Birt v. Wells Fargo Home Mortg., Inc.

Decision Date27 August 2003
Docket NumberNo. 02-124.,02-124.
Citation2003 WY 102,75 P.3d 640
PartiesDavid and Kimberly BIRT, Appellants (Plaintiffs), v. WELLS FARGO HOME MORTGAGE, INC., f/k/a Norwest Mortgage, Inc., Appellee (Defendant).
CourtWyoming Supreme Court

Representing Appellants: Curtis B. Buchhammer and Loretta R. Green of Buchhammer & Kehl, P.C., Cheyenne, Wyoming.

Representing Appellee: Robert T. McCue and Amanda Hunkins of Speight, McCue & Associates, P.C., Cheyenne, Wyoming.

Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ. VOIGT, Justice.

[¶ 1] David and Kimberly Birt (the Birts) appeal from the district court's Order Denying Defendant's Motion to Dismiss and Granting Defendant's Motion for Summary Judgment. Because there are no genuine issues of material fact and Wells Fargo Home Mortgage, Inc. (Wells Fargo) is entitled to judgment as a matter of law, we affirm.

ISSUES

[¶ 2] The parties' separate renditions of the numerous issues raised in this appeal are lengthy and somewhat argumentative. Consequently, we will restate the issues as follows, all of which arise in summary judgment context:

1. Did the parties enter into an express contract?
2. Did the parties enter into an implied contract?
3. Are the contract claims barred by the statute of frauds?
4. Did Wells Fargo breach the covenant of good faith and fair dealing?
5. Does the doctrine of promissory estoppel apply?
6. Does the doctrine of equitable estoppel apply?
7. Did Wells Fargo intentionally interfere with a contract between the Birts and their construction company?
8. Did Wells Fargo breach a duty to the Birts for the purposes of a negligence claim?
9. Did Wells Fargo breach a fiduciary duty owed to the Birts?
10. Was Wells Fargo guilty of negligent misrepresentation?
FACTS1

[¶ 3] The Birts intended to construct a house on property they owned in Laramie County. In April 2000, the Birts met with Richard Gibbs (Gibbs), a Wells Fargo loan officer. After reviewing the Birts' financial documents, Gibbs advised them that they would be eligible for a loan of $180,000.00. Gibbs did not disclose to the Birts that, based on their credit report, sub-prime financing at a higher interest rate would be necessary. The Birts had not built a home before, and they relied on Gibbs for guidance in completing the loan process. Gibbs advised the Birts to contact a building contractor, to develop design plans, and to keep him updated. The Birts updated Gibbs frequently, and Gibbs continued to assure the Birts that a loan would be forthcoming.

[¶ 4] In July 2000, the Birts advised Gibbs that Mr. Birt was no longer self-employed, but had obtained full-time employment with guaranteed overtime. After reviewing additional financial information supplied by the Birts, Gibbs advised them that the new employment put them in a better position, and stated that they might be eligible for an even larger amount. Gibbs advised the Birts to go forward with their plans because obtaining a loan would not be a problem. An architect completed design plans, and in August 2000, the Birts gave the plans to their proposed building contractor, Carter Brothers, to initiate the house's construction. Carter Brothers supplied the Birts with an estimated construction cost of $234,744.40. In mid-August 2000, Carter Brothers arranged for an appraisal of the house plans.

[¶ 5] On September 4, 2000, Gibbs advised the Birts to sign a construction contract with Carter Brothers, even though he knew, from a second credit report pulled in early August, that the Birts' credit rating had slipped and that they would not be able to borrow as much as previously anticipated. That afternoon, the Birts signed the construction contract for the earlier estimated amount. On September 12, 2000, the Birts received a letter welcoming them to Wells Fargo Mortgage Resources. Accompanying the letter were various loan disclosure documents required by the Federal Truth in Lending Act, which provided estimates of the loan amount, interest rate, and number of payments.2 The letter concluded by stating, "We look forward to serving you."

[¶ 6] During August and September 2000, representatives of Carter Brothers contacted Wells Fargo and inquired when the loan commitment letter would be completed so that construction could begin. Carter Brothers also hired a surveyor to survey the land. On October 2, 2000, Carter Brothers contacted the Birts and told them that they had not yet received the loan commitment letter. A few days later, Mrs. Birt contacted Gibbs' supervisor to inquire as to the status of the loan. The supervisor reviewed the file, and later that day informed the Birts that the loan had been denied. The Birts then terminated the construction contract.

STANDARD OF REVIEW

[¶ 7] Summary judgment motions are governed by W.R.C.P. 56(c):

The judgment sought shall be rendered forthwith 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.

[¶ 8] Our standard for the appellate review of a summary judgment was recently reiterated in Rino v. Mead, 2002 WY 144, ¶ 12, 55 P.3d 13, 17-18 (Wyo.2002) (quoting Hasvold v. Park County School Dist. No. 6, 2002 WY 65, ¶ 11, 45 P.3d 635, 637-38 (Wyo.2002)

):

"Summary judgment is proper only when there are no genuine issues of material fact and the prevailing party is entitled to judgment as a matter of law.... We review a summary judgment in the same light as the district court, using the same materials and following the same standards. `We examine the record from the vantage point most favorable to the party opposing the motion, and we give that party the benefit of all favorable inferences which may fairly be drawn from the record.'... Summary judgment serves the purpose of eliminating formal trials where only questions of law are involved.... We review a grant of summary judgment by deciding a question of law de novo and afford no deference to the district court's ruling on that question....
... A material fact is any fact that, if proved, would have the effect of establishing or refuting an essential element of a claim or defense asserted by a party...."
DISCUSSION

[¶ 9] The Birts' complaint against Wells Fargo alleged ten causes of action: breach of an express contract, breach of an implied contract, breach of the implied covenant of good faith and fair dealing, breach of an agreement to lend money, equitable estoppel, promissory estoppel, intentional interference with a contractual relationship, negligence, negligent misrepresentation, and breach of a fiduciary duty. Wells Fargo obtained summary judgment on all counts. We will separately discuss each cause of action, as well as Wells Fargo's statute of frauds defense. Many of the above-related facts are significant to the discussion of more than one issue. We will not repeat all the facts for each issue, but each issue will be considered in the context of all the facts.

EXPRESS CONTRACT

[¶ 10] The basic elements of a contract are offer, acceptance, and consideration. McLean v. Hyland Enterprises, Inc., 2001 WY 111, ¶ 42, 34 P.3d 1262, 1272 (Wyo. 2001). In order for a contract to exist, there must be mutual assent to the same terms. Roussalis v. Wyoming Medical Center, Inc., 4 P.3d 209, 231 (Wyo.2000). Whether a contract exists, its terms and conditions and the intent of the parties generally are questions of fact to be resolved by the fact-finder. Ewing v. Hladky Const., Inc., 2002 WY 95, ¶ 11, 48 P.3d 1086, 1088 (Wyo.2002) (quoting Roussalis, 4 P.3d at 250

). An express contract is one in which the terms are declared by the parties either in writing or orally at the time the contract is formed. Boone v. Frontier Refining, Inc., 987 P.2d 681, 685 (Wyo.1999); Wilder v. Cody Country Chamber of Commerce, 868 P.2d 211, 216 (Wyo. 1994). An express oral contract may be interpreted as a matter of law if the terms are shown without conflict in the evidence. Anderson v. South Lincoln Special Cemetery Dist. ex rel. Bd. of Trustees of South Lincoln Special Cemetery Dist., 972 P.2d 136, 139 (Wyo.1999).

[¶ 11] One specific question in determining the parties' intent is whether their contract was meant to be formed only upon the signing of written documents or was meant to be formed upon an oral understanding.

"`An agreement to make a written contract where the terms are mutually understood and agreed on in all respects is as binding as the written contract would be if it had been executed.' Robert W. Anderson House[w]recking and Excavating, Inc. v. Board of Trustees, School District No. 25, Fremont County, Wyoming, 681 P.2d 1326, 1331 (1984).

"`In general, the principle is well settled that where the parties to a contract intend that it shall be closed and consummated prior to the formal signing of a written draft, the terms having been mutually understood and agreed upon, the parties will be bound by the contract actually made, although it be not reduced to writing; but, on the other hand, if the parties do not intend to close the contract until it shall be fully expressed in a written instrument properly attested, then there will be no complete contract until the agreement shall be put into writing and signed.' Summers v. Mutual Life Ins. Co., 12 Wyo. 369, 75 P. 937, 943 (1904)."

Frost Const. Co. v. Lobo, Inc., 951 P.2d 390, 394 (Wyo.1998) (quoting Wyoming Sawmills, Inc. v. Morris, 756 P.2d 774, 776 (Wyo.1988)

).

[¶ 12] The Birts contend that, from the beginning, it was "understood" that they were seeking a mortgage loan from Wells Fargo for an amount between $180,000 and $185,000, with terms "within industry standards," and with the newly constructed home to serve as collateral. It is their position that the loan agreement was consummated when Wells Fargo sent them the Federal Truth in Lending disclosures:

The disclosure statements provided to the
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