Kenneth Wivell v. Wells Fargo Bank, N.A.
756 F.3d 609
8th Cir.2014Background
- Wivells purchased a MO home in 2006 financed by Wells Fargo; deed of trust contained a no-oral-modifications clause.
- Wivells sought modification/forbearance; they were told a moratorium existed but only if past due by ninety days and then were told it did not exist.
- From Apr 2009 to Jun 2010, Wivells pursued modification options, rejecting two Wells Fargo proposals.
- Kozeny, as trustee, foreclosed on June 30, 2010, after notifying the Wivells and handling the sale.
- Wivells sued in MO state court; Wells Fargo removed claiming Kozeny was fraudulently joined to destroy diversity.
- District court dismissed Wivells’ remaining claims; court later held Kozeny’s dismissal should be without prejudice; Wells Fargo’s dismissal on the merits followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraudulent joinder to defeat diversity | Kozeny improperly joined to defeat diversity | Kozeny essential to action; not properly severed | Joinder fraudulent; remand denied and Kozeny dismissed without prejudice |
| Negligence against Kozeny | Kozeny owed a duty via trustee role | No Missouri-duty for a non-enumerated trustee duty | No reasonable basis; dismissal affirmed (Kozeny) |
| Breach of fiduciary duty against Kozeny | Kozeny breached neutrality and impartiality | Dual agency permitted; no breach shown | No reasonable basis; dismissal without prejudice affirmed (Kozeny) |
| Wrongful foreclosure and related claims against Wells Fargo | Foreclosure occurred despite modification discussions | No-oral-modifications clause bars such claims; no valid misrepresentation | Claims fail; district court’s 12(b)(6) dismissal affirmed |
Key Cases Cited
- Murphy v. Aurora Loan Servs., LLC, 699 F.3d 1027 (8th Cir. 2012) (fraudulent joinder governs jurisdiction; de novo review)
- Wilkinson v. Shackelford, 478 F.3d 957 (8th Cir. 2007) (jurisdictional questions reviewed de novo)
- Filla v. Norfolk S. Ry. Co., 336 F.3d 806 (8th Cir. 2003) (no reasonable basis for claim supports fraudulent joinder)
- Spires v. Edgar, 513 S.W.2d 372 (Mo. banc 1974) (trustee duties fixed by contract; no implied duties beyond)
- Killion v. Bank Midwest, N.A., 987 S.W.2d 801 (Mo. Ct. App. 1998) (trustee is agent of debtor and creditor; impartiality required)
- Judah v. Pitts, 62 S.W.2d 715 (Mo. 1933) (creditor's agent can be trustee without invalidating sale)
- Reliance Bank v. Paramont Props., LLC, 425 S.W.3d 202 (Mo. Ct. App. 2014) (no-oral-modifications clause enforces no contractual expectation of oral promises)
- JAS Apartments, Inc. v. Naji, 230 S.W.3d 354 (Mo. Ct. App. 2007) (conduct must evidence waiver; not shown here)
- Sparks v. PNC Bank, 400 S.W.3d 454 (Mo. Ct. App. 2013) (information to trustee not enough to create actual notice)
- Zdazinsky v. Four Seasons Lakesites, Inc., 901 S.W.2d 224 (Mo. Ct. App. 1995) (lulling exception requires written notice; here no such written agreement)
- DanniX Painting, LLC v. Sherwin-Williams Co., 732 F.3d 902 (8th Cir. 2013) (state-law interpretation in diversity case; Missouri law applied)