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US Bank NA v. Dirwayi

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

April 10, 2018

JOHN DIRWAYI, et al., Defendants. JOHN DIRWAYI and NATALIYA S. KAZIMEIRETS, Third-Party Plaintiffs,



         This matter comes before the Court on Third-Party Defendant Wells Fargo Bank, N.A.'s (“Wells Fargo”) motion to dismiss for failure to state a claim (Dkt. 14); and Third-Party Defendant Rushmore Loan Management Services, LLC (“Rushmore”) and Plaintiff U.S. Bank NA's (“US Bank”) motion for summary judgment (Dkt. 34). The Court has considered the pleadings filed in support of and in opposition to the motions and the remainder of the file and hereby rules as follows:


         On July 30, 2017, Defendants and Third-Party Plaintiffs John Dirwayi and Nataliya Kazimirets (“Dirwayis”) executed a note and deed of trust to secure a home in Fife, Washington (“Residence”). Dkt. 1-1, Exhs. A-B. In 2009, the original lender assigned the deed to Wells Fargo, which resulted in Wells Fargo also servicing the note. Id., Exh. C.

         In 2009, the Dirwayis requested mortgage payment assistance. Dkt. 33, ¶ 7. On January 27, 2010, the Dirwayis and Wells Fargo entered into a loan modification agreement. Id. at 41-42.

         In 2011, the Dirwayis approached Wells Fargo regarding another loan modification. On May 14, 2011, Wells Fargo wrote the Dirwayis informing them that they “may be eligible for a modification offered by Fannie Mae (the owner of your loan).” Id. at 44. Wells Fargo instructed the Dirwayis that, to accept the offer, they were required to make three trial period payments instead of the regular monthly payments. Id. The letter also states that “[a]fter all trial period payments are timely made, your mortgage will be permanently modified.” Id. In a “frequently asked questions” supplement, Wells Fargo stated that “[y]our loan will not be permanently modified until you successfully complete the Trial Period Plan and you enter into a Loan Modification” and that “[o]nce you make all of your trial period payments on time, we will send you a Loan Modification Agreement detailing the terms of the modified loan. The Loan Modification Agreement will become effective once you and we have signed it.” Id. at 46-47. It is undisputed that the Dirwayis timely made the trial payments.

         On September 9, 2011, Wells Fargo wrote the Dirwayis informing them that they were eligible for a loan modification and enclosed a modification agreement (“Second Modification”). Id. at 51. The letter stated that, “[i]f you comply with the terms of the required Trial Period Plan, we will modify your mortgage . . . .” Id. In order to accept the offer, Wells Fargo instructed the Dirwayis to sign and return both copies of the Second Modification. Id. The Dirwayis were interested in the modification, so they signed the Second Modification and returned it to Wells Fargo. Nataliya, however, signed the Second Modification as “N. Dirwayi/N. Kazimirets” when the printed name below the signature line was “Nataliya S. Kazimirets.” Id. at 58. Wells Fargo rejected the documents because Nataliya's signature did not match the printed signature.

         Wells Fargo sent a second set of documents to the Dirwayis with instructions to sign the documents exactly as it appears on the document. Id. at 60. On October 8, 2011, the Dirwayis signed the documents, but Nataliya signed as “N. Kazimirets.” Id. at 65. The Dirwayis returned the documents and continued to remit the reduced monthly payments. Wells Fargo rejected the documents, and the delay violated Fannie Mae's requirement that the documents be signed by October 1, 2011.

         In early 2012, Wells Fargo requested updated financial information from the Dirwayis. Id. at 67-82. On March 28, 2012, Wells Fargo informed the Dirwayis that they did not qualify for a loan modification under the Home Affordable Modification Program. Id. at 92-93. On April 3, 2012, Wells Fargo wrote the Dirwayis informing them that they may be eligible for a modification through Fannie Mae. Id. at 96-101. The Dirwayis rejected the proposed modification and trial payment plan.

         On July 23, 2012, Wells Fargo referred the Dirwayis' loan for foreclosure proceedings. On September 27, 2012, the foreclosing Trustee, Quality Loan Service Corp. of Washington, recorded a notice of trustee's sale scheduled for January 25, 2013. Id. at 106-109. On November 5, 2012, Wells Fargo transferred the loan to U.S. Bank and transferred servicing of the loan to Rushmore. Id. at 111-112; Dkt. 34-1 ¶ 7.

         On July 26, 2013, the Dirwayis filed suit in state court to stop the foreclosure proceeding and asserted a claim for breach of the Second Modification. At some point in early 2014, the parties reached a settlement. On April 29, 2014, the Dirwayis' attorney sent Rushmore's attorney signed copies of another loan modification agreement (“2014 Proposed Modification”). Dkt. 34-3. The proposed payment amount was similar to the Second Modification, and both agreements establish a 40-year payment plan. Id. The new modification, however, indicated an increased deferred principal balance. Id. Although the Dirwayis signed the agreement, their attorney instructed Rushmore's attorney to hold the signed copies in trust until the Dirwayis delivered a countersigned copy of the settlement agreement. Id.

         On May 29, 2014, all parties in the suit executed a notice of settlement, and the court subsequently dismissed the complaint without prejudice. U.S. Bank and Rushmore assert that, “in order to accommodate” the Dirwayis, they “entered a system adjustment” to alter the terms of the loan. Id. ¶ 12. The altered terms appear to be consistent with the terms of the 2014 Proposed Modification. Id. After the adjustment, the Dirwayis made payments of $2, 058.81 from May 2014 to May 2015. Id. ¶ 13.

         In May 2015, Rushmore's attorney sent the Dirwayis' attorney a letter stating that the 2014 Proposed Modification would be revoked if the Dirwayis did not sign and return the proposed settlement agreement. Dkt. 42 at 5. On June 1, 2015, Rushmore's attorney informed the Dirwayis' attorney that he could no longer accept payments on behalf of Rushmore. Id. On July 25, 2015, the Dirwayis' attorney sent Rushmore's attorney a letter with the Dirwayis' June 2015 and July 2015 payments. Id. at 7. Rushmore's attorney returned the checks and informed the Dirwayis' attorney that Rushmore was in the process of revoking the loan modification agreement because the Dirwayis failed to enter the settlement agreement. Id.

         On April 27, 2016, U.S. Bank filed the instant judicial foreclosure action. Dkt. 1-1 at 2-39. On June 6, 2017, the Dirwayis filed an answer with affirmative defenses and counterclaims and included a third-party complaint. Dkt. 1-1 at 40-58. The Dirwayis asserted counterclaims against U.S. Bank for breach of contract and violation of the Washington Consumer Protection Act (“CPA”), RCW Chapter 19.86. Id. In the third-party complaint, the Dirwayis asserted claims against Wells Fargo and Rushmore for breach of contract, equitable indemnity, unjust enrichment, and violations of the CPA. Id.

         On August 31, 2017, Wells Fargo filed a motion to dismiss. Dkt. 14. On November 15, 2017, the Court converted the motion to a motion for summary judgment and requested subsequent briefing. Dkt. 25. On January 26, 2018, Wells Fargo filed an opening brief. Dkt. 32. On February 15, 2018, U.S. Bank and Rushmore filed a motion for summary judgment. Dkt. 34. On February 28 and March 5, 2018, the Dirwayis responded. Dkts. 39, 41. On March 8 and 9, 2018, Wells Fargo, U.S. Bank, and Rushmore replied. Dkts. 43, 44.

         II. ...

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