941 F. Supp. 2d 862
S.D. Ohio2013Background
- Mortgagors Ronald and Geraldine Dooley sue Wells Fargo Bank, N.A. over mortgage servicing and foreclosure in Beavercreek, Ohio, with Litton Loan Servicing LLC acting as servicer/agent for Wells Fargo.
- Plaintiffs allege Wells Fargo/Litton engaged in practices to induce HARP eligibility and failed to respond to short-sale inquiries.
- Foreclosure action was filed August 1, 2011; case involves alleged delays, fees, insurance costs, maintenance expenses, and credit impact.
- Plaintiffs assert negligence, fraud, intentional misrepresentation, intentional infliction of emotional distress, and OCSPA claims.
- Amended Complaint relies on contract-based relationships (mortgage/note) and seeks various damages; Wells Fargo moves to dismiss under Rule 12(b)(6).
- Court consents to magistrate judge jurisdiction under 28 U.S.C. § 636(c) and proceeds on dispositive motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether negligence claim is barred by economic loss doctrine | Dooley argues damages arise from negligent loan servicing | Wells Fargo contends damages are purely economic and contractual | Yes, dismissed for economic loss doctrine |
| Whether fraud/intentional misrepresentation claims meet Rule 9(b) pleading | Dooley asserts misrepresentations about HARP enrollment | Wells Fargo contends lack of specificity in time/place/content of misrepresentations | Yes, dismissed for failure to plead with particularity under Rule 9(b) |
| Whether intentional infliction of emotional distress claim is viable | Dooley claims extreme conduct caused severe emotional distress | Wells Fargo argues conduct not extreme/outrageous and injuries not proven | Yes, dismissed for lack of extreme conduct and insufficient injuries |
| Whether OCSPA claim applies to Wells Fargo as a financial institution | OCSPA should apply to bank-defendants | OCSPA excludes financial institutions from consumer transactions | Yes, OCSPA claim dismissed |
Key Cases Cited
- Pavlovich v. Nat’l City Bank, 435 F.3d 560 (6th Cir.2006) (economic-loss doctrine applied to banking context; independent tort duty required)
- Chemtrol Adhesives, Inc. v. American Mfrs. Mut. Ins. Co., 42 Ohio St.3d 40 (Ohio 1989) (economic loss rule: no recovery for purely economic losses in tort absent independent tort duty)
- Corporex Dev. & Constr. Mgmt., Inc. v. Shook, Inc., 106 Ohio St.3d 412 (Ohio 2005) (economic loss rule; contract-based damages limited in torts)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for pleading; not mere formulaic recitations)
- Yeager v. Local Union 20, Teamsters, 6 Ohio St.3d 369 (Ohio 1993) (extreme and outrageous conduct standard for IIED)