Vandall v. Wells Fargo Bank, N.A.

Filing 61

MEMORANDUM OPINION AND ORDER: Granting Defendant Wells Fargo Bank, N.A.'s 49 MOTION for Summary Judgment; terminating as moot any pending motions. Signed by Judge Irene C. Berger on 7/3/2018. (cc: attys; any unrepresented party) (slr)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
BECKLEY DIVISION
ERNEST VANDALL,
Plaintiff,
v.

CIVIL ACTION NO. 5:17-cv-03544

WELLS FARGO BANK, N.A.,
Defendant.

MEMORANDUM OPINION AND ORDER
The Court has reviewed the Defendant Wells Fargo Bank, N.A.’s Motion for Summary
Judgment (Document 49) and Memorandum in Support (Document 50), the Plaintiff’s Response
in Opposition (Document 51), and the Defendant’s Reply in Support (Document 52), as well as
the Plaintiff’s Complaint (Document 1-2) and all attached exhibits. For the reasons stated herein,
the Court finds that the motion should be granted.

PROCEDURAL HISTORY AND FACTUAL BACKGROUND
The Plaintiff, Mr. Ernest Vandall, initiated this action with the filing of a complaint in the
Circuit Court of Greenbrier County, West Virginia, on May 17, 2017. Mr. Vandall named Wells
Fargo Bank, N.A. (“Wells Fargo”) as the sole Defendant. Pursuant to its Notice of Removal
(Document 1), Wells Fargo removed the case to this Court on July 6, 2017, citing diversity
jurisdiction.

In 2009, Mr. Vandall purchased a home at 213 2nd Street, Rainelle, West Virginia. In
order to purchase the home, Mr. Vandall sought a mortgage from Wells Fargo and eventually
executed a promissory note and a Deed of Trust. (See, Def.’s Mot. for Sum. Judg., Ex A) (see
also, Ernest Vandall Depo., at 12:2- 13:22, Document 51-2.) During the origination process,
Wells Fargo determined that the property Mr. Vandall was purchasing was located in an area that
the Federal Emergency Management Agency (“FEMA”) designated as a Special Flood Hazard
Area (“SFHA”). (Def.’s Mot. for Sum. Judg., Ex. C.) Due to this designation, Wells Fargo
required Mr. Vandall to purchase flood insurance on the home in order to obtain the mortgage.
Shortly thereafter, Mr. Vandall acquired a flood insurance policy through Nationwide.
Importantly, however, because Wells Fargo required Mr. Vandall to obtain the flood insurance,
Wells Fargo would increase Mr. Vandall’s monthly mortgage payment by one-twelfth of the total
annual flood insurance premium, hold that money in an escrow account, and use it to pay the flood
insurance premium when it became due. (Id. at Ex. B, Deed of Trust, ¶ 3.) This process
continued through 2012, and Mr. Vandall received statements from Wells Fargo reflecting the
payments being made from the escrow account. (Id. at Ex. G.)
In October 2012, FEMA amended its Flood Insurance Rate Map for the Rainelle area, and
subsequently determined that Mr. Vandall’s property was no longer inside an SFHA. Due to this
change, Wells Fargo determined that Mr. Vandall was no longer required to maintain flood
insurance. On November 12, 2012, Wells Fargo generated a letter entitled “Flood Insurance
Notification” sent via first-class mail to Mr. Vandall informing him of this update. (Id. at Ex. J.)
This notification stated that, “[s]ince [Mr. Vandall’s] property is no longer located in a required
flood zone, your flood insurance is now OPTIONAL.”
2

(Id.) (emphasis in original.)

This

notification did not affect the cancellation of Mr. Vandall’s flood insurance policy, however. In
fact, because of Wells Fargo’s escrow method of payment, Mr. Vandall’s 2012-2013 flood
insurance premium had previously been paid and the policy remained in effect until September of
2013. On November 13, 2012, the very next day after sending the notification regarding the
change in required flood insurance, Wells Fargo sent Mr. Vandall a correspondence providing his
monthly payment and detailing the amount in his escrow account. (Id. at Ex. N.) Because the
flood insurance premium for 2012 through 2013 had been paid in full, and because the insurance
was no longer required, this November 2012 statement showed that Mr. Vandall’s monthly
mortgage payment would be reduced. (Id.) The statement also included a check refunding him
the balance of the escrow account that had been deducted to pay for flood insurance which was no
longer required. (Id.) Mr. Vandall alleges that, although he received and looked at all the mail
delivered to the residence in question, he did not receive the notice from Wells Fargo informing
him that flood insurance was no longer required. (Ernest Vandall Depo., at 35:10-23) (Document
51-2.) Mr. Vandall does not, however, dispute receiving the updated escrow notice reflecting the
subtraction of the flood insurance payment and the refund check that was attached. (Id. at 38:1739:2; 45:3-6.)
On August 2, 2013, nearly nine months after Wells Fargo sent the flood insurance update
notification and the updated escrow statement including a check, Nationwide sent Mr. Vandall a
Flood Insurance Policy Renewal Premium Notice. (See, Def.’s Mot. for Sum. Judg., Ex. Q.)
This notice included Mr. Vandall’s address and policy number, and informed him that his flood
insurance would expire on September 16, 2013. (Id.) The notice also included the amount of
the premium he could owe to renew the insurance policy for the following year. (Id.) Mr.
3

Vandall did not pay the premium to renew the flood insurance policy, and on September 17, 2013,
Nationwide sent him a notice informing him that the flood insurance policy had expired, but that
he could reinstate the policy by paying the annual premium. (Def.’s Mot. for Sum. Judg., Ex. R.)
Mr. Vandall alleges that he did not receive either of these notices from Nationwide and never
reinstated the policy. (Ernest Vandall Depo., at 51:1-52:7.)
In June 2016, Rainelle and the surrounding areas of Greenbrier County “experienced
catastrophic flooding,” which severely damaged Mr. Vandall’s home. (Compl., at ¶ 11-12.)
After the water subsided, Mr. Vandall contacted the National Flood Insurance Program,
administered by FEMA, “to make a claim for the extensive damage to his house and its contents.”
(Id. at ¶ 12.) FEMA informed Mr. Vandall that he did not have flood insurance, however, and
Mr. Vandall proceeded to call Wells Fargo. Wells Fargo informed Mr. Vandall that he did not
have flood insurance because, as the 2012 notices sent to him stated, the flood insurance was no
longer required on his mortgage, and he had allowed the flood insurance policy to lapse. Mr.
Vandall alleges in his complaint that Wells Fargo canceled his flood insurance and continued to
charge him for the cost of flood insurance even after the insurance had lapsed. He filed his
complaint thereafter.

STANDARD OF REVIEW
The well-established standard in consideration of a motion for summary judgment is that
“[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a)–(c); see also Hunt v. Cromartie, 526 U.S. 541, 549 (1999); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Hoschar v.
4

Appalachian Power Co., 739 F.3d 163, 169 (4th Cir. 2014). A “material fact” is a fact that could
affect the outcome of the case. Anderson, 477 U.S. at 248; News & Observer Publ’g Co. v.
Raleigh-Durham Airport Auth., 597 F.3d 570, 576 (4th Cir. 2010). A “genuine issue” concerning
a material fact exists when the evidence is sufficient to allow a reasonable jury to return a verdict
in the nonmoving party’s favor. FDIC v. Cashion, 720 F.3d 169, 180 (4th Cir. 2013); News &
Observer, 597 F.3d at 576.
The moving party bears the burden of showing that there is no genuine issue of material
fact, and that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp.,
477 U.S. at 322–23. When determining whether summary judgment is appropriate, a court must
view all of the factual evidence, and any reasonable inferences to be drawn therefrom, in the light
most favorable to the nonmoving party. Hoschar, 739 F.3d at 169. However, the non-moving
party must offer some “concrete evidence from which a reasonable juror could return a verdict in
his favor.” Anderson, 477 U.S. at 256. “At the summary judgment stage, the non-moving party
must come forward with more than ‘mere speculation or the building of one inference upon
another’ to resist dismissal of the action.” Perry v. Kappos, No.11-1476, 2012 WL 2130908, at
*3 (4th Cir. June 13, 2012) (unpublished decision) (quoting Beale v. Hardy, 769 F.2d 213, 214
(4th Cir. 1985)).
In considering a motion for summary judgment, the court will not “weigh the evidence and
determine the truth of the matter,” Anderson, 477 U.S. at 249, nor will it make determinations of
credibility. N. Am. Precast, Inc. v. Gen. Cas. Co. of Wis., 2008 WL 906334, *3 (S.D. W. Va. Mar.
31, 2008) (Copenhaver, J.) (citing Sosebee v. Murphy, 797 F.2d 179, 182 (4th Cir. 1986). If
disputes over a material fact exist that “can be resolved only by a finder of fact because they may
5

reasonably be resolved in favor of either party,” summary judgment is inappropriate. Anderson,
477 U.S. at 250. If, however, the nonmoving party “fails to make a showing sufficient to establish
the existence of an element essential to that party’s case,” then summary judgment should be
granted because “a complete failure of proof concerning an essential element . . . necessarily
renders all other facts immaterial.” Celotex, 477 U.S. at 322–23.

DISCUSSION
Wells Fargo moves for summary judgment as to each count of the Plaintiff’s complaint.
The Plaintiff alleged the following causes of action: Count I—Declaratory Relief, Count II—
Breach of Contract, Count III—Breach of Covenants of Good Faith and Fair Dealing, Count IV—
Negligence, Count V—Unjust Enrichment, Count VI—Conversion, Count VII—Detrimental
Reliance, Count VIII—Fraud, and Count IX—Punitive Damages. Importantly, in each of these
counts, Mr. Vandall claims that Wells Fargo is liable for his damages because it canceled his flood
insurance and continued to retain payments from him for that flood insurance.
Wells Fargo argues that it is entitled to summary judgment on all of the Plaintiff’s claims
because it was not responsible for and did not cancel the Plaintiff’s flood insurance. Wells Fargo
asserts that the contract for the flood insurance policy was solely between Nationwide and Mr.
Vandall, and it had no ability to cancel the policy when it was not a party to the contract. Wells
Fargo further contends that it informed Mr. Vandall that the flood insurance policy was no longer
mandatory after the FEMA flood map change, and that Nationwide informed him that the policy
would expire if he did not pay the premium. Wells Fargo specifically asserts it sent Mr. Vandall
the notice that his flood insurance was no longer required because it generated the notice with Mr.
Vandall’s name and address, and sent it via first-class mail. According to the Deed of Trust on
6

the mortgage signed by Mr. Vandall, any notice sent to Mr. Vandall by Wells Fargo “shall be
deemed to have been given to [Mr. Vandall] when mailed by first class mail OR when actually
delivered to [Mr. Vandall’s] notice address if sent by other means.” (Deed of Trust, at ¶ 15)
(Document 49-2.) Based on the Deed of Trust language, Wells Fargo argues that it is undisputed
that it sent Mr. Vandall the Flood Insurance Notification. Thus, because there is no genuine issue
of material fact regarding the Plaintiff’s claims that Wells Fargo cancelled his flood insurance and
continued to collect payments to pay for that cancelled insurance, and because it is undisputed that
Wells Fargo informed Mr. Vandall of the change to his flood insurance requirements, Wells Fargo
argues it is entitled to summary judgment on all of Mr. Vandall’s claims.
Mr. Vandall counters that Wells Fargo is not entitled to summary judgment. Mr. Vandall
first concedes that discovery has shown that “some of the counts [in his complaint] were based on
his mistaken understanding that Wells Fargo had cancelled his coverage and then required him to
continue to pay the premium . . . and, as a result, are no longer viable.” (Pl.’s Resp. in Opp. at 5.)
Specifically, Mr. Vandall concedes that his claims for “declaratory relief, conversion, unjust
enrichment, and fraud” cannot go forward. (Id.) As to the remaining counts, however, the
Plaintiff contends that there is a genuine issue of material fact that precludes summary judgment.
The Plaintiff asserts that, although Wells Fargo may have sent the notice informing him that his
flood insurance was no longer required and therefore his responsibility, he never received that
notice. He further asserts that he never received the notice from Nationwide in August of 2013
that his flood insurance policy was about to expire. Because he never received those documents,
he contends that there is a genuine issue of material fact as to whether Wells Fargo did, in fact,

7

notify him that flood insurance was no longer necessary, and that summary judgment should be
denied.
At the outset, and based on the Plaintiff’s concession that Counts I, V, VI, and VIII can no
longer go forward, Wells Fargo’s motion will be granted as to those counts. The Court further
finds that the Defendant’s motion should also be granted as to all of the remaining counts.
Although Mr. Vandall concedes that Wells Fargo did not cancel his flood insurance nor continue
to receive payments from him toward that insurance policy, he continues to contend that Wells
Fargo is liable for his loss of flood insurance because it failed to notify him that the flood insurance
was no longer required and that it would no longer be paid for out of his escrow account. The
Court finds this argument lacking in merit. First, the contract for a flood insurance policy was
entered into by Mr. Vandall and Nationwide. Each and every count in his complaint contends
that Wells Fargo improperly canceled his flood insurance, but as Mr. Vandall voluntarily concedes,
Wells Fargo could not, and did not, cancel his flood insurance policy.
Moreover, it is undisputed that Wells Fargo generated and sent Mr. Vandall the Flood
Insurance Notification. Pursuant to the Deed of Trust, any notice or document sent to Mr. Vandall
is “deemed to have been given to [him] when mailed by first class mail . . . .” (Deed of Trust, at
¶ 15) (Document 49-2.) Pursuant to West Virginia law, “[i]f the language [of a contract] is
unambiguous, it ‘must be construed according to its plain and natural meaning.’” Estep v. Fed.
Home Loan Mortg. Corp., No. 5:13-CV-02128, 2014 WL 1276495, at *3 (S.D.W. Va. Mar. 27,
2014) (quoting Fraternal Order of Police, Lodge No. 69 v. Fairmont, 468 S.E.2d 712, 716 (W.Va.
1996)). A writing is ambiguous if it is “reasonably susceptible of two different meanings.”
Estate of Tawney v. Columbia Natural Res., LLC, 633 S.E.2d 22, 28 (W.Va. 2006). The contract
8

between Mr. Vandall and Wells Fargo or the Deed of Trust, is unambiguous regarding when notice
is deemed delivered. It is clear, plain, and not reasonably susceptible to two different meanings.
Mr. Vandall is therefore deemed to have been given any notice in connection with his mortgage
when that notice was mailed via first-class mail to his notice address. Pursuant to the deposition
testimony of the Defendant’s employee, Lorrie Madden, Wells Fargo maintained a log which was
a “systematic record that is created when a letter is generated and mailed,” and that log indicated
that the letter was sent via first-class mail. (Lorrie Madden Depo., at 105:1-106:2) (Document
52-1.)

Thus, Wells Fargo has presented evidence that proves it sent the Flood Insurance

Notification to Mr. Vandall via first-class mail, and pursuant to the unambiguous language of the
Deed of Trust, Mr. Vandall is deemed to have received that notice.
Mr. Vandall’s argument that this is not sufficient proof that Wells Fargo sent the notice
invites the Court to ignore the evidence. Wells Fargo has presented evidence that it sent the letter
via first-class mail through its letter log and notice generating system. Mr. Vandall has not
presented evidence that Wells Fargo did not generate the letter or that its letter log and system of
generation are falsified. He merely argues that he did not see the notice and thus could not have
received it, and that “Wells Fargo cannot rely on the Deed of Trust’s provision that Vandall is
deemed to have received the notice because it was sent by first-class mail” to dispute Mr. Vandall’s
testimony.

(Pl.’s Resp. in Opp. at 10.)

However, Wells Fargo can, in fact, rely on the

unambiguous language of the contract entered into by it and Mr. Vandall to show that, when a
notice is sent by first-class mail, Mr. Vandall is deemed under the contract to have received it.
When contract language is unambiguous, “it is not the right or province of a court to alter, pervert
or destroy the clear meaning and intent of the parties as expressed.” Syl. Pt. 3, Haynes v.
9

DaimlerChrysler Corp., 720 S.E.2d 564, 565 (W.Va. 2011). The Deed of Trust language is
unambiguous, and Wells Fargo has shown pursuant to its letter log that it generated a Flood
Insurance Notice sent to Mr. Vandall via first-class mail. Again, this evidence is undisputed.
Mr. Vandall only argues that he did not see the notice he is deemed to have received.
Finally, whether or not Mr. Vandall received the expiration notices from Nationwide is
irrelevant to Wells Fargo’s liability for his losses. Wells Fargo was not a party to the contract
between Mr. Vandall and Nationwide, and what Nationwide did or did not do has no bearing on
whether or not Wells Fargo notified Mr. Vandall that flood insurance was no longer required. To
the extent that Mr. Vandall argues that Wells Fargo is liable for his losses because he did not
receive Nationwide’s expiration notice, that argument fails to provide sufficient evidence of a
genuine issue of material fact regarding Wells Fargo and its obligations under the Deed of Trust.
In sum, Wells Fargo has shown that it generated and sent to Mr. Vandall, via first-class
mail, a notification that flood insurance was no longer required to maintain his mortgage. The
Deed of Trust entered into by Mr. Vandall explicitly and unambiguously deems him to have
received that notice. Mr. Vandall concedes that Wells Fargo did not have the ability or authority
to cancel his flood insurance policy that he personally obtained through Nationwide.

CONCLUSION
Wherefore, after thorough review and careful consideration, the Court ORDERS that the
Defendant Wells Fargo Bank, N.A.’s Motion for Summary Judgment (Document 49) be
GRANTED. The Court further ORDERS that any pending motions be TERMINATED AS
MOOT.

10

The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and to
any unrepresented party.
ENTER:

11

July 3, 2018