Brush v. Wells Fargo Bank, N.A.
| Decision Date | 29 November 2012 |
| Docket Number | CIVIL ACTION NO. H-10-5016 |
| Parties | KRISTINA LEE STRUBLE BRUSH, and VERNON BRUSH, Plaintiffs, v. WELLS FARGO BANK, N.A., Defendant. |
| Court | U.S. District Court — Southern District of Texas |
This case arises out of a dispute between Kristina Lee Struble Brush and Wells Fargo Bank, N.A. over a mortgage loan that Mrs. Brush's father, Ronald James Struble, used to purchase a home. Mrs. Brush and her husband, Vernon Brush, moved into the home to help care for Struble, who was ill. Shortly before his death, Struble fell behind on his loan payments. The Brushes allege that, when Struble died, they informed Wells Fargo, the mortgage holder, and provided documents showing that Mrs. Brush had inherited the home. The Brushes allege that Wells Fargo agreed to modify the mortgage loan but then attempted to foreclose, breaching the agreement. In their amended complaint, the Brushes asserted claims against Wells Fargo for: (1) breach of contract; (2) detrimental reliance; (3) negligence; (4) breach of the duty of good faith and fair dealing; (5) violations of the Texas Debt Collection Act (TDCA); (6) violations of the Texas Deceptive Trade Practices Act (TDPA); (7) violations of the federal Fair Debt Collection Practices Act (FDCPA); and (8) declaratory and injunctive relief. (Docket No. 22).
Wells Fargo moved for summary judgment on all claims. (Docket No. 23). This court previously granted partial summary judgment against the Brushes on their negligence and breachof duty of good faith and fair dealing claims. (Docket No. 42). Wells Fargo seeks leave to file a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), (Docket Entry Nos. 54, 65), and has filed such motions, (Docket Entry Nos. 55, 64). In its Rule 12(c) motions, Wells Fargo argues that the Brushes have failed to state a breach of contract because the Brushes lacked authority to modify Stuble's loan and did not sufficiently allege that Wells Fargo received consideration for the purported loan modification agreements. Wells Fargo also moves for judgment on the pleadings as to the Brushes' detrimental reliance claim because they have not sufficiently alleged that Wells Fargo made a valid promise or that they relied on any promise to their detriment.
Based on the pleadings; the motions, responses, and replies; the record; the arguments of counsel; and the relevant law, this court orders as follows:
Wells Fargo's motion for summary judgment, (Docket Entry No. 23), is:
• granted as to the Brushes' contract claims under the October 2009 HAMP Letter and Mr. Brush's claim under the August 2010 Agreement and denied as to Mrs. Brush's claim under the August 2010 Agreement;
• granted as to the Brushes' promissory estoppel claims;
• granted as to the Brushes' claims under the TDCA §§ 392.301(a)(7), 392.304 & (a)(8) and denied as to the Brushes' claims under the TDCA § 392.301(a)(8);
• granted as to the Brushes' claims under the DTPA; and
• granted as to the Brushes' claims under the FDCPA.
Wells Fargo's motion for leave to file a motion for judgment on the pleadings, (Docket Entry No. 65), is granted. Wells Fargo's motion for judgment on the pleadings under Rule 12(c), (Docket Entry No. 64), is moot to the extent that Wells Fargo repeats arguments disposed of onsummary judgment and otherwise denied. Wells Fargo's motion for leave to file a motion for judgment on the pleadings, (Docket Entry No. 54), is moot. Wells Fargo's motion for judgment on the pleadings under Rule 12(c), (Docket Entry No. 55), is moot.
The reasons for these rulings are explained below.
On August 7, 2007, Ronald Struble took out a $199,500 loan from Profolio Home Mortgage Corporation (PMHC) to purchase a home at 14818 Inverrary Drive in Houston, Texas. Struble executed a promissory note ("Note") payable to PMHC and a mortgage deed of trust pledging the Property as collateral. (Docket Entry Nos. 22, ¶¶ 7-8; 37-2, Exs. 1, 2). By early 2008, Wells Fargo became the owner and servicer of the Note. (Docket No. 37-2, Ex. 3). Well Fargo currently holds and services the Note. .
In July 2008, after Struble became ill, the Brushes moved into the home to help care for him. (Docket Entry No. 36-2, ¶ 2). Well Fargo sent Struble letters dated February 18 and March 3, 2008 stating that he had defaulted on his loan and warning that, unless certain steps were taken, Well Fargo could exercise its option to accelerate the loan and foreclose. (Id. at Ex. 3). Well Fargo sent an August 25, 2008 letter to Struble offering to accept a partial reinstatement of the loan. (Id. at Ex. 5). Struble returned a signed Partial Reinstatement Agreement to Wells Fargo on September 5, 2008. (Id.).
On February 20, 2009, Struble died intestate leaving Mrs. Brush as his sole heir. (Docket Entry Nos. 36-1, ¶¶ 3-4; 37-2, Ex. 6). On July 14, 2009, the Brushes faxed Wells Fargo a handwritten note stating that Struble had died and that the Brushes: had "sold our home to help out with the Inverrary house"; had "a lot of money tied into" the home; and were "working onpaying everything" while "[e]verything with Ron Struble is tied up in Court." The Brushes also provided Wells Fargo with their contact information. (Docket No. 37-2, Ex. 9).
Wells Fargo sent a July 23, 2009 letter addressed to the now-deceased Struble confirming its receipt of the Brushes' mortgage-payment-assistance request. (Id., Ex. 10). As of August 12, 2009, Wells Fargo's records include an entry stating that Struble's mortgage was delinquent due to "MORTGAGER DECEASED." (Id., Ex. 11 at 40). A credit report in Wells Fargo's records also states: "INQUIRY SSN RECORDED AS DECEASED." (Id., Ex. 13).
Wells Fargo sent a letter dated August 13, 2009 addressed to Struble agreeing to accept a partial reinstatement of the defaulted loan. The letter confirmed "our conversation regarding the Forbearance arrangement and repayment of any past due amounts." (Docket No. 37-2, Ex. 14). On September 17, 2009, the Brushes faxed Wells Fargo another handwritten note again confirming Struble's death and asking for assistance in making the mortgage payments. (Id., Ex. 15, 16). They also sent Struble's death certificate, (Id., Ex. 17), a list of the Brushes' expenses, (Id., Ex. 18), and Mr. Brush's pay check stubs, (Id., Ex. 19).
Wells Fargo sent two documents, dated September 28, 2009, addressed to Struble. The first invited Struble to participate in the Home Affordable Modification Trial Period Plan (HAMP TPP). (Id., Ex. 20). The second confirmed that Struble had entered the HAMP Trial Period. (Id., Ex. 21). A HAMP TPP Letter dated October 26, 2009 names Struble as "Borrower" but was signed by the Brushes, each of whom added "Ronald J. Struble" next to their names. (Id., Ex. 23). The Brushes claim that they were told by Wells Fargo representatives that because Mrs. Brush was Struble's sole heir, she was authorized to sign a TPP Agreement. (Docket Entry No. 36-2, ¶ 13). The TPP Agreement submitted in the summary judgment record does not include a Wells Fargo representative's signature. (Docket Entry No. 37-2, Ex. 23).
The Brushes also sent Wells Fargo a completed tax return transcript request that they signed in their own names, (Id. at 76); a note stating that Struble was deceased and that the Brushes had "payed [sic] our saving to [sic] 20,000 to the house to keep things going until we could get back on our feet," (Id. at 79); and a financial worksheet filled out in the Brushes' names, (Id. at 80). On November 6, 2009, Wells Fargo requested and received IRS Tax Return Transcripts for the Brushes. (Id., Ex. 24). Beginning in November 2009, the Brushes made six $1,616.44 monthly payments to Wells Fargo as part of the HAMP TPP. (Docket No. 37-4, Ex. 57).
On November 13, 2009, a probate judge approved the Small Estate Affidavit that Mrs. Brush filed on behalf of Struble. (Docket Entry No. 37-2, Ex. 25). The Affidavit states that Struble died intestate, Mrs. Brush was his only child, and that he owned the home subject to a Wells Fargo mortgage. Mrs. Brush alleges that, on January 28, 2010, she sent Wells Fargo another copy of Struble's death certificate, along with the Affidavit and court order approving the Affidavit, via FedEx. (Docket Entry Nos. 36-2, ¶ 23; 37-3, Ex. 27).
Mrs. Brush alleges that, in early April 2010, a Wells Fargo representative called the Brushes and told them that the HAMP TPP would be cancelled and that they would receive documents within a few days. (Docket Entry No. 36-2, ¶ 27). In an April 19, 2010 letter addressed to Struble, Wells Fargo stated that it determined that Struble's mortgage loan did not qualify for HAMP but that a different program might be available. Enclosed with the letter was an unsigned proposed Loan Modification Agreement, with a May 1, 2010 effective date, between Struble and Wells Fargo. (Docket Entry No. 37-2., Ex. 28). On May 24, 2012, Wells Fargo ordered a title search for 14818 Inverrary. The title report listed Struble as the owner butalso stated that a "Small Estate Affidavit dated 11/13/2009" had been recorded on November 25, 2009. (Id., Ex. 29).
The Brushes received a second loan modification proposal notice dated July 19, 2010. This was also addressed to Struble. A proposed Loan Modification Agreement (August 2010 Agreement), effective September 1, 2010, was enclosed. (Id., Ex. 35). On August 14, 2010, Mrs. Brush executed the Agreement, signing both her name and Struble's name. (Id., Ex. 37). She alleges that she did this because the name printed below the signature line was Ronald J. Struble." (Docket Entry No. 36-2, ¶ 29). She explains: "I had already told Wells Fargo of my father's passing many times, and sent the proof of his passing and my right as the owner of the house, so I believed that this was just the way that the paperwork had to be done to make the loan modification agreement work out." (Id.). Mrs. Brush...
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