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

Filing 37

ORDER dissolving the preliminary injunction 29 by Judge Richard A Jones. (RS)

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1 HONORABLE RICHARD A. JONES 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 10 11 12 13 SCOTT KELLER and MARNIE KELLER, on behalf of themselves and others similarly situated, 14 17 ORDER Plaintiffs, 15 16 CASE NO. C14-422 RAJ v. WELLS FARGO BANK, N.A. and WELLS FARGO INSURANCE, INC., 18 Defendants. 19 20 21 22 23 24 25 26 27 On November 25, 2014, this court issued limited injunctive relief prohibiting the foreclosure sale of plaintiffs’ home pending further briefing by the parties. Dkt. # 29. The relevant background facts were summarized in that order. Id., pp. 2-3. Although the court found that plaintiffs were likely to succeed on the merits, the court expressed serious concern that plaintiffs had waived the ability to pursue their claims in this forum by failing to opt-out of a related class action pending in the Southern District of Florida, Fladell v. Wells Fargo Bank N.A., No. 0:13-cv-60721-FAM (J. Moreno). Parties to the Fladell class action released all claims that “relate, concern, arise ORDER- 1 1 from, or pertain in any way” to defendant Wells Fargo’s “conduct, policies, or practices 2 that concern Forced Placed Insurance.” Case No. 13-cv-60721, Dkt. #260 (Final 3 Judgment) ¶2.b. Plaintiffs received notice that they would be considered part of the 4 Fladell class. See Dkt. # 23, ¶ 5 (“Scott D. Keller and Marnie L. Keller of Bellingham 5 Washington (“the Kellers”) were among the Class Members mailed the Fladell Notice 6 Packet. The Kellers’ Fladell Notice Packet was not returned as undeliverable.”). 7 As more fully summarized in the court’s previous order, the plaintiffs alleged on 8 behalf of themselves and others similarly situated: that they made their monthly mortgage 9 payments on time, that they maintained hazard insurance on their home, that they 10 maintained sufficient funds in an escrow account for the payment of those insurance 11 premiums, that defendant failed to make the insurance premium payments as required by 12 the parties’ contract, that as a result of defendant’s conduct plaintiffs’ hazard insurance 13 was cancelled and consequently defendant purchased “force-placed insurance,” which 14 improperly caused an increase in the monthly amount due on plaintiffs’ mortgage. See 15 Dkt. # 29, pp. 2-3. Because these allegations fell squarely within the broadly-worded 16 Fladell release quoted above, the court directed plaintiffs to provide authenticated 17 evidence demonstrating that they had opted out of that case. Dkt. # 29, p. 6. 18 Alternatively, the court allowed plaintiffs the opportunity to explain why their claims 19 were not encompassed by the Fladell release. Plaintiffs were granted this opportunity in 20 addition to a limited stay of the foreclosure sale contingent upon payment of $1,149.59 21 (their regular monthly mortgage amount) into the registry of the court on or before 22 December 5, 2014. Dkt. # 31, p. 2. 23 Plaintiffs failed to comply with this court’s order. Plaintiffs’ mortgage payment 24 was posted five days late, on December 10, 2014. Plaintiffs also failed to provide any 25 proof that they had opted out of the Fladell class action, despite implying that such proof 26 existed in connection with their motion for preliminary injunction. Dkt. #23-3; Dkt. # 27, 27 p. 3; Dkt. # 35, p. 1. Additionally, rather than explain why their claims were not ORDER- 2 1 encompassed by the Fladell class action, plaintiffs impermissibly filed an amended 2 complaint without leave of court. Dkt. # 33; Fed. R. Civ. P. 15(a)(2) (”[A] party may 3 amend its pleading only with the opposing party’s written consent or the court’s leave.”). 4 Unfortunately, even if the court were to allow plaintiffs to amend their complaint, 5 their proposed amended allegations still fall within the Fladell release of claims. In their 6 amended complaint, plaintiffs allege that they maintained hazard insurance (id. at ¶ 9), 7 that they maintained sufficient funds for the payment of the hazard insurance premiums 8 (id. at ¶ 11), that defendant failed to make those premium payments as required by the 9 parties’ contract (id. at ¶¶ 10, 12) and that as a result of defendant’s conduct, plaintiffs’ 10 hazard insurance was cancelled, causing defendant to purchase force-placed insurance, 11 which resulted in an increase in plaintiff’s monthly mortgage amount (id. at ¶¶ 13, 14). 12 These allegations -- although focused solely on plaintiffs’ individual claims rather than 13 the previously asserted class claims -- still “arise from” and “pertain” to defendant’s 14 “conduct, policies, or practices that concern Forced Placed Insurance.” Dkt. # 33. 15 Because such claims were expressly waived as part of the Fladell settlement, the 16 plaintiffs are barred from bringing them in this forum. Final Judgment, ¶2.b. 17 Accordingly, the court hereby dissolves its preliminary injunction (Dkt. # 29). 18 Although defendant will be permitted to proceed with the foreclosure sale, nothing in this 19 order prevents the parties from negotiating an independent resolution of this dispute. The 20 court notes that plaintiffs have more than $100,000 of equity in their home and 21 encourages the parties to reach a settlement, if possible. 22 Dated this 19th day of December, 2014. 23 A 24 25 The Honorable Richard A. Jones United States District Judge 26 27 ORDER- 3

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