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Downey v. Wells Fargo Bank, N.A.

United States District Court, D. Massachusetts

July 11, 2014

COLLEEN DOWNEY and PATRICIA DOWNEY, Plaintiffs,
v.
WELLS FARGO BANK, N.A., Defendant.

MEMORANDUM AND ORDER

DENISE J. CASPER, District Judge.

I. Introduction

Colleen Downey and Patricia Downey ("Plaintiffs") have filed this lawsuit against Defendant Wells Fargo Bank, N.A. ("Wells Fargo") alleging violations of the Massachusetts Consumer Credit Cost Disclosure Act ("MCCCDA"), Mass. Gen. L. c. 140D; Mass. Gen. L. c. 93 § 49; Mass. Gen. L. c. 93A; fraudulent misrepresentation; and intentional and/or negligent infliction of emotional distress. D. 1-1. Wells Fargo has now moved for summary judgment. D. 16. For the reasons stated below, the Court ALLOWS Defendants' motion.

II. Factual Allegations

Unless otherwise noted, the following facts are as described in Wells Fargo's Statement of Facts, D. 18 ("SOF"), which Plaintiffs have admitted by their failure to controvert these facts. Stonkus v. City of Brockton Sch. Dep't , 322 F.3d 97, 102 (1st Cir. 2003) (quoting D. Mass. L.R. 56.1) (providing that "[m]aterial facts of record set forth in the statement required to be served by the moving party will be deemed for purposes of the motion to be admitted by the opposing parties unless controverted by the statement required to be served by opposing parties").[1]

In 2009, Plaintiffs engaged Wells Fargo to refinance the mortgage on their property. SOF ¶¶ 1-2. Wells Fargo is a federally chartered national bank. Id . ¶ 45. Plaintiffs allege that a Wells Fargo representative told Colleen Downey ("C. Downey") that Plaintiffs' loan payment would be $1, 800 including escrow and taxes but cannot recall the name of the representative who told her that. Id . ¶¶ 3-4. On September 17, 2009, Wells Fargo sent C. Downey initial disclosures for her loan, which included a "Truth-in-Lending disclosure." Id . ¶¶ 5, 7. The Truth-in-Lending disclosure stated that Plaintiffs' initial payments would be between $1, 784.12 and $1, 769.11 with an annual percentage rate of 3.3636%. Id . ¶¶ 8-9. The disclosure also stated that Plaintiffs' finance charge would be $182, 227.29 and their total amount financed would be $333, 553.22. Id . ¶ 9.

Wells Fargo also sent Plaintiffs a "Good Faith Estimate of Settlement Cost" on September 17, 2009, which clarified the loan terms, costs and payments providing for monthly principal and interest payments of $1, 631.08, a property insurance premium of $89.50, annual property taxes of $395.47, a mortgage insurance premium of $153.04 and therefore a total monthly payment of $2, 269.09. Id . ¶ 10. These amounts reflected a total mortgaged amount of $341, 649.00 with a 4.0% initial interest rate. Id.

On September 28, 2009, Plaintiffs completed and signed a mortgage loan application in the amount of $341, 649.00 with a 4.0% initial interest rate. Id . ¶ 13. Wells Fargo approved Plaintiffs for a loan of $348, 957.00. Id . ¶ 14. The parties closed the loan on November 10, 2009 and the Plaintiffs signed the Uniform Residential Home Loan Application on that date, id. ¶¶ 15, 16, although Plaintiffs separately assert that these signatures were forged. D. 21 ¶ 4. Although the amount of the loan changed, the initial interest rate and all other terms were the same as the September 28, 2009 application. SOF ¶ 17.

At the closing, Colleen Downey signed the loan documents under the closing attorney's supervision. Id . ¶ 18. She was asked to sign documents before her mother arrived. D. 21 ¶ 8. Although no one prevented her from reading the documents, she did not read or ask any questions about the documents before signing them. D. 18 ¶¶ 19-21. Ultimately, Plaintiffs signed a promissory note in the amount of $348, 957.00 secured by a mortgage on their property. Id . ¶¶ 27-28. At the closing, Plaintiffs received a "TILA" or "truth-in-lending" disclosure which they signed, a "HUD-1 Settlement Statement" and a "Loan Profile." Id . ¶¶ 29-30. The TILA Disclosure stated that their initial payment would vary from $1, 822.28 to $1, 806.95 with a total finance charge of $188, 240.56 and total amount financed of $340, 822.52. Id . ¶¶ 31-32. The HUD-1 Settlement Statement noted that Plaintiffs would also have to pay flood insurance, property taxes and property insurance on a monthly basis. SOF ¶ 34. Plaintiffs also received and signed two copies of the notice of their right to cancel the loan. Id . ¶ 35.

Plaintiffs defaulted on their mortgage in May 2011. Id . ¶ 42. Plaintiffs did not object to their payment amount until they sent Wells Fargo a demand letter on February 8, 2012. Id . ¶¶ 36-37. The letter demanded damages for Wells Fargo's failure to make certain disclosures at the closing and asked Wells Fargo to reallocate Plaintiffs' loan payments, but did not reference any debt collection activity or payment applications by Wells Fargo. Id . ¶¶ 38-39.

III. Procedural History

Plaintiffs filed a case in Norfolk Superior Court on June 3, 2012. D. 1-1 at 5.[2] Wells Fargo removed this matter to this Court on July 23, 2012. D. 1. Counts I and II allege violations of Mass. Gen. L. c. 93A and c. 140D, respectively and assert in part that Wells Fargo made inaccurate or insufficient disclosures about nature of the loan at closing (the "disclosure claims"). Compl., D. 1-1 at 9-10. Plaintiffs' also assert through their c. 93A claim that Wells Fargo, in the negotiations preceding the loan closing, intentionally misrepresented that Plaintiffs could refinance their loan in such a way to have a total monthly payment of $1, 800 per month, while Count III alleges a fraudulent misrepresentation claim under asserting same (the "fraud claims"). Id . at 9-11. Count IV alleges a violation of Mass. Gen. L. c. 93, § 49. Id . at 12. Count V alleges negligent and/or intentional infliction of emotional distress. Id.

IV. Discussion

A. Standard of Review

The Court grants summary judgment where there is no genuine dispute as to any material fact and the undisputed facts demonstrate that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). "A fact is material if it carries with it the potential to affect the outcome of the suit under applicable law." Santiago-Ramos v. Centennial P.R. Wireless Corp. , 217 F.3d 46, 52 (1st Cir. 2000). The movant bears the burden of demonstrating the absence of a genuine issue of material fact. Carmona v. Toledo , 215 F.3d 124, 132 (1st Cir. 2000); see Celotex v. Catrett , 477 U.S. 317, 323 (1986). If the movant meets its burden, the non-moving party may not rest on the allegations or denials in its pleadings, Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 256 (1986), but must come forward with specific admissible facts showing that there is a genuine issue for trial. Borges ex rel. ...


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