Wittenberg v. Wells Fargo Bank, N.A.

• Decision Date: 10 February 2012
• Docket Number: Civil Action No. 3:10–CV–58.
• Citation: 852 F.Supp.2d 731
• Court: U.S. District Court — Northern District of West Virginia
• Parties: Dianna WITTENBERG, Plaintiff, v. WELLS FARGO BANK, N.A., Samuel I. White, P.C., and Seneca Trustees, Inc., Defendants.

852 F.Supp.2d 731

Dianna WITTENBERG, Plaintiff,

v.WELLS FARGO BANK, N.A., Samuel I. White, P.C., and Seneca Trustees, Inc., Defendants.

Civil Action No. 3:10–CV–58.

United States District Court,

N.D. West Virginia,

Martinsburg.

Feb. 10, 2012.

Bobbie U. Vardan, R & B Law Group, PLLC, Falls Church, VA, Garry G. Geffert, Attorney at Law, Martinsburg, WV, for Plaintiff.

Jeremy Cook Hodges, Nelson Mullins Riley & Scarborough, LLP, Columbia, SC, Joseph S. Dowdy, Nelson Mullins Riley & Scarborough LLP, Raleigh, NC, Marc E. Williams, Nelson Mullins Riley & Scarborough LLP, Huntington, WV, Christopher R. Arthur, Lesley A. Wheeler, Samuel I. White, PC, Charleston, WV, for Defendants.

MEMORANDUM OPINION AND ORDER

JOHN PRESTON BAILEY, District Judge.

Pending before this Court are plaintiff Dianna Wittenberg's Motion for Partial Summary Judgment against Defendants Samuel I. White, P.C. and Seneca Trustees, Inc. [Doc. 127]; defendant Wells Fargo Bank, N.A.'s Motion for Summary Judgment [Doc. 129]; defendants Seneca Trustees, Inc.'s and Samuel I. White, P.C.'s Motion for Summary Judgment [Doc. 130]; and the plaintiff's Motion for Partial Summary Judgment against Defendant Wells Fargo Bank, N.A. [Doc. 133], all filed November 7, 2011. Those motions have since been fully briefed and are now ripe for decision. This Court has reviewed the record and the motions and, for the reasons set out below, finds that the plaintiff's motions should be DENIED and the defendants' motions should be GRANTED.

BACKGROUND

I. Undisputed Material Facts

A. Borrower's Background

The borrower in this case, Dianna Wittenberg, has a bachelor's degree in business administration from the University of Northern Colorado. (Wittenberg Depo. at pp. 101:18–102:4). She also completed some basic law classes at the Denver Legal Institute. ( Id. at pp. 102:9–103:10). Thereafter, she managed a regional of cable television system in Washington, D.C. for approximately ten years. ( Id. at p. 104:2–12). In 1991, she and her now ex-husband, a Navy Pilot, moved to Europe for seven years. During that time, she did not work. ( Id. at p. 104:15–105:5). Upon her return to the United States in 1998, she sold real estate for about a year until she was injured in a car accident from which she now receives Social Security Disability. ( Id. at pp. 110:12–111:11). Since 2000, she has been the owner of a leasing company called Regal, Inc., for which she sometimes negotiates leases with tenants. ( Id. at pp. 125:9–126:5).

B. Consummation of Loan

In 2005, Wittenberg met a First Independent Mortgage Company (“First Independent”) employee named Andy Swanson at a financial seminar. Swanson indicated that he could get her a refinance loan with beneficial and favorable terms.

On February 17, 2006, Wittenberg contacted Swanson to refinance her loan and extract equity for outstanding expenses. By fax dated February 23, 2006, Wittenberg informed Swanson that she would like to use George Glass as a closing attorney. Wittenberg attended the closing scheduled for the same day, but refused to complete the closing. The next day, Wittenberg sent Swanson a fax explaining why she did not go through with the closing.Specifically, Wittenberg complained that she did not want an Adjustable Rate Mortgage (“ARM”) and that the broker fee represented at closing did not reflect their previous discussions.

On March 13, 2006, First Independent arranged for an updated appraisal of Wittenberg's home that would serve as collateral for the refinance loan. (Appraisal at p. 1). By report dated March 15, 2006, Wittenberg's home was appraised at $640,000. ( Id.).

On March 20, 2006, Wittenberg sent an e-mail to Swanson asking for an update on when she could close on her loan. A First Independent representative named Tricia Randall replied the same day and asked, “Can you sign on Monday the 27th @ 3pm?” The next morning, March 21, 2006, Wittenberg confirmed that she would be available on the date proposed. After Randall responded that she might be able to schedule an earlier closing, Wittenberg replied on March 21, 2006, at 9:41 p.m., asking whether the closing could be conducted at 2:30 p.m., on March 27, 2006. Randall responded the next day, March 22, 2006, that the time change would be fine.

Thereafter, Wittenberg completed a five-page Fannie Mae Form 1003 application titled Uniform Residential Loan Application. Her signature on the fourth page is dated March 22, 2006, while her signature on the fifth page is dated March 26, 2006; Swanson's signature on the fourth page is dated March 27, 2006. (Loan Application at pp. 4 and 5). The first section on the first page describes the type of loan as a conventional mortgage and identifies its terms as a 30–year, adjustable rate mortgage for $416,000 at an interest rate of 5.87%. ( Id. at p. 1). The second section indicates that the purpose of the loan was to refinance and that the purpose of the refinance was “Cash–Out/Debt Consolidation.” ( Id.). More specifically, Wittenberg intended to pay off the $212,174 unpaid balance of the mortgage loan on her home and the $67,527 unpaid balance of another loan. ( Id. at pp. 3–4). In addition, Wittenberg would receive $125,069.02 in cash. ( Id. at p. 4).

On March 26, 2006, at 5:29 a.m., Wittenberg sent Swanson an e-mail asking him to call her “first thing.” After receiving neither a reply e-mail nor a phone call, Wittenberg sent Swanson another e-mail on March 27, 2006, at 12:15 p.m. In the second e-mail, Wittenberg complained: “Why do I have to continually be placed on hold when costs change at the end of the loan process. Please correct my brokerage fees back to what they have always been. $2700. Who is messing up this loan continually?” Less than an hour later, Randall replied that she had spoken to Swanson and that she would “get the origination fixed this morning and have new document [sic] sent over to title as I can.” On March 27, 2006, Wittenberg successfully closed on her loan.

C. Loan Documents

1. Note Dated March 21, 2006

Wittenberg executed a note dated March 21, 2006, with First Independent referencing loan number 26021701; however, written on top of the first page is the number 0150909596. This note is a six-page Fannie Mae Form 3534 uniform instrument titled Adjustable Rate Note (“Note”). Pursuant to this fully transferable instrument, Wittenberg promised to pay First Independent $416,000 over 30 years at an initial fixed interest rate of 5.875%, amounting to an initial monthly principal and interest payment of $2,036.67 due beginning May 1, 2006 (property taxes and insurance were to be paid by borrower). (March 21, 2006, Note at ¶¶ 1–3). This instrument also indicated that the initial fixed interest rate would change to an adjustable interest rate on April 1, 2011, that would not be greater than 10.875% nor less than 2.75%. ( Id. at ¶ 4(A), (D)). Pursuant to the standard language of the form, Wittenberg agreed that if she did not pay the full amount of each monthly payment on the date it is due, she would be in default. ( Id. at ¶ 7(B)). In the event of default, the instrument required the holder of the Note to send Wittenberg a written notice informing her that if she did not pay the overdue amount by a certain date, the note holder could require her to pay immediately the full amount of the unpaid principal and all the interest owed on that amount. ( Id. at ¶ 7(C)). Finally, the Note indicated that a deed of trust dated the same day would provide protection for the holder of the note should Wittenberg not keep the promises she made in this uniform instrument. ( Id. at ¶ 11). Wittenberg signed the Note without indicating a date of her signature. ( Id. at p. 6). Below Wittenberg's signature, First Independent's chief financial officer provided his signature. In addition, this area includes a stamp indicating that the Note would be paid to the order of Wells Fargo Bank, N.A. (“Wells Fargo”). This stamp is signed by Wells Fargo's assistant vice president. ( Id.). The March 21, 2006, Note is the only note Wells Fargo has on file for Wittenberg. (Wells Fargo 30(b)(6) Witness Mary Ellen Brust Depo. at p. 203:15–204:14).

2. Deed of Trust Dated March 21, 2006 and Amended to March 27, 2006

i. Introductory Provisions

Wittenberg also executed a fifteen-page Fannie Mae Form 3049 uniform instrument titled Deed of Trust and dated March 21, 2006; however, the “21” is crossed out and replaced with “27” next to the initials “DW.” (Deed of Trust at p. 1). This instrument purports to provide the security for the March 21, 2006, Note. Again, however, the “21” is crossed out and replaced with “27” next to the initials “DW.” ( Id. at p. 1). This instrument identifies Wittenberg as the borrower, First Independent as the lender, Scully & Glass or H. Charles Carl as the trustee, and Mortgage Electronic Registration Systems, Inc. (“MERS”) as the nominee for the lender and the lender's successors and assignees. ( Id.). The loan number given is the same as the March 21, 2006, Note: 26021701; however, written on the top of the first page of this instrument is “WF–150909596.” ( Id.). This instrument gave First Independent and any successor or assignee a security interest in Wittenberg's Charles Town, West Virginia, home. ( Id.). The second page describes the note secured as having a principal amount of $416,000 and a maturity date of April 1, 2036, the same terms of the March 21, 2006, Note. This page also indicates that an Adjustable Rate Rider was to be executed by Wittenberg. ( Id. at p. 2).

ii. Uniform Covenants

Beginning on the third page, the Deed of Trust lists twenty-one sections of “uniform covenants.” In Section 1 (titled “Payment of Principal Interest, Escrow Items, Prepayment Charges, and Late–Charges”), Wittenberg agreed to “pay when due the principal of, and interest on, the debt evidenced by the Note and any prepayment charges and late charges due under the Note.” ( Id. at § 1).

In Section 3 (titled “Funds for Escrow...