United States District Court, W.D. Missouri, Central Division
MICHAEL D. HART and PATTY S. HART, Plaintiffs,
WELLS FARGO HOME MORTGAGE, INC., et. al., Defendants.
Nanette K. Laughrey United States District Judge
se Plaintiffs Michael and Patty Hart bring this suit
concerning their mortgage loan against Defendants Wells Fargo
Home Mortgage, Inc., Wells Fargo & Company, and Wells
Fargo Bank, NA. The Defendants move to dismiss under
Fed.R.Civ.P. 12(b)(6) for failure to state a claim Doc. 12.
The motion is granted.
Harts obtained a mortgage loan from Wells Fargo using their
residence as collateral. Wells Fargo was not only the loan
originator, but the loan servicer. Starting around 2007, the
Harts began experiencing financial difficulties. Both of the
Harts lost their jobs in 2010 and Mr. Hart was incarcerated
from 2012 to May 2014. Their reduced income, plus living
expenses and the high interest rate on their loan, caused the
Harts "extreme difficulty" in making their mortgage
payments. Doc. 1-2, p. 3 of 14, ¶ 13. The Harts also
found that, "[s]ince [their] home [had] suffered a
severe loss in value from the time of its purchase, attempts
at refinancing through equity ... proved futile."
Id. at ¶ 14. Wells Fargo "approved a loan
modification sometime in 2014 for" the Harts.
Id., p. 9 of 14, ¶ 49. That modification
appears to have been a temporary one.
early 2015, the Harts "sent a letter of hardship and
their complete financial file to" Wells Fargo.
Id., p. 3 of 14, ¶ 15. Wells Fargo mailed the
Harts letters, indicating it was investigating the Harts'
situation and promising a prompt response. Communications
between the Harts and Wells Fargo regarding the status of the
Harts' modification request continued for months. The
Harts accrued escalating late fees and other penalties, their
credit was affected, and it was "impossible for them to
obtain financial products and loans from other institutions
to assist" them "in making the full payments on
their loan[.]" Id. at ¶ 19. Wells Fargo
"failed to grant a permanent modification[.]"
Id., p. 4 of 14, ¶ 21. The loan is now in
default and the property is at risk of foreclosure.
Id., p. 5 of 14, ¶ 27.
Harts' six-count complaint alleges claims for fraud,
deceit, negligent misrepresentation, negligence, violation of
unfair competition laws, declaratory judgment, reformation,
and breach of the implied covenant of good faith and fair
Rule 8(a)(2), a pleading must contain a "short and plain
statement of the claim showing that the pleader is entitled
to relief" Fed.R.Civ.P. 8(a)(2). Though this pleading
standard does not require "detailed factual allegations,
" the complaint must include sufficient factual
allegations to provide the grounds on which the claim rests.
Twombly, 550 U.S. 544');">1550 U.S. 544, 556 (2007). A pleading that
offers labels, conclusions, a formulaic recitation of
elements, or naked assertions devoid of factual enhancement
does not suffice. Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). Only well-pleaded facts are accepted as true,
while "[t]hreadbare recitals of the elements of a cause
of action" and legal conclusions are not. Id.
"[L]egal conclusions can provide the framework of a
complaint, [but] they must be supported by factual
allegations." Id. at 679. See also
Ashcroft, 556 U.S. at 678 (a court need not "accept
as true legal conclusions, even those stated as though they
are factual allegations").
reviewing a pro se complaint, the Court construes it
liberally and draws all reasonable inferences from the facts
in favor of the plaintiff Topchian v. JP Morgan Chase
Bank, N.A., 760 F.3d 843, 849 (8th Cir.
Count I: Fraud, Deceit, and Negligent
survive a motion to dismiss a claim of fraud, a plaintiff
must plead sufficient facts to establish: "(1) a
representation; (2) its falsity; (3) its materiality; (4) the
speaker's knowledge of its falsity or ignorance of its
truth; (5) the speaker's intent that it should be acted
on by the person in the manner reasonably contemplated; (6)
the hearer's ignorance of the falsity of the
representation; (7) the hearer's reliance on the
representation being true; (8) the hearer's right to rely
thereon; and (9) the hearer's consequent and proximately
caused injury." Renaissance Leasing, LLC v. Vermeer
Mfg. Co., 322 S.W.3d 112, 131-32 (Mo. 2010).
Fed.R.Civ.P. 9(b) requires a party to "state with
particularity the circumstances constituting fraud."
Conclusory allegations that a defendant's conduct was
fraudulent and deceptive are not sufficient to satisfy the
rule. Drobnak v. Andersen Corp., 561 F.3d 778, 783
(8th Cir. 2009). The plaintiff must plead
"such matters as the time, place and contents of false
representations, as well as the identity of the person making
the misrepresentation and what was obtained or given up
thereby." Freitas v. Wells Fargo Home Mortg.,
Inc., 703 F.3d 436, 439 (8thCir. 2013)
(quoting Abels v. Farmers Commodities Corp., 259
F.3d 910, 920 (8th Cir. 2001)). "In other
words, Rule 9(b) requires plaintiffs to plead the who, what,
when, where, and how: the first paragraph of any newspaper
story." Id. (quoting Summerhill v.
Terminix, Inc., 637 F.3d 877, 880 (8th Cir.
Count I, the Harts allege that Wells Fargo "at various
times" "knowingly misrepresented" "the
nature and terms of the loan; ... that the loan was a good
financial decision for [the Harts]; ... the modification
process of the loan; and the grossly inflated value of [their
home] that [Wells Fargo] used to justify the loan." Doc.
1-2, p. 4 of 14, ¶ 24. They further allege that Wells
Fargo knowingly or fraudulently induced them to take out the
loan, knowing they "were unlikely to ever be able to pay
[it] off." Id., at ¶ 25. Wells Fargo also
falsely represented that a loan modification would
"become considered, granted, and/or permanent if [the
Harts] paid the mortgage amount, on time and in full[,
]" and such representations "directly contradicted
Defendants' own policies and procedures."
Id., at ¶ 26. Also, Wells Fargo represented to
the Harts that they were "still on a trial modification
course, when in fact, " their "payments were still
be recorded as insufficient." Id.
Harts do not plead sufficient facts to establish the elements
of a fraud claim For example, they fail to allege the terms
of the loan they are referring to and when it was taken out,
or the terms of the temporary modification they obtained.
They do not allege the time, place and contents of the
allegedly false representations, the identity of the person
making the misrepresentations, and what they gave up as a
result of each such representation. They do not allege what
Wells Fargo' policies and procedures were, nor indicate
how the alleged misrepresentation violated them Thus, the