VAN BRUNT v. WELLS FARGO BANK, N.A.
3:19-cv-00170-ZNQ-TJB
D.N.J.Jul 11, 2023Background
- Plaintiff Dawn Van Brunt owned a primary residence in Freehold, NJ; Wells Fargo serviced the loan (FHA-insured) from ~2007–2017.
- Van Brunt defaulted after leaving her job to provide family care and sought a loan modification in Feb 2012; Wells Fargo denied modification in Dec 2013 and denied her appeal in Jan 2014.
- Separately, her condominium association obtained judgment and sold the home at auction in Feb 2014; Wells Fargo obtained final foreclosure judgment in July 2014, acquired title at a sale in Jan 2015, and held the deed until May 2018.
- In Aug–Sep 2018 Wells Fargo disclosed a calculation error that caused some borrowers to be wrongly denied modifications; Wells Fargo sent Van Brunt $25,000 and offered mediation (Dec 2018 mediation unsuccessful).
- Van Brunt sued under the New Jersey Consumer Fraud Act (CFA), common-law fraud, and intentional infliction of emotional distress (IIED); the District Court granted Wells Fargo’s Rule 12(b)(6) motion and dismissed all counts with prejudice as futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CFA causation: whether Wells Fargo’s misstatements/omissions and failure to fix calculation errors proximately caused Van Brunt’s foreclosure loss | Denial (caused by calculation error) and concealment caused her to lose ability to obtain a TPP/permanent mod, which would have prevented foreclosure; she had means/alternatives to cure COA debt | The COA foreclosure, timing gaps, and missing factual links make causation speculative and not adequately pleaded | Dismissed: plaintiff failed to plausibly plead that the alleged misrepresentation, the delayed fix, or the concealment of the specific SLoaD error proximately caused her loss |
| Common-law fraud: whether reasonable reliance was pleaded on Wells Fargo’s misrepresentation of ineligibility | She relied on Wells Fargo’s statements that she was ineligible for modification | Reliance element is not adequately pleaded; causal/reliance showing is more stringent than CFA | Dismissed: failure to plead reasonable reliance |
| IIED: whether Wells Fargo’s conduct was extreme and outrageous and proximately caused severe emotional distress | Systemic failures, concealment, and power imbalance rendered the conduct outrageous and intended to cause distress | Errors and operational failures were mistakes or negligence, not conduct “atrocious” enough for IIED | Dismissed: conduct not extreme/outrageous under NJ law; court need not reach intent/causation |
| Dismissal with prejudice / leave to amend | Plaintiff sought further amendment | Defendant opposed; court noted multiple prior amendments and unchanged substance | Dismissed with prejudice: further amendment would be futile and inequitable given prior chances and delay |
Key Cases Cited
- Kulwicki v. Dawson, 969 F.2d 1454 (3d Cir. 1992) (on a motion to dismiss, allegations are accepted as true)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must state a plausible claim for relief)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (distinguishing conclusory allegations from well-pleaded facts)
- Frederico v. Home Depot, 507 F.3d 188 (3d Cir. 2007) (Rule 9(b) heightened specificity for fraud-based claims)
- Bosland v. Warnock Dodge, Inc., 197 N.J. 543 (N.J. 2009) (elements of the New Jersey Consumer Fraud Act and intent for omissions)
- Pavan v. GreenPoint Mortg. Funding, 681 F. Supp. 2d 564 (D.N.J. 2010) (CFA requires ascertainable loss and causal connection)
- Arcand v. Brother Int'l Corp., 673 F. Supp. 2d 282 (D.N.J. 2009) (proximate causation under the CFA)
- Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012) (HAMP does not create a private federal right of action)
- Bukowski v. Wells Fargo Bank, N.A., [citation="757 F. App'x 124"] (3d Cir. 2018) (HAMP’s lack of private right does not foreclose state-law claims)