Stolts v. Wells Fargo Bank, NA
31 F. Supp. 3d 876
S.D. Tex.2014Background
- Cynthia De Leon Stolts and her husband executed a mortgage note and deed of trust; the note and deed were later held by Wells Fargo.
- The Stoltses defaulted in 2011–2012; Wells Fargo requested loss-mitigation documents, which Wells Fargo says it never received.
- Wells Fargo sent default and foreclosure notices in 2012 and scheduled a foreclosure sale for December 4, 2012.
- Stolts sued in Texas state court (Jan. 25, 2013) asserting breach of contract, promissory estoppel, negligent misrepresentation, common-law fraud, fraud by nondisclosure, and statutory fraud based on alleged oral promises that a loan modification was "under consideration."
- Wells Fargo removed the case to federal court, moved to dismiss under Rule 12(b)(6); the court converted the unopposed motion to one for summary judgment and later granted Wells Fargo’s subsequent summary-judgment motion. Plaintiff did not respond to the motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — enforceability of an alleged promise to consider a loan modification | Stolts contends Wells Fargo orally promised the modification was under consideration and that foreclosure violated that promise | Wells Fargo argues there was no enforceable contract (no consideration), no promise was made, and notices show plaintiff did not provide required documents | Court: No enforceable contract (lack of consideration); no breach shown — summary judgment for Wells Fargo |
| Promissory estoppel — reliance on oral promise to consider modification | Stolts claims reliance on the bank’s promise caused harm warranting enforcement | Wells Fargo: promise too vague, promissory estoppel cannot save an oral modification subject to the Statute of Frauds | Court: Claim fails — promise too indefinite for estoppel and barred by Statute of Frauds |
| Negligent misrepresentation — false information induced reliance | Stolts asserts she relied on the bank’s representations to her detriment | Wells Fargo: statements were promises of future action (non-actionable), no justifiable reliance, and no false statement of existing fact | Court: Claim fails — no evidence of false statements of existing fact or justifiable reliance |
| Fraud and fraud by nondisclosure (including statutory fraud) | Stolts alleges Wells Fargo knowingly misrepresented or concealed intent to foreclose while saying modification was under consideration | Wells Fargo: no misrepresentation or concealment — plaintiff never submitted required modification docs and received foreclosure notices; statutory fraud inapplicable to loan transactions | Court: Fraud and nondisclosure claims fail; statutory fraud claim fails because cited statute does not apply to loan transactions |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (genuine-issue standard for jury)
- Addicks Servs., Inc. v. GGP-Bridgeland, L.P., 596 F.3d 286 (5th Cir. 2010) (promises to negotiate are too indefinite for promissory estoppel)
- Sport Supply Grp., Inc. v. Columbia Cas. Co., 335 F.3d 453 (elements of Texas breach of contract)
- Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675 (Tex. 2003) (elements of negligent misrepresentation)
- James v. Wells Fargo Bank, N.A., [citation="533 Fed. App'x 444"] (5th Cir. 2013) (applying Statute of Frauds to oral promises not to foreclose)
- Milton v. U.S. Bank Nat. Ass'n, [citation="508 Fed. App'x 326"] (5th Cir. 2013) (same)