Gomez v. Wells Fargo Bank, N.A.
2012 U.S. App. LEXIS 7370
8th Cir.2012Background
- Gomezes signed HUD-1 disclosures showing appraisal fees payable to Rels Valuation in Wells Fargo loans.
- Rels Valuation is a Wells Fargo–First American joint venture that arranges appraisals; Wells Fargo maintains market rates charged to borrowers.
- Gomezes allege an Inflated Appraisal Fee Scheme where Rels/ Wells Fargo allegedly markup fees and include profits without passing savings to borrowers.
- Alleged scheme purportedly allowed Wells Fargo to control appraisal referrals and outcomes to secure loans despite actual property values.
- District court dismissed most claims for lack of standing or failure to plead statutory elements; district court declined to exercise supplemental jurisdiction over unjust enrichment claim.
- Gomezes appeal contends RICO, AZRAC, RESPA, and UCL violations; district court’s standing and pleading analyses are challenged.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| RICO/AZRAC standing to sue | Gomezes allege concrete financial loss from inflated fees. | Wells Fargo maintained market rates; no concrete loss. | Gomezes lack standing; no concrete financial loss shown. |
| RESPA Section 8(a) 'thing of value' | Control of appraisal process constitutes thing of value for referral. | Control allegations are too vague and appraisals were performed by third parties; no thing of value. | Assumed broad definition but pleaded facts insufficient to show thing of value or manipulation; claim rejected. |
| RESPA Section 8(b) fee splitting | Rels/owners share in illegal fees via ownership in Rels. | Overcharge alone does not prove fee splitting; no adequate pleading of fee sharing. | Claim foreclosed; no factual allegation of fee-splitting consistent with Haug. |
| UCL standing | Gomezes lost money due to overcharged appraisal fees. | Admitted market-rate charging; no loss of money or property tied to alleged conduct. | UCL claim rejected; no standing or loss shown. |
| Leave to amend | District court should have allowed amendment. | No clear motion to amend; district court did not abuse discretion. | District court did not abuse discretion; denial to amend affirmed. |
Key Cases Cited
- Potomac Elec. Power Co. v. Elec. Motor and Supply, Inc., 262 F.3d 260 (4th Cir.2001) (RICO injury requires concrete financial loss; reliance on padded bills rejected)
- Haug v. Bank of Am., N.A., 317 F.3d 832 (8th Cir.2003) (Section 8(b) requires fee sharing; overcharge alone not enough)
- McKell v. Wash. Mut., Inc., 142 Cal.App.4th 1457 (Cal.App.2006) (McKell discusses UCL standing and RESPA linkage; distinguishable facts)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S.2009) (Plaintiff must plead plausible claims; Twombly/Iqbal standard applied)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S.2007) (Plausibility standard for pleading claims)