Josephine Spaulding v. Wells Fargo Bank, N.A.
2013 U.S. App. LEXIS 7866
| 4th Cir. | 2013Background
- Spaulding and Haylett faced financial hardship and sought a HAMP mortgage modification from Wells Fargo.
- Wells Fargo denied their HAMP modification application after requesting additional income documentation.
- Plaintiffs filed five state-law claims in Maryland state court; Wells Fargo removed to federal court and moved to dismiss.
- District court dismissed all claims, holding no private right of action in HAMP and no contract or duty to support the state-law claims.
- Appellants appealed; Fourth Circuit reviews de novo the legal sufficiency of the complaint and affirms the district court.
- No TPP contract was executed, and Wells Fargo did not owe a duty or form a contract with Appellants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HAMP creates a private right of action. | Spaulding argues HAMP imposes duties via the SPA and directives. | Wells Fargo contends no private remedy exists under HAMP. | No private right of action under HAMP; district court proper to dismiss. |
| Whether there was an implied-in-fact contract between the parties. | Spaulding alleges tacit understanding to process under HAMP with consideration. | No contract formed; no mutual assent or definite terms. | No contract implied-in-fact; no breach claim viable. |
| Whether Wells Fargo owed a duty in negligence given lack of privity. | Bank owed duty to process modification properly. | Bank-customer relationship is contractual, not fiduciary; no duty absent privity. | No duty; negligence claim fails. |
| Whether MCPA and fraud claims survive given misrepresentation allegations. | Defendant made deceptive statements about processing and documentation. | Statements were not deceptive or made with intent to defraud; no Rule 9(b) sufficiency. | Claims fail; dismissed. |
Key Cases Cited
- Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012) (reiterates HAMP framework and SPAs; no private action against servicers without TPP)
- Jacques v. First Nat'l Bank of Md., 515 A.2d 756 (Md. Ct. App. 1986) (bank owed duty in processing loan applications only with privity or special circumstances)
- Parker v. Columbia Bank, 604 A.2d 521 (Md. Ct. Spec. App. 1992) (bank owes no duty absent contractual basis or special circumstances)
- Kuechler v. Peoples Bank, 602 F. Supp. 2d 625 (D. Md. 2009) (bank-customer relationship generally contractual, not fiduciary; no tort duty)