Norman v. Wells Fargo Bank
Filing
11
MEMORANDUM OPINION. Signed by District Judge Henry E. Hudson on 2/23/2018. Copy to Pro Se Plaintiff. (jsmi, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
RENEE NORMAN,
Plaintiff,
Civil Action No. 3:17.CV-585-HEH
V.
WELLS FARGO BANK, N.A.,
Defendant.
MEMORANDUM OPINION
(Granting Defendant's Motion to Dismiss)
This matter is before the Court on Defendant Wells Fargo Bank, N.A.'s
("Defendanf) Motion to Dismiss (ECF No. 3), filed on August 23, 2017. The Motion
included an appropriate Roseboro Notice, as required by Local Civil Rule 7(K) and the
Fourth Circuit's decision in Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975). All
parties have filed memoranda supporting their respective positions. (ECF Nos. 4, 8-9.)^
The Court will dispense with oral argument because the facts and legal contentions are
adequately presented in the materials before it, and oral argument would not aid in the
decisional process. E.D. Va. Local Civ. R. 7(J).
For the reasons set forth below, the Court will grant Defendant's motion. This
case will be dismissed in part with prejudice and in part without prejudice.
' On February 5, 2018, Plaintifffiled a document titled "Plaintiffs Additional Information to Oppose
Defendant Wells Fargo Bank, N.A.'s Rebuttal Memorandum of Law in Support of its Motion to
Dismiss." Plaintiff did not seek or obtain leave to make this filing, and therefore the Court will not
consider this document. See E.D. Va. Loc. Civ. R. 7(f)(1).
I
I.
BACKGROUND
As required by Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court
assumes Plaintiffs well-pleaded allegations to be true and views all facts in the light
most favorable to him. T.G. Slater & Son v. Donald P. & Patricia A. Brennan LLC, 385
F,3d 836, 841 (4th Cir. 2004) (citing Mylan Labs, Inc. v. Matkari, 1 F.3d 1130, 1134 (4th
Cir. 1993)). Viewed through this lens, the facts are as follows.
Plaintiff, a resident of Chesterfield County, Virginia, purchased a home located at
3430 Lady Marian Court, Midlothian, Virginia 23113 ("Property") in 2002 and financed
that transaction with a mortgage loan from Defendant. (Compl. 1-2, ECF No. 1-4.)
Plaintiff identifies that the loan amount was approximately $400,000 and that both parties
revised the loan agreement in October 2013. (Id. at 1.)
Plaintiff defaulted on her loan in December 2014 and received notice on June 20,
2017 that a foreclosure sale of the Property was scheduled for July 13, 2017. (Compl. 1.)
Plaintiff, proceedingpro se, filed suit in Chesterfield Circuit Court on July 12, 2017,
alleging that Defendantviolated numerous state and federal laws by breaching the terms
of the contract. {Id. at 1-4.) Plaintiff seeks injunctive relief, declaratory relief and
damages. (Id. at 3-4.)
Defendant successfully removed the case from state court to this Court pursuant to
28 U.S.C. §§ 1331, 1332, 1441, and 1446 (Notice of Removal 1, ECF No. 1) and
subsequently filed a Motion to Dismiss (ECF No. 3) on August 23, 2017.
11.
LEGAL STANDARD
"A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint;
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importantly, it does not resolve contests surrounding the facts, the merits of a claim, or
the applicability of defenses." Republican Party ofN.C. v. Martin, 980 F.2d 943, 952
(4th Cir. 1992) (citation omitted). The Federal Rules of Civil Procedure "require[] only
'a short and plain statement of the claim showing that the pleader is entitled to relief,' in
order to 'give the defendant fair notice of what the ... claim is andthe grounds upon
which it rests.'" BellAtl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v.
Gibson, 355 U.S. 41, 47 (1957)). A complaint need not assert "detailed factual
allegations," but it must contain "more than labels and conclusions" or a "formulaic
recitation of the elements of a cause of action." Twombly, 550 U.S. at 555 (citations
omitted). Thus, the "[f]actual allegations must be enough to raise a right to reliefabove
the speculative level" to one that is "plausible on its face" rather than merely
"conceivable." M at 555, 570. In considering such a motion, a plaintiffs well-pleaded
allegations are taken as true, and the complaint is viewed in the light most favorable to
the plaintiff. T.G. Slater & Son v. DonaldP. & Patricia A. Brennan LLC, 385 F.3d 836,
841 (4th Cir. 2004) (citing Mylan Labs, Inc. v. Matkari, 1 F.3d 1130, 1134 (4th Cir.
1993)). Legal conclusions enjoy no such deference. Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009).
Additionally, the Court acknowledges thatpro se complaints are afforded a liberal
construction. Laber v. Harvey, 438 F.3d 404, 413 n.3 (4th Cir. 2006). However, the
requirement of a liberal construction does not excuse a clear failure in the pleading to
allege a federally cognizable claim. See Weller v. Dep't ofSoc. Servs., 901 F.2d 387,
390-91 (4th Cir. 1990). As the Fourth Circuit explained in Beaudett v. City ofHampton,
"[t]hough [prose] litigants cannot, of course, be expected to frame legal issues with the
clarity and precision ideally evident in the work of those trained in law, neither can
district courts be required to conjure up and decide issues never fairly presented to them."
775 F.2d 1274, 1276 (4th Cir. 1985).
III.
ANALYSIS
At the outset, the Court notes that it is difficult to discern from the Complaint
precisely what conduct Plaintiffalleges gives rise to the various claims she asserts.
Defendant addresses the individual claims raised by Plaintiff, but also contends that the
Complaint as a whole fails to comply with the minimum pleading standards required
under Rule 8 of the Federal Rules of Civil Procedure. Plaintiffs Memorandum in
Opposition (ECF No. 8) does little to address the issues raised by Defendant; instead,
Plaintiff includes several quotations from various legal authorities and raises the issue of
standing.^
A.
Count I: Breach of Contract^
In Virginia, "[t]he elements of a breach of contract action are (1) a legally
enforceable obligation of a defendant to a plaintiff; (2) the defendant's violation or
^It is admittedly unclear what Plaintiff intends to argue with regard to standing. Tothe extent sheargues
that Defendant lacked standing to proceed with the foreclosure, such an argument is not properly before
the Court as Plaintiffs Complaint makes no mention of the standing issue. Moreover, any contention that
Defendant does not have an interest in the properly is directly at odds with the entirety of Plaintiff's
Complaint. Article III standing is not implicated because Plaintiff, not Defendant, filed the suit, and the
allegations in the Complaint (i.e. that Defendant instituted foreclosure proceedings against Plaintiff) are
sufficient to satisfy the 'case or controversy' requirement.
^Plaintiffs Complaintdoes not separate several of her claims into distinct counts. In the interestof
clarity, the Court applies its own organization to the claims raised by Plaintiff.
breach of that obligation; and (3) injury or damage to the plaintiff caused by the breach of
obligation." William H. Gordon Assocs., Inc. v. Heritage Fellowship, United Church of
Christ, 291 Va. 122, 784 S.E.2d 265, 274 (Va. 2016). Plaintiffbears the burden of
proving that Defendant breached the contract. See Carley Capital Group v. Newport
News, 709 F. Supp. 1387, 1396 (E.D. Va. 1989) ("In order to recover for breach of [a
contract], plaintiffs must prove, by a preponderance of evidence ... the defendants have
failed to perform under or breached the agreements.").
Notwithstanding the liberal construction afforded topro se complaints. Plaintiff
fails to state a claim for breach of contract. It is not clear from the face of the Complaint
what contractual obligation Plaintiff alleges Defendantbreached or what conduct gave
rise to this alleged breach. It appears that Plaintiffs claim stems from the notice
provided to her by Defendant in relation to her default and the subsequent scheduling of a
foreclosure. (Compl. 1.) Specifically, the Complaint states: "June 20, 2017 the plaintiff
receives Notice of Trustee Sale scheduling a non-judicial foreclosure auction date of July
13, 2017 ... Wells Fargo failed to send a notice to cure 30 days prior to foreclosure."
{Id.) Defendant construes Plaintiffs claim as relating to a loan provision that requires the
lender to provide the borrower with notice of default thirty days prior to foreclosure.
(Mem. Supp. Mot. Dismiss 6-7.) Defendant argues that Plaintiff misinterprets this
provision to require that notice be received thirty days prior to foreclosure, as opposed to
merely sent thirty days prior. {Id.)
Despite Defendant's admirable attempt at interpreting the Complaint, the Court
cannot construct Plaintiffs arguments for her. See United States v. Wilson, 699 F.3d 789,
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797 (4th Cir. 2012) C'[T]he special judicial solicitude with which a district court should
view ... pro se filings does not transform the court into an advocate." (internal citations
omitted)). The Complaint contains only limited details on the contents of Plaintiffs
mortgage loan with Wells Fargo and makes no mention of the provision that Defendant
cites. Moreover, even if the Court were to agree with Defendant's construction and
determine that Plaintiffs claim flows from the aforementioned notice provision, the
Complaint is at best internally inconsistent as to howthat provision was breached. While
Plaintiff makes one allegation that Defendant did not send the notice in a timely fashion,
she makes three other allegations related to her receiving notice. Plaintiffs pro se status
entitles her to some leeway; however, the Court is not empowered to discern her
"unexpressed intent." Laber v. Harvey, 438 F.3d 404,413 n.3 (4th Cir. 2006)
For these reasons, the Court will dismiss Plaintiffs breach of contract claim
without prejudice.
B.
Count II: Breach Duty of Good Faith and Fair Dealing
Virginia law recognizes the duty of good faith and fair dealing implicit in
contracts. Va. Vermiculite, Ltd. v. W.R, Grace & Co., 156 F.3d 535, 542 (4th Cir. 1998).
Breach of this duty gives rise to a claim for breach of contract, as opposed to a claim in
tort. Importantly though, "when parties to a contract create valid and binding rights, an
implied covenant of good faith and fair dealing is inapplicable to those rights." Ward's
Equip., Inc. v. New HollandN. Am., 254 Va. 379, 493 S.E.2d 516, 520 (Va. 1997). Thus,
"no implied duty arises with respect to activity governed by express contractual terms"
except in limited circumstances. Skillstorm, Inc. v. Electronic Data Systems, LLC, 666 F.
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Supp. 2d 610, 620 (E.D. Va. 2009) (citing Ward's Equip., 493 S.E.2d at 520); jee Stoney
Glen, LLC v. Southern Bank & Trust Co., 944 F. Supp. 2d 460, 466 (E.D. Va. 2013).
The case law reveals two situations where the duty of good faith and fair dealing is
breached. Stoney Glen, LLC, 944 F. Supp. 2d at 466. While "the duty of good faith does
not prevent a party from exercising its explicit contractual rights, a party may not
exercise contractual discretion in bad faith." Va. Vermiculite, Ltd., 156 F.3d at 542.
Beyond instances of contractual discretion, the duty may also be breached in relation to
an express contractual right if a party employs dishonesty in the exercise of that
contractual right. Stoney Glen, LLC, 944 F. Supp. 2d at 466; see also Charles E. Brauer
Co. V. NationsBank of Virginia, N.A., 251 Va. 28,466 S.E.2d 382, 386 (Va. 1996).
The Complaint does not contain sufficient information to state a claim for breach
of the duty of good faith and fair dealing. Plaintiff does not specifically allege that
Defendant exercised contractual discretion in bad faith or that Defendant acted with
dishonesty. Moreover, as detailed above, it is unclear what contract provision Plaintiff
alleges Defendant breached or what conduct caused such a breach. As such, the Court is
unable to discern from the Complaint whether the allegations taken as a whole would
support a breach of this duty.
Therefore, the Court will dismiss Plaintiffs claim for breach of the duty of good
faith and fair dealing without prejudice.
C.
Count III: Violation of the Fair Debt Collection Practices Act ("FDCPA")
Congress passed the FDCPA "to eliminate abusive debt collection practices by
debt collectors.'" 15 U.S.C. § 1692(e) (2012) (emphasis added). Plaintiff does not
specify the conduct by Defendant that she alleges violates the Act, nor does she identify
why the Defendant should be considered a debt collector within the meaning of the Act.
Instead, she merely states that"[Defendant] is in violation of the Fair Debt Collection
Practices Act." (Compl. 1.)
The FDCPA defines "debt collector" as an entity whose principal purpose "is the
collection of any debts, or who regularly collects or attempts to collect, directly or
indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. §
1692a(6). In simpler terms, a "debt collector" is "(1) a person whose principal purpose is
to collect debts; (2) a person who regularlv collects debts owed to another: or (3) a person
who collects its own debts, using a name other than its own as if it were a debt collector."
Henson v. Santander Consumer USA, Inc., 817 F.3d 131, 136 (4th Cir. 2016). There are
no allegations in the Complaint that would suggest Defendant falls into any of these three
categories. Even if Plaintiff had argued that Defendant satisfied one of those three
categories, the FDCPA does not apply to Defendant, as the FDCPA specifically exempts
"any officer or employee of a creditor while, in the name of the creditor, collecting debts
for such creditor." 15 U.S.C. § 1692a(6)(A); see Scott v. Wells Fargo Home Mortg., Inc.,
326 F. Supp. 2d 709, 718 (E.D. Va. 2003) ("[T]he law is well-settled ... that creditors,
mortgagors, and mortgage servicing companies are not debt collectors and are statutorily
exempt from liability under the FDCPA.").
Because the FDCPA is inapplicable to Defendant, the Court will dismiss this
count with prejudice.
D.
Count Four; Violation of the "Virginia Collection Agency Act"
The Virginia Collection Agency Act does not exist in Virginia law. However,
Defendant speculates Plaintiff may have intended to assert a claim under the "Virginia
Debt Collection Act." (Mem. Supp. Mot. Dismiss 6.) As previously noted, the deference
afforded topro se plaintiffs does not require district courts to "conjure up and decide
issues never fairly presented to them." Beaudett, 775 F.2d at 1276. Further, "[t]heCourt
may not construct a plaintiffs legal arguments." Negron-Bennett v. McCandless, No.
l:13-cv-387,2013 U.S. Dist. LEXIS 103681, at *9 (E.D. Va. July 24, 2013).
Because the Virginia Collection Agency Act is not a Virginia law, the Court will
dismiss this count with prejudice.
E.
Count Five: Negligence or "Reckless Conduct"
To establish an actionable negligence claim in Virginia, Plaintiff has the burden to
show "the existence of a legal duty, a breach of the duty, and proximate causation
resulting in damage." Atrium Unit Owners Ass'n v. King, 266 Va. 288, 585 S.E.2d 545,
548 (Va. 2003). Virginia law recognizes three degrees of negligence, with "willful,
wanton, and reckless'' negligence representing the greatest degree of negligence under
Virginia law. Griffin v. Shively, 227 Va. 317, 315 S.E.2d 210, 212-13 (Va. 1984)
(emphasis added). "A tort action cannot be based solely on a negligent breach of
contract." Richmond Metropolitan Authority v. McDevitt Street Bovis, 256 Va. 553, 507
S.E.2d 344, 347 (1998). Thus, "the duty tortuously or negligently breached must be a
common law duty, not one existing between the parties solely by virtue of the contract."
Foreign Mission Bd. ofS. Baptist Convention v. Wade, 242 Va. 234, 409 S.E.2d 144, 148
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(Va. 1991).
Plaintiff contends that "[a]s a proximate result of the negligent or reckless conduct
of [Defendant] the Consumers' credit has been impaired and they are threatened with the
eminent loss of their property." (Compl. 2.) However, she does not identify what duty
she alleges that Defendant breached. Regardless, all of Defendant's conduct noted in the
Complaint appears to stem from enforcement of the parties' loan agreement. As such,
any duty Plaintiff might allege that Defendant breached would only exist because of the
contract and therefore would not give rise to a tort action.
The Court will dismiss Plaintiffs claim of "negligence or reckless conduct"
without prejudice.
F.
Count Six: Slander of Title
"To prove slander of title, [Plaintiff] must show that [Defendant] acted with
malice or in reckless disregard of the truth or falsity of the statement[.]" Poindexter v.
Mercedes-Benz Credit Corp., 792 F.3d 406, 411 (4th Cir. 2015) (quoting Wright v.
Castles, 232 Va. 218, 349 S.E.2d 125, 129 (1986)). "Reckless disregard" is understood
to mean something significantly more than ordinary negligence, and "malice" suggests a
"corrupt motive such as hatred, revenge, personal spite, ill will, or desire to injure." Id. at
411-12 (internal citations omitted).
Plaintiff alleges that "defendant has caused to be recorded various documents
including a Notice of Trustee Sale which has impaired the Consumers' title which
constitutes slander of title." (Compl. 2.) However, the Complaint does not allege that
Defendant acted out of reckless disregard or malice nor does it provide the Court with
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any indication that Defendant's behavior approached either of those standards.
Moreover, there is nothing in the Complaint to suggest thatthe documents Plaintiff refers
to contained false statements. The Complaint does not give any details on the various
documents recorded other than the Notice of Trustee Sale, and the only allegation made
in regards to the Notice of Trustee Sale is related to the service of that notice and not its
contents.
Plaintiffs slander of title claim will be dismissed without prejudice.
G.
Count Seven: The Virginia Consumer Protection Act
The Virginia ConsumerProtection Act ("VCPA"), Va. Code Ann. § 59.1-196 et
seq., creates a statutory cause of action separate and distinct from common law fraud,
with the purpose of "expand[ing] the remedies afforded to consumers." Owens v. DRS
Auto. Fantomworks, Inc., 288 Va. 249, 764 S.E.2d 256, 260 (Va. 2015) (internal citations
omitted). Institutions such as Defendant are specifically excluded from liability under the
VCPA. Va. Code. Ann. § 59.1-199(D) ("Nothing in this chapter shall apply to ...
[b]anks, savings institutions, credit unions, small loan companies, public service
corporations, [or] mortgage lenders.").
Plaintiffs claim under the VCPA will be dismissed with prejudice.
H.
Count Eight: Slander of Credit
Virginia does not recognize a cause of action for slander of credit, and, as
previously stated, the Court is neither required nor permitted to construct Plaintiffs
arguments for her.
Plaintiffs claim for slander of credit will be dismissed with prejudice.
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1.
Count Nine: Infliction of Emotional Distress
At the outset, it is important to note thatPlaintiff does not allege or identify any
physical harm or injury that she has suffered. In Virginia,
a cause of action will lie for emotional distress, unaccompanied by physical
injury, provided four elements are shown: One, the wrongdoer's conduct
was intentional or reckless ... Two, the conduct was outrageous and
intolerable in that it offends against the generally accepted standards of
decency and morality ... Three, there was a causal connection between the
wrongdoer's conduct and the emotional distress. Four, the emotional
distress was severe.
Womackv. Eldridge, 215 Va. 338, 210 S.E.2d 145, 148 (Va. 1974).
Plaintiffmakes no allegations that suggest Defendant's conduct rose to the level of
"outrageous and intolerable" such that the norms of "decency and morality" are offended.
The only conduct discemable from the Complaint relates to the foreclosure on Plaintiffs
property due to non-payment. While enduring a home foreclosure is undoubtedly
upsetting, foreclosure is a legal remedy that Plaintiff agreed to furnish to Defendant in the
event of her default. See Webb v. EquiFirst Corp., No. 7:15-cv-00413, 2016 U.S. Dist.
LEXIS 43051, at *31 (W.D. Va. Mar. 31, 2016). Plainly put, nothing alleged in the
Complaint approaches the degree of conduct required to state a claim under this cause of
action.
Plaintiffs claim for infliction of emotional distress is will be dismissed without
prejudice.
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J.
Right to Rescission under the Truth in Lending Act'*
Plaintiffalleges that Defendant's failure to rescind her transaction "constitutes an
additional violation of the Act and Regulation Z," however Plaintiff also states that "the
issue need not be decided by this court at this time." (Compl. 3.) As such, the Court will
not construe Plaintiffs Complaint as asserting a cause of action under the Truth in
Lending Act and need not address the merits of such a claim.
K.
Declaratory Relief
The Federal Declaratory Judgment Act allows district courts to "declare the rights
and legal relations of any interested party seeking such a declaration." 28 U.S.C.
§ 2201(a). Declaratory judgment "is appropriate when the judgment will serve a useful
purpose in clarifying and settling legal relations in issue, and ... when it will terminate
and afford relief from uncertainty, insecurity, and controversy giving rise to the
proceeding. Centennial Life Ins. Co. v. Poston, 88 F.3d 255, 256 (4th Cir. 1996)
(alteration in original) (quoting
Cas. & Sur. Co. v. Quarks, 92 F.2d 231, 325 (4th
Cir. 1937)) (internal quotation marks omitted). A court's power to enter declaratory
relief "has consistently been considered discretionary." Id. (citations omitted)
Plaintiff seeks a declaratory judgment that "Wells Fargo has no interest in the
Property" and that the Deed of Trust is a nullity. (Compl. 4.) As detailed above, the
Complaint does not state a claim upon which relief can be granted. It is not clear what
specific conduct of Defendant that Plaintiff takes issue with or how this conduct would
'' Plaintiff references a violation of Regulation Z,which implements theTruth in Lending Act. 12 C.F.R.
§226 (2017).
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entitle her to relief. Given the lack of clarity as to what the Complaint alleges, the Court
is likewise unable to say that declaring any rights in this case would serve a useful
purpose. Therefore, the Court will decline to exercise its discretion to hear Plaintiffs
declaratory judgment claim, and this claim will be dismissed without prejudice.
L.
Injunctive Relief
To obtain a preliminary injunction, a plaintiff must show "that he is likely to
succeed on the merits, that he is likely to suffer irreparable harm in the absence of
preliminary relief, that the balance of equities tips in his favor, and that an injunction is in
the public interest." Winter v. Nat'I Res. Defense Counsel, Inc., 555 U.S. 7, 20 (2008).
Issuance of a preliminary injunction is an extraordinary remedy. Centra Tepeyac v.
Montgomery Cty., 722 F.3d 184, 189 (4th Cir. 2013) (en banc).
To the extent the injunctive relief sought in the Complaint is for a preliminary
injunction, such relief is inappropriate in this case. As discussed above, each of
Plaintiffs claims fail at this stage. Plaintiff therefore cannot show a likelihood of success
on the merits, which is required for this extraordinary remedy.
IV.
CONCLUSION
For the reasons stated above, the Defendant's Motion to Dismiss (ECF No. 3) will
be granted. Plaintiffs Complaint (ECF No. 1) for will be dismissed with prejudice in
part and without prejudice in part.
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Should Plaintiffwish to appeal, written notice of appeal must be filed with the
Clerk of Court within thirty (30) days of the date of entry hereof. Failure to file a notice
of appeal within that period may result in the loss of the right of appeal.
An appropriate Order will accompany this Memorandum Opinion.
/s/
Henry E. Hudson
United States District Judge
Date: hc,k
2ol^
Richmond, VA
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