Wittenberg v. First Independent Mortagage Company et al

Filing 194

MEMORANDUM OPINION AND ORDER denying 127 Motion for Partial Summary Judgment; granting 129 Motion for Summary Judgment; granting 130 Motion for Summary Judgment; and denying 133 Motion for Partial Summary Judgment; 65 First Amended Complaint is hereby DISMISSED WITH PREJUDICE and this matter is ORDERED STRICKEN from the active docket of this Court. Signed by Chief Judge John Preston Bailey on 2/10/2012. (cwm)

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF WEST VIRGINIA
MARTINSBURG

DIANNA WITTENBERG,

Plaintiff,
v.

Civil Action No. 3:10-CV-58
(BAILEY)

WELLS FARGO BANK, N.A.,
SAMUEL I. WHITE, P.C., and
SENECA TRUSTEES, INC.,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending before this Court are plaintiff Dianna Wittenberg’s Motion for Partial
Summary Judgment against Defendants Samuel I. White, P.C. and Seneca Trustees, Inc.
[Doc. 127]; defendant Wells Fargo Bank, N.A.’s Motion for Summary Judgment [Doc. 129];
defendants Seneca Trustees, Inc.’s and Samuel I. White, P.C.’s Motion for Summary
Judgment [Doc. 130]; and the plaintiff’s Motion for Partial Summary Judgment against
Defendant Wells Fargo Bank, N.A. [Doc. 133], all filed November 7, 2011. Those motions
have since been fully briefed and are now ripe for decision. This Court has reviewed the
record and the motions and, for the reasons set out below, finds that the plaintiff’s motions
should be DENIED and the defendants’ motions should be GRANTED.

1

BACKGROUND
I.

Undisputed Material Facts
A.

Borrower’s Background

The borrower in this case, Dianna Wittenberg, has a bachelor’s degree in business
administration from the University of Northern Colorado. (Wittenberg Depo. at pp. 101:18102:4). She also completed some basic law classes at the Denver Legal Institute. (Id. at
pp. 102:9-103:10). Thereafter, she managed a regional of cable television system in
Washington, D.C. for approximately ten years. (Id. at p. 104:2-12). In 1991, she and her
now ex-husband, a Navy Pilot, moved to Europe for seven years. During that time, she did
not work. (Id. at p. 104:15-105:5). Upon her return to the United States in 1998, she sold
real estate for about a year until she was injured in a car accident from which she now
receives Social Security Disability. (Id. at pp.110:12-111:11). Since 2000, she has been
the owner of a leasing company called Regal, Inc., for which she sometimes negotiates
leases with tenants. (Id. at pp.125:9-126:5).
B.

Consummation of Loan

In 2005, Wittenberg met a First Independent Mortgage Company (“First
Independent”) employee named Andy Swanson at a financial seminar. Swanson indicated
that he could get her a refinance loan with beneficial and favorable terms.
On February 17, 2006, Wittenberg contacted Swanson to refinance her loan and
extract equity for outstanding expenses. By fax dated February 23, 2006, Wittenberg
informed Swanson that she would like to use George Glass as a closing attorney.
Wittenberg attended the closing scheduled for the same day, but refused to complete the
closing. The next day, Wittenberg sent Swanson a fax explaining why she did not go
2

through with the closing. Specifically, Wittenberg complained that she did not want an
Adjustable Rate Mortgage (“ARM”) and that the broker fee represented at closing did not
reflect their previous discussions.
On March 13, 2006, First Independent arranged for an updated appraisal of
Wittenberg’s home that would serve as collateral for the refinance loan. (Appraisal at p.
1). By report dated March 15, 2006, Wittenberg’s home was appraised at $640,000. (Id.).
On March 20, 2006, Wittenberg sent an e-mail to Swanson asking for an update on
when she could close on her loan. A First Independent representative named Tricia
Randall replied the same day and asked, “Can you sign on Monday the 27th @ 3pm?” The
next morning, March 21, 2006, Wittenberg confirmed that she would be available on the
date proposed. After Randall responded that she might be able to schedule an earlier
closing, Wittenberg replied on March 21, 2006, at 9:41 p.m., asking whether the closing
could be conducted at 2:30 p.m., on March 27, 2006. Randall responded the next day,
March 22, 2006, that the time change would be fine.
Thereafter, Wittenberg completed a five-page Fannie Mae Form 1003 application
titled Uniform Residential Loan Application. Her signature on the fourth page is dated
March 22, 2006, while her signature on the fifth page is dated March 26, 2006; Swanson’s
signature on the fourth page is dated March 27, 2006. (Loan Application at pp. 4 and 5).
The first section on the first page describes the type of loan as a conventional mortgage
and identifies its terms as a 30-year, adjustable rate mortgage for $416,000 at an interest
rate of 5.87%. (Id. at p. 1). The second section indicates that the purpose of the loan was
to refinance and that the purpose of the refinance was “Cash-Out/Debt Consolidation.”
(Id.). More specifically, Wittenberg intended to pay off the $212,174 unpaid balance of the
3

mortgage loan on her home and the $67,527 unpaid balance of another loan. (Id. at pp.
3-4). In addition, Wittenberg would receive $125,069.02 in cash. (Id. at p. 4).
On March 26, 2006, at 5:29 a.m., Wittenberg sent Swanson an e-mail asking him
to call her “first thing.” After receiving neither a reply e-mail nor a phone call, Wittenberg
sent Swanson another e-mail on March 27, 2006, at 12:15 p.m. In the second e-mail,
Wittenberg complained: “Why do I have to continually be placed on hold when costs
change at the end of the loan process. Please correct my brokerage fees back to what
they have always been. $2700. Who is messing up this loan continually?” Less than an
hour later, Randall replied that she had spoken to Swanson and that she would “get the
origination fixed this morning and have new document [sic] sent over to title as I can.” On
March 27, 2006, Wittenberg successfully closed on her loan.
C.

Loan Documents
1.

Note Dated March 21, 2006

Wittenberg executed a note dated March 21, 2006, with First Independent
referencing loan number 26021701; however, written on top of the first page is the number
0150909596. This note is a six-page Fannie Mae Form 3534 uniform instrument titled
Adjustable Rate Note (“Note”). Pursuant to this fully transferable instrument, Wittenberg
promised to pay First Independent $416,000 over 30 years at an initial fixed interest rate
of 5.875%, amounting to an initial monthly principal and interest payment of $2,036.67 due
beginning May 1, 2006 (property taxes and insurance were to be paid by borrower).
(March 21, 2006, Note at ¶¶ 1-3). This instrument also indicated that the initial fixed
interest rate would change to an adjustable interest rate on April 1, 2011, that would not be
greater than 10.875% nor less than 2.75%. (Id. at ¶ 4(A), (D)). Pursuant to the standard
4

language of the form, Wittenberg agreed that if she did not pay the full amount of each
monthly payment on the date it is due, she would be in default. (Id. at ¶ 7(B)). In the event
of default, the instrument required the holder of the Note to send Wittenberg a written
notice informing her that if she did not pay the overdue amount by a certain date, the note
holder could require her to pay immediately the full amount of the unpaid principal and all
the interest owed on that amount. (Id. at ¶ 7(C)). Finally, the Note indicated that a deed
of trust dated the same day would provide protection for the holder of the note should
Wittenberg not keep the promises she made in this uniform instrument. (Id. at ¶ 11).
Wittenberg signed the Note without indicating a date of her signature. (Id. at p. 6). Below
Wittenberg’s signature, First Independent’s chief financial officer provided his signature.
In addition, this area includes a stamp indicating that the Note would be paid to the order
of Wells Fargo Bank, N.A. (“Wells Fargo”). This stamp is signed by Wells Fargo’s assistant
vice president. (Id.). The March 21, 2006, Note is the only note Wells Fargo has on file for
Wittenberg. (Wells Fargo 30(b)(6) Witness Mary Ellen Brust Depo. at p. 203:15-204:14).
2.

Deed of Trust Dated March 21, 2006 and
Amended to March 27, 2006
i.

Introductory Provisions

Wittenberg also executed a fifteen-page Fannie Mae Form 3049 uniform instrument
titled Deed of Trust and dated March 21, 2006; however, the “21" is crossed out and
replaced with “27" next to the initials “DW.” (Deed of Trust at p. 1). This instrument
purports to provide the security for the March 21, 2006, Note. Again, however, the “21" is
crossed out and replaced with “27" next to the initials “DW.” (Id. at p. 1). This instrument
identifies Wittenberg as the borrower, First Independent as the lender, Scully & Glass or
5

H. Charles Carl as the trustee, and Mortgage Electronic Registration Systems, Inc.
(“MERS”) as the nominee for the lender and the lender’s successors and assignees. (Id.).
The loan number given is the same as the March 21, 2006, Note: 26021701; however,
written on the top of the first page of this instrument is “WF-150909596.” (Id.). This
instrument gave First Independent and any successor or assignee a security interest in
Wittenberg’s Charles Town, West Virginia, home. (Id.). The second page describes the
note secured as having a principal amount of $416,000 and a maturity date of April 1, 2036,
the same terms of the March 21, 2006, Note. This page also indicates that an Adjustable
Rate Rider was to be executed by Wittenberg. (Id. at p. 2).
ii.

Uniform Covenants

Beginning on the third page, the Deed of Trust lists twenty-one sections of “uniform
covenants.” In Section 1 (titled “Payment of Principal Interest, Escrow Items, Prepayment
Charges, and Late-Charges”), Wittenberg agreed to “pay when due the principal of, and
interest on, the debt evidenced by the Note and any prepayment charges and late charges
due under the Note.” (Id. at § 1).
In Section 3 (titled “Funds for Escrow Items”), Wittenberg agreed to “pay to Lender
on the day Periodic Payments are due under the Note, until the Note is paid in full, a sum
(the ‘Funds’) to provide for payment of amounts due for: (a) taxes and assessments and
other items which can attain priority over this Security Instrument as a lien or encumbrance
on the Property; (b) leasehold payments or ground rents on the Property, if any; (c)
premiums for any and all insurance required by Lender under Section 5; and (d) Mortgage
Insurance premiums, if any, or any sums payable by Borrower to Lender in lieu of the
payment of Mortgage Insurance premiums in accordance with the provisions of Section
6

10.” (Id. at § 3).
In Section 19 (titled “Borrower’s Right to Reinstate After Acceleration”), Wittenberg
is granted the right to “have enforcement of this Security Instrument discontinued at any
time prior to the earliest of: (a) five days before sale of the Property pursuant to any power
of sale contained in this Security Instrument; (b) such other period as Applicable Law might
specify for the termination of Borrower’s right to reinstate; or (c) entry of a judgment
enforcing this Security Instrument.” (Id. at § 19). That right, however, is conditioned upon
Wittenberg first “(a) pay[ing] Lender all sums which then would be due under this Security
Instrument and the Note as if no acceleration had occurred; (b) cur[ing] any default of any
other covenants or agreements; (c) pay[ing] all expenses incurred in enforcing this Security
Instrument . . .; and (d) tak[ing] such action as Lender may reasonably require to assure
that Lender’s interest in the Property and rights under this Security Instrument . . ..” (Id.).
In Section 20 (titled “Sale of Note; Change of Loan Servicer, Notice of Grievance”),
Wittenberg agreed that “[t]he Note or a partial interest in the Note (together with this
Security Instrument) can be sold one or more times without prior notice to Borrower.” (Id.
at § 20). That section also explains that such a sale “might result in a change in the entity
(known as the ‘Loan Servicer’) that collects Periodic Payments due under the Note and this
Security Instrument and performs other mortgage loan servicing obligations under the Note,
this Security Instrument, and Applicable Law,” while indicating that “[t]here also might be
one or more changes of the Loan Servicer unrelated to a sale of the Note.” (Id.).
iii.

Non-Uniform Covenants

Beginning at the bottom of page eleven, the Deed of Trust listed eight sections
containing “non-uniform covenants.” In Section 22 (titled “Acceleration; Remedies”), First
7

Independent and any successor or assignee agreed to be required to “give notice to
Borrower prior to acceleration following Borrower’s breach of any covenant or agreement
in this Security Instrument . . ..” (Id. at § 22). The parties further agreed that any such
notice “shall specify: (1) the default; (b) the action required to cure the default; (c) a date,
not less than 30 days from the date the notice is given to Borrower, by which the default
must be cured; and (d) that failure to cure the default on or before the date specified in the
notice may result in acceleration of the sums secured by this Security Instrument and sale
of the Property.” (Id.). Section 22 also explains that “[i]f the default is not cured on or
before the date specified in the notice, Lender at its option may require immediate payment
in full of all sums secured by this Security Instrument without further demand and may
invoke the power of sale and any other remedies permitted by Applicable Law.” (Id.). “If
Lender invokes the power of sale,” Section 22 continues, “Lender or Trustee shall give
borrower, in the manner provided in Section 15, notice of Lender’s election to sell the
Property.” (Id.).
In Section 27 (titled “Trustees and Substitution of Trustees”), Wittenberg agreed that
“Lender may, at any time and from time to time hereafter, without notice, appoint and
substitute another Trustee or Trustees, corporations or person, in place of the Trustee
herein named to execute the trust herein created” and that “the new and substituted
Trustee or Trustees in each instance shall be vested with all the rights, titles, interests,
powers, duties and trusts in the premises which are vested in and conferred upon the
Trustees herein named . . ..” (Id. at § 27). Section 27 further requires that “[e]ach such
appointment and substitution shall be evidenced in writing which shall recite the parties to,
and the book and page of record of, this Security Instrument, and the description of the real
8

property herein described, which instrument . . . shall be conclusive proof of the proper
substitution and appointment of such successor Trustee or Trustees, and notice of such
proper substitution and appointment to all parties in interest.” (Id.).
The Deed of Trust concludes with Wittenberg’s signature acknowledged on March
27, 2006.
3.

Fixed/Adjustable Rate Rider dated March 21, 2006, and
Amended to March 27, 2006

As referenced on the second page of the Deed of Trust, Wittenberg also executed
a four-page Fannie Mae Form 3182 instrument titled Fixed/Adjustable Rate Rider and
dated March 21, 2006. Like the Deed of Trust, however, the “21" is crossed out and
replaced with “27" next to the initials “DW.” (March 27, 2006, Fixed/Adjustable Rate Rider
at p. 1). This instrument indicates that “[t]he Note provides for an initial fixed interest rate
of 5.875%,” the same initial fixed interest rate contained in the March 21, 2006, Note. (Id.
at p. 1). This instrument also provides that the initial fixed interest rate will change to an
adjustable interest rate on April 1, 2011, the same change date in the March 21, 2006,
Note. (Id.). Like the March 21, 2006, Note, this instrument explains that the adjustable
interest rate will never be greater than 10.875% nor less than 2.75%. (Id. at p. 2). Finally,
this instrument contains a stamp that it was recorded along with the Deed of Trust in
Jefferson County, West Virginia, on April 14, 2006. (Id. at p. 4).
4.

Notice of Right to Cancel Signed March 27, 2006

On March 27, 2006, Wittenberg signed a Notice of Right to Cancel to acknowledge
that she had received the same. This agreement informed Wittenberg that she had “a legal
right under federal law to cancel this transaction, without cost, within three business days
9

from whichever of the following events occurs last . . . the date of the transaction, which is
March 27, 2006; . . . the date you receive your Truth in Lending disclosure; or . . . the date
you receive this notice of your right to cancel.” (Notice of Right to Cancel at p. 1).
5.

Good Faith Estimate Prepared March 21, 2006, and
Signed March 27, 2006

On March 27, 2006, Wittenberg signed a settlement statement titled Good Faith
Estimate. This statement, prepared March 21, 2006, indicated that the total loan amount
was $416,000, the initial fixed interest rate was 5.875%, and the term of the loan was 30
years, amounting to a monthly principal and interest payment of $2,036.67, all terms
identical to those contained in the March 21, 2006, Note. (Good Faith Estimate at p. 1).
This statement also specifies that two months of hazard insurance premiums and six
months of taxes and assessment reserves would be deposited with First Independent.
(Id.). Finally, this statement estimated that $279,701.00 would pay off existing debt and
that the remaining $121,526.82 (after paying the estimated closing costs and prepaid
item/reserves) would be paid to Wittenberg in cash.
6.

Mortgage Loan Origination Agreement signed March 27, 2006

On March 27, 2006, Wittenberg entered into a one-page Mortgage Loan Origination
Agreement with First Independent.

In this agreement, First Independent notified

Wittenberg of its status as a licensed mortgage broker that “from time to time contract[s]”
with “participating lenders.” (Loan Origination Agreement at p. 1). The agreement further
indicates that First Independent was brokering Wittenberg’s loan for Wells Fargo.
7.

WV Collateral Protection Insurance Notice signed March 27, 2006

On March 27, 2006, Wittenberg signed a one-page WV Collateral Protection
10

Insurance Notice dated March 21, 2006. This notice informed Wittenberg that unless she
provided First Independent with evidence of the insurance coverage required by the Deed
of Trust, First Independent was authorized to purchase insurance at her expense to protect
its interest in her collateral. (Collateral Protection Insurance Notice at p. 1).
8.

Notice of Assignment, Sale or Transfer of Servicing Rights Dated
March 21, 2006, and Signed March 27, 2006

On March 27, 2006, Wittenberg signed a two-page Notice of Assignment, Sale or
Transfer of Servicing Rights. Wittenberg was thereby notified that “the servicing of [her]
mortgage loan, that is, the right to collect payments from [her], [was] being assigned, sold
or transferred from” First Independent to Wells Fargo, effective May 1, 2006, the date that
her first monthly payment would become due under the March 21, 2006, Note. (Notice of
Assignment, Sale or Transfer of Servicing Rights at p. 1). The bottom of the first page
indicated that Wittenberg’s total monthly payment would be $2,387.67, composed of
$2,036.67 for principal and interest, $261.80 for county property taxes, and $89.12 for
hazard insurance premiums. However, the tax and insurance figures were crossed out
accompanied by the initials “DW.” Similarly, the total monthly payment figure was crossed
out and replaced with $2,036.67. (Id.).
9.

HUD-1 Statement

Finally, Wittenberg received a United States Department of Housing and Urban
Development Final Settlement Statement, also known as a HUD-1 Statement. This
document lists the settlement date as March 27, 2006, and provides a breakdown of
Wittenberg’s closing costs as well as the distribution of the $416,000 principal.

11

D.

Servicing of Loan
1.

Securitization of Loan

Wells Fargo began servicing Wittenberg’s loan on April 19, 2006. (Brust Depo. at
206:1-5). At that time, Wells Fargo assigned Wittenberg’s loan the number 150909596.
(See Id. at 236:8-11).

On July 31, 2006, Wells Fargo, as servicer and securities

administrator, entered into a Pooling and Servicing Agreement (“PSA”) with Banc of
America Funding Corporation (“BAFC”), as depositor, and U.S. Bank National Association
(“U.S. Bank”), as trustee. (PSA at p. 1). Wittenberg’s loan was included in this PSA.
2.

Failure to Pay Real Estate Taxes / Escrow Account Established

In October 2007, Wells Fargo was advised by a Jefferson County, West Virginia, tax
collector that Wittenberg’s property taxes were past due and that a tax sale certificate had
been issued. (Brust Depo. at pp. 108:19-109:4). On October 16, 2007, Wells Fargo
advanced payment to cure the tax delinquency. (Id. at 166:20-167:4). By letter dated
October 18, 2007, Wells Fargo informed Wittenberg that it had paid the delinquent taxes
plus interest/penalty due. In this letter, Wells Fargo indicated that “[a]n escrow account
ha[d] been established on [her] behalf for the collection of the amount advanced to bring
[her] taxes current, as well as to pay all future tax bills for the life of [her] loan.” (Oct. 18,
2007, Letter at 1). In this regard, Wells Fargo explained that Wittenberg’s “monthly
mortgage payment [would] increase to repay the advance and to establish the escrow
account.” (Id.). On October 23, 2007, Wells Fargo sent Wittenberg a nearly identical letter
indicating that it had paid additional delinquent property taxes.
In November 2007, Wells Fargo discovered that the August 2007 installment also
was past due, paid that installment, and added the amount to Wittenberg’s already negative
12

escrow account. According to Wittenberg, she did not plan to pay the August 2007
installment until September 2008 because it was her practice to pay her taxes for the
second half of one year in September of the following year. (Wittenberg Depo. at p. 89).
On February 25, 2008, Wittenberg paid approximately one-third of the amount due
in her escrow account. As a result, Wells Fargo sent Wittenberg an Escrow Deficiency
Notice on March 10, 2008. When the deficiency went unpaid, Wells Fargo sent Wittenberg
another Escrow Deficiency Notice on August 8, 2008. The latter notice indicated that
Wittenberg had “an escrow deficiency for the payment of taxes and/or lender placed
insurance in the amount of $3039.49.” (Aug. 8, 2008, Escrow Deficiency Notice at 1).
Wells Fargo further explained that it had “adjusted [her] payment to spread this amount
over 12 payments beginning with her payment due 10/01/08.” (Id.). Specifically, the notice
outlined that an “Escrow Deficiency Spread” of $235.29 had been added to Wittenberg’s
principal and interest payment of $2,036.67 for an adjusted total payment of $2,289.96.
(Id.).
By letter dated October 9, 2008, Wells Fargo informed Wittenberg that a search of
her tax records indicated that she was delinquent in the amount of $11,627.82. The letter
further provided that if proof of payment was not received by November 11, 2008, Wells
Fargo would advance the money for payment of the Wittenberg’s delinquent taxes. By
letter dated December 17, 2008, Wells Fargo notified Wittenberg that because she failed
to provide the proof of payment requested, it had paid the delinquent real estate taxes and
all applicable interest/penalty due. According to an escrow statement dated December 19,
2008, this advance in payment required that Wittenberg’s monthly mortgage payment be
adjusted to $2,813.11.
13

3.

Requests for Loan Modification / Proposed Modifications

After failing to make her December 2008 payment, Wittenberg called Wells Fargo
on December 22, 2008, and spoke to a representative who identified herself as Leann
Miller. (Wittenberg Depo. at pp. 16:9-17:11). During this phone conversation, Wittenberg
indicated that she wished to pursue a loan modification.
By letter dated December 22, 2008, Miller confirmed that Wittenberg had called to
inquire about a modification of loan number 01050909596, the number written on top of the
March 27, 2006, Deed of Trust and the March 21, 2006, Note. Miller explained that “not
only must [Wells Fargo] service the mortgage loan in accordance with the terms of the Note
and the Security Instrument, but also by the guidelines established by the investor.” (Dec.
22, 2008, Letter at p. 1). To determine if Wittenberg qualified, Miller asked that she provide
certain financial information by December 31, 2008. This letter was delivered to Wittenberg
on or before December 24, 2008.

In late December 2008 or early January 2009,

Wittenberg provided the requested information. (Wittenberg Depo. at p. 18:7-13).
By letter dated February 11, 2009, Miller advised Wittenberg that a modification of
her loan numbered 0150909596 had been approved. By separate letter dated February
11, 2009, Wells Fargo confirmed its approval of a loan modification and provided a copy
of the modification agreement for Wittenberg to execute and return. Pursuant to the
proposed agreement, Wittenberg’s loan would be modified as follows. Beginning on April
1, 2009, the plaintiff would be required to make a monthly payment of $2,433.37. That
payment would be composed of a principal and interest payment amount of $2,164.09
(approximately $130 higher than the original principal and interest payment) and a required
escrow payment of $269.28. The modified interest rate would be 4.00% (nearly 2.00%
14

lower than the initial interest rate) and the modified maturity date would be July 1, 2036
(three months longer than the initial term). The modified principal balance would be
$431,276.80 (approximately $15,000 more than the initial principal balance). The proposed
agreement referenced the loan origination date as March 21, 2006.
In response, Wittenberg called Wells Fargo on February 18, 2009, to complain that
the modified monthly payment was too high. Miller and Wittenberg spoke again on March
23, 2009. At that time, Miller explained that the modified monthly payment amount of
$2,433.37 was the result of Wittenberg’s escrow deficiency. In late March 2009, a Wells
Fargo representative named Tina Marshall orally offered to amend the interest rate on the
proposed modification to 3.00%. (Wittenberg Depo. at pp. 20:15-21:2). Wittenberg
rejected this offer as well. (Id. at 21:3-6).
Instead, by letter dated April 2, 2009, Wittenberg complained that both offers
increased her principal balance, monthly payment amount, and the term of the loan. In that
letter, Wittenberg asked Wells Fargo to “produce both loan instruments pertaining to [her]
mortgage,” arguing that it was her “right to see who holds the Note and who is holding the
Mortgage or Deed of Trust.” (Apr. 2, 2009, Letter at 2). Wittenberg further requested that
Wells Fargo provide a more affordable loan modification without regard for the guidelines
of its investor, which Wittenberg presumed to be Bank of America, N.A. (“BofA”). In this
regard, Wittenberg has since indicated that she was only interested in a loan modification
that lowered her principal balance and monthly payment amount. (Wittenberg Depo. at p.
24:6-17).
By letter dated May 11, 2009, Wells Fargo responded to Wittenberg’s April 2, 2009,
letter.

(Wittenberg Depo. Ex. 4).

First, Wells Fargo offered another modification
15

agreement. This agreement reduced the interest rate to 2.00%, decreased the monthly
principal and interest payment amount to $1,750.81, and moved the next payment due to
July 1, 2009. (Id. at 1). The agreement provided referenced the “Note and Mortgage dated
3/21/2006.” (Id.). In addition, Wells Fargo stated that it had enclosed the Note and Deed
of Trust. By letter dated May 15, 2009, Wittenberg advised that the proposed modification
could not be accepted or denied, complaining that the increase in her principal balance had
not been adequately explained. (Wittenberg Depo. Ex. 6).
On June 2, 2009, Wittenberg spoke to representative at Wells Fargo named Chris
Bise. (Wittenberg Depo. at p. 31:15-19). During this phone conversation, Wittenberg
indicated that she did not intend to provide updated financial information, she believed that
Wells Fargo had overpaid her taxes, and that she thought she should be offered a loan
modification pursuant to the Home Affordable Modification Program (“HAMP”). (Id. at pp.
31:20-32:8). Wittenberg also asserted that it would not be acceptable for Wells Fargo to
offer a modification increasing her principle balance, even though she had been told that
the principle balance had to be increased so that taxes and escrow could be capitalized.
(Id. at pp. 32:9-13; 33:7-11). Following this conversation, Wittenberg faxed another letter
to Wells Fargo, arguing that her taxes were overpaid causing her principal balance to be
inflated in the recent modification agreement. (Wittenberg Depo. Ex. 5). In addition,
Wittenberg claimed that the Note and Deed of Trust were not enclosed on May 11, 2009,
as represented.
On June 9, 2009, Wittenberg’s counsel sent Wells Fargo a nineteen-page letter titled
“Qualified Written Request, Complaint, Dispute of Debt & Validation of Debt Letter, Cease
& Desist Letter.”

The letter made several requests for documents and information
16

concerning the origination, securitization, assignment, and servicing of Wittenberg’s loan.
The next day, Wittenberg’s counsel sent Wells Fargo a substantially identical fourteen-page
letter.
By letter dated August 3, 2009, Wells Fargo responded to the requests of
Wittenberg’s counsel. (Wittenberg Depo. Ex. 7). First, Wells Fargo indicated that the loan
had been originated on March 21, 2006, and that the loan was subsequently transferred
to Wells Fargo on April 19, 2006. (Id. at 1). Second, Wells Fargo enclosed a Customer
Account Activity Statement reflecting a complete payment history for the period of June 28,
2006, though July 16, 2009. (Id. at 3-5). Third, Wells Fargo enclosed a copy of the March
21, 2006, Note and the March 27, 2006, Deed of Trust. (Id. at 6-27). Finally, Wells Fargo
stated that “after a thorough review of the financial information provided, a decision was
made on July 9, 2009, that we are unable to offer a loan modification or any other workout
options at this time . . . because of the current income deficit of $279.97 . . . [which] cannot
be overcome by any modification the loan may currently qualify for.” (Id. at 2).
By cover letter dated September 14, 2009, Wittenberg sent the first of three hardship
letters to Wells Fargo and renewed her request for a loan modification. (Wittenberg Depo.
Ex. 8). Wittenberg also provided updated financial information on September 16, 2009.
(Wittenberg Depo. Ex. 9). On September 18, 2009, Wells Fargo indicated that it had
received Wittenberg’s request for a loan modification and that her request was under
review. However, by letter dated October 30, 2009, Wells Fargo denied Wittenberg’s
request, explaining that she “did not provide . . . all of the information needed within the
time frame required . . ..” (Wittenberg Depo. Ex. 10 at 2). Wittenberg challenged this
reason for denial by faxed letter dated November 13, 2009, arguing that she had provided
17

all necessary financial information. (Id. at 1).
4.

Special Forbearance Agreement

On December 22, 2009, Wittenberg sent the second of three hardship letters to
Wells Fargo and again sought a modification. (Wittenberg Depo. Ex. 11). On December
31, 2009, Wittenberg spoke to a Wells Fargo negotiator about entering into a trial
modification period.

(Wittenberg Depo. at pp. 61:3-62:3, 63:6-17).

During this

conversation, the negotiator reviewed Wittenberg’s financials and indicated that she would
receive a permanent loan modification upon successful completion of the trial period and
the submission of additional documentation. (Id. at p. 65:6-15). Wittenberg and the
negotiator did not discuss the terms of any permanent loan modification. (Id. at p. 114:1416).
By letter dated January 4, 2010, Wells Fargo offered Wittenberg a Special
Forbearance Agreement (“SFA”), which she believed to incorporate the agreement
discussed during the December 31, 2009, phone conversation. (Wittenberg Depo. Ex. 12;
Wittenberg Depo. at p. 61:3-7, 62:4-6, 63:20-64:11, 72:9-14, 73:15-21).

The letter

indicated that the SFA was “not a waiver of the accrued or future payments that become
due, but a trial period showing you can make regular monthly payments” and noted that
“investor approval is still pending.” (Wittenberg Depo. Ex. 12 at 2). Finally, the letter
explained:
Upon successful completion of the [SFA], your loan will not be contractually
current. Since the installments may be less than the total amount due, you
may still have outstanding payments and fees. Any outstanding payments
and fees will be reviewed for a loan modification. If approved for a loan
modification, based on investor guidelines, this will satisfy the remaining past
18

due payments on your loan and we will send you a loan modification
agreement. An additional contribution may be required.

(Id.). Wittenberg read, executed, and returned the SFA on January 20, 2010. (Wittenberg
Depo. at p. 66:14-16; Wittenberg Depo. Ex. 13).
The SFA provided for three trial payments of $1,570.83 due on the first of February,
March, and April 2010. (SFA at § 5). This monthly payment was the amount the negotiator
had worked up during the December 31, 2009, phone conversation. (Wittenberg Depo. at
p. 67:5-8). In addition, the SFA provided as follows:
This plan is an agreement to temporarily accept reduced payments or
maintain regular monthly payments during the plan specified below. Upon
successful completion of the outlined payments, your loan will be reviewed
for a Loan Modification. Based on investor approval, this may satisfy the
remaining past due amount on your loan.

The lender is under no obligation to enter into any further agreement, and
this forbearance shall not constitute a waiver of the lender’s right to insist
upon strict performance in the future.

All of the provisions of the note and security instrument, except as herein
provided, shall remain in full force and effect. . . . The lender, at its option,
may institute foreclosure proceedings according to the terms of the note and
security instrument without regard to this agreement.

(SFA at §§ 2-4).

Thereafter, Wittenberg made the three payments required by the SFA, but did not
receive a loan modification. (Brust Depo. at pp. 136:4-6, 153:16-21, 154:11-14). After
19

reviewing Wittenberg’s file on April 8, 2010, Wells Fargo determined that it needed more
information, including proof of income. (Brust Depo. at p. 156:7-15). The next day, Wells
Fargo called the law firm of Wittenberg’s counsel twice to advise that it needed updated
documentation. (Id. at 156:16-157:2). When there was no response, Wells Fargo sent
Wittenberg a letter dated April 13, 2010, indicating that it had reviewed the information she
had previously provided but that it could not offer a loan modification because it needed
further input from her: “We can only process a loan modification with input from you. We
have been unable to reach you to discuss your situation. For that reason, you have not
been approved for a mortgage loan modification.” (Id. at p. 157:2-7; Apr. 13, 2010, Letter
at p. 1). Wittenberg knew that she would need to provide additional information upon the
successful completion of the trial period. (Wittenberg Depo. at pp. 70:7-8, 75:4-9, 79:1980:1).
Wittenberg sent Wells Fargo a final hardship letter on April 22, 2010. (Wittenberg
Depo. Ex. 14). By letter dated April 23, 2010, Wells Fargo explained that Wittenberg “may
be eligible for a . . . ‘Short Sale,’” which it defined as “a workout program that allows a
borrower to sell the property, even if the proceeds are less than the loan payoff, due to low
property value.” (April 23, 2010, Letter at p. 1). In addition, Wells Fargo sent Wittenberg
a letter dated April 26, 2010, indicating that it would again work with her to determine what
options may be available and provided a list of the items it would need to make such a
determination. (Wittenberg Depo. Ex. 15 at 1). The letter further advised that it was
“imperative” that Wells Fargo receive the information by May 3, 2010. (Id.). After
Wittenberg failed to provide the requested information, Wells Fargo sent a follow-up letter
dated May 4, 2010. (Wittenberg Depo. Ex. 16). In this letter, Wells Fargo told Wittenberg
20

that it was “unable to continue exploring workout options available for [her] loan and [that
it had] closed her file” because it did “not have record of receiving the financial information
requested from [her] on April 26, 2010.” (Id. at 1).
By letter dated May 14, 2010, Wells Fargo once again asked that Wittenberg provide
the documentation required to consider workout options, this time by May 20, 2010. When
Wittenberg failed to do so, Wells Fargo sent a follow-up letter dated May 21, 2010.
Wittenberg did not provide the requested information and instead opted to file this action
on June 8, 2010. Wittenberg has not provided Wells Fargo with updated financials since
January 2010. (Wittenberg Depo. at p. 82:15-83:8).
E.

Trustee Assignments, Debt Collection Attempts, and Foreclosure
Efforts
1.

Samuel I. White, P.C.

By letter dated July 20, 2009, Samuel I. White, P.C. (“SIW”) sent Wittenberg a letter
on behalf of Wells Fargo seeking to collect the principal balance of her loan, $439,572.64.
The letter further provided:
[U]nless you, within thirty (30) days after receipt of this notice, dispute the
validity of the debt or any portion thereof, the debt will be assumed to be valid
by this firm. If you notify this firm in writing within the thirty (30) day period
that the debt, or any portion thereof, is disputed, this firm will obtain
verification of the debt and a copy of such verification will be mailed to you
by this firm.

(July 20, 2009, Letter at p. 1). In response, Wittenberg’s counsel sent SIW a letter titled
“Letter of Representation; Dispute & Validation of Debt Letter.” This letter notified SIW that
Wittenberg was “disputing the debt allegedly owed to [Wells Fargo]” and requested “proof
21

of [Wells Fargo’s] ownership and/or entitlement right.” (July 20, 2009, Letter at p. 1). This
letter further informed SIW that Wittenberg had sent a letter to Wells Fargo on June 25,
2009, requesting “closing documents as well as any documents evidencing a transfer or
assignment of the subject loan.” (Id.). Finally, this letter requested “a complete and
itemized transaction history of the subject loan” because “Wittenberg disputes that she is
in default since there seem to be irregularities in how her payments have been applied
since the inception of the loan.” (Id. at 2).
On August 4, 2009, SIW sent a fax to Wittenberg’s counsel indicating that
$23,838.57 must be received by August 21, 2009, for reinstatement. This fax also stated:
“Additionally, we have forwarded your July 30, 2009, correspondence to Wells Fargo Home
Mortgage, and requested from Wells Fargo Home Mortgage the note and payment history.
Once received we will forward the aforesaid to you.” (Aug. 4, 2009, Fax at p. 1). On
August 11, 2009, SIW faxed Wittenberg’s counsel a copy of the payment history on
Wittenberg’s loan. The next day, SIW faxed Wittenberg’s counsel a copy of the March 21,
2006, Note as proof of its entitlement to collect on the loan.
2.

Seneca Trustees, Inc.

The Deed of Trust lists Scully & Glass or B. Charles Carl, III as the Trustee, but
allows the Trustee to be substituted “at any time and from time to time . . . without notice
. . ..” (Deed of Trust at § 27). On August 18, 2009, SIW recorded a Corporate Assignment
of Deed of Trust referencing a deed of trust dated March 21, 2006, but corrected by hand
to read March 27, 2006. This instrument purports to assign Wittenberg’s Deed of Trust to
U.S. National Bank, as Trustee for Banc of America Funding Corporation 2006-G, effective
July 31, 2009.
22

On August 25, 2009, SIW recorded a Substitution of Trustee dated March 21, 2006.
On August 31, 2009, SIW recorded a Corrected Substitution of Trustee dated March 27,
2006 (with the day of the month handwritten). Both instruments purport to remove Scully
& Class or H. Charles Carl, III as Trustee and appoint Seneca Trustees, Inc. (“Seneca”).
By letter dated September 2, 2009, Seneca notified Wittenberg that she could
reinstate her loan for $26,651.68, if received on or before a September 15, 2009,
foreclosure sale. On September 9, 2009, however, Seneca rescheduled the foreclosure
sale for October 13, 2009, and notified Wittenberg on September 11, 2009, of the same.
Again, on September 24, 2009, Seneca continued the foreclosure sale until October 20,
2009.
By letter dated October 7, 2009, Seneca notified Wittenberg that she could reinstate
her loan for $26,651.68, if received by the October 20, 2009, foreclosure sale. On October
8, 2009, however, Seneca moved the foreclosure sale to October 28, 2009.
By letter dated November 18, 2009, Seneca notified Wittenberg that she could
reinstate her loan for $29,904.61, if received by a December 8, 2009, foreclosure sale. On
December 2, 2009, Seneca sent Wittenberg a copy of the Fixed/Adjustable Rate Rider
dated March 21, 2006, but changed to March 27, 2006, beside the initials “DW.” The
foreclosure sale scheduled for December 8, 2009, never took place.
At some point thereafter, Seneca scheduled Wittenberg’s home to be sold at
foreclosure on January 13, 2010, which Seneca cancelled by letter dated January 6, 2010,
two days after Wittenberg was offered the Special Forbearance Agreement. Six months
later, Seneca reset the foreclosure sale for July 20, 2010. Notice of this sale was published
in the July 1, 2010, issue of The Journal, a newspaper in Martinsburg, West Virginia.
23

However, by fax dated July 13, 2010, Seneca cancelled the sale.
II.

Procedural History
On June 8, 2010, Wittenberg filed suit in this Court against First Independent

(Original Lender), Wells Fargo (Servicer), MERS (Nominal Lender), Seneca (Substitute
Trustee), SIW (Debt Collection Firm), U.S. Bank (PSA Trustee), BofA (Investor), George
Glass (Closing Attorney), and Cameron Title, LLC (Title Insurer) [Doc. 1]. Wittenberg also
generically named John Does 1 through 50, which she has alleged are “investors,
mortgage aggregators (wholesalers), mortgage originators, loan sellers, Trustees of Pooled
Assets, and Trustees for holders of certificates of Collateralized Mortgage Obligations . .
..” ([Doc. 65] at ¶ 17).
By Order dated November 18, 2010, this Court granted summary judgment in favor
of Cameron Title, LLC (“Cameron Title”) [Doc. 48]. Specifically, this Court held that
Wittenberg’s claims against Cameron Title, a title insurer whose sole involvement in the
subject loan transaction was to provide lender’s title insurance, failed as a matter of law.
Cameron Title was dismissed with prejudice.
On December 30, 2010, this Court dismissed George Glass, finding that
Wittenberg’s claims for breach of fiduciary duty and negligence failed as a matter of law
[Doc. 58]. This Court explained its decision to dismiss a claim that Glass breached his
fiduciary duty and committed negligence by allegedly failing to shred, and instead providing
her lender and servicer with, the March 21, 2006, Note, as follows:
[T]he plaintiff has not once alleged that the terms of the March 21, 2006,
Note differ in any way from those in the March 27, 2006, Note. Instead, it
appears from her allegations, which is all that matters at this stage, that the
24

plaintiff pursues this claim based solely on the fact that the Notes are dated
six days apart. That will not suffice to survive a 12(b)(6) motion to dismiss.

...

For the same reasons outlined above, this Court finds that the plaintiff has
failed to adequately allege how she has been harmed by Glass’ alleged
failure to preserve the Note from the completed closing, and by extension, his
providing her lender and servicer with the Note from the aborted closing.

(Id. at 10, 11). Glass was dismissed with prejudice.
On February 4, 2011, Wittenberg filed a First Amended Complaint [Doc. 65],
containing thirteen (13) causes of action against the remaining defendants, either jointly or
individually: (Count I) violations of the Real Estate Settlement Procedures Act (“RESPA”),
12 U.S.C. § 2601, et seq.; (Count II) violations of the Federal Truth in Lending Act (“TILA”),
15 U.S.C. § 1601, et seq., and 12 C.F.R. § 226 (“Regulation Z”); (Count III) civil conspiracy;
(Count IV) breach of contract/implied covenant of good faith and fair dealing (Count V)
unjust enrichment; (Count VI) fraud; (Count VII) breach of fiduciary duty; (Count VIII)
negligence; (Counts IX) fraudulent, deceptive, or misleading representations in violation of
the West Virginia Consumer Credit and Protection Act (“WVCCPA”), W.Va. Code § 46A-1101, et seq.; (Count X) violations of the Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. § 1692a, et seq.; (Count XI) unfair or deceptive trade practices in violation of the
WVCCPA; (Count XII) slander of title; and (Count XIII) declaratory judgment.
Between February 14, 2011, and February 23, 2011, First Independent, Wells Fargo,
MERS, and U.S. Bank moved to dismiss the First Amended Complaint for failure to state
25

a claim against them upon which relief can be granted [Docs. 66, 68, 73, & 75]. On April
11, 2011, this Court entered a Memorandum Opinion and Order [Doc. 94], granting
dismissal on all claims against those defendants except a portion of Wittenberg’s breach
of contract claim against Wells Fargo.
This Court dismissed the following claims: (1) the civil conspiracy claim against all
movants as unsupported by allegations of an unlawful purpose; (2) the TILA claim against
all movants as time-barred; (3) the negligence claims against all movants as unsupported
by an allegation of injury and time-barred; (4) the fraud claim against First Independent,
Wells Fargo, and MERS as untimely and insufficiently pled; (5) the fraudulent, deceptive,
or misleading representations claim against First Independent, Wells Fargo, and MERS as
insufficiently pled and preempted by the National Bank Act (“NBA”) to the extent alleged
against Wells Fargo; (6) the unjust enrichment claim against First Independent, Wells
Fargo, and U.S. Bank as unsupported by allegations of inequitable benefits; (7) the RESPA
claims against First Independent and Wells Fargo as unsupported by a private cause of
action in part and unsupported an allegation of pecuniary loss in part; (8) the breach of
fiduciary duty claim against First Independent and Wells Fargo as untimely and
unsupported by an allegation of a special relationship; (9) the slander of title claim against
First Independent and Wells Fargo as unsupported by an allegation of a wrongful recording
of an unfounded claim on her property; (10) the declaratory judgment action against MERS
and U.S. Bank after rejecting Wittenberg’s argument that the securitization of her mortgage
loan rendered her Note unenforceable; (11) the breach of contract/implied covenant of
good faith and fair dealing claim against Wells Fargo to the extent that it relies upon the
HAMP, a Servicer Participation Agreement, or the Pooling and Servicing Agreement.
26

Accordingly, U.S. Bank, First Independent, and MERS were dismissed with prejudice.
This Court allowed the following claims to proceed: (1) the breach of contract/implied
covenant of good faith and fair dealing claim against Wells Fargo to the extent that it relies
upon a contract formed during a traditional trial modification; and (2) a claim for unfair or
deceptive trade practices against Wells Fargo wholly derivative of the breach of contract
claim.
On April 7, 2011, BofA moved to dismiss the First Amended Complaint for failure to
state a claim against it upon which relief can be granted [Doc. 91]. By Order dated May 5,
2011 [Doc. 100], this Court granted BofA’s motion for the same reasons already articulated
in its April 11, 2011, Memorandum Opinion and Order. BofA was dismissed with prejudice.
Neither Seneca nor SIW moved to dismiss the First Amended Complaint.
On June 2, 2011, this Court dismissed John Does 1 through 50 without prejudice,
noting that the May 31, 2011, discovery deadline had passed [Doc. 101]. Though the
discovery deadline was subsequently twice extended [Docs. 103 & 106], Wittenberg has
not moved to identify John Does 1 through 50. After an unsuccessful mediation on October
19, 2011 [Doc. 121], discovery was completed on October 21, 2011 [Doc. 106].
Thereafter, Wittenberg, Wells Fargo, Seneca, and SIW filed the following dispositive
motions on November 7, 2011.
A.

Wittenberg’s Motion for Partial Summary Judgment against Seneca and
SIW

Wittenberg moves for summary judgment against Seneca on her breach of fiduciary
duty claim, against SIW on her FDCPA claim, and against both defendants on her
fraudulent, deceptive, or misleading representations claim. In support of her motion,
27

Wittenberg argues that the facts uncovered in discovery show that these defendants acted
upon a deed of trust securing a note that has not been produced and that Wells Fargo
claims it does not have in its possession, a note dated March 27, 2006.
B.

Wells Fargo’s Motion for Summary Judgment

Wells Fargo moves for summary judgment on the two claims remaining against it,
namely: (1) the breach of contract/implied covenant of good faith and fair dealing claim
based upon a contract formed during a traditional trial modification; and (2) the wholly
derivative claim for unfair or deceptive trade practices. In support of its motion, Wells
Fargo argues that the Special Forbearance Agreement, which Wittenberg has testified she
understood to incorporate the traditional trial modification she alleged was breached, shows
that there is no genuine issue of material fact on either claim.
C.

Seneca’s and SIW’s Motion for Summary Judgment

Seneca and SIW move for summary judgment on all claims remaining against them,
including the claims which are the subject of Wittenberg’s motion. Seneca argues that the
breach of fiduciary duty claim seeks to improperly expand the role of a trustee in a deed
of trust. SIW argues that it is entitled to summary judgment on the FDCPA claim because
it adequately and properly verified the debt. Both defendants argue that their reliance on
the March 21, 2006, Note cannot support the fraudulent, deceptive, or misleading
representations claim because it is undisputed that Wittenberg had defaulted on her loan.
D.

Wittenberg’s Motion for Partial Summary Judgment Against Wells
Fargo

Wittenberg moves to reinstate, and for summary judgment on, her claim for
fraudulent, deceptive, or misleading representations against Wells Fargo, which this Court
28

dismissed as inadequately pled and preempted by the NBA on April 11, 2011. In support
of her motion, Wittenberg argues that this Court has subsequently changed its stance on
NBA preemption and discovery has revealed the invalidity of the March 21, 2006, Note.
These motions have been ripe for decision since mid-December 2011. A pretrial
conference is currently scheduled for February 17, 2012, to be followed by a jury trial on
February 28, 2012.
DISCUSSION
I.

Summary Judgment Standard
Summary judgment is appropriate “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986). A genuine issue exists “if the evidence is such that a reasonable jury
could return a verdict for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 250 (1986). Thus, the Court must conduct “the threshold inquiry of determining
whether there is the need for a trial-- whether, in other words, there are any genuine factual
issues that properly can be resolved only by a finder of fact because they may reasonably
be resolved in favor of either party.” Id. at 250.
The party opposing summary judgment “must do more than simply show that there
is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd.
v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). That is, once the movant has met its
burden to show absence of material fact, the party opposing summary judgment must then
come forward with affidavits or other evidence demonstrating there is indeed a genuine
29

issue for trial. Fed. R. Civ. P. 56(c); Celotex Corp., 477 U.S. at 323-25; Anderson, 477
U.S. at 248. “If the evidence is merely colorable, or is not significantly probative, summary
judgment may be granted.” Anderson, 477 U.S. at 249 (citations omitted).
II.

Analysis
A.

Wells Fargo Motion for Summary Judgment
1.

Count IV – Breach of Contract

In Count IV, Wittenberg claims that Wells Fargo breached a contract formed during
a traditional trial modification by failing to offer a permanent modification after she
successfully made three trial payments. In support of this claim, Wittenberg alleges the
following: (1) in February 2010, Wells Fargo informed her that she qualified for a $1,570.00
monthly payment and promised that if she made timely payments for three months, the
modification would become permanent; (2) she timely made the three agreed-upon
payments; (3) in May 2010, however, Wells Fargo informed her that it had placed her in
active foreclosure status again; and (4) also in May 2010, a Wells Fargo representative
informed her that the modification offer had been a “traditional modification” and that Wells
Fargo was “uncertain whether her investor would participate under HAMP.” ([Doc. 65] at
¶¶ 75-77, 79).
In denying Well’s Fargo’s motion to dismiss this claim, this Court found that the
plaintiff had stated an express breach of contract claim by alleging that Wells Fargo denied
a permanent loan modification even though it had promised one if she paid three trial
payments.
After discovery, it is undisputed that the agreement alleged was fully incorporated
in a written Special Forbearance Agreement (“SFA”) offered to Wittenberg on January 4,
30

2010, and reviewed, executed, and returned by her on January 20, 2010. Thus, to survive
summary judgment on this claim Wittenberg must present a genuine issue of material fact
that Wells Fargo breached the SFA. As explained below, however, she has failed to make
the requisite showing.
In West Virginia, the elements of breach of contract are (1) a contract exists between
the parties; (2) a defendant failed to comply with a term in the contract; and (3) damage
arose from the breach. See Wince v. Easterbrooke Cellular, Corp., 681 F.Supp.2d 688,
693 (N.D. W.Va. 2010). When determining whether a defendant failed to comply with a
term in the contract, a court is required to construe the contract in question according to the
plain and unambiguous language used. See Fifth Third Bank v. McClure Properties,
Inc., 724 F.Supp.2d 598, 605 (S.D. W.Va. 2010). In making this determination, a court
should find language ambiguous only when “it is reasonably susceptible to more than one
meaning in light of the surrounding circumstances and after apply the established rules of
construction.” FOP, Lodge No. 69 v. City of Fairmont, 196 W.Va. 97, 468 S.E.2d 712,
716 (1996).
Here, the SFA plainly and unambiguously stated that the purpose of the agreement
was exclusively to “temporarily accept reduced payments or maintain regular monthly
payments.” (SFA at § 2) (emphasis added). In addition, Wells Fargo was careful to explain
in the SFA that it was only upon “investor approval” that successful completion of the trial
plan “may satisfy the remaining past due amount” on Wittenberg’s loan. (Id.) (emphasis
added). Similarly, Wells Fargo cautioned that, “at its option, [it] may institute foreclosure
proceedings according to the terms of the note and security instrument without regard to
this agreement.” (Id. at § 4) (emphasis added). Finally, and perhaps most importantly, the
31

SFA provided in plain and unambiguous terms that Wells Fargo was “under no obligation
to enter into any further agreement, and [that] this forbearance shall not constitute a waiver
of [Wells Fargo’s] right to insist upon strict performance in the future.” (Id. at § 3)
(emphasis added).
Based upon these plain and unambiguous terms, this Court holds that Wittenberg
has failed to present a genuine issue of material fact that Wells Fargo breached the SFA
when it decided not to give her a permanent loan modification upon successful completion
of the trial period. Accordingly, this Court hereby DISMISSES Count IV (Breach of
Contract) to the extent that it claims an express breach of the SFA.
2.

Count IV – Breach of Implied Covenant of Good Faith and Fair
Dealing

West Virginia does not recognize a stand-alone cause of action for failure to exercise
contractual discretion in good faith. See Corder v. Countrywide Home Loans, Inc., 2011
WL 289343, *4 (S.D. W.Va. Jan 26, 2011). As such, a claim for breach of the implied
covenant of good faith and fair dealing can only survive if the borrower pleads an express
breach of contract claim. See e.g., Clendenin v. Wells Fargo Bank, N.A., 2009 WL
4263506, *5 (S.D. W.Va. Nov. 24, 2009) (holding that the bad faith claim “will live or die by
the [express] breach-of-contract claim . . ..”).
In light of the ruling above, there is no longer a viable express breach of contract
claim in this case. Thus, as a matter of law, there can be no claim for breach of the implied
covenant of good faith and fair dealing. Accordingly, this Court hereby DISMISSES Count
IV (Breach of Implied Covenant of Good Faith and Fair Dealing).

32

3.

Count IX – Unfair or Deceptive Trade Practices

As alluded to above and explained in its April 11, 2011 Memorandum Opinion and
Order, this Court allowed Wittenberg’s claim for unfair or deceptive trade practices to
proceed as one wholly derivative of the claim for breach of contract. To the extent this
Court has ruled above that Wittenberg has failed to make a sufficient showing that Wells
Fargo breached the SFA, this claim fails as well.

Accordingly, this Court hereby

DISMISSES Count IX (Unfair or Deceptive Trade Practices).
B.

Seneca, SIW, and Wittenberg Cross Motions for Summary Judgment
1.

Claims vs. Seneca (Substitute Trustee)
i.

Count VII – Breach of Fiduciary Duty

In Count VII, Wittenberg claims that Seneca breached the fiduciary duty it owed to
her as a substitute trustee by: (1) “failing to verify the validity of the March 21, 2006 [Note]
before initiating foreclosure proceedings against [her];” and (2) “attempting to foreclose on
[her] property” based upon an invalid note. ([Doc. 65] at ¶¶ 170-171).
The Deed of Trust permits the lender or the lender’s assignee to have the trustee
or substitute trustee “invoke the power of sale” if a default remains uncured after proper
notice of default. (Deed of Trust at § 22). In addition, W.Va. Code § 38-1-3 provides, in
whole, that:
The trustee in any trust deed given as security shall, whenever required by
any creditor secured or any surety indemnified by the deed, or the assignee
or personal representative of any such creditor or surety, after the debt due
to such creditor or for which such surety may be liable shall have become
payable and default shall have been made in the payment thereof, or any
part thereof, by the grantor or other person owing such debt, and if all other
conditions precedent to sale by the trustee, as expressed in the trust deed,
shall have happened, sell the property conveyed by the deed, or so much
thereof as may be necessary, at public auction, having first given notice of
33

such sale as prescribed in the following section [§ 38-1-4].
Interpreting this language, the Supreme Court of Appeals of West Virginia has held
that “the fiduciary duty owed by the trustee in a trust deed given as security in connection
with a home mortgage loan does not require the trustee to review account records to
ascertain the actual amount due prior to foreclosing . . ..” Lucas v. Fairbanks Capital
Corp., 217 W.Va. 479, 488, 618 S.E.2d 488, 497 (2005). In that same case, the Supreme
Court of Appeals also held that “nothing in the language of W.Va. Code § 38-1-3 . . .
suggest[s] that a trustee has a duty to consider objections to the foreclosure sale.” Id.
“Rather, the duties of a trustee set out in the statute are rather sparse. First, the trustee
must receive a communication from a creditor or surety indemnified by the deed that the
debt has become due, a default has occurred, and that a foreclosure sale is demanded.”
Id. at 495. Section 38-1-3 has not been interpreted to require a trustee to investigate the
validity of the underlying obligation.
Based upon the above, this Court concludes that Wittenberg has failed to present
a genuine issue of material fact that Seneca failed to perform its “rather sparse” duties.
First, Wittenberg does not dispute that she defaulted on her loan and that the Deed of Trust
provides for the invocation of the power of sale. Second, Wittenberg disputes neither that
Seneca received a communication from Wells Fargo that she had defaulted nor that a
foreclosure sale was scheduled as demanded. Accordingly, this Court hereby DISMISSES
Count VII (Breach of Fiduciary Duty).
ii.

Count XIII – Declaratory Judgment

In Count XIII, which names MERS, U.S. Bank, BofA, and Seneca, Wittenberg seeks
a declaration that “the Deed of Trust currently encumbering [her] property to be null and
34

void and to order such Deed of Trust and all related fillings to be removed from the land
records.” ([Doc. 65] at ¶ 219). In support of this request, Wittenberg alleges that “[t]he
negotiable instruments for [her] loan are not enforceable because the note was securitized
and, therefore, is subject to and governed by a Pooling and Servicing Agreement (‘PSA’).”
(Id. at ¶ 209).
On April 11, 2011, this Court dismissed this claim to the extent that it was requested
against MERS and U.S. Bank, rejecting Wittenberg’s argument that the securitization of her
loan rendered her Note unenforceable. For the same reason, this Court dismissed this
claim against BofA on May 5, 2011. Now, on the same basis and finding that there is no
genuine issue of material fact precluding summary judgment, this Court hereby
DISMISSES Count XIII (Declaratory Judgment) to the extent that it asks for the same relief
against Seneca.
iii.

Count VI – Fraud

In Count VI, Wittenberg claims that she was defrauded by Seneca, which she
alleges fraudulently misrepresented that it had the authority to foreclose on her property.
([Doc. 65] at ¶ 162).
On April 11, 2011, this Court dismissed an identical fraud claim against MERS
finding that Wittenberg had no damages because her property had not been foreclosed.
After discovery, it is undisputed that Seneca has not foreclosed on Wittenberg’s property.
In fact, the evidence shows that Seneca has continued the foreclosure sale on several
occasions and ultimately cancelled the sale on July 13, 2010. As such, assuming without
finding that Seneca lacked authority to foreclose, this Court concludes that Wittenberg has
failed to present a genuine issue of material fact that a representation to the contrary has
35

caused her damages sufficient to allow a claim of fraud to go to a jury. Accordingly, this
Court hereby DISMISSES Count VI (Fraud) to the extent that it relates to Seneca’s
representation regarding its authority to foreclosure.
iv.

Count IX – Fraudulent, Deceptive, or Misleading
Representations

In Count IX, Wittenberg claims that each letter sent by Seneca “alleged a
delinquency in her mortgage is a separate fraudulent, deceptive or misleading
representation of the character, extent or amount of [the] claim against [her],” in violation
of W.Va. Code § 46A-2-127(d). ([Doc. 65] at ¶ 187). This claim, like the claim for breach
of fiduciary duty, is based upon the theory that the March 21, 2006, Note is invalid. Thus,
Wittenberg asserts that Seneca’s representations that it was entitled to foreclose were false
representations of the character of the claim against her because Seneca did not possess
a valid note to initiate the foreclosure process.
Article 2, Section 127 of the WVCCPA, provides that “[n]o debt collector shall use
any fraudulent, deceptive or misleading representation or means to collect or attempt to
collect claims or to obtain information concerning consumers.” W.Va. Code. § 46A-2-127.
The section then gives as an example “[a]ny false representation or implication of the
character, extent or amount of a claim against a consumer, or of its status in any legal
proceeding.” W.Va. Code § 46A-2-127(d).
Here, Wittenberg bases her claim of falsity upon the premise that Seneca made
representations that it was entitled to foreclose on a note which she claims is invalid.
However, as explained above, a trustee in West Virginia does not have a duty to investigate
the validity of a note. See Lucas, 618 S.E.2d at 497; W.Va. Code § 38-1-3. Instead, a
36

trustee acts upon the demand of a creditor. Thus, because Seneca was not required to
conduct an independent investigation into the validity of the March 21, 2006, Note, it cannot
be reasonably said to have made a false representation as to that validity. As such,
Wittenberg’s claim fails as a matter of law. Accordingly, this Court hereby DISMISSES
Count IX (Fraudulent, Deceptive, or Misleading Representations) to the extent that it is
alleged against Seneca.
2.

Claims vs. SIW (Debt Collector)
i.

Count X – FDCPA

In Count X, Wittenberg claims that SIW violated the FDCPA by failing to verify her
debt and by making false, deceptive, or misleading representations in connection with the
collection of her debt. The Court will consider each claim in turn.
a.

Validation of Debt

Wittenberg first claims that SIW “continued collection activities without providing
verification of the debt to [her] after she requested verification of the debt in writing, in
violation of 15 U.S.C. § 1692g(b).” ([Doc. 65] at ¶ 192).
Pursuant to § 1692g(a) of the FDCPA, a debt collector must send the consumer a
written notice containing, among other things, “a statement that if the consumer notifies the
debt collector in writing within the thirty-day period that the debt, or any portion thereof, is
disputed, the debt collector will obtain verification of the debt or . . . a copy of such
verification . . . will be mailed to the consumer by the debt collector.” 15 U.S.C. §
1692g(a)(4). Pursuant to § 1692g(b), “[i]f the consumer notifies the debt collector in writing
within the thirty-day period described in subsection (a) that the debt, or any portion thereof,
is disputed . . . , the debt collector shall cease collection of the debt, or any disputed portion
37

thereof, until the debt collector obtains verification of the debt . . . and a copy of such
verification . . . is mailed to the consumer by the debt collector.” 15 U.S.C. § 1692g(b).
Here, Wittenberg claims that SIW continued collection efforts without verifying her
debt, in violation of § 1692g(b). Insofar as it is undisputed that SIW faxed Wittenberg’s
counsel a copy of the March 21, 2006, Note and a complete payment history to verify the
debt, this Court can only assume that Wittenberg claims such verification was insufficient
because the March 21, 2006, Note is allegedly invalid.
In the Fourth Circuit, however, “verification of a debt involves nothing more than the
debt collector confirming in writing that the amount being demanded is what the creditor is
claiming is owed . . ..” Chaudhrey v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999). In
addition, other courts have specifically held that verification of a debt does not obligate a
debt collector to investigate whether the debt is valid. See Poulin v. The Thomas
Agency, 760 F.Supp.2d 151, 159 (D.Me. 2011); Clark v. Capital Credit & Collection
Servs., Inc., 460 F.3d 1162, 1174 (9th Cir. 2006); Rudek v. Frederick J. Hanna &
Assocs., P.C., 2009 WL 385804, *2 (E.D. Tenn. Feb. 17, 2009); Shapiro v. Haenn, 222
F.Supp.2d 29, 44 (D. Me. 2002). At bottom, “confirmation of the amount of the debt and
the identity of the creditor, which is then relayed to the debtor, is sufficient.” Poulin, 760
F.Supp.2d at 159 (citing Chaudhrey, 174 F.3d at 406).
Therefore, this Court concludes that § 1692g(b) did not require SIW to investigate
the validity of the March 21, 2006, Note provided by Wells Fargo and which SIW then
relayed to Wittenberg. Wittenberg’s § 1692g(b) claim thus fails as a matter of law.
Accordingly, this Court hereby DISMISSES Count X (FDCPA) to the extent that it claims
a violation of § 1692g(b).
38

b.

False, Deceptive, or Misleading Representation

Wittenberg next claims that each of SIW’s demands for payments which were not
due was a false representation of the character, amount, or legal status of a debt, in
violation of the FDCPA, 15 U.S.C. § 1692e(2)(A). ([Doc. 65] at ¶ 191).
Pursuant to § 1692e of the FDCPA, “a debt collector may not use any false,
deceptive, or misleading representation or means in connection with the collection of any
debt.” 15 U.S.C. § 1692e. The false representation of “the character, amount, or legal
status of any debt” is a violation of § 1692e(2)(A).
Here, Wittenberg argues that SIW falsely represented the character of legal status
of a debt by providing her with what she claims is an invalid March 21, 2006 Note, for proof
of its entitlement to collect her debt. However, “[t]he FDCPA does not require a debt
collector to engage in an independent investigation of the debt referred for collection.”
Sayyed v. Wolpoff & Abramson, LLC, 733 F.Supp.2d 635, 646 (D. Md. 2010) (citing
Jenkins v. Heintz, 124 F.3d 824, 834 (7th Cir. 1997) (holding that a debt collection has no
obligation to conduct an independent debt validity investigation); Elane v. Revenue
Maximation Group, 233 F.Supp.2d 496, 500 (E.D.N.Y. 2002) (noting that defendant was
entitled to rely on its client’s representation that the debt was valid)).
Like the § 1692g(b) claim, therefore, this claim cannot be based upon SIW’s alleged
failure to investigate the validity of the March 21, 2006, Note. Wittenberg’s § 1692e(2)(A)
claim thus fails as a matter of law. Accordingly, this Court hereby DISMISSES Count X
(FDCPA) to the extent that it claims a violation of § 1692e(2)(A).
ii.

Count VI – Fraud / Count XII – Slander of Title

In Count VI, Wittenberg claims that she was defrauded by SIW, which she alleges
39

created fraudulent Substitution of Trustee documents. ([Doc. 65] ¶ 162). In Count XII,
Wittenberg claims that SIW’s recording of the Substitution of Trustee documents
constituted a slander to the title to the her property because SIW knew or should have
known that those documents “contained false statements as to the owner of the note and
the beneficial owner of the Deed of Trust.” (Id. at ¶¶ 202-203).
SIW did not move to dismiss these claims, which have not been further developed
after discovery. The only context for these claims is Wittenberg’s allegation that “[b]ecause
the 2006-Trust has no ownership interest in the March 21 Note (or any other note that may
be subsequently be [sic] found), it has no authority to appoint Seneca Trustee as substitute
trustee under the Deed of Trust.” ([Doc. 65] at ¶ 93). In this context, this Court can only
assume that this claim is based upon Wittenberg’s general theory that the securitization of
her loan was unlawful, as alleged most extensively in Count XII. Because this Court has
already rejected that theory, these claims must fail as a matter of law for the same reasons
previously explained in this Court’s April 11, 2011, Memorandum Opinion and Order.
Accordingly, this Court hereby DISMISSES Count VI (Fraud) and Count XII (Slander of
Title) to the extent alleged against SIW.
iv.

Count IX – Fraudulent, Deceptive, or Misleading
Representations

In Count IX, Wittenberg claims that each letter sent by SIW “alleging a delinquency
in her mortgage is a separate fraudulent, deceptive or misleading representation of the
character, extent or amount of [the] claim against [her],” in violation of W.Va. Code § 46A-2127(d). ([Doc. 65] at ¶ 187). Again, Wittenberg bases this claim solely upon the theory that
the March 21, 2006, Note is invalid.

As such, Wittenberg claims that SIW falsely
40

represented that it was entitled to collect on a valid note.
In dismissing Wittenberg’s identical claim under the FDCPA, this Court joined
several courts in holding that the FDCPA did not require a debt collector to investigate the
validity of the debt it has been asked by a creditor to collect. Wittenberg has not presented,
and this Court has been unable to find, any authority that would persuade this Court to treat
this WVCCPA claim differently from her FDCPA claim. As such, this Court holds that SIW
could not have violated W.Va. Code § 46A-2-127(d) based upon Wittenberg’s invalidity
theory because SIW was not required to conduct an independent investigation into the
validity of the March 21, 2006, Note. Accordingly, this Court hereby DISMISSES Count IX
Fraudulent, Deceptive, or Misleading Representations) to the extent that it is alleged
against SIW.
3.

Civil Conspiracy Claim vs. Seneca and SIW

In Count III, titled “Common Law Civil Conspiracy,” Wittenberg claims that Seneca
and SIW “acted together in an attempt to unlawfully foreclose on [her] property.” ([Doc. 65]
at ¶ 142).
In West Virginia, “[a] civil conspiracy is not a per se, stand-alone cause of action; it
is instead a legal doctrine under which liability for a tort may be imposed on people who did
not actually commit a tort themselves but who shared a common plan for its commission
with the actual perpetrator(s).” Dunn v. Rockwell, 225 W.Va. 43, 57, 689 S.E.2d 255, 269
(2009) (citing Kessel v. Leavitt, 204 W.Va. 95, 129, 511 S.E.2d 720, 754 (1998)).
To the extent that no viable tort claim remains in this action against Seneca and
SIW, any claim of civil conspiracy fails as a matter of law. Accordingly, this Court hereby
DISMISSES Count III (Civil Conspiracy).
41

D.

Wittenberg Motion for Partial Summary Judgment

In Count IX, Wittenberg claims that each of the letters sent by Seneca and SIW on
behalf of Wells Fargo “alleging a delinquency in her mortgage is a separate fraudulent,
deceptive or misleading representation of the character, extent or amount of [the] claim
against [her],” in violation of W.Va. Code § 46A-2-127(d). ([Doc. 65] at ¶ 187). Specifically,
Wittenberg alleges that she received “foreclosure notices sent to her by Wells Fargo,” that
“Wells Fargo sent [her] foreclosure notices referencing a different loan number [than on the
DOT],” and that she received “several notices from Defendant Samuel I. White, PC stating
that it had been retained by defendant Wells Fargo to institute foreclosure proceedings .
. ..” (Id. at ¶¶ 70, 104, 106).
On April 11, 2011, this Court dismissed Count IX as it pertains to Wells Fargo on two
alternative bases:
First, the plaintiff has failed to allege that she was not delinquent on
her loan payments. In fact, she admits that she was three months behind,
though she alleges that she stopped making payments in reliance upon
statements by a Wells Fargo representative. (See [Doc. 65] at ¶ 51). If,
according to her own allegations, the plaintiff was delinquent, then the
foreclosure notices could not have been fraudulent, deceptive, or misleading
as a matter of law.
Moreover, to the extent the plaintiff argues that any claim of
delinquency was fraudulent, deceptive, or misleading because she only
became delinquent in reliance upon representations made by Wells Fargo
during a potential loan modification, her claim is preempted . . . by the NBA[.]

([Doc. 94] at 24-25).
On November 7, 2011, Wittenberg filed the instant Motion for Partial Summary
42

Judgment against Wells Fargo, asking this Court to reinstate, and grant her summary
judgment on, Count IX. With regard to the first basis, Wittenberg argues that the false
representations she claimed concerned the validity of the March 21, 2006, Note, not
whether she was behind on payments. In other words, Wittenberg claims that Wells Fargo
violated W.Va. Code § 46A-2-127(d) by falsely representing to her, directly through its
representatives or indirectly through Seneca and SIW, that it was entitled to collect on the
March 21, 2006, Note. As for the second basis, Wittenberg argues that this Court would
no longer find Count IX preempted by the NBA after its decision in O’Neal v. Capital One
Auto Finance, Inc., 2011 WL 4549148 (N.D. W.Va. Sept. 29, 2011). For each of the
independent reasons that follows, this Court finds that reinstatement is unwarranted.
Reinstatement would be unduly prejudicial to Wells Fargo at this stage. Specifically,
during the seven-month period between dismissal of Count IX and this motion, Wells Fargo
had no reason to believe, let alone notice, that it would have to defend against Count IX.
Importantly, discovery had been closed for two weeks at the time this motion, the first
indication that Wittenberg intended to request reinstatement of Count IX against Wells
Fargo, was filed.
Reinstatement would ignore Wittenberg’s failure to practice due diligence. After the
April 11, 2011, decision, Wittenberg failed to move to alter or amend this Court’s judgment
within 28 days pursuant to Rule 59 of the Federal Rules of Civil Procedure to clarify that
Count IX was based upon her challenge of the validity of the March 21, 2006, Note, not that
she was actually behind on payments. As clarified, that claim may have escaped NBA
preemption. Moreover, Wittenberg waited until five weeks after this Court’s O’Neal
decision to move for reinstatement.
43

Reinstatement would be futile because Wittenberg has not presented a genuine
issue of material fact that she can succeed against Wells Fargo on Count IX based upon
the theory that the March 21, 2006, Note is invalid. First, Wittenberg does not dispute the
following facts: (1) she promised to pay First Independent (or its assignees or successors)
$416,000 at an initially fixed interest rate of 5.875% over a term of 30 years; (2) she
immediately received substantial benefit from this refinance loan, namely her home loan
and another personal loan were paid off and she received over $100,000 in cash; and (3)
she has not made a regular payment on this loan since December 2008, over three years
ago. Second, Wittenberg has failed to present a genuine issue as to the existence of a
note dated March 27, 2006. Nor has she presented a genuine issue of material fact that,
assuming its existence, the other note contained terms that differ from the uniform Fannie
Mae March 21, 2006, Note. Third, Wittenberg does not dispute that after receiving a copy
of March 21, 2006, Note, which she now claims is invalid, she nevertheless sought a
modification of its terms. In fact, she actually made three payments toward the March 21,
2006, Note as part of a trial modification governed by a written Special Forbearance
Agreement that she fully reviewed and signed. See Potesta v. United States Fid. & Guar.
Co., 202 W.Va. 308, 316, 504 S.E.2d 135, 143 (1998) (explaining the doctrine of estoppel).
Therefore, Wittenberg has failed to present a genuine issue of material fact that she can
succeed against Wells Fargo on Count IX based upon the theory that the March 21, 2006,
Note is invalid.
For these reasons, this Court finds that reinstatement of Count IX against Wells
Fargo is unwarranted.

44

CONCLUSION
For the foregoing reasons, this Court concludes that Wittenberg’s Motion for Partial
Summary Judgment against Defendants Samuel I. White, P.C. and Seneca Trustees, Inc.
[Doc. 127] and Motion for Partial Summary Judgment against Defendant Wells Fargo
Bank, N.A. [Doc. 133] should be, and hereby are, DENIED. In addition, this Court
concludes that Wells Fargo’s Motion for Summary Judgment [Doc. 129] and Seneca’s and
SIW’s Motion for Summary Judgment [Doc. 130] should be, and hereby are, GRANTED.
Accordingly, Wittenberg’s First Amended Complaint [Doc. 65] is hereby DISMISSED WITH
PREJUDICE and this matter is ORDERED STRICKEN from the active docket of this Court.
Finally, the Clerk is directed to enter judgment in favor of the defendants.
It is so ORDERED.
The Clerk is hereby directed to transmit copies of this Order to counsel of record.
DATED: February 10, 2012.

45