffs argument that Wells Fargo is bound by the note and mortgage by
the integration clause set forth in the loan modification agreement.

As explained by the

Magistrate Judge,
This Court has previously determined that Wells Fargo was not a
party to the note and mortgage and cannot be held liable for
breaches of such.... Most tellingly, Plaintiff supplies this Court
with no legal basis for the proposition that a servicer becomes a
lender and subject to the terms set forth in the note and mortgage
simply because it has referred to itself as a lender in the loan
modification agreement.
Wells Fargo at no point became
independently obligated as a lender under Plaintiffs note and
mortgage. Plaintiff cannot back her way into imposing liability on
Wells Fargo for breaches of the note and mortgage when Wells
Fargo was not a party to those documents in the first instance, no
rights or obligations were assigned to or assumed by Wells Fargo,
and this Court has previously dismissed any and all claims with
prejudice that Wells Fargo was liable for a breach of the note and
mortgage. 6
Even if Plaintiff provided this Court with
the tenable legal argument that parol evidence
should be introduced to explain the ambiguous
terms of the loan modification, . . . such [an]
argument fails because all record evidence shows
that, for the operative time period, Goldman was
Plaintiff s lender. It would be absurd for this Court
to conclude that a loan modification agreement
between a mortgagor and servicer acts as an
assignment of .rights, implied or otherwise, to
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transform a servicer into the lender.... [A]t no
time did Wells Fargo independently become
contractually obligated under Plaintiffs note and
mortgage.
[d. at 13-14.

Plaintiff argues that "[d]espite this Court's original determination that Wells Fargo was
not an assignee to the original loan contracts, in granting summary judgment to Goldman this
Court subsequently determined that Wells Fargo, and not Goldman, was in fact an assignee to all
obligations under the original loan contracts related to servicing." PL's Obj. [ECF No. 716] at 29.
Plaintiffs argument does not bind Wells Fargo to the terms set forth in the original note
and mortgage to have those provisions operate as a contract between her and Wells Fargo. This
Court held that as to the servicing of plaintiffs loan, Wells Fargo was obligated to Glover to
service her loan pursuant to the terms of the GoldmanfWaMu servicing agreement. Goldman
Mot. for Summ. J. R&R [ECF No. 536] at 18-19, adopted by Memo. Order [ECF No. 565].
Contrary to Plaintiffs assertion, this Court has never held that Wells Fargo was assigned any
part of or was obligated by the original note or mortgage. It has simply been found that Wells
Fargo was obligated to Plaintiff to service her loan pursuant to the servicing agreement and
bound by the terms set forth in the loan modification agreement executed between Plaintiff and
Wells Fargo on behalf of Goldman. !d. The record remains undisputed that there is no evidence
of a breach under either of those contracts.
All other arguments set forth by Plaintiff do not adequately illustrate how the Magistrate
Judge's findings are contrary to law or fact, and accordingly, Plaintiffs objections regarding the
breach of contract claim are overruled as meritless.
ii. Unjust Enrichment

The remaining viable legal theories on Plaintiffs unjust enrichment claim involve "the
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improper collection and handling of escrow charges and the failure to adhere to RESP A
provisions." R&R [ECF No. 713] at 14. Plaintiff now argues, for the first time in her objections,
that she has properly supported an unjust enrichment claim for a payment made to Wells Fargo
in connection with the loan modification agreement allegedly applied toward attorney's fees and
foreclosure charges. PI. 's Obj. [ECF 716] at 40.
As correctly pointed out by Wells Fargo, however, Plaintiff did not allege this legal
theory on unjust enrichment in her Second Amended Complaint, and these were also not the
grounds raised in the original briefing, or expounded by the Magistrate Judge. See R&R [ECF
No. 713] at 15 ("Plaintiffs remaining claim against Wells Fargo for unjust enrichment includes
the improper collection and handling of escrow charges and the failure to adhere to RESP A
provisions. ").
Just as Plaintiff may not amend her complaint through arguments in a brief in opposition
to a motion for summary judgment, it follows that she may not do so through objections filed to
a Report and Recommendation.' See McMahon v. Salmond, --- Fed. App'x ---, ---, 2014 WL
3805622, at *6 (3d Cir. Aug. 4, 2014) ("A plaintiff may not amend his complaint through
arguments in his brief in opposition to a motion for summary judgment."); Jimenez v. Barnhart,
46 Fed. App'x 684 (3d Cir. 2002) (a legal argument first made in "objections to the Magistrate
Judge's Report and Recommendations, and not in [plaintiffs] opening brief' is deemed
waived.).

It must also be noted that plaintiff was given leave to amend her complaint a total of four
times during the pendency of this litigation. R&R [ECF No. 713] at 5. Any argument that
Plaintiff should be permitted to now amend her complaint approximately six years after removal
could certainly not overcome this court's discretion to deny a motion to amend for undue delay,
bad faith or dilatory motive, repeated failure to cure deficiencies through previous amendments
and undue prejudice to the opposing party. See Merck & Co., Inc. v. Apotex, Inc., 287 Fed.
App'x 884, 888 (Fed. Cir. 2008); Lorenz v. CSX Corp., 1 F .3d 1406, 1413 (3d Cir. 1993); USX
Corp. v. Barnhart, 395 F.3d 161, 166-67 (3d Cir. 2004).
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Plaintiff does not otherwise object to the Magistrate Judge's recommendation to grant
summary judgment in Wells Fargo's favor for her unjust enrichment claim.

Therefore,

Plaintiff's objections as to her unjust enrichment claim are overruled as meritless.
iii. Act 6

The Magistrate Judge recommended granting summary judgment in favor of Wells Fargo
on Plaintiff's remaining Act 6 claim because it had been previously determined that there was no
section 406 violation because Wells Fargo was not a residential mortgage lender as applied by
that section and based upon the Pennsylvania Superior Court's decision in Glover v. Udren Law
Offices, P. c., 92 A.3d 24 (Pa. Super. 2014), Plaintiff is not entitled to any remedies under section

502, as that section is not a substantive cause of action. See R&R [ECF No. 713] at 17-25.
Plaintiff argues that this Court's previous finding that Wells Fargo was not a residential
mortgage lender was superseded by the Court's grant of summary judgment as to all claims in
favor of Goldman, Plaintiff's lender. PI.' s Obj. [ECF No. 716] at 41.
Plaintiff's argument primarily fails to consider that she did not bring an Act 6 claim
against Goldman, and no such claim has been adjudicated by this Court. See Sec. Am. CompI.
[ECF No. 109] at 54 ("Defendants Wells Fargo And/Or Udren Violated The Pennsylvania Loan
Interest And Protection Act By Collecting Prohibited Foreclosure-Related Attorney's Fees And
Costs."). This Court did not make a disposition of any Act 6 claims against Goldman, therefore
Plaintiff's argument that the Goldman opinion "superseded" the finding that Wells Fargo was not
a residential mortgage lender under Act 6 is unavailing. The only claims that Plaintiff brought
against Goldman and adjudicated by this Court in the summary judgment motion were Counts
III-VIII: all separate breach of contract claims.
Plaintiff also argues that the Magistrate Judge erred

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In

applying the Pennsylvania

Superior Court's decision in Udren, because it was not applicable or binding and it should have
applied In re Smith, 866 F.2d 576, 586 (3d Cir. 1989) which she argues is binding and
dispositive of this matter.
As explained in the R&R, Smith is inapposite to this case because the sections under Act
6 at issue in Smith differ from the sections implicated here. Moreover, in Smith, a substantive
cause of action remained under section 403, whereas here, the substantive cause of action under
section 406 has been dismissed such that there is no basis for a remedy under section 502.
Additionally, the Magistrate Judge's reliance on the Superior Court's decision in Udren was
proper and in line with Fidelity Union Trust Co. v. Field, 311 U.S. 169, 177-179 (1940) ("An
intermediate state court in declaring and applying state law is acting as an organ of the State and
its determination, in the absence of more convincing evidence of what state law is, should be
followed by a federal court in deciding a state question.").
Accordingly, Plaintiffs objections as to her Act 6 claim are overruled as meritless.
iv. FDCPA

As an initial matter, the Magistrate Judge recommended temporarily denying Wells
Fargo's motion for summary judgment as to the FDCPA claim insofar as it related to the alleged
failure to withdraw the foreclosure complaint. Neither party objects to this finding. The parties
are ordered to submit briefing consistent with the attendant order on this limited issue.
Plaintiff s remaining claims under the FDCP A fall under sections 1692f and 1692e. As
explained by the Magistrate Judge:
Plaintiff claims that Wells Fargo violated section 1692f by
representing that Plaintiff "owed amounts [she] did not owe,
including charges for, inter alia, unincurred and/or unreasonable
attorney's fees and costs, excessive escrow charges, excessive
interest charges, late fees for payments that were not late, and other
unauthorized charges, including collection on foreclosure fees and

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charges." Sec. Am. Compi. [ECF No. 109] at ~ 168. Additionally,
Plaintiff claims that Wells Fargo violated section 1692e "by failing
to correctly notify [Plaintiff] in its subsequent communications that
it is a debt collector." !d. at ~ 171.
R&R [ECF No. 713] at 26. The Magistrate Judge found that both of these claims failed because
Plaintiff failed to come forward with evidence that Wells Fargo demanded or collected amounts
that were not due in violation of section 1692f and that Plaintiff similarly failed to provide any
evidence of a communication in which Wells Fargo did not identify itself as a debt collector in
violation of section 1692e and only offered textbook bare assertions in support of her
conclusions. Id. at 26-28. Plaintiff objects to this finding on the basis that the communication at
issue is an amount of$I,492.29 demanded by Wells Fargo in the LMA transmittal letter and not
the LMA itself as referenced by the R&R. Pl.'s Obj. [ECF No. 716] at 56.
This does not save Plaintiff's section 1692f claim from being dismissed at the summary
judgment stage. Plaintiff still offers no evidence that the amounts were not owed or applied to
any attorney's fees.
Additionally, Plaintiff's argument that the LMA "transmittal letter" is an actionable
communication under the FDCP A, but provides no authority that a so-called "transmittal letter"
is distinguishable from a loan modification agreement as not being considered an actionable
communication under the FDCP A because it does not constitute a demand for payment. See

Nash v. Green Tree Servicing, 943 F.Supp.2d 640, 656 (E.D.Va. 2013) (a loan modification
agreement is not actionable under the FDCP A even where it causes plaintiff's "purported arrears
to be added to her loan balance, along with the fees [the servicer] was attempting to collect"
because such "letters [did] not demand payment, but simply allow[ed plaintiff] one last
opportunity to modify her loan through her lender.").
Accordingly, Plaintiff's objections as to her FDCPA claim are overruled as meritless.
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V.

UTPCPL

Lastly, Plaintiff objects to the Magistrate Judge's recommended grant of summary
judgment in favor of Wells Fargo on her claim under the UTPCPL.

The Magistrate Judge

recommended that summary judgment be granted in favor of Wells Fargo for this claim because
Plaintiff advanced no evidence of a deceptive act or justifiable reliance on that deceptive act.
Plaintiff provides four objections as to this finding:

(1) the burden never shifted to

plaintiff to produce evidence of her claim; (2) justifiable reliance does not need to be established
under the catch-all provision of the UTPCPL; (3) a bill and payment of the bill is sufficient to
show reliance; (4) she produced evidence of a deceptive act and reliance on that act. Pl.'s Obj.
[ECF No. 716] at 48-55.
Plaintiffs first objection is rejected. As pointed out by Plaintiff, the summary judgment
movant can show it is entitled to summary judgment "by demonstrating that the nonmoving
party's evidence itself is insufficient to establish an essential element of its claim." Id. at 49
(quoting lOA Fed. Prac. & Proc. Civ. § 2727 (3d ed.)). That is exactly what Wells Fargo did
here, and what the Magistrate Judge based his recommendation on. As explained in the Report
and Recommendation: "The non-moving party, Plaintiff, bears the burden of establishing the
essential elementals of her claim by bringing forth sufficient evidence in support thereof to
survive summary judgment. In meeting this burden, the non-moving party may not rely on bare
assertions or conclusory allegations. That is what Plaintiff does here." R&R [ECF No. 713] at
30.

In making this argument, Plaintiff misinterprets a moving party's burden for summary

judgment as a moving party is "not require[ d] ... to negate the elements of the nonmoving
party's case." Lujan v. Nat'l Wildlife Fed., 497 U.S. 871, 885 (1990).

Regardless, it is

undisputed that Wells Fargo implemented the terms of the loan modification agreement and

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serviced the loan in accordance with the loan modification agreement and servicing agreement.
As explained by the Magistrate Judge:
Wells Fargo's concise statement of material fact as to this point
states: "Wells Fargo implemented the [l]oan [m]odification per the
terms set forth therein and pursuant to the Servicing Agreement
with Goldman." Def.'s Concise Statement of Material Facts [ECF
No. 654] at ~ 16. Plaintiff responds: "Admitted, in part. The LMA
[loan modification agreement] speaks for itself. The terms of the
2008 LMA are accurately set forth by Wells Fargo. The LMA does
not incorporate or reference the Servicing Agreements. The
Servicing Agreements integrate and interpret the Purchase
Agreements, which are not in the record. It is not possible to
interpret an agreement when only half of the agreement is in the
record. The Servicing Agreements explicitly provides that
servicing rights could not be transferred without fulfilling certain
prerequisites which include obtaining auditing certificates and
officer certificates. There are no transactional documents in the
record linking Wells Fargo to the WaMuiGoldman servicing
agreements." PI. 's Resp. to Def.'s Concise Statement of Material
Fact [ECF Nos. 667 and 678] at ~ 16. Therefore, Plaintiff only
disputes the applicability of the servicing agreements, and she
admits that Wells Fargo implemented the loan modification
pursuant to its terms.
R&R [ECF No. 713] at 11 n.5.
Next, while Plaintiff argues she need not show justifiable reliance, she provides no
authority for this position and her argument is legally unsupported and therefore her objection is
overruled. See Hunt v. Us. Tobacco Co., 538 F.3d 217,222 (3d Cir. 2008) ("The Supreme Court
of Pennsylvania has consistently interpreted the Consumer Protection Law's private-plaintiff
standing provision's causation requirement to demand a showing ofjustifiable reliance[.]").
Additionally, Plaintiff has failed to show justifiable reliance, i. e., how the allegedly
illegal fees charged at the closing of the LMA would have altered her decision to enter into the
loan modification. See Laidley v. Johnson, 2011 WL 2784807, at *3 (E.D.Pa. July 11, 2011)
("To show justifiable reliance a plaintiff must provide evidence demonstrating how his

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knowledge of a mortgage loan's actual terms would have altered his decision to execute the
mortgage."); see also Slapikas v. First American Title Ins. Co., 298 F.R.D. 285, 295 (W.D.Pa.
2014) (merely demonstrating that the "amount listed was wrong" not enough to show justifiable
reliance).
Lastly, Plaintiff still supplies no evidence of a deceptive act in her objections and only
cursorily states that the "fees charged at the closing of the LMA" constituted a deceptive act.
Pl.'s Obj. [ECF No. 716] at 50]. Plaintiff has supplied this Court with no evidence that the fees
charged were not due or illegal. Plaintiffs objections as to her UPTCPL claim are overruled as
meritless.
Accordingly, after a de novo review of the pleadings and documents in this case, together
with the Report and Recommendation and pleadings thereto, the following Order is entered:
ANDNOW,this

~

dayof

M·

,2014,

/

IT IS HEREBY ORDERED that Defendant Wells Fargo's motion for summary judgment
[ECF No. 652] is granted in all respects except for the limited issue surrounding the FDCPA
claim arising after June 7, 2007;
IT IS FURTHER ORDERED that Defendant shall file a supplemental brief on that
limited issue within fifteen days, with Plaintiff to respond within fifteen days thereafter. Briefs
are limited to fifteen (15) pages. The parties need not recount the factual averments in their
supplemental briefing, as such facts are sufficiently set forth in the original briefs and the
adopted Report and Recommendation;
IT IS FURTHER ORDERED that the Report and Recommendation of Magistrate Judge
Robert C. Mitchell is hereby adopted as the Opinion of the District Court.

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, , >.

:c;~~
The Honorable Donetta W. Ambrose
United States District Judge

cc:

all counsel of record via CMIECF electronic filing

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