McDevitt v. Wells Fargo Bank, N.A.

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
ROBERT M. MCDEVITT,
Plaintiff,
v. Civil Action No. 12-1297 (GK)
WELLS FARGO BANK, N.A.,
Defendant.
MEMORANDUM OPINION
Plaintiff Robert M. McDevitt ("McDevitt" or "Plaintiff")
brings this diversity action against Wells Fargo Bank, N.A.
("Wells Fargo" or "Defendant") for wrongful foreclosure, breach
of contract, and negligent infliction of emotional distress.
This matter is before the Court for reconsideration of
Defendant's Motion for Summary Judgment [Dkt. No. 19] and
Plaintiff's Motion for Summary Judgment on Liability and Partial
Summary Judgment on Damages [Dkt. No. 20]. Upon consideration
of the parties' Amended Joint Statement of Stipulated Facts
[Dkt. No. 31] and reconsideration of the Motions, Oppositions,
Replies, and the entire record herein, and for the reasons
stated below, the Court grants Wells Fargo's Motion and denies
Plaintiff's Motion.
I . BACKGROUND
A. Factual Background1
1. The Note and Deed of Trust
On July 18, 2003, McDevitt executed a 30-year Adjustable
Rate Mortgage Note ("Note") and Deed of Trust with World Savings
Bank for a $520,000 loan to purchase a private residence at 211
C St. NE in Washington D.C. (the "Property") . The loan had an
indexed interest rate that changed monthly and a monthly payment
that changed annually on September 1 of each year. See Affidavit
of Robert M. McDevitt, Ex. A (Note) ~ 2 [Dkt. No. 1-2].
At Paragraph 3 of the Note, McDevitt agreed that:
I will pay Principal and interest by making payments
every month.
I will make my monthly payments on the 1st day of each
month beginning on September 01, 2003. I will make
these payments every month until I have paid (i) all
the Principal and interest, and (ii) any other charges
described below that I may owe under this Note, and
(iii) any charges that may be due under the Security
Instrument [.]
The Note provided that McDevitt would be obligated to pay a late
charge if he did not pay his monthly payment within 15 calendar
days of the date it was due, and also that any failure to pay
1
Unless otherwise noted, the facts set forth herein are
undi"sputed and drawn from the parties' Amended Joint Statement
of Stipulated Facts [Dkt. No. 31].
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the monthly payment on the due date constituted a default,
permitting the lender to accelerate the loan. Note~ 7(A)-(C).
McDevitt had the right to make advance payments on his
mortgage, subject to certain restrictions. Paragraph 5 of the
Note stated:
I HAVE THE RIGHT TO MAKE PAYMENTS OF PRINCIPAL AT ANY
TIME BEFORE THEY ARE DUE. A PAYMENT OF PRINCIPAL
BEFORE IT IS DUE IS CALLED A "PREPAYMENT." WHEN I
MAKE A PREPAYMENT, I WILL TELL THE LENDER IN WRITING
THAT I AM DOING SO. THE LENDER MAY REQUIRE THAT ANY
PARTIAL PREPAYMENT BE MADE ON THE SAME DATE THAT A
PAYMENT IS DUE. IF I MAKE A PARTIAL PREPAYMENT,
THERE WILL BE NO CHANGES IN THE DUE DATES OR AMOUNTS
OF MY PAYMENTS UNLESS THE LENDER AGREES IN WRITING TO
THOSE CHANGES [ . ]
Note ~ 5 (emphasis in original).
2. The April 14, 2008 Payment at Wachovia Bank
World Savings Bank (the holder of McDevitt's Note) was
subsequently acquired by Wachovia Corporation and, in late 2007,
changed its name to Wachovia Mortgage, FSB ( "Wachovia
Mortgage") . Wachovia Corporation also owned Wachovia Bank, N.A
( "Wachovia Bank" ) . Wachovia Bank and Wachovia Mortgage were
separate legal entities, but had a servicing agreement, which
enabled a Wachovia Mortgage customer to submit mortgage payments
at Wachovia Bank.
On April 14, 2008, McDevitt went to a Wachovia Bank branch
on Pennsylvania Avenue in Washington D.C. to make two mortgage
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payments: one in the amount of $4,400i the other in the amount
of $25,000. On the subject line of his $4,400 check, McDevitt
wrote "4/01/08 payment." On the subject line of his $25, 000
check, McDevitt wrote "Deferred interest + pay off one year
principal payments." McDevitt orally instructed employees at
Wachovia Bank that he wanted the $25,000 check to be applied to
future monthly payments as they would come due. 2
Along with the two checks, McDevitt also submitted a
payment coupon of the kind he normally used to mail his payments
to Wachovia Mortgage. The payment coupon contained preprinted
text reciting four payment options: (1) a "Minimum Payment" of
$2,647i (2) an "Interest Only" payment of $3807.61i (3) a
"Sched. Principal and Interest" payment of $4317.33 i and (4) a
"15-Year Pmt. Plan" payment of $6,499.93. See Affidavit of
Robert M. McDevitt, Ex. C (photocopy of checks and payment
coupon) [Dkt. No. 1-2].
2
Although Wachovia Bank could accept a payment on behalf of
Wachovia Mortgage, it did not have access to the customer's
mortgage account and could not make any decisions as to how a
mortgage payment would be applied. However, McDevitt was not
aware of the distinction between Wachovia Mortgage and Wachovia
Bank. He believed that the "Wachovia" Bank branch that accepted
his payments was the same "Wachovia" entity holding his
mortgage, and was not told otherwise by the Wachovia Bank
personnel with whom he dealt on April 14, 2008.
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Next to these four options, the payment coupon included
lines for McDevitt to specify: (1) the amount of his payment,
( 2) any "Additional Amount to go to Principal/Deferred
Interest," and ( 3) the "Total Amount Enclosed." On the first
line, McDevitt wrote "4,400" to indicate his payment amount. On
the second line, McDevitt crossed out the words "Deferred
Interest," left unchanged the word "Principal," and added the
words "one year payments," such that (construed in the light
most favorable to McDevitt) the text read "Additional Amount to
go to Principal/ one year payments: $25, 000" On the third
line, he entered [$]29,400 for the total payment enclosed with
his payment coupon.
McDevitt asked the Wachovia Bank personnel with whom he
dealt for a receipt of his payment, and he received a single
page photocopy of the two checks along with his payment coupon.
The photocopy was date-stamped by Wachovia Bank and initialed by
the branch manager.
3. Wachovia's Application of the April 14 Payment
Wachovia Mortgage subsequently applied the $4,400 check to
McDevitt's regular monthly payment and the $25,000 check to
reduce his principal balance. When McDevitt received his
monthly mortgage statement in June 2 008, he learned that his
$2 5, 0 0 0 payment had not been held for future monthly payments,
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as he requested, but applied to reduce his principal balance.
He then contacted Wachovia Mortgage to correct the application
of his payment, and was advised to "continue making payments
until we've resolved this." There is no evidence that McDevitt
made a record of the date on which this conversation took place
or the name of the individual with whom he spoke.
McDevitt continued to make his monthly mortgage payments
throughout all of 2008, 2009, and January 2010. During this
time, McDevitt made multiple telephone calls to Wachovia
Mortgage and Wells Fargo 3 and was given the same advice each
time: continue making his monthly payments until the application
of his $25,000 payment was resolved. Again, McDevitt did not
present evidence of the dates on which these conversations took
place, the names of the individuals with whom he spoke, or
whether such indi victuals worked for Wachovia Mortgage or Wells
Fargo.
In or around January 2010, McDevitt spoke by telephone with
a customer service representative who told him "Don't worry, its
handled" and implied that " [his] problem had been resolved."
This conversation left McDevitt with the impression that he was
not required to make any more loan payments for approximately 12
3
In late 2009, Wachovia Mortgage was merged into Wells Fargo
Bank but continued to trade under the name Wachovia Mortgage.
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months starting in early 2010, although Wells Fargo Bank did not
send him anything in writing to confirm that his payment
scheduled had been modified. As with the other telephone calls,
McDevitt does not appear to have made any record of the date on
which this conversation took place or the name of the individual
with whom he spoke.
In February 2010, McDevitt stopped making his monthly
mortgage payments.
4. The Notice of Default
On February 22, 2010, Wachovia Mortgage wrote to McDevitt
to advise him that his mortgage payment due February 1, 2010 had
not been received. On March 18, 2010, Wachovia Mortgage again
wrote to McDevitt, expressing concern that his loan was then two
months in arrears, and proposing solutions to avoid foreclosure.
On April 5, 2010, Wachovia Mortgage sent McDevitt notice that
"Your loan has been approved for commencement of foreclosure
action which may cause you to lose your property and any owner's
equity." On June 4, 2010, Wachovia Mortgage sent McDevitt
another letter advising him of his loan's delinquent status and
providing information about the federal government's Home
Affordable Modification Program. Wells Fargo, as successor to
Wachovia Mortgage, then retained the law firm of Rosenberg &
Associates ("Rosenberg") to commence foreclosure proceedings.
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5. The Foreclosure Proceedings
Rosenberg's first contact with McDevitt appears to have
been through a "fair debt letter." The parties do not agree on
when the fair debt letter was mailed, but stipulated that the
letter was dated July 26, 2010, and that Michael Amos ("Amos"),
the individual in charge of McDevitt's foreclosure file at
Rosenberg, testified that the letter was drafted and mailed on
July 26, 2010. The parties further stipulated that McDevitt did
not receive the fair debt letter until September 2 or 3, 2010,
only a few days before the foreclosure sale, which was scheduled
for September 7. 4
The fair debt letter advised McDevitt of his default and
the amount then due on the Note. It also stated that if,
"within thirty (30) days of receipt of this letter," McDevitt
disputed all or a portion of the debt in writing, or requested
the name 'and address of the original creditor, Rosenberg would
cease collection of the debt until it obtained verification of
the debt and ascertained the name and address of the original
creditor.
On August 4, 2010, Rosenberg also sent McDevitt, by
certified mail, a Notice of Foreclosure Sale of Real Property
4
The parties proffer different theories as to why McDevitt did
not receive the fair debt letter until September, but these
theories are not material to the Court's analysis.
-8-
("foreclosure notice") . In fact, Rosenberg sent McDevitt two
such notices, one addressed to "Occupant" and the other
addressed to "Robert M. McDevitt." The foreclosure notice
advised McDevitt that, to satisfy his debt to Wells Fargo, his
Property was to be sold at a foreclosure sale on September 7,
2010 at 10:13 a.m. See Ex. C to McDevitt's Mot. (Foreclosure
Notice) [Dkt. No. 20-4]. However, McDevitt never received
either of the foreclosure notices, and both were returned
"unclaimed" by the U.S. Postal Service. No definitive
explanation was offered by either party as to why the notices
were "unclaimed."
At 9:27 a.m. on the morning of the foreclosure sale,
September 7, 2010, McDevitt emailed Rosenberg that he disputed
the debt and requested the name of the creditor to whom the debt
was owed. However, the foreclosure sale went forward, and later
that day, McDevitt's Property was sold at foreclosure to a third
party for $510,000. The next day, Amos responded to McDevitt's
email, and sent him verification of the debt and the name of the
creditor.
After the foreclosure, McDevitt continued to live at the
Property pending various legal challenges, but ultimately was
evicted in March 2012. He had $142,876.56 of equity in the
Property.
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B. Procedural Background
On August 3, 2012, McDevitt filed his Complaint alleging
claims for wrongful foreclosure, breach of contract, and
negligent infliction of emotional distress. [Dkt . No. 1] .
Wells Fargo moved to dismiss the Complaint pursuant to Fed. R.
Civ. P. 12 (b) (6), which the Court denied on September 25, 2012
[Dkt . No. 12] . On February 28, 2013, after discovery, Wells
Fargo filed a Motion for Summary Judgment [Dkt. No. 19] , and
McDevitt filed a cross Motion for Summary Judgment on Liability
and Partial Summary Judgment on Damages [Dkt. No. 20]. On March
14, 2013, the parties each filed Oppositions [Dkt. Nos. 21, 22],
and on March 28, 2013, they filed their Replies [Dkt. Nos. 23,
24] . On March 29, 2013, the Court denied the Motions in a one-
page Order, and referred the parties to a Magistrate Judge for
settlement. [Dkt. No. 25].
On May 8, 2013, after unsuccessful settlement negotiations,
the Court held a status conference and agreed to reconsider the
parties' Motions for Summary Judgment. The parties then filed
an Amended Joint Statement of Stipulated Facts [Dkt. No. 31] to
aid the Court in its reconsideration of the Motions. 5
5
The parties have stipulated to these facts for purposes of
summary judgment only.
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II. STANDARD OF REVIEW
Summary judgment may be granted if the pleadings, the
discovery and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material fact and
that the moving party is entitled to judgment as a matter of
law. See Fed. R. Civ. P. 56(c); Arrington v. United States, 473
F.3d 329, 333 (D.C. Cir. 2006). To prevail on such a motion,
the moving party must demonstrate either that there is no
~genuine" factual dispute, or that any such dispute is not
~material" to the case. ~A dispute over a material fact is
'genuine' if 'the evidence is such that a reasonable jury could
return a verdict for the non-moving party. '" Arrington, 473
F.3d at 333 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 247 (1986)). A fact is ~material" if it might affect the
outcome of the case under the substantive governing law.
Liberty Lobby, 477 U.S. at 248.
As the Supreme Court stated in Celotex Corp. v. Catrett,
~the plain language of Rule 56(c) mandates the entry of summary
judgment, after adequate time for discovery and upon motion,
against a party who fails to make a showing sufficient to
establish the existence of an element essential to that party's
case, and on which that party will bear the burden of proof at
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trial." 477 u.s. 317/ 322 (1986). The Supreme Court has
further explained/
When the moving party has carried its burden under
Rule 56(c) its opponent must do more than simply show
1
that there is some metaphysical doubt as to the
material facts. Where the record taken as a
whole could not lead a rational trier of fact to find
for the non-moving party 1 there is no "genuine issue
for trial. 11
Matsushita Elec. Indus. Co. v. Zenith Radio Corp. 1 475 U.S. 574 1
586-87 (1986) (footnote and citations omitted) .
In other words 1 "' [t] he mere existence of some alleged
factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment; the requirement
is that there be no genuine issue of material fact. 1
" Scott v.
Harris 1 550 U.S. 372 1 380 (2007) (quoting Liberty Lobby I 477
U.S. at 247-48) (emphasis in original).
At the same time 1 the Supreme Court has also consistently
emphasized that the judge 1 s function on a motion for summary
judgment is not "to weigh the evidence and determine the truth
of the matter but to determine whether there is a genuine issue
for trial. 11
Liberty Lobby 1 477 U.S. at 249. "Credibility
determinations/ the weighing of the evidence/ and the drawing of
legitimate inferences from the facts are jury functions I not
those of a judge" deciding a motion for summary judgment. Id.
at 255; see also Reeves v. Sanderson Plumbing Prods. 1 Inc./ 530
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u.s. 133, 150 (2000). Therefore, summary judgment is only
appropriate if the non-movant fails to offer any "evidence on
which the jury could reasonably find for the [non-movant] . "
Liberty Lobby, 477 U.S. at 252.
In deciding a motion for summary judgment, "the court must
draw all reasonable inferences in favor of the nonmoving party,
and it may not make credibility determinations or weigh the
evidence." Reeves, 530 U.S. at 150. Ultimately, the court must
determine "whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law."
Liberty Lobby, 477 U.S. at 251-52.
III. ANALYSIS
A. Wrongful Foreclosure
In Count I of the Complaint, McDevitt asserts a claim for
wrongful foreclosure. Under District of Columbia law, "an
action for wrongful or improper foreclosure may lie where the
property owner sustains damages by reason of a foreclosure
executed in a manner contrary to law." Johnson v. Fairfax Vill.
Condo. IV Unit Owners Ass'n, 641 A.2d 495, 505 (D.C. 1994)
(citation omitted). In his Complaint, McDevitt asserted that
Wells Fargo was liable for wrongful foreclosure because the
Rosenberg firm did not send him written notice of foreclosure as
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required under District of Columbia law. Compl. ~ 34 (citing
D.C. Code §§ 42-815; 42-815.01). However, McDevitt now concedes
that Rosenberg did comply with the District of Columbia notice
provisions by sending him the foreclosure notice in August, even
if he never received it. Pl.'s Opp'n at 20 [Dkt. No. 22].
Consequently, the disagreement between the parties as to the
date of mailing the notice of foreclosure is no longer material.
McDevitt now argues, however, that Rosenberg violated the
federal Fair Debt Collection Practices Act ( "FDCPA") in failing
to halt the foreclosure sale on his Property after he disputed
the debt. Id. at 21-23. He further contends that this
violation may serve as the predicate for a wrongful foreclosure
claim under District of Columbia law because it resulted in his
foreclosure being "executed in a manner contrary to law." Id.
at 23-27.
1. Relevant Provisions of the FDCPA
The FDCPA provides, in relevant part, that in connection
with the collection of any debt, a debt collector must send
written notice to the debtor specifying the amount of debt, the
name of the creditor to whom it is owed, and a statement that,
within 30 days of receipt of the written notice, the debtor may
request certain information relating to debt. 15 u.s.c. §
1692g (a) Further,
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[i] f the consumer notifies the debt collector in writing
within [30 days of receipt of the notice] that the debt, or
any portion thereof, is disputed, or that the consumer
requests the name and address of the original creditor, the
debt collector shall cease collection of the debt
until the debt collector obtains verification of the debt .
. or the name and address of the original creditor, and a
copy of such [information] is mailed to the consumer by the
debt collector.
15 U.S.C.A. § 1692g(b).
McDevitt contends that the Rosenberg firm violated section
1692g (b) of the FDCPA when it did not postpone the foreclosure
sale after being notified that the debt was disputed, nor send
him the requested information until the following day.
McDevitt does not cite, and the Court has not found, any
case in which a plaintiff was permitted to use an FDCPA
violation as a predicate for a claim for wrongful foreclosure
under District of Columbia law. 6 Even assuming, however, that a
wrongful foreclosure claim may be based on a violation of the
6
As McDevitt concedes, Pl.'s Opp'n at 25, courts considering
claims for wrongful foreclosure have generally assumed that
foreclosure is not wrongful where it complies with the District
of Columbia notice provisions. See, e.g., Kibunja v. Alturas,
LLC, 856 A.2d 1120, 1123, 1129 (D.C. 2004) (assuming that law
applicable to claim for wrongful foreclosure was District of
Columbia notice statute where "main thrust of [plaintiff's case]
was that they were not given adequate notice" of foreclosure
sale) (citing Johnson, 641 A.2d at 504); Young v. 1st Am. Fin.
Servs., 992 F. Supp. 440, 445 (D.D.C. 1998) (reasoning that
where "defendants did not violate [D.C. notice statute]
any foreclosure that occurred was not wrongful").
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FDCPA, an issue the Court need not reach, McDevitt's claim fail·s
because Wells Fargo is not a proper defendant under the FDCPA.
2. The FDCPA Only Applies to "Debt Collectors"
With one exception, not applicable here, the FDCPA applies
only to "debt collectors," defined as persons whose principal
business is the collection of debt or who "regularly collect[]
debts owed or due or asserted to be owed or due another."
15 U.S.C. § 1692a(6). A creditor, such as Wells Fargo, by
contrast, is not a debt collector and is not subject to the
FDCPA unless it acquires a debt in default solely for the
purpose of facilitating collection of such debt. See 15 U.S.C.
§ 1692a (4), (6) . Because the parties agree that Wells Fargo
acquired McDevitt's debt in 2009 as part of a merger with
Wachovia Mortgage, and that McDevitt's loan was not in default
at that time, Wells Fargo indisputably is a creditor, not a
"debt collector."
McDevitt devotes much of his papers to the question of
whether the Rosenberg firm is a "debt collector." However,
Rosenberg's status as a debt collector is immaterial unless
Wells Fargo may be held vicariously liable for the firm's debt
collection activities. McDevitt presents no evidence suggesting
Wells Fargo had the right to control Rosenberg in its
foreclosure activities, which is an essential prerequisite to
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any claim based on vicarious liability. See, e.g., Moorehead v.
Dist. of Columbia, 747 A.2d 138, 146 (D.C. 2000) (relationship
based on control "is the decisive factor in vicarious liability
analysis") . 7
Therefore, McDevitt cannot bring such an FDCPA claim
against Wells Fargo because, as a matter of law, the FDCPA does
not apply to Wells Fargo in its capacity as a creditor. 8
Accordingly, summary judgment shall be granted in favor of Wells
Fargo on Count I.
B. Breach of Contract
In Count II of the Complaint, McDevitt asserts a claim for
breach of contract. The interpretation of a facially clear
7
It also is questionable whether a creditor that is not also a
debt collector may ever be held vicariously liable under the
FDCPA. See, e.g. , Wadlington v. Credit Acceptance Corp. , 76
F.3d 103, 108 (6th Cir. 1996) ("We do not think it would accord
with the intent of Congress . for a company that is not a
debt collector to be held vicariously liable for a collection
suit filing that violates the Act only because the filing
attorney is a 'debt collector.'"); Townsend v. Fed. Nat. Mortg.
Ass'n, No. 3:12-cv-00045, 2013 WL 549263, at *10 (W.D. Va. Feb.
12, 2013) (" [C]reditors [may not] be held vicariously liable for
FDCPA violations by independent debt collectors acting on their
behalf.") (citation omitted). The Court of Appeals in this
Circuit has not yet addressed this issue.
8
Further, as Wells Fargo points out, McDevitt most probably is
time-barred from bringing any claim under the FDCPA itself
because the FDCPA has a one-year statute of limitations for
civil actions. See 15 U.S.C. § 1692k(d). However, it is not
necessary to reach this issue in light of the Court's ruling
above.
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contract is a question of law to be resolved by the court. See,
e.g., NRM Corp. v. Hercules, Inc., 758 F.2d 676, 682 (D.C. Cir.
1985). Thus, where a contract is unambiguous, summary judgment
is appropriate, "'since, absent such ambiguity, a written
contract duly signed and executed speaks for itself and binds
the parties without the necessity of extrinsic evidence.'"
Angulo v. Gochnauer, 772 A.2d 830, 834 (D.C. 2001) (citation
omitted). A contract is ambiguous when "the provisions in
question are reasonably susceptible of different constructions
or interpretations." 1901 Wyoming Ave. Co-op. Ass'n v. Lee, 345
A.2d 456, 461 n.7 (D.C. 1975).
McDevitt argues that Wells Fargo's Motion should be denied
because the parties dispute: (1) how often a payment needed to
be made under the contract, (2) "the mechanism for contract
alterations," and (3) whether his $25,000 payment was applied
properly. P1 . ' s Opp' n at 15 , 16 , 18 . 9 However, as discussed
below, the Note unambiguously required McDevitt to make monthly
payments, and further required that any modifications to his
payment schedule be made in writing. Therefore, the Court may
resolve the first two disputes as a matter of law. Because
9
McDevitt also argues that the parties dispute why he stopped
making his mortgage payments, Pl.'s Opp'n at 19, but McDevitt's
motivation for not paying his mortgage is immaterial to the
legal issues presented in the Motions.
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there is no genuine dispute that McDevitt stopped making his
monthly payments without obtaining the Bank's agreement in
writing, the third issue is not relevant to disposition of the
claim.
1. The Note Required McDevitt to Make Payments
Every Month
McDevitt first argues that although he failed to make
payments in February through September of 2010, he was not in
default because his advance payment of $25,000 in April 2008
satisfied the payments otherwise due for that period of time.
McDevitt contends that his action was consistent with Paragraph
3 of the Note, which he construes to mean that so "long as a
borrower . . submitted a payment for each month," the borrower
was not literally required to make a payment each month. Pl.'s
Opp'n at 15. (emphasis in Pl.'s Opp'n)
However, the Note does not require payments "for" every
month. It clearly states that McDevitt was required to "pay
Principal and interest by making payments every month [,]
on the 1st day of each month," and "every month [thereafter]
until [he had] paid [ ] all the Principal and interest[.]" Note
~ 3 (emphasis added) . This language does not merely set the
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total dollar amount which McDevitt was to have paid off, it also
dictates the precise frequency and timing of each payment. 10
Moreover, Paragraph 5 addressed how, if at all, McDevitt,s
payment schedule would be affected in the event he made an
advance payment. It states:
IF I MAKE A PARTIAL PREPAYMENT, THERE WILL BE NO
CHANGES IN THE DUE DATES OR AMOUNTS OF MY PAYMENTS
UNLESS THE LENDER AGREES IN WRITING TO THOSE CHANGES.
Therefore, McDevitt,s argument that his advance payment
relieved him of the obligation to make future monthly payments
is inconsistent with the plain language of the Note, which
literally required payments "each,, and "every 11
month for the
life of the loan, regardless of any prepayments, unless the
lender agreed otherwise in writing.
2. The Writing Requirement Was Not Modified by the
Bank's Conduct
McDevitt also argues that "despite whatever the loan
agreements said[,] the Bank,s actual practice was to simply
alter [the contract, s] terms verbally at McDevitt, s request [.] 11
Pl. , s Opp, n at 17. McDevitt points to instances in which the
Bank orally agreed to waive his late fees. From these
10
McDevitt appears to have had a limited right to pay less than
the full amount of interest due each month, with the result that
any deficiency would be added to his principal balance as
deferred interest. See Note ~ 3 (E) - (F) This feature of the
Note is not at issue.
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occasions, he reasons that "a reasonable juror could infer that
[his payment schedule had been verbally modified because] the
Bank granted special accommodations verbally and as a
matter of course." Id.
However, McDevitt does not articulate any legal theory by
which the Bank's verbal waiver of late fees on a case-by-case
basis affected its future right to require that any
modifications to his payment schedule be in writing. McDevitt
suggests that the Bank's waiver of late fees is relevant because
"the contract between the parties left out important details and
policies, leaving them to be determined outside the contract as
they arose. " Id. This argument is simply incorrect as it
relates to his payment schedule. As discussed above, the Note
did not "le[ave] out important details" regarding McDevitt's
payment schedule or the manner in which it would be modified.
Therefore, McDevitt may not use extrinsic evidence in an attempt
to contradict the Note's plain and unambiguous terms.
To the extent McDevitt is arguing that the Bank's conduct
over the course of the loan somehow waived the writing
requirement in its entirety, he is also incorrect. While a
party may waive its rights under a contract, a court will not
infer waiver from the party's conduct absent a "'clear,
unequivocal and decisive act of the party who is claimed to have
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waived its rights, so consistent with an intention to waive that
no other reasonable explanation is possible.'" Kersey v.
Washington Metro. Area Transit Auth., 533 F. Supp. 2d 181, 196
(D.D.C. 2008) (quoting 13 Williston on Contracts § 39:28 at 626-
27 (4th ed. 2000)). The Bank's occasional oral waiver of late
fees is not evidence - and certainly is not clear, unequivocal
and decisive evidence - that the Bank abandoned the right at
issue in this case, namely that McDevitt's monthly payment
schedule could not be changed unless the Bank agreed in writing
to any such change.
McDevitt concedes that "no writing exists now or has
existed altering the contract's terms." Pl.'s Opp'n at 17.
Therefore, for all the foregoing reasons, the Court shall, as a
matter of law, grant summary judgment in favor of Wells Fargo on
Count II.
C. Negligent Infliction of Emotional Distress
Finally, in Count III, McDevitt asserts a claim for
negligent infliction of emotional distress. Under District of
Columbia law,
[A] plaintiff may recover for negligent infliction of
emotional distress if the plaintiff can show that (1)
the defendant has a relationship with the plaintiff,
or had undertaken an obligation to the plaintiff, of a
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nature that necessarily implicates the plaintiff's
emotional well-being, (2) there is an especially
likely risk that the defendant's negligence would
cause serious emotional distress to the plaintiff, and
(3) negligent actions or omissions of the defendant in
breach of that obligation have, in fact, caused
serious emotional distress to the plaintiff.
Hedgepeth v. Whitman Walker Clinic, 22 A.3d 789, 810-11
(D.C. 2011).
The parties devote most of their papers to the
question of whether Wells Fargo and its predecessors in
interest undertook any special relationship with McDevitt
that satisfies the first prong of the test set forth in
Hedgepeth. Wells Fargo argues that it had no duty to avoid
negligent infliction of emotional distress because the
nature of its relationship with McDevitt was purely
contractual. Def. 's Mem. P & A at 19-22. In particular,
it notes Hedgepeth's statement that a duty to avoid the
negligent infliction of emotional distress generally does
not arise where the purpose of a particular relationship or
undertaking is not "to care for the plaintiff's emotional
well-being [but] to obtain a financial, commercial or legal
objective, even if its non-attainment due to [the
defendant's] negligence is emotionally distressing to the
[plaintiff] . " Hedgepeth, 22 A.3d at 815 (citations
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omitted) . This language squarely covers the facts of this
case.
Even assuming the Bank did owe McDevitt a duty to
avoid negligent infliction of emotional distress, McDevitt
has not put forth any evidence that the Bank ever breached
it. McDevitt suggests only two theories by which he seeks
to hold the Bank liable for negligent infliction of
emotional distress.
First, he contends that the Bank was negligent in
failing to apply his $25,000 payment in the manner he
directed. See Compl. ~ 46. This theory merely restates
his breach of contract claim, and does not give rise to a
separate claim for negligence. Cf. Choharis v. State Farm
Fire and Cas. Co., 961 A.2d 1080, 1089 n.12 (D.C. 2008)
(allegation of negligent performance of insurance contract
"does not mean that there is a separate cause of action
sounding in tort for negligence, but rather that the
[plaintiff] may recover damages therefor under a breach of
contract theory") (citing Myers v. Firemen's Ins. Co. of
Washington, D.C., 274 F.2d 84, 86 (D.C. Cir. 1959)).
Second, McDevitt suggested in his Opposition to
Defendant's Motion for Summary Judgment that the Rosenberg
firm was negligent for failing to send him proper notice of
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the foreclosure sale or for "wrongfully foreclosing on
[his] home." Pl.'s Opp'n at 31; see also Compl. `` 45-47.
However, McDevitt now concedes that the firm did send him
notice of foreclosure more than a month before the
foreclosure sale; he just didn't receive it.
Even assuming McDevitt has raised a genuine issue of
fact that Rosenberg was negligent in failing to mail the
fair housing letter in a timely fashion, he still has not
set out any basis on which a jury could find Wells Fargo
liable for the firm's purported negligence. Although he
recites the general rule that "[u]nder standard agency
principles, [a] principal is liable for the negligence of
its agent," he does not cite any case in which a client was
held vicariously liable for the negligence of its attorney.
Pl.'s Opp'n at 30.
Further, the weight of authority provides that a
client generally is not vicariously liable for its
attorney's torts, absent evidence that the client directed,
controlled, authorized, or ratified the attorney's
allegedly tortious conduct. See Horwitz v. Holabird &
Root, 212 Ill. 2d 1, 12-14 (Ill. 2004) ("[W]hen attorneys
act pursuant to the exercise of independent professional
judgment they are presumptively independent
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contractors for purposes of imposing vicarious liability.")
(citing cases); Givens v. Mullikin ex rel. Estate of
McElwaney, 75 S.W.3d 383, 398 (Tenn. 2002) ("'Unless a
client is implicated in some way other than merely being
represented by the attorney the client cannot be
liable for the attorney's conduct.'") (quoting Bradt v.
West, 892 S.W.2d 56, 76-77 (Tex. App. 1994)).
As discussed earlier, McDevitt points to no evidence
suggesting that Wells Fargo had any input into, or control
over, the manner in which the Rosenberg firm conducted the
foreclosure proceedings: Further, McDevitt does not
suggest any way in which Wells Fargo may have been
negligent in selecting Rosenberg as its foreclosure
counsel. Accordingly, even assuming Wells Fargo did have a
duty to McDevitt to avoid the negligent infliction of
emotional distress, there is no basis on which a reasonable
jury could find by a preponderance of the evidence that
Wells Fargo breached its duty, or is vicariously liable for
any purported negligence of Rosenberg.
As the Supreme Court said in Liberty Lobby, summary
judgment should be granted where there is no "evidence on
which the jury could reasonably find for the plaintiff."
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477 U.S. at 252. Therefore, the Court shall grant summary
judgment in favor of Wells Fargo on Count III.
IV. CONCLUSION
For the foregoing reasons, Wells Fargo's Motion is granted,
and McDevitt's Motion is denied. An Order shall accompany this
Memorandum Opinion.
May 29, 2013 Glf!ss&t ``
United States District Judge
Copies to: attorneys on record via ECF
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