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Titus v. Wells Fargo Bank, N.A.

United States District Court, W.D. Washington

June 6, 2017

TERESA S. TITUS, Plaintiff,


          ROBERT J. BRYAN United States District Judge

         THIS MATTER comes before the Court on two matters: the Motion for Summary Judgment (Dkt. 66) filed by several defendants: Wells Fargo, N.A. and Wells Fargo Home Mortgage (collectively, “Wells Fargo”), Federal National Mortgage Association, aka Fannie Mae, and Mortgage Electronic System (“MERS”); and the Joint Motion for Summary Judgment of Defendants Northwest Trustee Services, Inc. and RCO Legal, P.S (Dkt. 69). The Court has considered the pleadings filed in support of and in opposition to the motions, oral argument by the parties held in open court on June 5, 2017, and the remainder of the file herein.


         The Court previously dismissed all claims against Fannie Mae and MERS. Dkt. 47 at 16. Because there are no pending claims against Fannie Mae and MERS, for both defendants the motion for summary judgment is moot.[1]

         Concerning Wells Fargo, the Court dismissed all claims except those for violations of the Federal Debt Collection Practices Act (FDCPA) (Claim 1) and the Washington Consumer Protection Act (CPA) (Claim 5), as well as a common law claim for breach of contract (Count 3). Dkt. 47 at 16.

         The Court dismissed all claims against RCO Legal, except the claim for violations of the FDCPA (Claim 1). Dkt. 33 at 8. The Court dismissed all claims against Northwest Trustee except the claim for violations of the FDCPA (Claim 1). Dkt. 32 at 9.


         The facts substantiated by the record are recited in favor of the nonmoving party, Ms. Titus.

         In 2007, Ms. Titus executed a promissory note (“Promissory Note”) to obtain a mortgage loan from SunTrust Mortgage, Inc. Dkt. 67-1. The Promissory Note named Ms. Titus as Borrower and SunTrust Mortgage as Lender. The Promissory Note states that the Borrower “understand[s] that the Lender may transfer this Note” and that “anyone who takes this Note by transfer . . . is called the ‘Note Holder.'” Id. To secure her obligations under the Note, Ms. Titus executed a Deed of Trust, which listed Ms. Titus as Borrower and SunTrust Mortgage as Lender. Dkt. 67-3.

         In December of 2010, Ms. Titus defaulted on her loan by deliberately not paying monthly mortgage payments. Dkt. 74 at ¶12. She made the decision on the telephonic advice of Wells Fargo employees, who, Ms. Titus represents, told her that defaulting on her loan was the only way to gain eligibility to refinance her loan. Id. at ¶¶9-11. At that time, Ms. Titus was gainfully employed and had over $70, 000 in savings. Id. After defaulting on the loan, Ms. Titus qualified for a HAMP loan modification (“Modified Loan Agreement”), which she executed on June 17, 2011. Id. at ¶13; Dkt. 67-6. The Modified Loan Agreement listed Wells Fargo as “Lender or Servicer” and MERS as “nominee for lender and lender's successors and assigns.” Id. at 2. The agreement gave MERS “the right to exercise . . . the right to foreclose . . . and to take any action required of the lender[.]” Id. at 12.

         Ms. Titus defaulted a second time in 2013, this time due to financial hardship. Dkt. 74 at ¶15. By letter dated September 16, 2013, Wells Fargo informed Ms. Titus that her loan was in default. Dkt. 74-1 at 2. The letter explained how Ms. Titus could cure the default and requested that Ms. Titus continue making monthly loan payments. Id. A formal Notice of Default later followed, naming Wells Fargo as the loan servicer. Dkt. 70-8.

         On October 8, 2013, MERS, as nominee for SunTrust Mortgage, executed an Assignment of Deed of Trust conveying the Deed of Trust to Wells Fargo. Dkt. 67-9. On December 19, 2013, Wells Fargo executed a Beneficiary Declaration affirming its status as the “actual holder of the promissory note . . . secured by the deed of trust.” Dkt. 67-8. The Beneficiary Declaration states that “the trustee may rely upon the truth and accuracy of the averments made in this declaration.” Id.

         Ms. Titus entered Chapter 13 bankruptcy on March 3, 2014, which remained pending until April 17, 2015. Dkt. 74 at ¶¶15, 18. Thereafter Ms. Titus sought a second loan modification. Represented by an attorney, Ms. Titus attended two foreclosure mediation sessions, in July and September of 2015. Ms. Titus and Wells Fargo both signed an Agreement to Participate in Foreclosure Mediation. Dkt. 74-3 at 2, 3. The mediation was unsuccessful. Dkt. 70-13 at 2, 3. According to Ms. Titus, Wells Fargo made only “take it or leave it” offers, without meaningfully negotiating. Dkt. 74 at ¶34. A legal assistant to Ms. Titus' then-attorney states that at the July 2015 session she heard an attorney for Wells Fargo state, “We don't have the note.” Dkt. 74-6 at 7.

         In support of Wells Fargo's argument that it did (and still does) possess the Promissory Note, at oral argument Wells Fargo-for the first time-produced what it represents to be the original Promissory Note. Dkt. 85. The Promissory Note has an indorsement in blank by SunTrust Mortgage and a signature signed in blue ink by Ms. Titus. Dkt. 85 at 3. According to Wells Fargo's records custodian, Shae Smith, Wells Fargo's business records show loan servicing by Wells Fargo beginning in December 1, 2007 and possession of the Promissory Note on January 7, 2008. Dkt. 67 at ¶¶3, 4; Dkt. 67-2.


         Summary judgment is proper only 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 movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving party is entitled to judgment as a matter of law when the nonmoving party fails to make a sufficient showing on an essential element of a claim in the case on which the nonmoving party has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1985). There is no genuine issue of fact for trial where the record, taken as a whole, could not lead a rational trier of fact to find for the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)(nonmoving party must present specific, significant probative evidence, not simply “some metaphysical doubt.”). See also Fed.R.Civ.P. 56(e). Conversely, a genuine dispute over a material fact exists if there is sufficient evidence supporting the claimed factual dispute, requiring a judge or jury to resolve the differing versions of the truth. Anderson v. Liberty Lobby, Inc., 477 .S. 242, 253 (1986); T.W. Elec. Service Inc. v. Pacific Electrical Contractors Association, 809 F.2d 626, 630 (9th Cir. 1987).

         The determination of the existence of a material fact is often a close question. The court must consider the substantive evidentiary burden that the nonmoving party must meet at trial - e.g., a preponderance of the evidence in most civil cases. Anderson, 477 U.S. at 254, T.W. Elect. Service Inc., 809 F.2d at 630. Any factual issues of controversy must be resolved in favor of the nonmoving party only when the facts specifically attested by that party contradict facts specifically attested by the moving party. The nonmoving party may not merely state that it will discredit the moving party's evidence at trial, in the hopes that evidence can be developed at trial to support the claim. T.W. Elect. Service Inc., 809 F.2d at 630 (relying on Anderson, supra). ...

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