Faulks v. Wells Fargo & Co.

231 F.Supp.3d 387

Laurence FAULKS, Plaintiff,

v.WELLS FARGO & COMPANY, et al., Defendants.

Case No. 13–cv–02871–MEJ

United States District Court, N.D. California.

Signed February 7, 2017

Henry Joseph Hymanson, John Steve Sargetis, Pamela Jeanne Palmieri, Sandeep Singh Dhillon, Stephen James Foondos, United Law Center, Roseville, CA, for Plaintiff.

Daniel A. Armstrong, Robert Arthur Bailey, Anglin Flewelling Rasmussen Campbell & Trytten LLP, Pasadena, CA, Kimberly Irene Culp, Venable LLP, Los Angeles, CA, Cody Scott Lonning, Venable LLP, San Francisco, CA, for Defendants.

ORDER RE: MOTION FOR SUMMARY JUDGMENT

MARIA–ELENA JAMES, United States Magistrate Judge

INTRODUCTION

Pending before the Court is Defendant Wells Fargo Bank, N.A.'s ("Wells Fargo") Motion for Summary Judgment. Mot., Dkt. No. 126. Plaintiff Laurence Faulks ("Plaintiff") filed an Opposition (Dkt. No. 129) and Wells Fargo filed a Reply (Dkt. No. 134). The Court previously vacated the hearing on the Motion. Dkt. No. 135. Having considered the parties' positions, the relevant legal authority, and the record in this case, the Court GRANTS Wells Fargo's Motion for the following reasons.

BACKGROUND

Unless otherwise noted, the following facts are undisputed. On July 3, 2007, Plaintiff obtained a $525,000 mortgage loan from World Savings Bank, FSB (the "Loan"). Declaration of Brandon McNeal ("McNeal Decl.") ¶ 7, Dkt. No. 128–1; Declaration of Laurence Faulks ("Faulks Decl.") ¶ 6, Dkt. No. 129–1. The Loan was secured by a deed of trust recorded against real property—Plaintiff's house located at 25 Cameo Way, San Francisco, California (the "Property"). McNeal Decl. ¶ 7. World Savings Bank, FSP later changed its name to Wachovia Mortgage, FSP, which then merged with Wells Fargo in November 2009. Mot. at 1; Opp'n at 1–2.¹

Plaintiff suffered from serious medical problems in August 2009, which worsened in January 2010. Declaration of Daniel A. Armstrong ("First Armstrong Decl."), Ex. 1 ("Faulks Dep.") 21–18:22–8, Dkt. No. 126–1; Faulks Decl. ¶¶ 9–10. He began receiving California disability benefits in January 2010. Faulks Decl. ¶ 12. Plaintiff missed his first Loan payment in April 2010. McNeal Decl. ¶ 8 & Ex. 1 (Processing Notes) at 10; Faulks Decl. ¶ 13.

In late 2010, Plaintiff applied for a loan modification under the Home Affordable Modification Program ("HAMP"). McNeal Decl. ¶ 9, Ex. 2 at 15 ("WF Feb. 16 Letter"); Faulks Decl. ¶¶ 15–16 & Ex. 3 ("Pl. Feb. 16 Letter"). On February 16, 2011, Wells Fargo sent Plaintiff a letter acknowledging the receipt of documents and stating those documents were under review. WF Feb. 16 Letter; Pl. Feb. 16 Letter. The letter further stated, "[i]f your loan has been previously referred to foreclosure then we will continue the foreclosure process while we evaluate your loan for HAMP. However, no further foreclosure sale will be conducted and you will not lose your home during the HAMP evaluation." Id. (both). Wells Fargo denied Plaintiff's application on February 25, 2011 on account of Plaintiff's "excessive financial obligations." Faulks Decl., Ex. 4; see id. ¶ 18; McNeal Decl. ¶ 9 & Ex. 2 at 25 (Feb. 25, 2011 Loss Mitigation Processing Note ("Feb. 25 LMT Process Note") stating "DISPOSITION: EXCESSIVE FORBEARANCE–THRESHOLD CANNOT BE REACHED").

Plaintiff applied for another modification review in June or July 2011. McNeal Decl. ¶ 10 & Ex. 3; Faulks Decl. ¶ 19. On July 27, 2011, Plaintiff received a letter from Wells Fargo requesting additional information, including tax returns, Social Security verification, and income documentation by August 26, 2011. McNeal Decl. ¶ 10 & Ex. 4 (July 27, 2011 letter); Faulks Decl. ¶ 21 & Ex. 5 (July 27, 2011 letter). On August 22, 2011, Wells Fargo caused to be recorded a Notice of Default and Election to Sell under Deed of Trust. McNeal Decl. ¶ 11 & Ex. 5 (Notice). On August 27, 2011, Wells Fargo sent Plaintiff another letter stating it still had not received the requested documents and notifying him that if it did not timely receive the documents, "the modification request will be considered withdrawn[.]" Id. ¶ 12 & Ex. 6. The August 27 letter extended the deadline for Plaintiff to submit the documents to September 11, 2011. Id. (both). On September 13, 2011, Wells Fargo sent Plaintiff a letter stating it had not received the required documentation; as such, it deemed Plaintiff's request for HAMP assistance withdrawn. Id. ¶ 12 & Ex. 8 (Sept. 13, 2011 letter).

Plaintiff sought another loan modification review in September 2011. Id. ¶ 13 & Ex. 9 at 50; see Mot. at 3. On September 27, 2011, Wells Fargo Executive Mortgage Specialist Jennifer Klute sent Plaintiff via overnight mail a letter dated September 24, 2011. Faulks Decl. ¶ 22 & Ex. 6 (Sept. 24, 2011 letter and envelope). This letter, which Plaintiff received on September 28, 2011, requested that Plaintiff fax Wells Fargo his "award letter from Social Security Disability for evidence of income" by September 30, 2011. Id. (both). But the fax number listed in the letter was incomplete; as such, Plaintiff was unable to successfully fax the required documents. Id. ¶ 23. He went to his local Wells Fargo branch office, where he worked with a Wells Fargo employee to determine the correct fax number. Id. Plaintiff asserts that for the next three days, he spent approximately ten hours a day trying to submit his documents by the September 30 deadline. Id.

Wells Fargo received all of Plaintiff's required documentation on October 10, 2011. McNeal Decl. ¶ 14 & Ex. 10 at 56–62 (Oct. 7–13, 2011 Loss Mitigation Process Notes ("Oct. 7–13 LMT Process Notes")). That same day, Wells Fargo mailed Plaintiff a letter stating his loan was being reviewed under the HAMP program. Id. ¶ 14 & Ex. 11 at 68–70 ("WF Oct. 10 Letter"); Faulks Decl. ¶ 24 & Ex. 8 ("Pl. Oct. 10 Letter"). This letter included the following statements:

The HAMP evaluation and the process of foreclosure may proceed at the same time. If the loan has been previously referred to foreclosure, the foreclosure process will continue while the loan is evaluated for HAMP. However, no foreclosure sale will be conducted and you will not lose your home during the HAMP evaluation.

WF Oct. 10 Letter at 68; Pl. Oct. 10 Letter at 1.

Plaintiff contends Wells Fargo sent him two letters dated October 11, 2011. The first letter notified him that his mortgage was being reviewed under the HAMP program. Faulks Decl. ¶ 25 & Ex. 9 ("Oct. 11 Review Letter"). According to Plaintiff, the letter contained a statement that "[d]uring the review process, your loan will not be referred to foreclosure. If the loan has previously been referred to foreclosure, the foreclosure will continue; however, a foreclosure sale will not be held and you will not lose your home during this time period." Oct. 11 Review Letter at 1.

The parties agree that Wells Fargo sent Plaintiff a letter dated October 11, 2011 denying his application due to Plaintiff's "excessive financial obligations." Id. ¶ 14 & Ex. 11 at 71–72 ("WF Oct. 11 Denial Letter"); Faulks Decl. ¶ 25 & Ex. 10 at 1 ("Pl. Oct. 11 Denial Letter"). Mr. McNeal explains that Plaintiff's financial documentation showed a gross monthly income of $2,685.88. McNeal Decl. ¶ 14. Wells Fargo could not reduce Plaintiff's mortgage installment to an amount representing 31–34% of his gross monthly income without changing the terms of the Loan beyond HAMP's requirements. Id. ; WF Oct. 11 Denial Letter at 71; Pl. Oct. 11 Denial Letter at 1.

On December 8, 2011, Plaintiff attended a Home Preservation Workshop. Faulks Decl. ¶ 27. That day, he met with Wells Fargo representative Justin Saavedra. Id. ¶ 27; McNeal Decl. ¶ 16 & Ex. 13 (Dec. 8, 2011 SER Process Notes). Plaintiff also met with Alejandro Copado from Consumer Credit Counseling of San Francisco ("CCC"). Faulks Decl. ¶ 27. According to Wells Fargo, a Wells Fargo representative advised Plaintiff that he needed to submit financial documentation in order to initiate another modification review. McNeal Decl. ¶ 16 & Ex. 13 at 77 (Dec. 8, 2011 SER Process Notes). On December 22, 2011, Wells Fargo sent Plaintiff a letter requesting additional documents: a completed IRS form 4506–T, Plaintiff's tax returns, and income documentation. McNeal Decl. ¶ 16 & Ex. 14 (Dec. 23, 2011 Letter). Having received no response from Plaintiff, Wells Fargo attempted to contact Plaintiff via telephone starting on December 27, 2011. Id. ¶ 17 & Ex. 15 at 83 (Dec. 27, 2011–Jan. 23, 2012 SER Process Notes). Wells Fargo asserts that it managed to reach Plaintiff on January 13, 2012. Id. ¶ 17 & Ex. 15 at 84. Plaintiff contends that same day, he faxed to Mr. Saavedra his IRS form 4506–T, tax returns, and social security increase notice. Faulks Decl. ¶ 13 & Ex. 11 (fax cover sheet dated Jan. 13, 2012).

Wells Fargo avers that on January 23, 2012, it determined that it was still missing required documentation and contacted Plaintiff via telephone and by letter to inform him of such. McNeal Decl. ¶ 17, Ex. 15 at 85, Ex. 16 (Jan. 23, 2012 letter). The letter, signed by Justin Saavedra, stated that Mr. Saavendra "ha[d] not received all of the documentation previously requested" and set a deadline of February 7, 2012 for Plaintiff to submit the required papers. Ex. 16 at 86, id. The letter warned Plaintiff that "[i]f [he] did not receive the required documents by February 07, 2012, the modification request would be considered withdrawn, and collection efforts w[ould] resume." Id. Wells Fargo did not receive the requested documentation by February 7, 2012. Id. ¶ 18.

The parties agree that on February 9, 2012, Wells Fargo sent Plaintiff a letter notifying him that Wells Fargo was unable to offer him a loan modification under HAMP because he failed to provide the requested documents; for that reason, his application was considered withdrawn. Id. ¶ 18 & Ex. 17 (WF Feb. 9, 2012 Letter); Faulks Decl. ¶ 32 & Ex. 14 (Pl. Feb. 9, 2012 Letter). Wells Fargo Home Preservation Specialist Cynthia Boyd sent Plainti...