Adam v. Wells Fargo Bank, N.A.

• Decision Date: 26 August 2011
• Docket Number: Civil Action No. ELH-09-2387
• Parties: ABDOU-MALIK YACOUBOU ADAM, Plaintiff, v. WELLS FARGO BANK, N.A., Defendant.
• Court: U.S. District Court — District of Maryland

ABDOU-MALIK YACOUBOU ADAM, Plaintiff,

v.WELLS FARGO BANK, N.A., Defendant.

Civil Action No. ELH-09-2387

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

Dated: August 26, 2011

MEMORANDUM OPINION

Plaintiff Abdou-Malik Yacoubou Adam, pro se, filed suit against Wells Fargo Bank, N.A. ("Wells Fargo"), defendant.¹ In his Complaint (ECF 2), plaintiff set forth five claims arising from Wells Fargo's servicing of a mortgage on real property owned by Mr. Yacoubou,² located at 3805 Mayberry Avenue in Baltimore, Maryland (the "Property"), and sought $2 million in "compensatory damages." On July 28, 2010, Judge J. Frederick Motz dismissed Count II of the complaint, which alleged discrimination on the basis of "race, national origin, and religion." See Memorandum and Order (ECF 32 & 33). Four counts remain: Count I ("Deception and contract violation"); Count III ("Libel and Slander"); Count IV ("Negligence");and Count V, alleging "Strict Liability," which Judge Motz construed as a claim under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq.

The parties subsequently filed cross-motions for summary judgment (ECF 46 & 50). Mr. Yacoubou has also filed a "Motion to Request a Speedy Jury Trial" (ECF 44).³ All of the motions have been fully briefed,⁴ and no hearing is necessary to resolve them. See Local Rule 105.6. For the reasons that follow, I will grant in part, and deny in part, both parties' motions for summary judgment, and will deny plaintiff's "Speedy Trial" motion.

Background⁵

A. Purchase and Refinancing of the Property

Plaintiff purchased the Property in January 2005, for $150,000, with financing from a mortgage company that is not related to this case. See Deposition of Abdou-Malik Yacoubou Adam ("Yacoubou Dep.") at 23, Ex.1 to Wells Fargo MSJ (ECF 50-2); see also SDAT Real Property Record, Ex.2 to Wells Fargo MSJ (ECF 50-3). At the time of purchase, plaintiffintended to reside in the Property with his wife, as their primary residence. Yacoubou Dep. at 26-27. However, he and his wife separated shortly after the purchase, ultimately divorced, and never moved into the Property. Id. at 27-35. Although Mr. Yacoubou contemplated selling the Property, he decided instead to rent it to a tenant. Id. at 29.

In October 2007, Mr. Yacoubou refinanced the Property, obtaining a loan of $212,000 from Gateway Funding Diversified Mortgage Services, L.P. ("Gateway"). To obtain the loan, Yacoubou submitted a "Uniform Residential Loan Application" (the "Application") to Gateway. See Ex.19 to Wells Fargo MSJ (ECF 50-20). In the Application, Yacoubou checked two boxes indicating that the Property would be his "Primary Residence." Id. at 1, 3. He also indicated that he was employed as a "Chemical Engineer" by "First Axis Engineering Services." Id. at 1. Under that loan, Mr. Yacoubou's total monthly payment was $1,652.50 (inclusive of principal, interest on the loan, and amounts to be escrowed for insurance and real estate taxes). Id. at 2.

Gateway's loan was secured by a Deed of Trust on the Property. See Deed of Trust, Ex.18 to Wells Fargo MSJ (ECF 50-19). The Deed of Trust refers to Gateway as the "Lender," to Yacoubou as the "Borrower," and to the Deed of Trust as the "Security Instrument." Id. at 1. The following provisions of the Deed of Trust are relevant here, id. at 3-10:

1. Payment of Principal, Interest, Escrow items, Prepayment Charges, and Late Charges. Borrower shall 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. Borrower shall also pay for Escrow Items pursuant to Section 3.

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Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted.

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2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, all payments accepted and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note; (b) principal due under the Note; (c) amounts due [for "Escrow Items" to cover taxes, assessments, ground rents, and insurance premiums] under Section 3. Such payments shall be applied to each Periodic Payment in the order in which it became due. Any remaining amounts shall be applied first to late charges, second to any other amounts due under this Security Instrument, and then to reduce the principal balance of the Note.

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3. Funds for Escrow Items. . . . Lender may, at any time, collect and hold Funds [to pay for Escrow Items] in an amount (a) sufficient to permit Lender to apply the Funds at the time specified under [the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601 et seq.] and (b) not to exceed the maximum amount a lender can require under RESPA. Lender shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with Applicable Law.

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If there is a deficiency of Funds held in escrow, as defined under RESPA, Lender shall notify borrower as required under RESPA, and borrower shall pay to Lender the amount necessary to make up the deficiency in accordance with RESPA, but in no more than 12 monthly payments.

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6. Occupancy. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower's control.

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8. Borrower's Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide lender with material information) in connection with the Loan. Material representations include, but are not limited to, representations concerning Borrower's occupancy of the Property as Borrower's principal residence.

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16. Governing Law . . . . This Security Instrument shall be governed by federal law and the law of the jurisdiction where the property is located.

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20. Sale of Note; Change of Loan Servicer . . . . The 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. 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. There also might be one or more changes of the Loan Servicer unrelated to the sale of the Note. If there is a change of the Loan Servicer, Borrower will be given written notice of the change . . . .

B. Mortgage Servicing by Wells Fargo

Shortly after execution of the Deed of Trust, Gateway notified Mr. Yacoubou that "the servicing of [his] loan, that is, the right to collect payments from [him]," had been transferred to "Wells Fargo Home Mortgage, Inc.,"⁶ effective as of the monthly payment due on December 1, 2007. Notice of Assignment at 1, Ex.3 to Wells Fargo MSJ (ECF 50-4). It is undisputed that, through May 2008, Mr. Yacoubou sent monthly payments of $1,652.50 to Wells Fargo. Mr. Yacoubou did not timely make the payments due in June or July 2008, however. According to Mr. Yacoubou, he did not remit the payments because he disputed an increase in his monthly payment amount imposed by Wells Fargo during this time period. ⁷ See Yacoubou Dep. at 53.

The exact basis for the increase in the monthly payment amount is unclear from the record. Wells Fargo has produced a letter, which appears to be dated July 10, 2008, sent to Mr.Yacoubou from Wells Fargo's "Tax Department." Ex.4 to Wells Fargo MSJ (ECF 50-5).⁸ In the letter, Wells Fargo informed Mr. Yacoubou that it had "changed [Yacoubou's] property tax payment option from a semi-annual disbursement to an annual disbursement, based on information from [his] local taxing authority." Id. Specifically, the letter stated: "According to your local taxing authority, the semi-annual disbursement option for paying property taxes is not available to you, as the property is not recorded as your primary residence." Id. The letter also said: "Changing from semi-annual to annual disbursement could result in a change in your monthly mortgage payment amount when your escrow account is analyzed." Id. However, no definite change in the monthly payment amount was set forth in the letter.

According to a much later letter, sent to Mr. Yacoubou on April 21, 2009, by a representative of Wells Fargo, see Ex.7 to Wells Fargo MSJ (ECF 50-8), Wells Fargo had performed an "escrow account analysis" on June 9, 2008, and "concluded that there was a shortfall in the escrow account in the amount of $249.43." Id. at 2. According to the April 2009 letter, as a result of this analysis, Wells Fargo recalculated Mr. Yacoubou's monthly payment at $1,696.21, representing the original monthly figure of $1,652.50 plus $20.79 per month (i.e., the $249.43 "shortfall," divided over twelve months), and an additional $22.92 per month for homeowner's insurance.⁹ Id. at 2. The April 2009 letter also claimed that an "Escrow Disclosure Statement and Notice of New Mortgage Payment" were sent to Mr. Yacoubou on June 9, 2008, notifying him that,...