Salvador v. Bank of America, National Ass'n Ex Rel. Wells Fargo Bank, N.A. (In Re Salvador)
456 B.R. 610
Bankr. M.D. Ga.2011Background
- Debtors refinanced March 2006 with Wells Fargo for a HELOC-style loan, later alleged to be a setup for a ‘flipping’ transaction.
- They entered a Trial Period Plan (TPP) under HAMP December 2009 with temporary reduced payments ($2,100 to $1,147).
- Debtors provided financials during 2009–2010 to verify eligibility for modification; Wells Fargo later declared default and refused further payments.
- Foreclosure proceedings began in October 2010, with a scheduled date of November 2, 2010; Debtors filed Chapter 13 on October 26, 2010.
- Debtors asserted GAFLA, RESPA, UDTPA, FBPA, a HAMP third-party beneficiary theory, and common-law claims; Wells Fargo moved for judgment on the pleadings.
- Court granted Wells Fargo’s motion on Counts I, II, III, IV, VI, VII; partial grant/denial on Count V after analysis of RESPA claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| GAFLA preemption of state law | Salvador contends GAFLA claims survive; preemption not complete. | Wells Fargo argues OCC preemption covers GAFLA provisions for national banks. | GAFLA claims preempted; Count I dismissed. |
| Enforceability of the TPP as a contract | TPP constituted a valid contract to modify the loan. | TPP lacked essential terms; not a binding contract. | TPP unenforceable; Count II dismissed. |
| Promissory estoppel based on modification promise | Promissory estoppel supports modification expectation. | Modification promise too vague; not enforceable. | Promissory estoppel claim rejected; Count III dismissed. |
| Third-party beneficiary under HAMP (SPA) | Salvador seeks rights as intended beneficiary of SPA. | Borrowers are incidental beneficiaries; no standing to sue. | No standing; Count IV dismissed. |
| RESPA private right of action and damages timing | Failure to disclose and QWR responses breached RESPA; damages proper. | Some claims time-barred; certain RESPA disclosures outside scope; some claims actionable. | Partial: Counts under 2603, 2605/2607/2608/2609 and pattern damages dismissed; partial denial for 2605 servicing-related QWR claim. |
Key Cases Cited
- Mergens v. Dreyfoos, 166 F.3d 1114 (11th Cir. 1999) (judgment on the pleadings standard; factual disputes resolved in movant's favor)
- Wachovia Bank v. Burke, 414 F.3d 305 (2d Cir. 2005) (preemption by OCC; federal regulation preempts state lending rules)
- Reuben v. First National Bank of Atlanta, 146 Ga.App. 864, 247 S.E.2d 504 (Ga. Ct. App. 1978) (agreement to loan without essential terms unenforceable)
- Hardy v. Regions Mortgage, Inc., 449 F.3d 1357 (11th Cir. 2006) (no private cause of action under RESPA §2609; TILA/RESPA scope limits)
- Collins v. FMHA-USDA, 105 F.3d 1366 (11th Cir. 1997) (no private action under certain RESPA provisions; absence of private remedy)
- In re Tomasevic, 273 B.R. 682 (Bankr. M.D. Fla. 2002) (causation/damages nexus in RESPA context; burden on proof)