Take a look at this new order in the Northern District California federal district court in the 9th circuit, Sutcliffe v. Wells Fargo, No. 11-CV096595 (N.D. Cal. May 9, 2012)
Numerous courts have held that the TPP is an enforceable agreement, at least for the purposes of surviving a motion to dismiss under Rule 12(b)(6). See Wigod v. Wells Fargo Bank, 637 F.3d 547 (7th Cir. 2012) (holding that plaintiffs stated breach of contract claim based on TPP and that district court had erred in dismissing claim on a Rule 12(b)(6) motion); In re Ossman, 2012 WL 315485, at * 3-4 (Bkrtcy. C.D.Cal., Jan. 31, 2012) (denying motion to dismiss breach of contract claim based on TPP, finding that at the pleading stage, allegations were sufficient to establish existence of enforceable contract); Gaudin v. Saxon Mortgage Services, Inc., 2011 WL 5825144, at *3-4 (N.D. Cal. Nov. 17, 2011)(same); Kennedy v. Wells Fargo Bank, N.A., 2011 WL 4526085, at *2-3 (C.D. Cal. Sept. 28, 2011)(same); Darcy v. CitiFinancial, Inc., 2011 WL 3758805, at * 5-6 (W.D.Mich., Aug. 25, 2011)(same); Belyea v. Litton Loan Servicing, LLP, 2011 WL 2884964, at *8 (D. Mass. July 15, 2011)(same); In re Bank of Am. Home Affordable Modification Program (HAMP) Contract Litig., 2011WL2637222, at * 3-4 (D. Mass. July 6, 2011) (same); Turbeville v. JPMorgan Chase Bank, 2011WL 7163111, at * 4-5 (C.D.Cal., April 4, 2011) (same); Durmic v. J.P. Morgan Chase Bank, N.A.,2010 WL 4825632, at * 1 (D. Mass. Nov. 24, 2010); Bosque v. Wells Fargo Bank, N.A., 762 F.Supp. 2d 342, 351-53 (D. Mass. 2011) (same); Stagikas v. Saxon Mortg., Servs., Inc., 795 F. Supp.2d 129, 136 (D. Mass. 2011); see also Ansanelli v. JP Morgan Chase Bank, N.A., 2011 WL1134451, at *3-5 (N.D. Cal. March 28, 2011) (holding that plaintiffs stated breach of contract claim under Rule 12(b)(6) based on oral offer to modify loan if plaintiffs successfully completed trial payment plan).
This Court finds the reasoning of Wigod and Gaudin to be persuasive and therefore
concludes that at the pleading stage, at least, Plaintiffs have sufficiently alleged mutual assent based on the TPP.
Sutcliffe v. Wells Fargo, No. 11-CV096595 (N.D. Cal. May 9, 2012).
The “end-run” argument is when the bank claims that attempts to bring state law breach of contract claims are an end run around HAMP, which failed to provide a private cause of action, so apparently no cause of action can arise around HAMP misconduct:
Killing the bank’s “end-run” argument:
Wells Fargo contends that Plaintiffs’ claims are an impermissible attempt to enforce the HAMP guidelines under state law, even though HAMP does not provide a private right of action. Numerous courts have rejected this argument and so does this Court. See, e.g., Wigod v. Wells Fargo Bank, 637 F.3d at 581-582 (“The end-run theory is built on the novel assumption that where Congress does not create a private right of action for violation of a federal law, no right of action may exist under state law, either”); Darcy v. CitiFinancial, Inc., 2011 WL 3758805, at * 4 (W.D.Mich., Aug. 25, 2011)(“a state-law breach of contract claim [is] not preempted or otherwise generally precluded by HAMP”); Belyea v. Litton Loan Servicing, LLP, 2011 WL 2884964, at *8 (D. Mass. July 15, 2011) (“Plaintiffs’ claims rest on the theory that the TPP Agreements entered into by Litton and the Plaintiffs constitute binding contracts and that Litton breached those contracts
Rejecting Mootness Argument (p. 19):
The Court also rejects Wells Fargo’s contention that Plaintiffs’ claims are moot because Wells Fargo has offered Plaintiffs a permanent modification and Plaintiffs have accepted that offer.
A party asserting mootness has a heavy burden. Medici v. JPMorgan Chase Bank, N.A. 2012 WL 929785, at * 3 (D.Or., Mar. 16, 2012) (citing Feldman v. Bomar, 518 F.3d 637, 642 (9th Cir. 2008)). “A claim is moot if it has lost its character as a present, live controversy.” American Rivers v.National Marine Fisheries Service, 126 F.3d 1118, 1123 (9th Cir. 1997) (citations omitted). Thus, the Ninth Circuit has held that “[i]f an event occurs that prevents the court from granting effective relief, the claim is moot and must be dismissed.” Id. (citation omitted). In the context of foreclosure, for example, claims for wrongful foreclosure are likely moot where the foreclosure is cancelled and a loan modification is offered instead. See Wooten v. Countrywide Home Loans Inc.,2012 WL 346460, at *4 (E.D.Cal., Feb. 1, 2012).
On the other hand, claims that are related to a foreclosure but which are based on alleged wrongful conduct that goes beyond the wrongful foreclosure are not necessarily rendered moot where the foreclosure is vacated. See, e.g., Medici v. JPMorgan Chase Bank, N.A., 2012 WL 929785, at *3-4 (D.Or., Mar. 16, 2012) (holding that where foreclosure was rescinded, claims challenging foreclosure were moot but negligence claims were not because the plaintiff may still have suffered damages in the form of bank fees and attorneys’ fees in her efforts to retain her house). The Court finds that that is the case here because Plaintiffs’ claims are based on Wells Fargo’s alleged unfair and deceptive conduct in connection with the two forbearance offers and the TPP and not on wrongful conduct committed in foreclosure proceedings
Distinguishing 9(b) pleading standard for unfair competition law as opposed to common law fraud:
While Wells Fargo is correct that UCL claims premised on fraudulent conduct trigger the heightened pleading standard under Rule 9(b), see Perez v. Wells Fargo Bank, N.A., 2011 WL 3809808, at *14 (N.D. Cal. Aug. 29, 2011), Plaintiffs have met that standard by identifying the specific representations that are alleged to be fraudulent, namely, the statements in the TPP and the forbearance offers purporting to offer a loan modification if the borrower complied with the terms of the offers. As the Court explained in Reyes, “‘[f]raudulent,’ as used in the [UCL], does not refer to the common law tort of fraud but only requires a showing members of the public ‘are likely to be deceived.’”Reyes, 2011 WL 30759, at *22 (citing Olsen v. Breeze, 48 Cal.App.4th 608, 618 (1996)(citation omitted)). Plaintiffs’ allegations are sufficient, at this stage of the case, to state a UCL claim based on the theory that members of the public would likely be deceived by these communications from Wells Fargo.