Joanne C. Miller v. Wells Fargo Bank
160 A.3d 975
| R.I. | 2017Background
- Joanne C. Miller mortgaged a Warwick, RI home; she defaulted after reduced income and sought a loan modification from Wells Fargo under HAMP in 2009.
- Wells Fargo sent document requests; Miller submitted multiple hardship letters and financial materials but received repeated notices saying information was missing.
- Wells Fargo denied a modification by letter dated October 29, 2009; Miller contends she had already provided sufficient documentation by then.
- Wells Fargo scheduled and held a foreclosure sale on March 10, 2010; Miller later sought rescission which was denied.
- Miller sued Wells Fargo in Kent Superior Court raising multiple claims (including deceptive trade practices, HAMP-related claims, breach of good faith, promissory estoppel); after a bench trial the court entered judgment for Wells Fargo and Miller appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wells Fargo violated federal/Treasury/HAMP directives by foreclosing while modification was pending | Miller: Treasury Directive 09-01/HAMP barred foreclosure during verification period and Wells Fargo improperly foreclosed | Wells Fargo: No contractual duty; issue not pleaded or tried below; servicer could proceed under program rules | Waived on appeal (not pleaded/tried); Court refused to consider it |
| Breach of implied covenant of good faith and fair dealing | Miller: Wells Fargo acted in bad faith during modification review and refused to consider modification | Wells Fargo: Mortgage contained no obligation to modify; no enforceable duty to consider modification | Judgment for Wells Fargo — claim fails absent contractual duty to modify |
| Promissory estoppel (reliance on alleged promise to rescind foreclosure) | Miller: She relied on Wells Fargo’s representations and on HAMP review, causing detriment | Wells Fargo: No admissible evidence that any Wells Fargo employee made a binding promise; Miller failed to prove reliance | Judgment for Wells Fargo — insufficient evidence to prove promissory estoppel |
| Whether borrower is third-party beneficiary of HAMP/servicer–government agreements | Miller: HAMP rules created enforceable rights or obligations benefiting borrowers | Wells Fargo: Borrowers are not intended third-party beneficiaries of servicer–government contracts | Held for Wells Fargo — borrowers not third-party beneficiaries; HAMP does not create a private right enforceable here |
Key Cases Cited
- McGarry v. Pielech, 47 A.3d 271 (R.I. 2012) (standard for judgment as a matter of law)
- McNulty v. Chip, 116 A.3d 173 (R.I. 2015) (implied covenant cannot create contractual rights beyond the agreement)
- Young v. Wells Fargo Bank, N.A., 717 F.3d 224 (1st Cir. 2013) (HAMP does not create enforceable beneficiary rights for borrowers)
- MacKenzie v. Flagstar Bank, FSB, 738 F.3d 486 (1st Cir. 2013) (borrowers are not third-party beneficiaries of lender–government HAMP agreements)
- Cathay Cathay, Inc. v. Vindalu, LLC, 962 A.2d 740 (R.I. 2009) (elements required to establish third-party beneficiary status)