Dixon v. Wells Fargo Bank, N.A.
2011 U.S. Dist. LEXIS 80187
D. Mass.2011Background
- Dixons allege Wells Fargo promised to negotiate a loan modification if they followed steps and provided financial information, then foreclosed.
- Dixons stopped paying and provided financial data as instructed, relying on Wells Fargo's promise.
- Wells Fargo initiated foreclosure proceedings after the Dixons complied, prompting they sought injunctive relief, specific performance, and damages.
- Massachusetts court previously issued a preliminary injunction halting foreclosure while dispute proceeded.
- Court must decide whether promissory estoppel is plead adequately and whether HOLA preempts the state-law claim.
- Dixons seek damages limited to reliance expenditures if promissory estoppel is established.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether promissory estoppel is adequately pleaded | Dixons relied on Wells Fargo's promise to negotiate a modification. | Promise was too indefinite to bind and not a true contract. | Yes; complaint states promissory estoppel and reliance damages may be recoverable. |
| Whether promissory estoppel is preempted by HOLA | Claim is a general common-law remedy for reliance, not a loan-terms or servicing regulation. | Rest of §560.2 preempts state-law claims touching lending or servicing. | Not preempted; promissory estoppel is a general common-law claim not designed to regulate lending. |
Key Cases Cited
- Loranger Constr. Corp. v. E.F. Hauserman Co., 376 Mass. 757 (Mass. 1978) (promissory estoppel standards adopted through Restatement § 90)
- McLearn v. Hill, 276 Mass. 519 (Mass. 1931) (promissory estoppel seeks to enforce reliance in preliminary negotiations)
- Greenstein v. Flatley, 19 Mass. App. Ct. 351 (Mass. App. Ct. 1985) (conduct constituting unfairness in negotiations may support estoppel)
- Rosenfield v. United States Trust Co., 290 Mass. 210 (Mass. 1935) (the promise must be capable of enforcement where appropriate)
- Cohoon v. Citizens Bank, 2000 WL 33170737 (Mass. Super. 2000) (promissory estoppel based on negotiations surrounding mortgage payoff)