Cannon v. Wells Fargo Bank, N.A.
926 F. Supp. 2d 152
D.D.C.2013Background
- Plaintiff Andrea Cannon, on behalf of herself and others, sues Wells Fargo Bank, N.A. and Wells Fargo Insurance, Inc. (Wells Fargo Defendants) and QBE Specialty Insurance Co. and QBE First Insurance Agency, Inc. (QBE Defendants) in DC Superior Court; action removed to federal court; motions to dismiss pending.
- Plaintiff obtained a mortgage from Wachovia (predecessor to Wells Fargo) on 1235 Queen Street NE, DC, in 2007; Deed of Trust allows lender to obtain insurance at borrower’s expense if coverage lapses; lender-placed insurance (LPI) used when needed.
- From 2008 to 2012, Plaintiff’s property was insured by Great American Insurance and prior coverage existed; Wells Fargo mailed letters Aug. 2011 and Feb. 2012 offering Wells Fargo Insurance programs and stating temporary lender-placed coverage may be obtained, with costs added to the mortgage.
- Aug. 31, 2011 letter alleged Wells Fargo secured temporary coverage via QBE Insurance Corporation with a 90-day binder and potential higher cost; February 9, 2012 binder for the Queen Street property evidenced a premium; the binder suggested premiums could be higher than voluntary coverage.
- Plaintiff alleges kickbacks/commissions to Wells Fargo from force-placed policies and a “bundle of services” provided by QBE; Plaintiff asserts seven causes of action including breach of implied covenant, unjust enrichment, multiple fraud theories, unconscionability, and conversion.
- Court’s posture: QBE Specialty lacked personal jurisdiction; other claims against Wells Fargo and QBE Defendants analyzed under Rule 12(b)(6).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has personal jurisdiction over QBE Specialty. | Cannon asserts DC long-arm jurisdiction under 13-423(a)(4). | QBE Specialty lacks substantial DC activity; not regularly doing business in DC. | No personal jurisdiction; claims against QBE Specialty dismissed. |
| Whether CPPA claims arise from a consumer transaction. | CPPA applies to consumer-merchant relationships; allegations fit CPPA. | Insurance arrangement relates to business use of property; not a consumer transaction. | Counts under CPPA dismissed for failure to plead consumer-transaction basis. |
| Whether unjust enrichment claims survive given an express contract. | Plaintiff conferred benefits and seeks recovery; unjust enrichment independent of contract. | Existence of Deed of Trust precludes quasi-contract recovery. | Unjust enrichment claims dismissed as to all Defendants; contract governs the dispute. |
| Whether fraud, concealment, and misrepresentation claims state a plausible claim. | Defendants misrepresented or concealed information to obtain LPI; reliance by Plaintiff alleged. | Plaintiff did not allege reliance; many CPPA counts fail to plead plausible claims. | Common-law fraud and related CPPA/TILA claims dismissed; lack of reliance and plausibility. |
| Whether unconscionability and related claims survive. | Unconscionability under DC law due to terms of LPI and disclosures. | Claims misapplied; unconscionability not shown in contract terms. | Counts Seven and related J dismissed for failure to state unconscionable terms. |
Key Cases Cited
- Shaw v. Marriott Int’l, Inc., 605 F.3d 1039 (D.C. Cir. 2010) (CPPA consumer-transactions scope; business-use exclusion)
- Iqbal, Ashcroft v., 129 S. Ct. 1937 (U.S. 2009) (pleading plausibility standard; factual enhancement required)
- Twombly, Bell Atl. Corp. v., 550 U.S. 544 (U.S. 2007) (pleading standard requires plausible claim)
- GTE New Media Servs. Inc. v. BellSouth Corp., 199 F.3d 1343 (D.C. Cir. 2000) (jurisdictional facts may be weighed with affidavits; pleadings not taken as true for jurisdiction)
- Urban Inst. v. FINCON Servs., 681 F. Supp. 2d 41 (D.D.C. 2010) (jurisdictional proof and evidentiary standards in DC)
- Plesha v. Ferguson, 725 F. Supp.2d 106 (D.D.C. 2010) (unjust enrichment requires absence of express contract)
- Williams v. First Gov’t Mortg. & Investors Corp., 225 F.3d 738 (D.C. Cir. 2000) (unconscionability in mortgage contracts analyzed under DC law)