Short v. Wells Fargo Bank Minnesota, N.A.

Citation401 F.Supp.2d 549
Decision Date18 November 2005
Docket NumberNo. CIV.A. 3:04-1096.,CIV.A. 3:04-1096.
CourtU.S. District Court — Southern District of West Virginia
PartiesMichael L. SHORT, Plaintiff, v. WELLS FARGO BANK MINNESOTA, N.A.; Countrywide Home Loans, Inc.; Tri-State Title, Inc., a corporation; Bonnie Sue Fleming; and, Douglas M. Legg, Defendants.

Bren J. Pomponio, Daniel F. Hedges, Heather E. W. Walsh, Mountain State Justice, Inc., Charleston, WV, for Plaintiff.

Bruce M. Jacobs, H. Dill Battle, III, Scott Palmer Mason, Spilman Thomas & Battle, Julie M. Meeks, Stephen M. Fowler, Travis A. Griffith, Pullin Fowler & Flanagan, Charleston, WV, for Defendants.

MEMORANDUM OPINION AND ORDER

CHAMBERS, District Judge.

Pending is a motion for summary judgment brought by defendants Countrywide Home Loans, Inc. (hereinafter "Countrywide") and Wells Fargo Bank Minnesota, N.A. (hereinafter "Wells Fargo") pursuant to Rule 56 of the Federal Rules of Civil Procedure. For the reasons set forth below, the motion is GRANTED in part and DENIED in part.

I

On April 15, 2005, the plaintiff Michael L. Short filed an eight count amended complaint against defendants Wells Fargo; Countrywide; Tri-State Title, Inc. (hereinafter "Tri-State"); Bonnie Sue Fleming (hereinafter "Fleming"); and Douglas M. Legg (hereinafter "Legg"). The plaintiff has named defendants Wells Fargo and Countrywide in six of the eight counts in his amended complaint. Specifically, defendants Wells Fargo and Countrywide are named in Count I for violating the Truth in Lending Act (hereinafter "TILA"). Defendants Wells Fargo and Countrywide are named in Count II for unconscionable contract in violation of the West Virginia Consumer Credit and Protection Act as well as defendants Tri-State, Legg and Fleming. Defendant Countrywide is named in Count III for breach of its duty of good faith and fair dealing. Defendant Countrywide is named in Count IV for unauthorized charges. Defendant Countrywide is named in Count V for failure to provide statements of account, and defendants Wells Fargo and Countrywide are named in Count VIII for joint venture, conspiracy and agency as well as defendants Tri-State, Legg and Fleming.

The amended complaint alleges the following facts: In April of 2000, the plaintiff spoke to a loan officer for Delta Funding and applied for a mortgage loan to refinance his home. On June 2, 2000, a man called the plaintiff at approximately 11:00 P.M. The man told the plaintiff that he had the loan documents for closing plaintiff's loan and asked for permission to come by plaintiff's residence to close the loan. At approximately 1:45 A.M., the man showed up at plaintiff's residence and presented a large stack of papers, directing him where to initial and sign. From plaintiff's review of the Deed of Trust, he asserts that the man was Legg. Plaintiff was approached again a few weeks later by a different man in a car and asked to sign additional papers. Plaintiff was never provided any copies of the loan documents he signed nor was he given any explanation of their content at the closing.

In July, 2000, plaintiff received notice to send his loan payments to Countrywide. Subsequently, in November or December of 2003, plaintiff received notice that he owed two payments in one month. After several unsuccessful attempts at contacting Countrywide's customer service, plaintiff was informed that he owed approximately $893.00 plus attorney fees and other fines. Plaintiff was told it would take fourteen days to determine the amount of the attorney fees. Countrywide's counsel later informed him that the attorney fees were $1,092.00, making the total amount due $1,985.00. Plaintiff remitted payment of the entire amount to Countrywide by certified check.

Following the above instance, plaintiff continued to have difficulties surrounding his loan. In January of 2004, plaintiff sent a money order to Countrywide; however, it was rejected. In March, 2004, he called Countrywide to inquire as to why he was not receiving his monthly statements on time. He was informed by Countrywide, that because his home had been in foreclosure and was now out, the computer took time to get the statements out on schedule. On a separate occasion, plaintiff inquired about certain charges on his account and was told that Countrywide had mistakenly charged him fees that could not legally be charged in West Virginia. His account, however, was never properly credited. Following these difficulties, he filed the present action in this Court.

On August 22, 2005, defendants Wells Fargo and Countrywide filed the pending motion for summary judgment. The defendants argue that they are entitled to relief on the following grounds: With regard to the claims against Wells Fargo in Counts I and II, they argue that Wells Fargo, as the holder of the Note, is a holder-in-due-course and, thus, is insulated from plaintiff's origination claims. They also argue that Wells Fargo, as an assignee of the Note, cannot be held liable for any claims by plaintiff stemming from the origination of the loan pursuant to 15 U.S.C. § 1641(e). With regard to the claims against Countrywide in Counts I and II, they argue that Countrywide, as the servicer of the loan, cannot be held liable for any claims by plaintiff stemming from the origination of the loan pursuant to 15 U.S.C. § 1641(f). With regard to Count VIII, they argue that they exercised no control over Tri-State, Legg and Fleming. They also argue that there is no evidence that they and the other defendants had an express or implied agreement to share profits and that, absent such an agreement, plaintiff's claim that a joint venture existed among them must fail as a matter of law.

The Court will address each of defendants' grounds for relief seriatim, and additional facts will be introduced as they relate to the arguments for relief.

II

Summary judgment is governed by Rule 56 of the Federal Rules of Civil Procedure, which provides, in pertinent part, as follows:

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.

Fed.R.Civ.P. 56(c) (2005). Moreover, the rule also provides, in relevant part, as follows:

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.

Fed.R.Civ.P. 56(e) (2005). In discussing this standard, the U.S. Supreme Court stated:

In our view, the plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be no "genuine issue as to any material fact," since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial. The moving party is "entitled to a judgment as a matter of law" because the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 56(c)).

"[I]n assessing a motion for summary judgment all justifiable inferences must be drawn in favor of the nonmoving party for `[c]redibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts.'" Drewitt v. Pratt, 999 F.2d 774, 778 (4th Cir.1993) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). Hence, "[t]he court `must perform a dual inquiry into the genuineness and materiality of any purported factual issues.'" 999 F.2d at 778 (quoting Ross v. Communications Satellite Corp., 759 F.2d 355, 364 (4th Cir.1985)).

The substantive law identifies facts that are material. Consequently, "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgement. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. "Genuineness means that the evidence must create fair doubt; wholly speculative assertions will not suffice." Ross, 759 F.2d at 364. Therefore, in reviewing the evidence, a judge must determine "whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented. The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. at 252, 106 S.Ct. 2505. If no genuine issue of material fact exists the Court has an obligation "to prevent `factually unsupported claims and defenses' from proceeding to trial." Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir.1987) (quoting Celotex, 477 U.S. at 323-24, 106 S.Ct. 2548).

Finally, when a party's "state of mind" is a decisive element of a claim or defense, summary judgment is seldom appropriate because "state of mind" determinations usually depend on the credibility of witnesses or the resolution of conflicting inferences drawn from circumstantial or self-serving evidence. Thacker v. Peak, 800 F.Supp. 372, 376 (S.D.W.Va.1992) (citing Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir.1979) and Ross, 759 F.2d at 364). Nevertheless, even if motive is material, summary...

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