Claude v. Wells Fargo Home Mortg., CIVIL ACTION NO. 3:13-cv-00535 (VLB)
| Decision Date | 14 August 2014 |
| Docket Number | CIVIL ACTION NO. 3:13-cv-00535 (VLB) |
| Court | U.S. District Court — District of Connecticut |
| Parties | PHENOL CLAUDE, Plaintiff, v. WELLS FARGO HOME MORTGAGE, et al. Defendants. |
The pro se Plaintiff, Phenol Claude, a Connecticut resident, brings this action against Wells Fargo Home Mortgage, Wells Fargo Bank, N.A. (collectively "Wells Fargo"), and all related insurers and fiduciary bondholders, and unnamed John Doe 1 and Jane Doe 1. In his complaint, the Plaintiff asserts fifteen counts for: fraud (Count I); mail fraud (Count II); unfair debt collection (Count III); civil conspiracy (Count IV); violations of RICO, 18 U.S.C. § 1961, et seq. (Count V); statutory theft and conversion of funds (Count VI); violations of the Equal Credit Opportunity Act, 15 U.S.C. § 1691, et seq. ("ECOA"), violations of Sections 107 and 128 of the Truth in Lending Act, 15 U.S.C. §§ 1606 and 1638 ("TILA"), and Sections 226.18(e), (g), and (h) and 226.22 of Regulation Z, 12 C.F.R. Part 226 ("Reg. Z") (Count VII); malicious abuse of process (Count VIII); intentional infliction of emotional distress (Count IX); trespass (Count X); failure to provide accurate TILA disclosures in the Real Estate Settlement Procedures Act, 12U.S.C. § 2605, et seq. ("RESPA") (Count XI); violations of the disclosure requirements in the Home Ownership and Equity Protection Act, 15 U.S.C. § 1639 ("HOEPA") (Count XII); predatory lending practice, in violation of ECOA, Connecticut TILA, TILA and Reg. Z, and RESPA (Count XIII); escrow shortage disclosure in violation of RESPA, 15 U.S.C. § 1691, et seq. 12 U.S.C. § 2605(e)(k), TILA §§ 1606 and 1638, and Reg. Z § 226.18(e), (g), and (h) and 226.22 (Count XIV); and constitutional rights violations pursuant to 42 U.S.C. §1981(a), 1983, 1985, 2000d, et seq., and the Fair Housing Act, 42 U.S.C. §§ 3601-3619 ("FHA") (Count XV). The Defendants moved to dismiss this complaint pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief may be granted and for failure to plead with the requisite specificity of Fed. R. Civ. P. 9(b).
For the reasons that follow, the motion is GRANTED in part and DENIED in part.
The following facts and allegations are taken from the Plaintiff's First Amended Complaint, and these facts and allegations are deemed to be true for purposes of this motion. [Dkt. 10, Complaint]. The Plaintiff is a citizen of Connecticut, residing at 43 Tarragon Drive, East Hampton, Connecticut. [Id. at ¶ 1]. The Defendant Wells Fargo Home Mortgage is headquartered in San Francisco California and is a California corporation licensed to do business inConnecticut.1 [Id. at ¶ 2]. As highlighted by the Defendants, Wells Fargo merged with Wells Fargo Bank, N.A. in May 2004, with the sole surviving entity being Wells Fargo Bank, N.A. Presently, Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. The Complaint, therefore, proceeds against Wells Fargo Bank, N.A. ("Wells Fargo"). [Dkt. 28, Defendants' Memorandum of Law in Support of Motion to Dismiss, p. 2 n.1].
On or around September 5, 2012, the Plaintiff received a letter from Wells Fargo regarding the property located at 43 Tarragon Drive in East Hampton, asserting that an escrow shortage balance needed to be remedied. [Dkt. 10, ¶ 5]. In essence, Claude's mortgage required him to maintain an escrow account with funds sufficient for the bank to pay Claude's real estate taxes and homeowner's insurance. The September letter informed Claude that his taxes and/or homeowner's insurance premium had increased, rendering his tax and insurance escrow deficient. Wells Fargo gave the Plaintiff two options for remedying this deficit. He could either pay the balance in a lump sum payment before November 1, 2012, and the monthly mortgage payment would be reduced by a specific amount listed in the notice, or pay the deficiency over 36 months. Under the latter option, Claude's monthly mortgage payment would be increased by theamount of the difference divided by 36. [Id.]. To prevent the automatic monthly mortgage payment increase, the Plaintiff submitted a financial hardship withdrawal request from his 401k retirement plan and used those funds to make a lump sum payment to Wells Fargo in satisfaction of the shortage. [Id. at ¶ 6]. Due to the withdrawal, the Plaintiff alleges that he suffered financial repercussions, including a six-month contribution moratorium, the loss of his employer's contribution match, and a tax penalty. [Id. at ¶ 7].
On or around October 23, 2012, Wells Fargo received and cashed the check it received from the Plaintiff to pay the escrow shortage. [Id. at ¶ 9]. In November 2012, the first month that would require the new lower payment, the Plaintiff paid the lower mortgage amount specified in the September notice, and Wells Fargo received and cashed that check. [Id. at ¶ 10]. However, the Plaintiff alleges that Wells Fargo refused to honor the terms of the September 5, 2012 notice by refusing to accept the lower mortgage payment rate and, without notice, placed the Plaintiff in delinquent status. [Id. at ¶ 12]. The Plaintiff alleges in a conclusory fashion that [Id. at ¶ 13]. The Plaintiff does not detail, however,any other instance when he received notices describing a short in his escrow fund.2
The Plaintiff alleges that instead of correcting the balance on his escrow account, as he had already paid the required lump sum amount, the Defendant "has taken the most extreme measures of reporting the plaintiff to all of the credit bureaus of the United States for non-payment even though the plaintiff has not missed a single payment . . . ." . The Plaintiff also alleges that he called Wells Fargo numerous times to discuss the issue, but the matter was never resolved, and Wells Fargo continued to send "threatening" letters, including threats of foreclosure. [Id. at ¶ 16].
On February 17, 2013, the Plaintiff sent a letter to the Defendant asking it to explain why Wells Fargo continued to request a higher mortgage payment even though there was no escrow shortage. He also asked Wells Fargo to explain in writing what happened to the payment the Plaintiff made to extinguish the escrow balance shortage. [Id. at ¶ 17]. This notice clearly listed the Plaintiff's account number and provided a brief summary of the issue with his escrow payment. The Plaintiff alleges that the Defendant has not responded to this letter or explained why the lump sum payment made by the Plaintiff was not applied to the escrowshortage. [Id.]. The Defendant has admitted that it made an error(s) in servicing the Plaintiff's mortgage due to computer system incompatibilities and integration challenges after the merger.
Instead, the Plaintiff alleges that on April 7, 2013, April 10, 2013, and April 15, 2013, Wells Fargo sent the Plaintiff letters demanding payment and stating that if payment was not made, Plaintiff would risk acceleration of the mortgage and potential loss of the property.3 [Id. at ¶ 50]. The Plaintiff further alleges that the Defendant obtained or was granted an order by the court either granting or providing the right to proceed to a foreclosure action. [Id. at ¶ 20]. The Plaintiff was not certain as to the details of this action because no court papers were ever provided to him. [Id.]. However, he does allege that the Defendant obtained a second and invalid quit claim deed from his ex-wife allegedly used to commence the foreclosure proceeding against him. [Id. at ¶ 24]. He alleges that this was impermissible because the first quit claim was obtained from her just subsequent to their divorce, and the deed was recorded by the town of East Hampton. [Id. at ¶ 23]. Over the course of the dispute, the Plaintiff also alleges that Wells Fargo sent a surveyor or inspector to his property without his permission to inspect and take photographs of the residence, seemingly to prepare for a foreclosure action or to ensure that the property was properly kept. [Id. at ¶ 28].
The Plaintiff alleges that the last time he spoke with Wells Fargo, in an apparent attempt to reconcile the dispute, Wells Fargo promised to remedy the situation by taking the following steps: (1) issuing a new mortgage payment coupon reflecting the corrected monthly mortgage payment amount pursuant to the September 5, 2012 stipulation; (2) applying the sum received from the Plaintiff for the balance of the escrow shortage; (3) correcting and retracting all false information sent to all of the major credit bureaus ("CRA") that discredited and damaged the Plaintiff's credit score; (4) returning all monies paid for three months or more to the property inspector responsible for inspecting the property, and applying that sum to the Plaintiff's mortgage principal; (5) sending to the Plaintiff a copy of the quit claim deed allegedly executed and sent to Wells Fargo by the Plaintiff's ex-wife; and (6) correcting all interests paid toward the Plaintiff's mortgage for the year of 2012 for the purpose of filing an amendment with the IRS to accurately report all interests paid by the Plaintiff for that year. [Id. at ¶ 22].
However, the Plaintiff alleges that on June 10, 2013, the Defendant reinstated a private mortgage that was previously discontinued in retaliation for the present litigation. [Id. at ¶ 27]. Moreover, the Plaintiff alleges that this dispute has caused him severe emotional distress, humiliation, financial hardship, severe property damage, and physical harm in the form of a sleeping disorder. [Id. at ¶ 21].
"'To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted...
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