Spaulding v. Wells Fargo Bank, N.A.
920 F. Supp. 2d 614
D. Maryland2012Background
- Plaintiffs own their home in Maryland and refinanced in 2006 with Wells Fargo as servicer.
- Plaintiffs applied for a HAMP loan modification in Feb 2010, seeking a Trial Period Plan (TPP).
- Wells Fargo requested additional income documents in Mar 2010; Plaintiffs submitted late, eleven days after a 10-day deadline.
- Wells Fargo sent delinquency notices and foreclosure notices in 2010, then denied the HAMP modification in Aug 2010.
- Plaintiffs filed suit in 2011 alleging contract, negligence, MCPA, negligent misrepresentation, and fraud; Wells Fargo removed and moved to dismiss.
- Court grants leave for supplemental authority and grants Wells Fargo’s motion to dismiss, dismissing all counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs have a private right of action for HAMP denial | Spaulding/Haylett rely on HAMP guidelines for a private remedy | Wells Fargo argues no private right of action to enforce HAMP without a TPP | No private right; claims dismissed (Counts I–V) due to lack of TPP/privilege to enforce HAMP |
| Whether a breach of implied-in-fact contract exists | Existence of implied contract from Wells Fargo’s HAMP participation | No contract formed; no implied duty | Dismissed; no contract or implied-in-fact contract formed |
| Whether negligence and negligent misrepresentation claims exist without a tort duty | Contractual privity creates a tort duty | No separate tort duty arising from contract; Jacques exception not applicable | Dismissed Counts II and IV for lack of a duty in tort |
| Whether MCPA and common-law fraud claims survive | Wells Fargo misrepresented receipt of documents and HAMP obligations | Wells Fargo acknowledged receipt; no misrepresentation; failure to plead fraud with particularity | Dismissed Counts III and V; pleading deficiencies and absence of misrepresentation |
Key Cases Cited
- Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012) (supports private right under a TPP where one exists; hinges on contract terms)
- Astra USA Inc. v. Santa Clara County, Cal., 131 S. Ct. 1342 (U.S. 2011) (limits private rights where no actionable statutory framework exists)
- Jacques v. First Nat’l Bank of Maryland, 515 A.2d 756 (Md. 1986) (negligence exception to contract-based duties; generally not applicable)
- Parker v. Columbia Bank, 604 A.2d 521 (Md. Ct. Spec. App. 1992) (limits tort liability in bank-borrower relationships absent special circumstances)
- Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (U.S. 2007) (requires evaluation of evidence in a complaint; context for pleading standards)