Norboe v. Wells Fargo Bank, N.A.

George NORBOE v. WELLS FARGO BANK, N.A., REO Property Advisors, LLC et al.

No. NNHCV136038377

Superior Court of Connecticut, Judicial District of New Haven, New Haven

January 31, 2018

UNPUBLISHED OPINION

OPINION

Ecker J.

This is a lawsuit arising from what defendants call their " property preservation activities," and plaintiff calls defendants’ " home break-ins," which took place while plaintiff was in default on his mortgage loan. This memorandum adjudicates the pending motions for summary judgment and/or to dismiss filed by defendant Wells Fargo. See Motion for Summary Judgment, dated May 30, 2017 (# 257.00); Wells Fargo’s Motion to Dismiss Sixth Count, dated June 16, 2017 (# 274.00); see also Wells Fargo’s Objection to Motion for Order, dated March 14, 2017. (# 235.00) (arguing that plaintiff lacks standing). The dispositive motions filed by the other defendants (REO Property Advisors, LLC and Mortgage Contracting Services, LLC) will be addressed in separate orders.

The court heard argument on these motions on August 7, 2017. It has read all of the memoranda and accompanying exhibits and affidavits filed by the parties. These materials have been analyzed in accordance with the legal standards applicable to the particular motion under consideration. See e.g., Grenier v. Commissioner of Transportation, 306 Conn. 523, 534-35 (2012) (summary judgment; noting that constitutional right to a jury trial limits ability of courts to engage in summary adjudication); Windsor Financial Savings and Loan Ass’n v. Reliable Mechanical Contractors, LLC, 175 Conn.App. 651, 658-59 (2017) (summary judgment); Cuzzo v. Town of Orange, 315 Conn. 606, 614-15 (2015) (motion to dismiss).

One preliminary word is in order. The court’s rulings deciding the pending motions easily could be seventy pages in length. The operative complaint contains thirty-two counts, and the pending motions, collectively, attack all counts directed at the three moving defendants. The voluminous evidentiary materials submitted by the parties in connection with these motions fill notebooks. The applicable legal principles and doctrines are not especially complicated in the abstract, but they are numerous, and there is no consensus in the courts as to how many of these various substantive rules (of agency negligence, trespass, contract, emotional distress, unfair trade practices, etc.) should apply to the particular subject matter at issue. See generally Christopher K. Odinet Banks, Break-Ins, and Bad Actors in Mortgage Foreclosure, 83 U. Cin. L.Rev. 1155, 1186-93, 1200-06 (2015) (describing, and lamenting, mixed and inconsistent results in private litigation of similar claims in courts across country). In light of scheduling considerations,¹ resource constraints, and the fact that this decision has no precedential effect beyond this case, the court sees no purpose in providing an elaborate recitation of the facts or an extended discussion of general legal principles.

Eight counts of the complaint are directed against defendant Wells Fargo (First through Seventh and Twenty-Fifth Counts). Most of Wells Fargo’s briefing is devoted to its motion for summary judgment, but Wells Fargo also moves to dismiss the complaint for lack of subject-matter jurisdiction, on two distinct grounds. These jurisdictional claims will be addressed first.

I. Wells Fargo’s Jurisdictional Arguments

A. The Class Action Release- Wells Fargo’s first argument for dismissal is based on the fact that plaintiff is (or may be) a member of a class that has settled a class-action lawsuit relating to " property inspection fees" on mortgages serviced by Wells Fargo, Huyer v. Wells Fargo and Company, Docket No. 4:08-cv-00507 (S.D. Iowa) (" Huyer " ). Wells Fargo argues that plaintiff’s claims in the present case have been extinguished because they fall within the scope of the release in the Huyer settlement. The court has reviewed the terms of the Settlement Agreement and the release contained therein, and rejects Wells Fargo’s position. Huyer involved claims of financial wrongdoing against Wells Fargo in connection with the fees charged to mortgagors for property inspections conducted when the homeowners were late paying their loans. The certified class entitled to damages in the Huyer settlement is limited to " [a]ll persons who, according to Wells Fargo records, paid property inspection fees billed by [Wells Fargo] ... for drive-by property inspections automatically ordered by [Wells Fargo] ... as a result of a late payment of their mortgage," Order on Class Certification, Huyer v. Wells Fargo and Company, Docket No. 4:08-cv-00507, Doc. # 206.00 (S.D. Iowa, 10/23/13), and the release contained in the Settlement Agreement is limited to claims " based upon, arising out of, or relating to, in any way, property inspection fees assessed on a mortgage serviced by Wells. Fargo, or Wells Fargo’s practices in ordering or charging borrowers for property inspections," Huyer v. Njema, 847 F.3d, 934, 936 (8th Cir. 2017). Plaintiff’s claims here have nothing to do with the property inspection fees, and have not been released.²

B. Ascertainable Loss- Wells Fargo also mounts what it characterizes as a jurisdictional attack on the Sixth Count, which sets forth plaintiff’s claim against Wells Fargo under the Connecticut Unfair Trade Practices Act (" CUTPA" ), General Statutes § 42-110a et seq. Wells Fargo contends that the court lacks subject-matter jurisdiction over this claim because plaintiff cannot prove an essential element of his CUTPA claim, namely that he suffered any " ascertainable loss" as a result of the alleged wrongdoing. See § 42-110g (" ascertainable loss" requirement); Fairfield Heights Residence Ass’n v. Fairfield Heights, Inc., 310 Conn. 797, 822 (2014) (discussing " ascertainable loss" requirement); Artie’s Auto Body, Inc. v. Hartford Fire Ins. Co., 287 Conn. 208, 217-18 (2008) (same). Wells Fargo also seeks summary judgment on the Sixth Count on these same grounds, among others. See Motion for Summary Judgment (# 257.00), at pp. 26-27. Whether treated as a jurisdictional issue or a merits issue, the determinative question is the same: could a fact-finder reasonably conclude, on this record, that plaintiff has suffered any ascertainable loss as that term is used in CUTPA?

Wells Fargo argues that the only harm alleged in the Sixth Count is the imposition of improper charges/fees by Wells Fargo, first in connection with the " property preservation" activities that plaintiff says never should have been undertaken, and second in the form of post-acceleration late fees which plaintiff contends would not have been approved by a court in foreclosure proceedings. Wells Fargo argues that plaintiff has suffered no " ascertainable loss" giving rise to a claim under § 42-110g, as a matter of law, because none of these allegedly improper charges and fees have actually been paid by plaintiff.

Plaintiff responds that Wells Fargo’s argument ignores numerous significant aspects of his damages claim. Plaintiff points out that, in addition to the improper charges and fees, he also suffered property damage and losses resulting from the forced entries into his home; there was a broken door, spoiled food caused by the electricity shut-off, changed locks and repair-related damage, a stolen watch, and so forth. See, e.g., Complaint, First Count, ¶¶ 12, 14, 16, 18, 23, 31; Second Count, ¶ 2; Third Count ¶ 6, 8. These allegations are all incorporated by reference into the Sixth Count, see Complaint, Sixth Count, ¶ 1, and consequently are included in the Sixth Count’s claim for damages, id. at 7 (" As a result of Wells Fargo’s conduct, the plaintiff sustained substantial injury through loss of his property ..." ).

The court agrees with plaintiff that (1) these allegations are contained within the CUTPA count, (2) there is evidentiary support upon which a jury could credit such allegations, and (3) this type of damage unquestionably qualifies as " ascertainable loss ... of property" under CUTPA. Because the harm at issue includes more than emotional distress and uncollected charges/fees, there is no need to determine whether those damages standing alone would satisfy the " ascertainable loss" requirement.^[1] Accordingly, the motion to dismiss the Sixth Count (CUTPA) is denied. Likewise, the court denies Wells Fargo’s motion for summary judgment the Sixth Count to the extent that motion is based on the contention that plaintiff cannot establish any " ascertainable loss" as a matter of law.

II. Wells Fargo’s Summary Judgment Arguments

The remainder of Wells Fargo’s arguments in support of its motion for summary judgment fall into two basic categories. One set of arguments contend, on various theories, that Wells Fargo is not legally responsible for any wrongdoing that may have occurred in connection with property preservation activities at plaintiff’s property, because Wells Fargo’s connection to the allegedly wrongful acts is too attenuated for legal liability to attach- whether under the doctrine of respondeat superior or any other principle of agency law. These " attenuation" claims all rely on the fundamental point that the alleged wrongdoing was not committed by Wells Fargo or its employees, but, rather, by the independent contractor hired by Wells Fargo to conduct the bank’s property preservation activities (defendant Mortgage Contracting Services, LLC, hereinafter " MCS" ), or by one or more sub-contractors hired by MCS to perform those services (including defendant REO Property Advisors, LLC, hereinafter " REO" ), or by the individuals, known as " field workers," hired by REO (or others) to carry out the actual property-preservation work. Wells Fargo argues that this indisputable factual scenario creates a barrier...