Angino v. Wells Fargo Bank, N.A., CIVIL NO. 1:15-CV-418

• Decision Date: 19 February 2016
• Docket Number: CIVIL NO. 1:15-CV-418
• Parties: RICHARD ANGINO and ALICE ANGINO, Plaintiffs, v. WELLS FARGO BANK, N.A., and WELLS FARGO HOME MORTGAGE, Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

RICHARD ANGINO and ALICE ANGINO, Plaintiffs,
v.
WELLS FARGO BANK, N.A.,
and WELLS FARGO HOME MORTGAGE, Defendant.

CIVIL NO. 1:15-CV-418

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

February 19, 2016

(Chief Judge Conner)

(Magistrate Judge Carlson)

REPORT AND RECOMMENDATION

I. Statement of Facts and of the Case

This lawsuit, which comes before us for consideration of a motion to dismiss, is one of several cases¹ brought by the plaintiffs against various financial institutions arising out of a common core of operative facts. The plaintiffs in this action are Richard Angino, a local attorney, and his spouse, Alice Angino. (Doc. 1, ¶4.) The plaintiffs are in their 70s and as Mr. Angino approaches the conclusion of his professional career he and his wife have experienced a series of financial reversals. As described by the Anginos in the well-pleaded facts set forth in their

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complaint, these financial setbacks are in large measure a product of some $13,000,000 in loans and mortgage indebtedness which they agreed to undertake in connection with various residential and commercial projects over a number of years up through 2002. (Id., ¶6.)

This indebtedness included a mortgage on a luxurious residential property. (Id., ¶7.) In 2002, the Anginos had an existing mortgage in the amount of $708,000 on this property with First Union Bank, a financial institution which later became the defendant, Wells Fargo. (Id., ¶8.) According to the Anginos, in 2002, they renegotiated "once in a lifetime" terms for a new mortgage loan from the bank. (Id., ¶10.) This new mortgage was based upon an appraised value for the home of $2,310,000, and was a 100% cash mortgage, with interest only payments for the first 10 years of the loan. (Id., ¶¶8-18.)

The Anginos agreed to these new loan terms, and used the nearly $2.3 million dollars disbursed to them for an array of purposes. (Id., ¶13.) However, in the decade which followed a confluence of events impaired the ability of the Anginos to make the principal payments which they had agreed to in 2002 when they refinanced this loan. These events included the economic downturn in 2007-2009, which led to significant stock losses for the Anginos in their margined stock holdings; (Id., ¶22) as well as severe financial reversals in various speculative

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commercial and residential real estate investments. (Id., ¶23.) In addition, by 2013, Richard Angino's legal practice was also experiencing financial difficulties "because of having insufficient cases for eight attorneys." (Id., ¶27.)

Confronted with this cascading array of financial difficulties, the Anginos were unable to make full loan payments in 2013, when principal payments began to come due under the terms of the 2002 loan agreement. (Id., ¶28.) These loan defaults compounded over time. (Id., ¶¶28, 31, 32, 34, 41, 42.) Thus, the Anginos' complaint describes in some detail the plaintiffs' breach of their 2002 agreement to make timely loan payments. However, notably, with respect to the original 2002 loan agreement, the Anginos' current complaint does not describe any actions by the bank which violated the terms of this agreement. Instead, the Anginos seem to allege that the bank is liable to them, in part, because the bank refused to further modify these loan terms in a fashion that would have been more favorable to these defaulting borrowers, something the Anginos represent they anticipated would occur in the future. Thus, the apparent premise of this complaint is that the plaintiffs have some right to compel the bank to modify agreed-upon loan terms to its detriment and to the benefit of these defaulting borrowers. Significantly, nothing in the 2002 written loan agreement reflected a promise of commitment by any of the parties to refinance this loan at some time in the future.

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As the Anginos' 2002 loan fell deeper into default, the Anginos began a series of lengthy, protracted, and arduous exchanges with Wells Fargo, seeking relief under the Home Affordable Modification Program, (HAMP), or any other mortgage relief the bank could offer. (Id., ¶¶43-78.) While the Anginos provide a detailed narrative of these communications, and characterize the discussions as an agreement to refinance their loan, what is noteworthy about the well-pleaded facts in the complaint is that they do not seem to reflect an agreement by Wells Fargo to refinance this $2.3 million loan. At most, these communications describe a process-albeit a frustrating process from the plaintiffs' perspective-by which the Anginos could provide information to the bank so it could determine whether to enter into a modified loan agreement. Ultimately, these efforts were entirely unavailing, since the Anginos' did not qualify for HAMP program mortgage relief. (Id., ¶54.)

Based upon these averments, and in the face of these loan defaults, the Anginos have filed an eight-count civil complaint, which combines and conflates various claims and causes of action. In Count I the Anginos allege that Wells Fargo breached its 2002 loan agreement with the Anginos. This breach of contract claim, however, does not rest upon any breach of the actual terms of this written loan agreement. Rather, it seems premised upon "expectations of the parties that refinancing would be available." (Id., ¶81) Thus, the breach of this 2002 contract

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alleged by the Anginos in fact entails a failure to enter into some new, different and more favorable loan agreement ten years later in 2012 when the Anginos began defaulting on this initial agreement. In Count II of their complaint, the Anginos allege a second breach of contract claim, an alleged breach of a series of "HAMP TPP Agreements" between the plaintiffs and the bank in 2012 through 2014. (Id., ¶90.) However, the well-pleaded facts in the complaint describe something that appears to fall well short of an agreement to refinance. Rather, the well-pleaded facts reflect discussions regarding a process by which the Anginos could provide information to the bank so it could determine whether to enter into a modified loan agreement.

Count III of the complaint, in turn, alleged that the bank engaged in unfair and deceptive practices under Pennsylvania's Unfair Trade Practices and Consumer Protection law, 73 Pa.C.S. §201-1, when it refused to further modify this loan. This unfair trade practice claim, as pleaded, seems expressly premised upon the Anginos' claims that they had some free-standing right to a loan modification under HAMP or due to the Dodd-Frank Wall Street Reform and Consumer Protection Act, a premise which is a recurring theme throughout this complaint. (Id., ¶¶100-109.) Count IV of the complaint advances a promissory estoppel claim, which is once again based upon two notions which appear unsupported by either the law or the well-pleaded facts: the idea that Wells Fargo agreed to refinance this

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loan, coupled with the legal premise that the Anginos had an enforceable right to refinance this loan under HAMP or some other federal statute. (Id., ¶¶110-113.)

In Count V of the complaint, the Anginos endeavor to bring claims charging alleged violations of the Real Estate Settlement Procedures Act, ("RESPA"), 12 U.S.C. §2605, et seq. Specifically, the Anginos seem to allege that the defendants failed to respond to the plaintiff's "Qualified Written Requests" for information their loan and failed to correct erroneous loan information. (Id., ¶¶114-130.) Count VI of the complaint, in turn, alleged violations of the federal Fair Credit Reporting Act, by the bank. These alleged Fair Credit Report Act violations appear to have pertained to the bank's factually accurate reports that the Anginos had defaulted on their loan, but are flawed. (Id., ¶¶132-137.) Finally, Count VII of the complaint accuses the bank in a summary fashion of fraud, deceit, conspiracy, negligence and the intentional or negligent infliction of emotional distress. (Id.,¶¶137-143.)

Presented with this multi-faceted complaint, Wells Fargo Bank has now moved to dismiss the complaint citing numerous legal deficiencies in this pleading. (Docs. 6 and 12.) The Anginos, in turn, have responded to this motion to dismiss, albeit frequently in a summary fashion, often arguing the viability of many of these legal claims through a single summary, assertion. (Doc. 15.) Wells Fargo's motion to dismiss is fully briefed and, therefore, is now ripe for resolution.

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While we note that some of the plaintiffs' claims seem to have transmogrified factually in the course of this litigation, when we consider the allegations actually made by the plaintiffs in their complaint, we find that many of these allegations do not state a claim upon which relief may be granted. Therefore, we recommend dismissal of Counts I, II, III, IV, VI, and VII of the complaint, although some counts, and particularly Count III which alleges a violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law, 73 Pa.C.S. §201-1 should be dismissed without prejudice to the filing of a n amended complaint stating well-pleaded facts in support of this claim. As for Count V of the complaint, which bring claims charging alleged violations of the Real Estate Settlement Procedures Act, ("RESPA"), 12 U.S.C. §2605, et seq.,it is recommended that the motion to dismiss be denied, but that the plaintiffs be directed to file a more definite statement of their claims pursuant to Rule 12(e) of the Federal Rules of Civil Procedure.

II. Discussion

A. Rule 12(b)(6)- The Legal Standard

Wells Fargo has filed a motion to dismiss this complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure, which provides that a complaint should be dismissed for "failure to state a claim upon which relief can be granted." Fed. R.

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Civ. P. 12(b)(6). With respect to this benchmark standard for legal sufficiency of a complaint, the United States Court of Appeals for the Third Circuit has recently...