Midland Mortg. Corp. v. Wells Fargo Bank, N.A.

• Decision Date: 25 February 2013
• Docket Number: Civil Action No. 3:12–00244–MBS.
• Parties: MIDLAND MORTGAGE CORPORATION, a South Carolina corporation, Plaintiff, v. WELLS FARGO BANK, N.A., a national banking association, Defendant.
• Court: U.S. District Court — District of South Carolina

926 F.Supp.2d 780

MIDLAND MORTGAGE CORPORATION, a South Carolina corporation, Plaintiff,

v.WELLS FARGO BANK, N.A., a national banking association, Defendant.

Civil Action No. 3:12–00244–MBS.

United States District Court,

D. South Carolina,

Columbia Division.

Feb. 25, 2013.

William Wharton Watkins, Sr., William W Watkins Law Office, Columbia, SC, Jordan M. O'Brien, American Mortgage Law Group, Novato, CA, for Plaintiff.

Ronald James Tryon, Lawrence Michael Hershon, Parker Poe Adams and Bernstein, Columbia, SC, for Defendant.

ORDER AND OPINION

MARGARET B. SEYMOUR, Senior District Judge.

Plaintiff Midland Mortgage Company (“Plaintiff”) filed this action for damages, alleging state law claims for negligence and negligent misrepresentation against Defendant Wells Fargo Bank, N.A. (“Defendant”). (ECF No. 24, pp. 4–5.) This matter is before the court on Defendant's motions to dismiss and for summary judgment on the claims asserted against it by Plaintiff. ( See ECF Nos. 29, 51.) Plaintiff opposes Defendant's motions. ( See ECF Nos. 32, 56.) For the reasons set forth below, the court GRANTS Defendant's motion for summary judgment as to Plaintiff's claims.

I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

The facts as viewed in the light most favorable to Plaintiff are discussed below.

Plaintiff contracted to make a residential mortgage loan to Brian and Teri Sumsion (the “Borrowers”) for the purchase of real property located at 5 Roe Deer Circle, Blythewood, South Carolina 29016. (ECF No. 24, p. 2 ¶ 5.) As a part of the loan approval process, Plaintiff obtained from Defendant a Verification of Deposit (“VOD”) to confirm that the Borrowers had sufficient funds in their bank account to pay the required closing costs for the loan. ( Id. at ¶ 6.) Specifically, on February 14, 2008, Plaintiff paid Defendant $20.00 to produce a VOD that would be used to verify the funds in the Borrowers' checking account on deposit as of that date. ( Id. at ¶ 9.) Plaintiff alleges that it received from Defendant a VOD indicating a balance of $1,578.51 in the Borrowers' checking account. ( Id.; see also ECF No. 25.) After receiving Defendant's VOD, the loan sought by the Borrowers from Plaintiff closed on February 25, 2008. ( Id. at ¶ 5; see also ECF No. 25–2, p. 4.)

On July 22, 2010, JP Morgan Chase Bank, N.A. (“Chase”), sent correspondence to Plaintiff, stating that the mortgage insurer for the Borrowers' loan, Republic Mortgage Insurance Company (“RMIC”), had rescinded the Borrowers' mortgage insurance coverage. (ECF No. 25–1, p. 1.) RMIC rescinded the mortgage insurance coverage on the Borrowers' loan after an investigation revealed:

The [B]orrowers did not have sufficient funds with which to pay their required closing costs with ample cash reserves as represented and, in particular, did not have $1,279 on deposit in their account with Wells Fargo Bank as of 2/14/08, their actual balance as of that date being $0; the document purporting to be a Verification of Deposit form as provided by Wells Fargo Bank is a false document containing fictitious information; the [B]orrowers were not in regular receipt of combined income at the represented rate of $7,872 per month, their actual combined income at the time of this transaction being no more than $5,853 per month; and, in view of the foregoing, the [B]orrowers' true qualifying ratios were not as had been represented in their application for this loan, nor were they within the limits permitted by RMIC for insurance purposes.

(ECF No. 25–1, p. 2.) On August 27, 2010, Plaintiff contacted Defendant to request a Reverification of the VOD (“re-VOD”) regarding the amount the Borrowers had in their account with Defendant as of February 14, 2008. (ECF No. 25–3, pp. 1–2.) Defendant responded on September 1, 2010 with a re-VOD confirming that the original VOD, showing a balance of $1,578.51, was correct. (ECF No. 25–3, p. 4.)

On January 27, 2011, Chase sent Plaintiff another letter, indicating that Chase had received a repurchase/make whole demand letter from Fannie Mae, the investor Chase had sold the Borrowers' loan to. (ECF No. 24, p. 3 ¶ 12; see also ECF No. 25–2, pp. 1–4.) In its January 27, 2011 letter, Chase further indicated that Plaintiff would be required to repurchase the Borrowers' loan from Chase if Chase had to repurchase the Borrowers' loan from Fannie Mae. ( Id.) On May 12, 2011, RMIC sent Chase correspondence indicating that RMIC's decision to rescind the Borrowers' insurance certificate was sufficiently supported by the finding of RMIC's investigators that the Borrowers' cash assets were misrepresented based on a false VOD. ( See Pl.'s Ex. No. 1, p. 2, from Feb. 12, 2013 Mot. Hr'g.) On July 1, 2011, Plaintiff sent Defendant a letter regarding Chase's pending repurchase demand and asked Defendant to either assist in rebutting the allegation that the original VOD was erroneous, or indemnify Plaintiff for damages caused by the original VOD. (ECF No. 25–4, pp. 1–2.) Plaintiff alleges that it did not receive a response from Defendant to the July 1, 2011 correspondence. (ECF No. 24, p. 3 ¶ 14.)

On October 13, 2011, Plaintiff sent a renewed request for a re-VOD of the Borrowers' amount on deposit as of February 14, 2008 to Defendant's Balance Confirmation Services Department. (ECF No. 25–5, p. 1.) On October 21, 2011, Defendant's Balance Confirmation Services Department provided Plaintiff with a re-VOD that confirmed that the Borrowers' checking account balance as of February 14, 2008 was $0. (ECF No. 25–6, p. 2.) On October 31, 2011, Plaintiff repurchased the Borrowers' loan from Chase for approximately $99,256.00. (ECF No. 24, p. 4 ¶ 17.)

On January 26, 2012, Plaintiff filed a complaint in this court, asserting state law claims against Defendant for negligence and negligent misrepresentation. (ECF No. 1.) On March 8, 2012, Defendant answered the complaint denying Plaintiff's claims. (ECF No. 17.) On March 28, 2012, Plaintiff filed a motion to amend the complaint to correct inaccuracies in the descriptions of the parties in the pleading. (ECF No. 21.) The court granted Plaintiff's motion to amend the complaint on March 29, 2012, and Plaintiff's amended complaint was filed on that same date. (ECF Nos. 23, 24.) Defendant answered the amended complaint denying Plaintiff's claims on April 12, 2012. (ECF No. 28.)

On April 24, 2012, Defendant filed a motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 29.) Plaintiff filed opposition to Defendant's motion to dismiss on May 11, 2012, to which Defendant filed a reply in support of dismissal on May 21, 2012. (ECF Nos. 32, 33.) On September 19, 2012, Defendant filed a motion for summary judgment pursuant to Fed.R.Civ.P. 56. (ECF No. 51.) Plaintiff filed opposition to Defendant's motion for summary judgment on October 16, 2012, to which Defendant filed a reply in support of summary judgment on October 19, 2012. (ECF Nos. 56, 59.)

II. LEGAL STANDARD

A. Summary Judgment Generally

Summary judgment should be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is “material” if proof of its existence or non-existence would affect the disposition of the case under the applicable law. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248–49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine question of material fact exists where, after reviewing the recordas a whole, the court finds that a reasonable jury could return a verdict for the nonmoving party. Newport News Holdings Corp. v. Virtual City Vision, 650 F.3d 423, 434 (4th Cir.2011).

In ruling on a motion for summary judgment, a court must view the evidence in the light most favorable to the non-moving party. Perini Corp. v. Perini Constr., Inc., 915 F.2d 121, 123–24 (4th Cir.1990). The non-moving party may not oppose a motion for summary judgment with mere allegations or denials of the movant's pleading, but instead must “set forth specific facts” demonstrating a genuine issue for trial. Fed.R.Civ.P. 56(e); see Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Shealy v. Winston, 929 F.2d 1009, 1012 (4th Cir.1991). All that is required is that “sufficient evidence supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.” Anderson, 477 U.S. at 249, 106 S.Ct. 2505. “Mere unsupported speculation ... is not enough to defeat a summary judgment motion.” Ennis v. Nat'l Ass'n of Bus. & Educ. Radio, Inc., 53 F.3d 55, 62 (4th Cir.1995). A party cannot create a genuine issue of material fact solely with conclusions in his or her own affidavit or deposition that are not based on personal knowledge. See Latif v. The Community College of Baltimore, 354 Fed.Appx. 828, 830 (4th Cir.2009).

B. Dismissal for Failure to State a Claim Generally

A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim should not be granted unless it appears certain that the plaintiff can prove no set of facts that would support her claim and would entitle her to relief. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993). When considering a motion to dismiss, the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir.1999); Mylan Labs., Inc., 7 F.3d at 1134. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The...