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Hackett v. Wells Fargo Bank, N.A.

United States District Court, C.D. California

November 4, 2019

HACKETT
v.
WELLS FARGO BANK, N.A., ET AL.

          Attorneys Present for Defendants: Eric Mercer

          Attorneys Present for Plaintiffs: David Newman

          Present: The Honorable CHRISTINA A. SNYDER, Judge

          CIVIL MINUTES - GENERAL

         Proceedings:WELLS FARGO BANK, N.A.'S MOTION FOR SUMMARY JUDGMENT (ECF No. 41, filed October 2, 2019)

         PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT (ECF No. 44, filed October 4, 2019)

         I. INTRODUCTION

         This case arises out of plaintiffs Walter H. Hackett III and Lorinda D. Hackett's attempts to modify and/or request information regarding the terms of their home loan with their lender, defendant Wells Fargo Bank, N.A. ("Wells Fargo" or "the bank"). In general, the Hacketts allege that Wells Fargo failed to comply with federal regulations requiring federally-insured lenders to provide adequate notices to prospective borrowers within established timeframes following the receipt of certain qualifying requests.

         The Hacketts filed their first complaint in this Court on October 6, 2017. See ECF No. 1 ("Compl."). The complaint asserted a claim for relief pursuant to the Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. § 1691(d)(1), two claims for relief pursuant to the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2605(f), a claim for negligence pursuant to California law, as well as a claim pursuant to California Business and Professions Code § 17200, the California Unfair Competition Law ("UCL"). On March 4, 2018, the Court granted the bank's motion to dismiss the Hacketts' ECOA, negligence, and UCL claims, but denied the motion as to the RESPA claims. See ECF No. 24 ("First MTD Order").

         The Hacketts filed their first amended complaint ("FAC") on April 4, 2018. See ECF No. 25. The FAC asserts the same five claims for relief that were previously alleged in the complaint. On June 25, 2018, the Court granted the bank's motion to dismiss the FAC as to the Hacketts' negligence claim, but denied the motion as to the Hacketts' other claims for relief. See ECF No. 31 ("Second MTD Order"). The four surviving claims for relief contained within the FAC-(1) the ECOA claim (which arises from two separate alleged violations), (2-3) the RESPA claims, and (4) the UCL claim-comprise the operative pleading before the Court.

         Wells Fargo moved for summary judgment, or in the alternative, partial summary judgment on all four of the Hackett's remaining claims on October 2, 2019. See ECF No. 41 ("Bank's MSJ"). On October 4, 2019, the Hacketts filed their own motion for summary judgment, or partial summary judgment, on one of the violations alleged in their ECOA claim and one of their RESPA claims. See ECF No. 44 ("Hacketts' MSJ"). On October 11, 2019, the Bank filed its opposition to the Hacketts' motion, as well as a statement of genuine disputes in response to the Hacketts' asserted undisputed facts. See ECF No. 46 ("Bank's Opp."), ECF No. 46-3 ("BSGD"). The Hacketts filed their opposition to the bank's motion on October 15, 2019, as well as their own statement of genuine disputes. See ECF No. 47 ("Hacketts' Opp."), ECF No. 47-1 ("HSGD"). The parties filed replies on October 21, 2019. See ECF No. 48 ("Bank's Reply"), ECF No. 51 ("Hacketts' Reply").[1]

         A hearing was held at which both parties appeared on November 4, 2019. Having considered the parties arguments, the Court finds and concludes as follows.

         II. FACTUAL BACKROUND

         The following facts are not materially disputed and are set forth for purposes of background. Unless otherwise noted, the Court references only facts that are uncontroverted and as to which evidentiary objections have been overruled.

         A. The Hacketts' Loan And Related Bankruptcy

         The Hacketts own a home in West Covina, California, where they live. HSGD ¶ 1. In June 2006, the Hacketts refinanced their home loan with Pinnacle Financial. Id. Wells Fargo began servicing that loan shortly afterward, and the bank remains the servicer of that loan to this day. HSGD ¶ 2. In 2010, the Hacketts defaulted on the loan by failing to make two loan payments, totaling approximately $6, 000. HSGD ¶ 3. That same year, the Hacketts filed the first of several bankruptcy petitions. BSGD ¶ 2. The final bankruptcy petition was filed in 2012 and discharged in February 2015. HSGD ¶ 7. The Hacketts claim that they fully satisfied all of the arrears related to those bankruptcies by May 2014. Id. Wells Fargo, however, contends that only $929.39 of the $6, 000.00 loan arrearage was paid by the Hacketts through the bankruptcy. Id. According to Wells Fargo, the bankruptcy trustee's final report indicates that the bank was stilled owed more than $5, 000 on the loan at the time the bankruptcy discharged in February 2015. Id.

         B. The 2013 Loan Modification Request

         Wells Fargo records indicate that the Hacketts filed paperwork applying for a loan modification on January 18, 2013. BSGD ¶ 6.[2] These same records indicate that a bank representative opened a file on the application on February 12, 2013. BSGD ¶ 9. The bank next communicated with the Hacketts on April 22, 2013, at which time the bank stated that their "file is under review." Id. In May 2013, the Hacketts' counsel at the time requested a status update on the application. Id. The bank representative stated she would investigate the status, and sent several messages to the Hacketts between May, June, and July 2013 to the effect that their application remained under review. Id. On July 25, 2013, the bank representative informed the Hacketts' that their application "documents have expired" and instructed the Hacketts to provide "all updated documents for the file at this time." Id. The Hacketts resubmitted application documents to the bank in September 2013. HSGD ¶ 8. The bank sent a response letter on September 11, 2013 indicating that the bank was reviewing the application. HSGD ¶ 9. After its review, the bank sent the Hacketts a letter on October 3, 2013 including an offer for a "Special Forbearance Plan." HSGD ¶ 10. The plan confirmed that (i) the loan was in default, (ii) the Hacketts would make three monthly loan payments in a reduced amount of $1, 543.77, and (iii) the loan would still not be current even if the three payments were made. HSGD ¶ 11. The Hacketts made the three payments pursuant to the plan. Id. Wells Fargo and the Hacketts subsequently executed a one year Loan Modification Agreement in May 2014 ("the 2014 Modification"). HSGD ¶ 12. The 2014 Modification lowered the Hacketts' interest rate to 2.875% and reduced the monthly payment amount to $1, 198.12 for the period between June 1, 2014 and July 1, 2015. Id. The 2014 Modification also established a total loan arrearage of $7, 716.31. Id. The Hacketts made the required payments pursuant to the 2014 Modification agreement during its term. HSGD ¶ 14.

         C. The 2015 Loan

         Modification Request The Hacketts applied for a second loan modification on July 15, 2015, two weeks after the terms of the 2014 Modification expired. HSGD ¶ 15. Wells Fargo sent a response letter the following day. HSGD ¶ 17. That July 16 letter stated that it was a "response to [the Hacketts'] recent request for mortgage assistance," and confirmed that the bank "recently received documentation from you requesting mortgage assistance." Id. The letter instructed the Hacketts to call the bank to "determine what options might be available" to assist them, and directed the Hacketts to "gather" certain identified information "and have it handy when you call." Id. The Hacketts then spoke with the bank by phone on July 22, 2015. HSGD ¶ 18. On the phone. Wells Fargo advised the Hacketts that the bank required additional documentation: (i) two paycheck stubs from Lorinda Hackett; (ii) a Social Security award letter from Walter Hackett; and (iii) documents showing proof of change of circumstances. Id. Apart from the July 16 letter, there is no evidence in the record demonstrating that any of these requests were provided to the Hacketts in writing.

         The next day, July 23, 2015, Wells Fargo informed the Hacketts in writing that the bank had closed the file on their request for modification because the Hacketts had failed to submit a complete application. HSGD ¶ 19.

         D. The 2016 Requests For Information

         On February 1, 2016, the Hacketts wrote to bank representatives requesting information related to their loan. HSGD ¶ 20. The letter requested information that, the Hacketts contended, were related to their efforts to obtain another loan modification. Id. Wells Fargo sent the Hacketts a response dated that same day. HSGD ¶ 21. The Hacketts deny receiving the letter, and contest that Wells Fargo in fact sent the letter, even though the bank attaches the letter to its motion. Id. The bank's letter states that it would "complete our research" for the requested information "and provide you with the results on or before 02/15/2016." Id. On February 15, 2016, the bank sent another letter indicating that a substantive response could be expected before February 29, 2016. HSGD ¶ 22.

         Wells Fargo wrote to the Hacketts again on February 24, 2016. HSGD ¶ 23. The February 24 letter attached more than 50 pages of documents and information requested by the Hacketts, including the relevant deed of trust, promissory notes, loan information report, as well as recent correspondence between the bank and the Hacketts. Id. The bank stated that it was "unable to provide any further information because" the Hacketts' "remaining requests are too broad." Id. The bank invited the Hacketts to submit "more specific details about what you're seeking," after which time they committed to review the request again. Id. The Hacketts submitted a second request for information on March 1, 2016. HSGD ¶ 26. Wells Fargo acknowledged receipt on March 7, 2016. HSGD ¶ 27. On March 21, 2016, the bank sent the Hacketts documents that responded to the requested information, but again indicated that it could not comply with all of the Hacketts requests since some of those requests were too broad. HSGD ¶ 28.[3]

         E. The Hacketts' Current Status

         The Hacketts have been current on their loan payments since 2016. HSGD ¶ 16. There have been no foreclosure proceedings. HSGD ¶ 34. The Hacketts' credit ratings have neither increased nor decreased since 2015. HSGD ¶ 35. The Hacketts have approximately $300, 000 in equity in their home, and do not plan to sell. HSGD ¶ 38. The Hacketts claim that, as a result of the bank's alleged misconduct, they have had to rely on short-term loans and retirement savings to make their mortgage payments. HSGD ¶ 39.

         III. ...


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