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Nichols v. Federal Deposit Insurance Corp.

United States District Court, W.D. Washington, Seattle

May 10, 2017





         This matter comes before the Court on Defendant's Motion for Summary Judgment.[1]Dkt. #56. Defendant argues that all of Plaintiff's claims arising out of a prior loan with Washington Mutual Bank should be dismissed as a matter of law. Id. Pro Se Plaintiff opposes the motion, asserting that there are genuine disputes as to the material facts of this case, and therefore judgment as a matter of law is not appropriate. Dkt. #58. Oral argument was held on April 28, 2017. Dkt. #70. The parties held a mediation soon thereafter. However, the matter did not resolve. Dkt. #74.

         As the Undersigned stated during oral argument, the courts of this District are all too familiar with the failure of Washington Mutual Bank, and the devastating effect it had on vulnerable home owners who were victims of its questionable loan practices. See Dkt. #71 at 22:7-13. Plaintiff alleges that she is one such victim. Without reaching the same conclusion, the Court does acknowledge that Plaintiff has suffered a number of personal hardships over the last decade, which impacted her financially and motivated her to enter into certain agreements and loans. While the Court is sympathetic to Plaintiff's situation, it is also constrained by the law in resolving the issues now before it. Accordingly, for the reasons discussed herein, the Court GRANTS Defendant's motion and dismisses Plaintiff's claims.


         On November 22, 2014, pro se Plaintiff, Diana Nichols, filed a Complaint against Defendant Federal Deposit Insurance Corporation (“FDIC”) as Receiver for now-defunct Washington Mutual Bank (“WaMu”), alleging, inter alia, breach of contract, negligence, fair lending violations and fraud. Dkt. #1. Plaintiff served the FDIC in Washington, D.C., in March of 2015. Dkts. #3 and #4, Ex. 1. According to Plaintiff, in April of 2015 she received a letter via e-mail from an attorney at the law firm Miller, Nash, Graham and Dunn, stating that she represented the FDIC in the instant suit and admonishing Plaintiff for improperly performing service. Dkt. #4 at 3. However, that attorney had not appeared in this Court on behalf of Defendant at that time. As a result, Plaintiff moved for default judgment against Defendant, which the Court denied on the basis that Plaintiff had not completed service. Dkt. #15. Plaintiff apparently completed service at some point thereafter, and Defendant appeared in this case and filed an Answer to the Complaint. See Dkts. #12, #13, #14, #16, #17, #18, #19 and #20.

         Plaintiff is a resident of the State of Connecticut who entered into a home mortgage loan with WaMu in July of 2005. Dkts. #1 at ¶ 1 and #57-1 at 7:19-21. She alleges that the loan was misrepresented to her both as to the nature and to the material terms of the loan. Dkts. #1 at ¶ 13 and #58 at 2-5. She alleges that these misrepresentations effectively increase the amount of her loan principle over time, because the loan has been structured such that her monthly payment never fully covers the interest being generated on the loan. Id. at ¶ ¶ 16-29. In other words, Plaintiff entered into a negatively amortizing loan.[2] Plaintiff alleges that, as a result, she will never fully pay off the loan.[3] Dkt. #1 at ¶ ¶ 16-29. Plaintiff also alleges that she was coerced into consummating this loan at a particularly vulnerable time in her life, of which the loan officer was aware. Id. at ¶ 43. and Dkt. #58 at 2-5.

         Defendant admits that Plaintiff entered into a home loan with WaMu on or about July 13, 2005. Dkt. #20 at ¶ ¶ 1 and 12. Defendant also admits that on September 25, 2008, the Director of the Office of Thrift Supervision closed WaMu and appointed the FDIC as Receiver. Id. at ¶ 3.

         After WAMU closed, JPMorgan Chase Bank, N.A. (“Chase”), became the subsequent servicer of Plaintiff's loan. Dkts. #1 at ¶ 60 and #56 at 5, fn. 21. In January 2012, Plaintiff requested a modification of her loan under the Making Home Affordable Program. Dkt. #57-1 at 174:-177:24 and Ex. 28 thereto. In June 2012, Chase informed Plaintiff that it had reviewed her request for a loan modification and proposed a Loan Modification Agreement. Id. at 178:18-179:6 and Ex. 29 thereto. In July 2012, Plaintiff and Chase entered into a Loan Modification Agreement, modifying the loan originally made by WAMU. Id. at 182:8-183:25 and 187:7-23 and Exs. 30 and 31 thereto. According to Plaintiff, she has since defaulted on the modified payment agreement, but admits that it is still “technically” in place. Dkt. #71 at 5:4-6. The record indicates that payments on the loan modification ceased in February 2013.[4] Dkt. #69-1, Ex. B at DIANAN6000006.

         In June and July of 2014, Plaintiff apparently sought to file a late claim with the FDIC-Receiver. Dkt. #1 at ¶ ¶ 5-6. On July 23, 2014, Plaintiff received a letter stating that the FDIC had accepted her claim under the late-filed claims exception. Id. at ¶ 7. On September 25, 2014, Plaintiff received a letter stating that her claim had been disallowed, and that she could file a lawsuit within 60 days of receiving the letter. Id. at ¶ 8. The instant lawsuit followed. Plaintiff alleges the following claims for relief, all in relation to the original WaMu Note and Mortgage (which was a cashout refinance of a prior loan): 1) breach of contract and the covenant of good faith and fair dealing; 2) negligence; 3) violation of TILA and Regulation Z; 4) Unconscionability; 5) unjust enrichment; 6) fraud in the factum; and 7) duress. Dkts. #1 at ¶ ¶ 64-121 and #57-1, Exs. 19-20. It appears that Plaintiff seeks monetary damages and an Order declaring the original Note & Mortgage to be Null & Void. See Dkt. #1 at ¶ ¶ 70-72, 80, 96, 110, 113 and 121.


         A. Legal Standard

         Summary judgment is appropriate where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). In ruling on summary judgment, a court does not weigh evidence to determine the truth of the matter, but “only determine[s] whether there is a genuine issue for trial.” Crane v. Conoco, Inc., 41 F.3d 547, 549 (9th Cir. 1994) (citing Federal Deposit Ins. Corp. v. O'Melveny & Meyers, 969 F.2d 744, 747 (9th Cir. 1992)). Material facts are those which might affect the outcome of the suit under governing law. Anderson, 477 U.S. at 248.

         The Court must draw all reasonable inferences in favor of the non-moving party. See O'Melveny & Meyers, 969 F.2d at 747, rev'd on other grounds, 512 U.S. 79 (1994). However, the nonmoving party must make a “sufficient showing on an essential element of her case with respect to which she has the burden of proof” to survive summary judgment. Celotex Corp. v. Catrett,477 U.S. 317, 323 (1986). Further, “[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will ...

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