Phillip Corvello v. Wells Fargo Bank N.A.
728 F.3d 878
| 9th Cir. | 2013Background
- HAMP created to assist distressed homeowners; servicers sign Treasury directives under which they may receive modification incentives.
- Plaintiffs Corvello and Lucias complied with TPP terms (documentation and trial payments) but were not offered permanent modifications.
- TPP contained promises to offer a permanent modification if conditions were met; 2G/2F/2G described, requiring execution of Modification Agreement before modification.
- District court dismissed claims under Rule 12(b)(6), relying on language that modifications occur only after a fully executed Modification Agreement.
- Plaintiffs allege Wells Fargo accepted trial payments and representations but failed to offer or notify of eligibility for a permanent modification, violating the TPP terms.
- Court reviews contract interpretations under Wigod and California law to determine whether the bank had an obligation to offer a permanent modification when conditions were met.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TPP creates a contract to offer permanent modification | Corvello | Wells Fargo | Yes; modification obligation exists when terms met. |
| Whether failure to notify eligibility breaches contract | Corvello and Lucias | Wells Fargo | Yes; notice obligation required despite other conditions. |
| Whether claims survive under Rosenthal Act and related theories | Lucias; Corvello | Wells Fargo | Claims survive to the extent based on TPP breach. |
Key Cases Cited
- Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012) (bank obligated to offer modification after compliant TPP; not just rely on signed Modification Agreement)
- West v. JPMorgan Chase Bank, N.A., 154 Cal. Rptr. 3d 285 (Cal. Ct. App. 2013) (California adoption of Wigod reasoning; obligation to offer permanent modification after compliance)