McNutt v. Wells Fargo Bank, N.A.

          Keith A. Mathews, Esq.

          Christopher J. Valente, Esq.

          MEMORANDUM AND ORDER

          Andrea K. Johnstone United States Magistrate Judge

         In an amended complaint, the plaintiffs, Gregory and Sara McNutt, allege that Wells Fargo Bank, N.A. and America's Servicing Company (“Wells Fargo”^[1]) violated federal and state law with regard to a balloon payment due on the maturity date of the plaintiffs' modified mortgage. Doc. no. 7. Wells Fargo moves to dismiss under Federal Rule of Civil Procedure (“Rule”) 12(b)(6) for failure to state a claim. Doc. no. 9. The plaintiffs object. Doc. no. 10. For the following reasons, Wells Fargo's motion is granted in part and denied in part.

         Standard of Review

         Under Rule 12(b)(6), the court must accept the factual allegations in the complaint as true, construe reasonable inferences in the plaintiff's favor, and “determine whether the factual allegations . . . set forth a plausible claim upon which relief may be granted.” Foley v. Wells Fargo Bank, N.A., 772 F.3d 63, 71 (1st Cir. 2014) (citation and quotation marks omitted). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Analyzing plausibility is “a context-specific task” in which the court relies on its “judicial experience and common sense.” Id. at 679.

         The scope of the court's analysis on a Rule 12(b)(6) motion is generally limited to “facts and documents that are part of or incorporated into the complaint . . . .” GE Mobile Water, Inc. v. Red Desert Reclamation, LLC, 6 F.Supp.3d 195, 199 (D.N.H. 2014) (quoting Rivera v. Centro Medico de Turabo, Inc., 575 F.3d, 10, 15 (1st Cir. 2009)); see also Fed. R. Civ. P. 12(d). As an exception to this rule, the First Circuit permits trial courts to consider “documents the authenticity of which are not disputed by the parties; official public records; documents central to plaintiff's claim; and documents sufficiently referred to in the complaint” without converting a motion to dismiss into one for summary judgment. Id. (brackets omitted) (quoting Rivera, 565 F.3d at 15).

         Background

         Accepting the factual allegations set forth in the amended complaint as true, the relevant facts are as follows.^[2]

         On August 23, 2010, the plaintiffs entered into a loan modification with Wells Fargo. The loan modification agreement included the following language: “If on October 01, 2035, (the ‘Maturity Date') Borrower still owes amounts under the Note and Security Instrument, as amended by this Agreement, Borrower will pay those amounts in full on the Maturity Date.” Amend. Compl. (doc. no. 7) ¶ 16; doc. no. 1-1, at 10. The modification agreement did not estimate or calculate what any such payment might be. Prior to entering into the modification, Wells Fargo confirmed to the plaintiffs by e-mail that there would be no balloon payment under the modification. Relying on this representation, the plaintiffs entered into the modification agreement.

         On February 16, 2016, the plaintiffs received a letter from Wells Fargo with the subject line: “Important clarification about your mortgage account . . . .” Doc. no. 1-1, at 16. In this letter, Wells Fargo indicated for the first time that there would be a balloon payment in the amount of $109, 439.97 due and owing under the loan modification on the maturity date. The letter attributed the omission of this balloon payment from the modification agreement to a “clerical error.” Doc. no. 1-1, at 16. On May 2, 2016, the plaintiffs received a second letter from Wells Fargo, which indicated that the balloon payment was being added under the language in the modification agreement quoted above.

         Both letters made reference to an April 30, 2010 telephone conversation between Gregory McNutt and a Wells Fargo representative. The letters suggest that this representative indicated during this conversation that there would be an interest-accruing balloon payment due and payable as of the maturity date. This telephone conversation never occurred.

         The plaintiffs have made every payment under the modification agreement in full and on time. They bring this action alleging violations of state and federal law.

         Discussion

         The plaintiffs' amended complaint is comprised of seven counts. Count I is captioned “Equitable Considerations.” Count II alleges fraud in the inducement. Count III alleges breach of the covenant of good faith and fair dealing. Counts IV and V respectively allege state-law negligent misrepresentation and negligence (“state tort claims”). Count VI alleges violations of the New Hampshire Consumer Protection Act (“CPA”), N.H. Rev. Stat. Ann. § 358-A. Finally, Count VII alleges violations of the Real Estate Settlement Procedure Act (“RESPA”), 12 U.S.C. § 2605(k).

         Wells Fargo moves to dismiss the amended complaint in its entirety. The plaintiffs concede that Wells Fargo is exempt from the CPA and seek to voluntarily dismiss Count VI. This request is granted and Count VI is dismissed with prejudice.^[3] The plaintiffs otherwise object to Wells Fargo's motion.^[4]

         I. Equitable Considerations

         The court turns first to the plaintiffs' claim for “equitable considerations.” In their amended complaint, the plaintiffs generally allege that Wells Fargo acted inequitably, stating that Wells Fargo's actions are “unconscionable” and that the plaintiffs “should be allowed to pay their mortgage pursuant to the document they signed.” Amend. Compl. ¶¶ 20, 26 (doc. no. 7). In their objection to the motion to dismiss, the plaintiffs contend that this count should survive because it is “included as a plea . . . for equitable relief even if other causes of action plead[ed] by the Plaintiffs fail.” Doc. no. 9, at 2. Neither of these documents identifies a specific claim in equity that the plaintiffs wish to pursue against Wells Fargo. Indeed, the plaintiffs have failed to ...