Robinson v. Quicken Loans, Inc.
3:12-cv-00981
| S.D.W. Va | Dec 24, 2013Background
- Plaintiff Janet R. Robinson obtained a HELOC from Quicken Loans in 2003 (≈$81,000, variable rate, interest‑only first 10 years, 18% cap); loan was transferred to Wells Fargo for servicing.
- Payments rose beginning July 2004 as rate increased; by 2006 payments increased further; refinance sought in 2005 was refused after Quicken’s appraisal showed lower value.
- Robinson sued Quicken Loans and Wells Fargo alleging: (Count I) unconscionable contract; (Count II) illegal loan under W. Va. Code § 31‑17‑8(m)(8); (Count III) fraud (misrepresentations about rate stability and home value, and suppression of terms); (Count IV) joint venture/agency between Quicken and Wells Fargo.
- Defendants moved for summary judgment (Quicken: full; Wells Fargo: partial). Plaintiff sought leave to file a surreply and to “conform pleadings to the evidence” to add an equitable fraud claim; the Court allowed the surreply but denied the attempted amendment.
- Court’s disposition: Quicken’s motion granted in part and denied in part; Wells Fargo’s partial motion denied. The fraud claim based on misrepresentation that the interest rate would not rise was dismissed as time‑barred; other claims largely survived summary judgment issues of fact.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Unconscionable contract (Count I) | Quicken induced HELOC by misrepresentations, pressure, unreliable AVM, excessive fees and one‑sided terms | Agreement was neither procedurally nor substantively unconscionable as a matter of law | Denied summary judgment — genuine factual disputes preclude resolution as a matter of law |
| Illegal loan under W. Va. Code § 31‑17‑8(m)(8) (Count II) | Loan exceeded fair market value; discovery rule tolled limitations until later appraisal evidence | Two‑year catchall statute governs and bar applies; claim accrued at closing or when refinancing denied | Denied summary judgment — factual dispute over when plaintiff knew; discovery rule may toll limitations until later appraisal |
| Fraud — interest‑rate misrepresentation (Count III) | Agent told Robinson rate would not rise; she relied and was harmed when rate rose | Claim governed by two‑year statute; plaintiff knew or should have known when payments rose; barred | Granted — dismissed as time‑barred (accrual and discovery rule apply; plaintiff put on notice by loan documents and rate increase) |
| Fraud — home‑value misrepresentation (Count III) | Quicken represented home value ≈$84k; true value much lower; plaintiff relied | Two‑year statute applies and claim accrued at closing or at refinance refusal | Denied summary judgment — discovery rule/timing disputed; genuine issues of material fact on reliance and accrual |
| Joint venture / agency (Count IV) | Quicken and Wells Fargo had coordinated program, profit/price sharing, delegated underwriting — creates joint venture/agency liability | Agreement language and practice deny agency/joint venture; no control or profit‑sharing | Denied summary judgment — fact‑intensive inquiry; reasonable jury could find joint venture or agency and/or that Quicken exceeded authority |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard for genuine dispute)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (drawing inferences at summary judgment)
- Celotex Corp. v. Catrett, 477 U.S. 317 (burden at summary judgment and necessity of evidence)
- State ex rel. Johnson Controls, Inc. v. Tucker, 229 W. Va. 486 (standard for procedural and substantive unconscionability)
- Dunn v. Rockwell, 225 W. Va. 43 (five‑step accrual/discovery rule analysis for statute of limitations)
- Trafalgar House Const., Inc. v. ZMM, Inc., 211 W. Va. 578 (fraud and misrepresentation governed by two‑year statute)
- Bowens v. Allied Warehousing Servs., Inc., 229 W. Va. 523 (elements of fraud under West Virginia law)