Stolts v. Wells Fargo Bank, NA

• Court: U.S. District Court — Southern District of Texas
• Writing for the Court: ANDREW S. HANEN, District Judge.
• Citation: Stolts v. Wells Fargo Bank, NA, 31 F. Supp. 3d 876 (S.D. Tex. 2014)
• Decision Date: 16 January 2014
• Docket Number: Case No. 1:13–CV–19.
• Parties: Cynthia De Leon STOLTS, Plaintiff, v. WELLS FARGO BANK, NA, Defendant.

31 F.Supp.3d 876

Cynthia De Leon STOLTS, Plaintiff

v.WELLS FARGO BANK, NA, Defendant.

Case No. 1:13–CV–19.

United States District Court, S.D. Texas, Brownsville Division.

Signed Jan. 16, 2014.

Luis R. Hernandez, Zayas & Hernandez, P.C., Brownsville, TX, for Plaintiff.

Jason Levi Sanders, Ethan M. Lange, Susan E. Adams, Robert T. Mowrey, Locke Lord LLP, Dallas, TX, Lecia L. Chaney, Colvin, Chaney, Saenz & Rodriguez, LLP, Brownsville, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

ANDREW S. HANEN, District Judge.

Before the Court are Defendant Wells Fargo's Motion to Dismiss, [Doc. No. 5] and Motion for Summary Judgment, [Doc. No. 18]. For the reasons below, Defendant's Motion for Summary Judgment is granted and Defendant's Motion to Dismiss is denied as moot.

I. BACKGROUND

A. Factual Background and Procedural History

This case centers on promises allegedly made by Defendant, Wells Fargo Bank, to Plaintiff, Cynthia De Leon Stolts regarding an alleged loan modification application on her house mortgage. [Doc. No. 1 Ex. D–3 at 2]. Plaintiff and Philip Stolts (collectively, the “Stoltses”) originally executed a note payable to Realty Mortgage Corporation on November 13, 2007 as well as a Deed of Trust granting a security interest in the property. Realty Mortgage later indorsed the note to Wells Fargo and also assigned the Deed of Trust to Wells Fargo. In 2011, the Stoltses defaulted on the loan by failing to make timely payments. Plaintiff contacted Wells Fargo later that year to report difficulties in making payment, prompting Wells Fargo to request documents for loss mitigation review. Wells Fargo did not receive any documents in response. The Stoltses again defaulted in April 2012 by failing to timely submit their payment, prompting Wells Fargo to mail notices of default to both Plaintiff and Mr. Stolts later that month. In May 2012 Wells Fargo also mailed the Stoltses stating that no loss mitigation agreement was reached, and in August 2012, Wells Fargo notified the Stoltses that it had not received the documents necessary to consider a loan modification. The Stoltses did not cure the default, and on November 27, 2012, Wells Fargo notified the Stoltses that a foreclosure sale was scheduled for December 4, 2012.

The Plaintiff filed suit in Texas court against Wells Fargo on January 25, 2013 attacking the foreclosure. Plaintiff's claims centered around Wells Fargo's alleged oral promise that a loan modification to Plaintiff's mortgage was under consideration. Plaintiff's state law claims were breach of contract, promissory estoppel, negligent misrepresentation, common law fraud, fraud by nondisclosure, and statutory fraud. [Doc. No. 1 Ex. D–3]. Plaintiff also requested exemplary damages and a temporary restraining order. [Doc. No. 1 Ex. D–3 at 5–7].

On February 6, 2013, Wells Fargo removed the case to this Court pursuant to 28 U.S.C. §§ 1332(a), 1441, 1446. Subsequently, on February 21, 2013, Wells Fargo filed a 12(b)(6) Motion to Dismiss. Plaintiff never filed a response. In turn, this Court ordered the unopposed Motion to Dismiss to be treated as a Motion for Summary Judgment, pursuant to the Federal Rules of Civil Procedure 12(d). [Doc. No. 15]. Defendants then filed a Motion for Summary Judgment on November 13, 2013. [Doc. No. 18]. Plaintiff has yet to file a response.

B. Legal Standards

Local Rule 7.3 of the Southern District of Texas requires the submission of Plaintiff's responses to Defendant's motions in twenty-one days. No response, timely or otherwise, was ever filed by Plaintiff. Although the Court is thus entitled to treat the motions as unopposed, see S.D. Tex. L.R. 7.4, the Court nonetheless analyzes the underlying merits of Defendant's motions below. See Johnson v. Pettiford, 442 F.3d 917, 918 (5th Cir.2006) (citing John v. State of Louisiana, 757 F.2d 698, 709 (5th Cir.1985) ) (trial court should not grant judgment solely by default on dispositive motion for failure to respond).

A movant is entitled to summary judgment if the “the pleadings, the discovery and disclosure materials on file, and any affidavits, show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c)(2). Once a movant makes a properly supported motion, the burden shifts to the non-movant to show that summary judgment should not be granted. Celotex Corp. v. Catrett, 477 U.S. 317, 321–25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The nonmoving party must go beyond the pleadings and provide specific facts showing that there is a genuine issue for trial.See Celotex, 477 U.S. at 324, 106 S.Ct. 2548 ; Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A material fact dispute is “genuine” if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Ordinarily, the court would “resolve factual controversies in favor of the nonmoving party, but only when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994).

II. DISCUSSION

Based on the records before the Court, Plaintiff's claims all fail. In short, Plaintiff's claims are fatally defective because Wells Fargo's alleged promise that a loan modification was “under consideration” is not legally enforceable and there is no factual evidence that Wells Fargo ever breached this alleged promise.¹ This Court will first discuss Plaintiff's contract claims before discussing her tort claims.

A. Contract Claims

1. Plaintiff's breach of contract claim fails

“Under Texas law, the elements of a breach of contract claim are (1) the existence of a valid contract; (2) performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach.” Sport Supply Grp., Inc. v. Columbia Cas. Co., 335 F.3d 453, 465 (5th Cir.2003) (citing Renteria v. Trevino, 79 S.W.3d 240, 242 (Tex.App.-Houston 14th Dist.2002, no pet.); La Villa Indep. Sch. Dist. v. Gomez Garza Design, Inc., 79 S.W.3d 217, 225 (Tex.App.-Corpus Christi 2002, pet. denied)).

Plaintiff's breach of contract claim fails for two reasons. First, the alleged promise to consider a loan modification is unenforceable due to lack of consideration. Contracts modifications are permitted if such modifications satisfy all contractual elements. Arthur J. Gallagher & Co. v. Dieterich, 270 S.W.3d 695, 702 (Tex.App.2008) (“A contract modification must satisfy the traditional requirements of a contract—there must be a meeting of the minds supported by consideration.”); Hathaway v. Gen. Mills, Inc., 711 S.W.2d 227, 228 (Tex.1986) (“Parties have the power to modify their contracts. A modification must satisfy the elements of a contract: a meeting of the minds supported by consideration.”) (internal citations omitted); James v. Wells Fargo Bank, N.A., 533 Fed.Appx. 444, 447 (5th Cir.2013) (“[T]he plaintiffs' breach of contract claim fails as a matter of law because the parties' oral agreement to enter into loan modification proceedings never ripened into an enforceable contract due to plaintiffs' lack of consideration ....”) (internal citations omitted). Under the undisputed facts as well as Plaintiff's pleadings, Plaintiff's breach of contract claims fail because she did not offer any consideration for Defendant's alleged promise to consider her loan modification.

Second, under Plaintiff's pleadings and the factual record, there was no breach of Defendant's alleged promise that Plaintiff's “loan modification was under consideration[,]” see [Doc. No. 1 Ex. D–3 at 2], because the undisputed facts indicate that Defendant never made this promise.² Instead, the factual record indicates that Defendant notified Plaintiff that she failed to provide the necessary documents required for a loan modification application. See [Doc. No. 18 Ex. A]. Therefore, Plaintiff's claim for breach of contract fails as a matter of law under both the pleadings and the factual record before this Court.³

2. Plaintiff's promissory estoppel claim fails

Under Texas law, “[p]romissory estoppel applies to bar the application of the statute of frauds and allow the enforcement of an otherwise unenforceable oral agreement when (1) the promisor makes a promise that he should have expected would lead the promisee to some definite and substantial injury; (2) such an injury occurred; and (3) the court must enforce the promise to avoid the injury.” Exxon Corp. v. Breezevale Ltd., 82 S.W.3d 429, 438 (Tex.App.2002) (internal citations omitted).

Plaintiff's promissory estoppel claim fails; the record does not contain any evidence that the Defendant made a promise it should have expected would lead the Plaintiff to some definite and substantial injury.⁴

B. Tort Claims

1. Plaintiff's negligent misrepresentation claim fails

“The elements of a cause of action for [negligent misrepresentation] are: (1) the representation is made by a defendant in the course of his business, or in a transaction in which he has a pecuniary interest; (2) the defendant supplies ‘false information’ for the guidance of others in their business; (3) the defendant did not exercise reasonable care or competence in obtaining or communicating the information; and (4) the plaintiff suffers pecuniary loss by justifiably relying on the representation.” See Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675, 686 (Tex.2003) (citing Federal Land Bank Ass'n v. Sloane, 825 S.W.2d 439, 442 (Tex.1991) ).

Plaintiff's negligent misrepresentation claim fails; there is no evidence that Defendant failed to consider a loan modification submitted by Plaintiff. There is also no evidence that Defendant failed to meet any other of its representations to the Plaintiff. Therefore, Plaintiff has failed to raise a factual issue regarding her...