Kenneth Wivell v. Wells Fargo Bank, N.A.
773 F.3d 887
8th Cir.2014Background
- Wivells purchased a home in 2006 using Wells Fargo financing; deed of trust included a no-oral-modifications clause; Kozeny served as trustee; foreclosure sale occurred June 30, 2010; Wivells sued Wells Fargo and Kozeny in Missouri state court; Wells Fargo removed based on fraudulent joinder of Kozeny; district court dismissed remaining claims against both defendants; Wivells appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraudulent joinder of Kozeny to defeat diversity | Wivells argued Kozeny had a viable claim suite | Wells Fargo argued Kozeny was fraudulently joined | Kozeny fraudulently joined; remand denial affirmed regarding Kozeny claims |
| Dismissal of Kozeny claims for lack of subject-matter jurisdiction | Kozeny claims should be adjudicated in state court | Diversity jurisdiction existed after removal and Kozeny is nondiverse | Dismissal against Kozeny should be without prejudice for lack of jurisdiction |
| MMPA claim against Wells Fargo—whether conduct was 'in connection with' the sale | Wivells contend conduct was in connection with sale due to continued modification discussions | Watson/Conway limit applicability; some conduct not in connection with sale | Remand vacated in part; conduct related to sale under MMPA remanded for further proceedings |
| Negligence and negligent misrepresentation claims against Wells Fargo | Claims arise from alleged mismanagement of loan; implied duties alleged | No tort duty arises from lender-borrower contract; no plausible claim | Affirmed dismissal of negligent and negligent-misrepresentation claims against Wells Fargo |
Key Cases Cited
- Murphy v. Aurora Loan Servs., LLC, 699 F.3d 1027 (8th Cir. 2012) (fraudulent-joinder standard and jurisdictional analysis in removal)
- Filla v. Norfolk S. Ry. Co., 336 F.3d 806 (8th Cir. 2003) (test for fraudulent joinder; 'no reasonable basis in fact and law')
- JAS Apartments, Inc. v. Naji, 230 S.W.3d 354 (Mo. Ct. App. 2007) (waiver require a clear, manifest intent; not shown here)
- Sparks v. PNC Bank, 400 S.W.3d 454 (Mo. Ct. App. 2013) (trustee duties; actual knowledge standard for foreclose)
- Reliance Bank v. Paramont Props., LLC, 425 S.W.3d 202 (Mo. Ct. App. 2014) (no-oral-modifications clause enforces no contractual expectancy)
- Zdazinsky v. Four Seasons Lakesites, Inc., 901 S.W.2d 224 (Mo. Ct. App. 1995) (lulling theory not extended beyond written forbearance terms)
- Killion v. Bank Midwest, N.A., 987 S.W.2d 801 (Mo. Ct. App. 1998) (trustee duties; impartiality and integrity in administration)
- Spires v. Edgar, 513 S.W.2d 372 (Mo. 1974) (trustee duties fixed by deed of trust)
- Conway v. CitiMortgage, Inc., 438 S.W.3d 410 (Mo. 2014) (continuing duties; sale in connection with loan)
- Watson v. Wells Fargo Home Mortg., Inc., 438 S.W.3d 404 (Mo. 2014) (modification negotiations not in connection with sale unless service encompassed)
- Dannix Painting, LLC v. Sherwin-Williams Co., 732 F.3d 902 (8th Cir. 2013) (predict Missouri law; follow state decisions)