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Henderson v. Wells Fargo Bank, NA

United States District Court, D. Connecticut

January 27, 2016

GENEVIEVE HENDERSON, Plaintiff,
v.
WELLS FARGO BANK, NA, Defendant.

RULING ON DEFENDANT’S MOTION TO DISMISS

Janet Bond Arterton, U.S.D.J.

This suit, brought by pro se Plaintiff Genevieve Henderson against Defendant Wells Fargo Bank, NA (“Wells Fargo”), alleges breach of contract, unfair trade practices, misrepresentation, infliction of emotional distress, and fraudulent, unlawful and/or abusive commencement of foreclosure action, arising out of Wells Fargo’s foreclosure on Plaintiff’s house. (See Fourth Am. Compl. [Doc. # 48].) Wells Fargo now moves [Doc. # 59] to dismiss the complaint in its entirety. Oral argument was held on January 26, 2016. For the following reasons, Defendant’s motion is granted in part and denied in part.

I. Factual Allegations

A. HAMP Application

Plaintiff alleges the following facts in her Fourth Amended Complaint. Plaintiff purchased her house in 1985. (Fourth Am. Compl. ¶ 4.) In 2008, she refinanced her mortgage, which was subsequently taken over by Wells Fargo. (Id.) Plaintiff dutifully made her mortgage payments as they became due, and by early 2010, her outstanding loans totaled $175, 000. (Id.) In February 2010, Plaintiff, having suffered a decrease in her income, applied for a loan modification through the federal Home Affordable Mortgage Program (“HAMP”). (Id. ¶ 5.)

Plaintiff waited for a decision on her HAMP application for months. (Id. ¶ 6.) In the interim, she missed two payments on her mortgage. (Id.) When she attempted, at Wells Fargo’s direction, to make a payment before another became due, Wells Fargo refused to accept the money. (Id. ¶¶ 6-7.) In August 2010, while Plaintiff was still waiting for a decision on her HAMP application, Wells Fargo commenced a foreclosure action against her in state court. (Id. ¶ 8.)

As part of the state court action, Ms. Henderson participated in mediation with Wells Fargo. (Id. ¶ 9.) During the mediation, all parties agreed that Wells Fargo would modify Plaintiff’s mortgage with a reverse mortgage. (Id.) “However, shortly after that agreement, Wells [Fargo] contacted Plaintiff and induced her to abandon Mediation with the promise that [it] had all the paperwork they needed to go forward with the HAMP and they would send the paperwork directly to underwriting with no further delays. . . .” (Id.) “Based on Defendant’s representations, Plaintiff abandoned Mediation . . . .” (Id.)

B. The Special Forbearance Agreement

In June 2011, with the foreclosure action still on hold, Plaintiff entered into a Special Forbearance Agreement (“the Agreement”) with Wells Fargo.[1] (Id. ¶ 10.) Under the Agreement, Wells Fargo “temporarily accept[ed] reduced installments” on Plaintiff’s mortgage, in the amount of $304.11 per month for a period of three months. (Agreement, Ex. A to Opp’n Mot. to Dismiss at 3.) The Agreement warned, however, that “[u]pon successful completion of the Agreement, [Plaintiff’s] loan [would still] not be contractually current. Since the installments may be less than the total amount due, [Plaintiff] may still have outstanding payments and fees.” (Id.) It continued: “Any outstanding payments and fees will be reviewed for a loan modification, based on investor guidelines, [sic] this will satisfy the remaining past due payments on your loan and we will send you a loan modification agreement. An additional payment may be required.” (Id.) Section 3 of the Agreement stipulated: “The lender is under no obligation to enter into any further agreement, and this Agreement shall not constitute a waiver of the lender’s right to insist upon strict performance in the future.” (Id.) Under Section 4:

All of the provisions of the Note and Security Instrument, except as herein provided, shall remain in full force and effect. Any breach of any provision of this Agreement or non-compliance with this Agreement, shall render the forbearance null and void. The lender, in its sole discretion and without further notice to [Plaintiff], may terminate this Agreement. If the Agreement is terminated the lender may institute foreclosure proceedings according to the terms of the Note and Security Instrument. In the event of foreclosure, [Plaintiff] may incur additional expenses of attorney’s fees and foreclosure costs.

(Id.)

A cover letter to the Agreement explained:

This is not a waiver of the accrued or future payments that become due, but a trial period showing you can make regular monthly payments. . . . Any outstanding payments and fees will be reviewed for a loan modification. If approved for a loan modification, based on investor guidelines, this will satisfy the remaining past due payments on your loan and we will send you a loan modification agreement. . . . Any installments received will be applied to the unpaid principal balance on the loan. . . . If your loan is in foreclosure, we will instruct our foreclosure counsel to suspend foreclosure proceedings once the initial installment has been received, and to continue to suspect the action as long as you keep to the terms of the Agreement. Upon full reinstatement, we will instruct [sic] our foreclosure proceedings and report to the credit bureaus accordingly.

(Id. at 1-2.)

Plaintiff timely paid all three trial period payments. (Fourth Am. Compl. ¶ 10.) However, Wells Fargo did not send her a loan modification agreement. (Id.) On June 6, 2012, Wells Fargo placed Plaintiff in “active foreclosure.” (Id. ¶ 12.) On June 14, 2012, Defendant notified Plaintiff she did not qualify for a HAMP modification. (Id. ¶ 13.)

C. Defendant’s Conduct

In the time between February 2010, when Plaintiff first applied for a HAMP modification, and June 2012 when Defendant notified her that she did not qualify for a modification, “Defendant constantly and purposely changed contact persons about 15 times or more, and with each new contact person, Plaintiff had to start the process over again by submitting new documents . . . . Each time [Defendant] applied this delay tactic, it caused Plaintiff’s mortgage to increase and her equity to decrease.” (Id. ¶ 19(B).) In the process of considering Plaintiff’s HAMP application, Defendant requested that Plaintiff produce “boxes of documentation, ” amounting to “hundreds of documents.” (Id. ¶ 12.)

As a result of Defendant’s delays in processing Plaintiff’s HAMP application and its failure to modify Plaintiff’s payments, Plaintiff’s outstanding debt increased by over $100, 000. (Id. ¶ 14.) In addition, she suffered “a tremendous amount of stress, pain, and suffering, ” increased blood pressure, and difficulty sleeping. (Id. ¶¶ 15, 17.) Plaintiff alleges that Defendant never intended to modify her mortgage and only induced her to sign the Agreement in order to “drag out the process, ” “increase Plaintiff’s mortgage, ” and “decrease her equity.” (Id. ¶ 15.)

II. Discussion[2]

Defendant contends that Plaintiff’s Complaint should be dismissed for failure to state a claim for ...


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