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Murray v. Wells Fargo Home Mortgage

July 17, 2008

WINSTON MURRAY, ET AL., APPELLANTS,
v.
WELLS FARGO HOME MORTGAGE, ET AL., APPELLEES.



Appeal from the Superior Court of the District of Columbia (CAB 4329-05) (Hon. Judith E. Retchin, Trial Judge).

The opinion of the court was delivered by: King, Senior Judge:

Argued March 6, 2008

Before REID and KRAMER, Associate Judges, and KING, Senior Judge.

The owners of a residential property, along with the daughter of one of the owners, brought suit against the mortgagee of the property, the mortgagee's sub-servicing agent, and the substitute foreclosure trustees in connection with the initiation of foreclosure proceedings against the owners in 2002. In the complaint, the owners also included a claim against the mortgagee in connection with a 1999 settlement agreement reached after an earlier foreclosure proceeding brought in 1996. The complaint alleged breach of contract, breach of the duty of good faith and fair dealing, violation of the D.C. Consumer Protection Act, breach of fiduciary duty by the foreclosure trustees, and tortious interference with contract. The trial court either dismissed or granted summary judgment in favor of the defendants with respect to all claims and the owners and the daughter have appealed from all the judgments entered against them. In addition, their attorney appeals from the trial court's assessment of attorneys' fees against him. We affirm.

I.

Winston Murray and Naomi Smith ("owners"), owned property located at 1602 Webster Street, N.W. in Washington, D.C. ("the property"). The deed for the property was recorded on December 2, 1994. GE Capital Mortgage Services was the mortgagee of the property and also the servicing agent for the owners' mortgage. Wells Fargo Home Mortgage, Inc. sub-serviced the loan on behalf of GE Capital Mortgage Services. In July 1996, GE Capital instituted foreclosure proceedings against the owners and sold the property. In September of 1996, the owners brought suit against GE Capital alleging wrongful foreclosure and other claims. The owners maintain that they entered into a settlement agreement with GE Capital in July of 1999 in that action that had the effect of restoring the property to them and also required GE Capital to notify credit agencies and other lenders that "the prior foreclosure respecting the property was begun in error" and that the owners have satisfactorily resolved any financial "delinquencies." In their complaint here, the owners contend that GE Capital failed to advise credit reporting agencies that it foreclosed in error.

In May 2002, Wells Fargo attempted to foreclose against the owners. Attorneys Jeffrey Fisher and Martin Goldberg, and the Fisher Law Group, L.L.C. (hereinafter "foreclosure trustees"), served as foreclosure trustees and instituted the foreclosure. The owners contend that the foreclosure was wrongful because the notice of foreclosure overstated the statutory cure amount by "failing to credit the account for payments due and accepted." They also claim that, acting through counsel, they advised Wells Fargo that the statutory cure amount on the notice was incorrect. Furthermore, they claim that Wells Fargo refused to adjust the cure amount or provide an accounting.

Aisha Murray ("Aisha") is the daughter of Winston Murray, one of the owners of the property. The owners claim that Aisha was their agent for the purpose of making mortgage payments to GE Capital and that she was the beneficiary of an agreement between them that allowed her to live in the property. They also contend the agreement contained a provision allowing the owners to transfer the property to Aisha at a time of her choosing, when she deemed market conditions to be favorable. With the aim of postponing the foreclosure, Aisha claims that she advised Wells Fargo and the foreclosure trustees that she intended to purchase the property. She further contends that Wells Fargo and the trustees would only agree to postpone the foreclosure sale "under terms so onerous and impractical as to make their satisfaction virtually impossible in the time permitted." The foreclosure sale did not take place because the owners sold the property to Aisha and paid off the mortgage. Aisha claims that as a result of the actions of GE Capital, Wells Fargo, and the foreclosure trustees, she purchased the property on extremely unfavorable terms. Specifically, she contends that the refusal to postpone the foreclosure sale or adjust the statutory cure amount on the part of GE Capital, Wells Fargo, and the foreclosure trustees required her to: obtain financing at an unfavorable interest rate; expeditiously make expensive repairs to the property at the insistence of her financing bank; and pay tax on the transfer even though the transaction could have been tax free.

Winston Murray, Naomi Smith, and Aisha Murray ("plaintiffs") brought suit against GE Capital, Wells Fargo, and the foreclosure trustees ("defendants") in Superior Court on June 6, 2005. The five-count complaint alleged: (1) breach of contract against GE Capital; (2) breach of good faith and fair dealing against GE Capital and Wells Fargo Home Mortgage; (3) violation of the D.C. Consumer Protection Act against all defendants; (4) breach of fiduciary duty against the foreclosure trustees; and (5) tortious interference with contract against all defendants. In October 2005, plaintiffs filed a first amended complaint.

Wells Fargo and GE Capital filed a motion to dismiss the complaint and the foreclosure trustees filed a motion to dismiss, or in the alternative, for summary judgment. Plaintiffs did not respond to any of the motions and the trial court entered orders of dismissal. Plaintiffs subsequently moved for reconsideration after which the trial court vacated the orders of dismissal and awarded attorneys' fees to the defendants to be paid by plaintiffs' counsel. Defendants then re-filed their motions.

In an order dated July 20, 2006, the trial court granted in part and denied in part defendants' motions. It granted summary judgment in favor of GE Capital and Wells Fargo on the breach of contract claim (Count 1), ruling that the claim was barred by the applicable statute of limitations. The court also granted GE Capital and Wells Fargo's motions for summary judgment on the good faith and fair dealing claim (Count 2), relying again on the statute of limitations. The trial court dismissed plaintiffs' D.C. Consumer Protection Act claim (Count 3) against all three defendants for failure to state a claim on which relief could be granted. It ruled that the Consumer Protection Act did not apply to the transaction at issue in this case. The trial court also dismissed the tortious interference with contract claim (Count 5) against all three defendants on the ground that plaintiffs failed to state a claim on which relief could be granted. On the breach of fiduciary duty claim (Count 4), the trial court dismissed Aisha Murray's claim against the foreclosure trustees, but declined to dismiss the owners' claims. The foreclosure trustees then moved for clarification and on October 12, 2006, the trial court entered summary judgment in their favor against all plaintiffs on the breach of fiduciary duty claim "for the reasons set forth" in the foreclosure trustees' motion. These appeals followed.

II.

On appeal, appellants contend that: (1) their claims against GE Capital based on the settlement agreement are not barred by the statute of limitations; (2) their breach of duty of good faith and fair dealing claims against Wells Fargo and the foreclosure trustees are not barred by the statute of limitations; (3) their claims against Wells Fargo and the foreclosure trustees are covered by the D.C. Consumer Protection Act; (4) the trial court erred in dismissing their breach of fiduciary duty claim against the foreclosure trustees because their complaint identified sufficient facts to state a claim; (5) the trial court erred in dismissing Aisha Murray's tortious interference with contract claim because even though the property transfer took place, it took place under conditions unfavorable to Murray due to the appellees' actions; and (6) the trial court improperly awarded attorneys' fees to the appellees in connection with their filing motions in opposition to the reinstatement of the complaint.

A. Standard of Review

This court reviews a "'dismissal for failure to state a claim de novo.'" Washkoviak v. Student Loan Mktg. Ass'n, 900 A.2d 168, 177 (D.C. 2006) (quoting Oparaugo v. Watts, 884 A.2d 63, 75 (D.C. 2005)). Like the trial court, this court accepts all of the allegations in the complaint as true, and must construe all facts and inferences in favor of the plaintiff. Atkins v. Industrial Telecomm. Ass'n, Inc., 660 A.2d 885, 887 (D.C. 1995). For this court, "[t]he only issue on review of a dismissal made pursuant to Rule 12 (b)(6) is the legal sufficiency of the complaint[.]" Aronoff v. Lenkin Co., 618 A.2d 669, 684 (D.C. 1992). Dismissal for failure to state a claim on which relief can be granted is "impermissible 'unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Owens v. Tiber Island Condo. Ass'n, 373 A.2d 890, 893 (D.C. 1977) (quoting Conley v. Gibson, 355 U.S. 41, 45 (1957)). In addition, a complaint should not be dismissed because a court does not believe that a plaintiff will prevail on her claim. Duncan v. Children's Nat'l Med. Ctr., 702 A.2d 207, 210 (D.C. 1997).

When the trial court concludes that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law[,]" a summary judgment motion should be granted. Woodland v. District Council 20, 777 A.2d 795, 798 (D.C. 2001). "This court applies 'the same substantive standard as the trial court' and 'conduct[s] an independent review of the record.'" Television Capital Corp. of Mobile v. Paxson Commc'ns Corp., 894 A.2d 461, 466 (D.C. 2006) (internal citation omitted).

B. Appellants' Individual Claims

The plaintiffs' complaint contains five counts, each of which were either dismissed by the trial court or summary judgment was entered. We analyze each count separately below.

1. Breach of Contract Claim Against GE Capital

Count one of the complaint alleges that GE Capital breached a 1999 settlement agreement by failing to advise credit reporting agencies that the first foreclosure on the property was mistakenly initiated by GE Capital. The trial court dismissed that claim against GE Capital because the complaint was filed more than three years after the contract at issue was signed. The trial court noted that a three-year statute of limitations generally applies to a breach of contract claim. It also explained that a cause of action for breach of contract accrues when the contract is first breached. As the contract at issue here did not specify a date for performance, the trial court ...


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