Webster v. JP Morgan Chase Bank

• Decision Date: 16 November 2012
• Docket Number: No. 20110235–CA.,20110235–CA.
• Citation: 721 Utah Adv. Rep. 47,290 P.3d 930
• Parties: Debbie A. WEBSTER, Plaintiff and Appellant, v. JP MORGAN CHASE BANK, NA, Defendant and Appellee.
• Court: Utah Court of Appeals

290 P.3d 930

721 Utah Adv. Rep. 47

Debbie A. WEBSTER, Plaintiff and Appellant,

v.JP MORGAN CHASE BANK, NA, Defendant and Appellee.

No. 20110235–CA.

Court of Appeals of Utah.

Nov. 16, 2012.

Debbie A. Webster, Murray, Appellant Pro Se.

Scott M. Lilja, Salt Lake City, for Appellee.

Before Judges Davis, McHUGH, and ROTH.

MEMORANDUM DECISION

ROTH, Judge:

¶ 1 Debbie A. Webster appeals from the dismissal of her complaint, in which she alleged seven causes of action against JP Morgan Chase Bank, NA (Chase) for contract, fraud, and intentional tort. The district court dismissed the contract claims on the basis that Webster could not rely on an oral modification of the contract, the fraud claims on the basis of unreasonable reliance and failure to plead fraud with particularity, and the tort claims on the basis that Webster had not alleged any intentional conduct by Chase. Webster argues that her complaint alleged sufficient facts to survive a motion to dismiss. We reverse and remand for further proceedings on the contract and fraud claims but affirm the dismissal of her intentional tort claims.

¶ 2 On appeal from a motion to dismiss for failure to state a claim for relief, “we give the trial court's ruling no deference and review it under a correctness standard.” MBNA Am. Bank, NA v. Goodman, 2006 UT App 276, ¶ 4, 140 P.3d 589 (mem.) (citation and internal quotation marks omitted); see alsoUtah R. Civ. P. 12(b)(6) (permitting a defendant to move for dismissal if the plaintiff “fail[s] to state a claim upon which relief can be granted”). “When determining whether a trial court properly granted a 12(b)(6) motion to dismiss, we accept the factual allegations in the complaint as true and consider them and all reasonable inferences to be drawn from them in a light most favorable to the plaintiff.” Goodman, 2006 UT App 276, ¶ 4, 140 P.3d 589 (footnote, citation, and internal quotation marks omitted).

¶ 3 In March 2007, Webster opened a home equity line of credit with Washington Mutual Bank (Washington Mutual) to provide her with access to funds with which she could attend nursing school. Webster met with a Washington Mutual representative on three occasions, and she explained each time that she would be giving up her employment to attend school. On each occasion, the representativeexplained that the loan was based on the value of Webster's home, the equity she had built in it, and her excellent credit history. The Washington Mutual representative also assured Webster that her unemployment would not prevent her from obtaining advances on the loan and that she would not need to provide the bank with any pay stubs or W–2s to maintain an active account or to draw on her line of credit. On the third occasion, Webster executed a Washington Mutual Equity Plus Agreement and Disclosure (the Agreement). The Agreement stated in section 17 that “[Webster] will provide [Washington Mutual] with a current financial statement, a new credit application, or both, at any time upon our request.” A separate section of the Agreement, section 14(b)(iii), explained that Washington Mutual reserved the right to suspend advances on the line of credit if Webster was “in default of a material obligation of th[e] Agreement,” which included failure “to provide documents ... such as updated financial information.” Webster withdrew funds from the line of credit and made timely payments. Washington Mutual apparently never requested any updated financial information from her, in the form of a current financial statement or otherwise.

¶ 4 In September 2008, however, the Federal Deposit Insurance Corporation (FDIC) took Washington Mutual into receivership. A number of Washington Mutual's assets, including Webster's home equity line of credit, were sold to Chase. On March 6, 2009, Chase sent Webster a letter on Washington Mutual letterhead. The letter requested that she “help updat[e her] financial information” by “sign[ing] the enclosed Internal Revenue Service (IRS) Form 4506–T,” which “allow[ed Chase] to obtain a summary of a specified federal tax return,” and by “[p]rovid[ing] a copy of a recent paystub ... and any additional current income documentation [Webster] would like to provide.” The letter then directed her to return the items to “Washington Mutual Bank, a division of JP Morgan Chase Bank.” When Webster failed to respond to this letter, or to a follow-up letter on March 24, Chase suspended her account. After informal attempts to resolve the issue failed, Webster filed this action, asserting claims for breach of contract and breach of the covenant of good faith and fair dealing (collectively, the contract claims); fraud and fraudulent inducement (collectively, the fraud claims); and tortious interference with economic relations, tortious interference with prospective business relations, and intentional infliction of emotional distress (collectively, the intentional tort claims) against Chase.¹

¶ 5 On Chase's motion, the district court dismissed all seven of Webster's claims, and Webster appealed. Webster has narrowly attacked the court's rulings with respect to each category of claims, and Chase has commensurately responded. Our review is accordingly limited to the specific challenges presented by the parties. We offer no opinion on the overall viability of the complaint or the merits of Webster's claims. Instead, we leave it to the parties and the trial court to resolve the remaining issues through appropriate proceedings on remand.

I. The Contract Claims

¶ 6 The district court dismissed Webster's contract claims on the basis that “the purported promises alleged [to be breached] ... are at odds with, and contrary to, the terms of the written agreement between the parties.” It reasoned that “there cannot be a reasonable reliance” on “any oral promise that [Webster] wouldn't ever have to [submit financial documentation to have access to the home equity] funds” in the face of “documents that are contrary to that promise.” The court further explained the dismissal of the breach of the covenant of good faith and fair dealing claim as being due to Chase's letter providing Webster with

a choice as to what she could provide [in response to Chase's request for updated financial documentation] and there was nothing ... that limited her to providing only certain [financial documents]. In fact, [Webster] didn't try to file anything and so because of that, ... [Chase] was entitled to suspend her loan and because [it] ha[d] the right to suspend the loan, there was no breach....

We conclude that these claims should not have been dismissed.

¶ 7 The district court's reasoning for dismissing the contract claims seem to encompass two subconclusions: one, that a written agreement cannot be orally modified contemporaneous with its execution without those amendments being memorialized in writing and, two, that Webster's reliance upon such a modification was not reasonable. According to Webster, the written contract was simultaneously modified by oral agreement to preclude Chase's enforcement of section 17 of the contract. Webster asserts that Chase breached the modified agreement when it requested the IRS Form 4506–T and her current pay stubs. In making this argument, Webster does not make any effort to establish that such a contract modification is legal under Utah law. But neither does Chase expressly assert that a written contract can never be orally modified contemporaneous with the execution of the written agreement.² Instead, it defends the district court's dismissal on two related grounds: its own compliance with the Agreement as written and Webster's lack of reasonable reliance on any oral modification to the Agreement. It is not readily apparent whether Chase intended these to be separate reasons for affirming even if a written contract can be orally modified in some circumstances or if its reasoning identifies separate facets of a more general claim that written agreements cannot be simultaneously orally modified. Regardless of the relationship between its arguments, Chase has not responded with an alternative basis for upholding the dismissal of the contract claims.

¶ 8 Chase argues that Webster failed to state a claim for breach of contract because she could not establish that a breach occurred when it merely exercised rights afforded it by the terms of the written Agreement. According to the Agreement, Chase could request “a current financial statement.” Chase asserts that a “financial statement” would by ordinary definition include income and tax information. Webster counters that even if the term “financial statement” would ordinarily include such things, Chase orally promised it would not ask for her pay stubs or W–2s. Neither party has adequately analyzed on appeal whether the contract term “financial statement” encompasses the IRS Form 4506–T and pay stubs that Chase specifically requested from Webster and whether Webster was therefore obligated by the Agreement to provide them at Chase's request. Instead, each side makes assumptions about the meaning of the term “financial statement,” and neither addresses whether the term could be ambiguous. Because the parties have failed to appropriately brief this issue, we cannot determine whether Chase is correct that Webster failed to state a claim for breach of contract and decline to affirm the district court on this basis.

¶ 9 Chase also submits that we should affirm the district court based on the court's own reasoning, i.e., that Webster could not reasonably have relied on an oral promise when a written agreement attached to the complaint provides to the contrary. As authority for this proposition, Chase relies on the Utah Supreme Court's decision in Gold Standard, Inc. v. Getty Oil Co., 915 P.2d 1060 (Utah 1996).

¶ 10 In Gold Standard, the parties had entered into a written agreement, in which Gold Standard, Inc. (GSI) agreed to contribute 25% and Getty Oil Co. (Getty) agreed to...