KOONTZ v. FARGO
| Decision Date | 01 April 2011 |
| Docket Number | CIVIL ACTION NO. 2:10-cv-00864 |
| Parties | ANN L. KOONTZ, Plaintiff, v. WELLS FARGO, N.A., Defendant. |
| Court | U.S. District Court — Southern District of West Virginia |
OPINION TEXT STARTS HERE
Pending before the Court is Defendant Wells Fargo, N.A.'s motion to dismiss the complaint for failure to state a claim upon which relief may be granted [Docket 6]. For the reasons that follow, the motion is GRANTED IN PART and DENIED IN PART.
Plaintiff Ann L. Koontz ("Plaintiff") is a resident of Beckley, West Virginia. (Docket 1-2 at 5.) Defendant Wells Fargo, N.A. ("Wells Fargo") is a corporation headquartered in Iowa and doing business in West Virginia. (Id.) Sometime in 2003, Plaintiff responded to an online solicitation from Wells Fargo to finance the purchase of a residence located at 100 Glenn Avenue, Beckley, West Virgnia. (Id.) Plaintiff contacted Wells Fargo jointly with her then-husband, Bruce N. Richmond, and the pair co-signed an agreement with Wells Fargo to borrow $79,000 for the purchase of the Glenn Avenue residence. During an initial contact, Wells Fargo allegedly informed Plaintiff that, pursuant to a forthcoming financing agreement, the total monthly payment on the residence would be $614.00. (Id.) Wells Fargo also allegedly told Plaintiff that "although themortgage contained an adjustable interest rate . . . the interest rate would likely go down over time." (Id.) At the June 5, 2003, closing Plaintiff first learned that her total monthly payment on the residence would be over $700.00. (Id.) Although not elaborated upon, Plaintiff's complaint states that the "closing was rushed and hurried, without sufficient explanation of the loan documents and loan terms," and she only continued with the loan closing because "it was too late to back out." (Id.)
For the next six years, although Plaintiff's monthly loan payments increased to approximately $980.00, she managed to make payments according to the agreement with Wells Fargo. (Id. at 6.) In 2009, Plaintiff divorced her husband and was then unable to make payments under the agreement with Wells Fargo. (Id.) At that time, Plaintiff contacted Wells Fargo to request assistance. Wells Fargo allegedly advised Plaintiff to apply for the Home Affordable Modification Program, took her financial information to fill out an application, and informed Plaintiff that the application process would take approximately three months, during which time she need not make mortgage payments. (Id.) Sometime thereafter, and presumably in late 2009, a "Mr. Windust" informed Plaintiff that she qualified for a trial-modification, which offered a lower monthly payment of $550.00 per month for three months. (Id.) According to "Mr. Windust," if Plaintiff successfully paid $550.00 per month for three months, the modification would become permanent, and Plaintiff's monthly payment would be permanently reduced to $550.00. (Id.) Although Plaintiff allegedly made three $550.00 payments in January, February, and March of 2010, Wells Fargo denied modification of Plaintiff's home loan. (Id. at 7.)
In March 2010, shortly after receiving news that her modification was denied, Plaintiff again contacted Wells Fargo. She was told to continue pursuing a modification, and she was assigned a new Wells Fargo representative with whom to work. (Id.) The new agent allegedly "assured[Plaintiff] that her loan would be modified and directed [her] to again fill out loan modification paperwork and provide employment check stubs." (Id.) According to the complaint, the new Wells Fargo agent, like the first, instructed Plaintiff not to make any mortgage payments until the modification was approved. About one month later, on April 20, 2010, a foreclosure trustee contacted Plaintiff by letter to inform her that Wells Fargo was instituting foreclosure proceedings against Plaintiff. A foreclosure sale date was allegedly set for May 10, 2010. (Id.) Upon learning of the pending foreclosure sale, Plaintiff contacted Wells Fargo. (Id. at 8.) She was assured that the foreclosure letter was "just a formality" and that Wells Fargo had reached "no final decision regarding modification." (Id.) On April 30, 2010, the Wells Fargo representative with whom Plaintiff had been communicating informed her that her loan modification was denied. (Id.)
Over the next week, Plaintiff called Wells Fargo and the foreclosure trustee, attempting to determine the exact amount required to reinstate her loan and avoid foreclosure. (Id.) On May 8, 2010, Plaintiff received a letter from Wells Fargo that stated the foreclosure could be cancelled if Plaintiff executed an enclosed forbearance agreement and submitted the first installment payment. (Id.) Plaintiff's complaint states that the forbearance letter did not contain the amount of the required first payment, but Plaintiff executed the forbearance agreement nonetheless and returned it to Wells Fargo and the foreclosure trustee with no payment. (Id. at 8-9.) Plaintiff thereafter contacted the foreclosure trustee about the forbearance letter, but she was unsuccessful in halting the foreclosure on her home. (Id. at 9.) After the foreclosure sale, Plaintiff allegedly faxed a letter to Wells Fargo requesting a foreclosure review, and she was later told that a review would be performed. (Id.) According to the complaint, Wells Fargo never contacted Plaintiff with a decision regarding her requested foreclosure review. (Id. at 10.)
Plaintiff filed her complaint in the Circuit Court of Kanawha County, West Virginia, and Wells Fargo was served with process on May 28, 2010. (Docket 1 at 2.) On June 24, 2010, the action was removed to this Court, on the basis of diversity of citizenship. (Id. at 2-3.) Plaintiff asserts six counts in her complaint, most of which stem from the allegation that Wells Fargo assured Plaintiff that her loan would be modified but nonetheless pursued foreclosure. Count I alleges that the loan agreement contained unconscionable terms and was induced by unconscionable conduct. (Docket 1-2 at 10-11.) Count II alleges that Wells Fargo violated W. Va. Code § 46A-2-127 by making misrepresentations in the collection of a debt. (Id. at 11-12.) Counts III and IV are breach of contract claims, relating to the original loan agreement and the alleged oral agreement to reduce monthly payments to $550.00, respectively. (Id. at 12-14.) Count V is an estoppel claim, and Count VI is a negligence claim. (Id. at 14, 15.) Plaintiff requests actual and punitive damages, equitable relief, declaratory relief, and attorneys' fees. (Id. at 10-15.)
On August 2, 2010, Wells Fargo moved to dismiss the complaint for failing to state a claim upon which relief may be granted pursuant to Rule 12(b)(6). (Docket 6.) Wells Fargo asks the Court to dismiss Counts I through VI with prejudice because they fail to meet the pleading standards of Rule 8 and are otherwise legally deficient.
Federal Rule of Civil Procedure 8(a)(2) requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2); Erickson v. Pardus, 551 U.S. 89, 93 (2007). This requirement is intended to ensure that the complaint provides "fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Plaintiff's demonstration thathe is entitled to relief requires "more than labels and conclusions." Id. In other words, "a formulaic recitation of the elements of a cause of action will not do." Id.; see also Giarratano v. Johnson, 521 F.3d 298, 304 (4th Cir. 2008). Nonetheless, the complaint must only contain "[f]actual allegations . . . [sufficient] to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555; see also Ashcroft v. Iqbal,__U.S.__, 129 S. Ct. 1937, 1949 (2009) (). All of the facts alleged in the complaint must "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570.
Federal Rule of Civil Procedure 12(b)(6) permits a Wells Fargo to challenge the complaint as "fail[ing] to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). In ruling on a motion to dismiss under Rule 12(b)(6), the Court must accept the allegations in the complaint as true. Twombly, 550 U.S. at 555. Likewise, the Court is required to draw "all reasonable . . . inferences from those facts in the plaintiff's favor." Edwards v. City of Goldsboro, 178, F3d 231, 244 (4th Cir. 1999). Therefore, a motion to dismiss under Rule 12(b)(6) should be granted only if, after accepting all well-pleaded allegations contained in a complaint as true and drawing all reasonable inferences therefrom in the plaintiff's favor, the complaint fails to allege enough facts to state a claim that is plausible on its face. See Twombly, 555 U.S. at 555, 570.
In moving to dismiss Count I, Wells Fargo contends that "Plaintiff has alleged no facts that support her claim that the loan was induced by unconscionable conduct or included unconscionable terms." (Docket 7 at 10.) In response, Plaintiff argues that she has "provide[d] more than sufficientfacts to. . . [meet the] standard of Rule 8." (Docket 9 at 7.) In particular, Plaintiff points to three excerpts of the complaint as adequate to state a claim for unconscionable conduct or unconscionable contract terms. First, Plaintiff "alleges that she is unsophisticated in financial matters, while Wells Fargo . . . is a large national corporation." (Id. at 8; Docket 1-2 at 5, 10.) Second, Plaintiff alleges that "[t]he closing was rushed and did not give [Plaintiff] an opportunity...
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