ROBERT M. MCDEVITT, Plaintiff,
WELLS FARGO BANK, N.A., Defendant.
Gladys Kessler United States District Judge.
Plaintiff Robert M. McDevitt ("McDevitt" or "Plaintiff") brings this diversity action against Wells Fargo Bank, N.A. ("Wells Fargo" or "Defendant") for wrongful foreclosure, breach of contract, and negligent infliction of emotional distress.
This matter is before the Court for reconsideration of Defendant's Motion for Summary Judgment [Dkt. No. 19] and Plaintiff's Motion for Summary Judgment on Liability and Partial Summary Judgment on Damages [Dkt. No. 20] . Upon consideration of the parties' Amended Joint Statement of Stipulated Facts [Dkt. No. 31] and reconsideration of the Motions, Oppositions, Replies, and the entire record herein, and for the reasons stated below, the Court grants Wells Fargo's Motion and denies Plaintiff's Motion.
A. Factual Background
1. The Note and Deed of Trust
On July 18, 2003, McDevitt executed a 30-year Adjustable Rate Mortgage Note ("Note") and Deed of Trust with World Savings Bank for a $520, 000 loan to purchase a private residence at 211 C St. NE in Washington D.C. (the "Property"). The loan had an indexed interest rate that changed monthly and a monthly payment that changed annually on September 1 of each year. See Affidavit of Robert M. McDevitt, Ex. A (Note) H 2 [Dkt. No. 1-2].
At Paragraph 3 of the Note, McDevitt agreed that:
I will pay Principal and interest by making payments every month.
I will make my monthly payments on the 1st day of each month beginning on September 01, 2003. I will make these payments every month until I have paid (i) all the Principal and interest, and (ii) any other charges described below that I may owe under this Note, and (iii) any charges that may be due under the Security Instrument[. ]
The Note provided that McDevitt would be obligated to pay a late charge if he did not pay his monthly payment within 15 calendar days of the date it was due, and also that any failure to pay the monthly payment on the due date constituted a default, permitting the lender to accelerate the loan. Note ¶ 7 (A)-(C).
McDevitt had the right to make advance payments on his mortgage, subject to certain restrictions. Paragraph 5 of the Note stated:
I HAVE THE RIGHT TO MAKE PAYMENTS OF PRINCIPAL AT ANY TIME BEFORE THEY ARE DUE. A PAYMENT OF PRINCIPAL BEFORE IT IS DUE IS CALLED A "PREPAYMENT." WHEN I MAKE A PREPAYMENT, I WILL TELL THE LENDER IN WRITING THAT I AM DOING SO. THE LENDER MAY REQUIRE THAT ANY PARTIAL PREPAYMENT BE MADE ON THE SAME DATE THAT A PAYMENT IS DUE. ... IF I MAKE A PARTIAL PREPAYMENT, THERE WILL BE NO CHANGES IN THE DUE DATES OR AMOUNTS OF MY PAYMENTS UNLESS THE LENDER AGREES IN WRITING TO THOSE CHANGES[.]
Note ¶ 5 (emphasis in original).
2. The April 14, 2008 Payment at Wachovia Bank
World Savings Bank (the holder of McDevitt's Note) was subsequently acquired by Wachovia Corporation and, in late 2007, changed its name to Wachovia Mortgage, FSB ("Wachovia Mortgage"). Wachovia Corporation also owned Wachovia Bank, N.A ("Wachovia Bank"). Wachovia Bank and Wachovia Mortgage were separate legal entities, but had a servicing agreement, which enabled a Wachovia Mortgage customer to submit mortgage payments at Wachovia Bank.
On April 14, 2 008, McDevitt went to a Wachovia Bank branch on Pennsylvania Avenue in Washington D.C. to make two mortgage payments: one in the amount of $4, 400; the other in the amount of $25, 000. On the subject line of his $4, 400 check, McDevitt wrote "4/01/08 payment." On the subject line of his $25, 000 check, McDevitt wrote "Deferred interest pay off one year principal payments." McDevitt orally instructed employees at Wachovia Bank that he wanted the $25, 000 check to be applied to future monthly payments as they would come due.
Along with the two checks, McDevitt also submitted a payment coupon of the kind he normally used to mail his payments to Wachovia Mortgage. The payment coupon contained preprinted text reciting four payment options: (1) a "Minimum Payment" of $2, 647; (2) an "Interest Only" payment of $3807.61; (3) a "Sched. Principal and Interest" payment of $4317.33; and (4) a "15-Year Pmt. Plan" payment of $6, 499.93. See Affidavit of Robert M. McDevitt, Ex. C (photocopy of checks and payment coupon) [Dkt. No. 1-2].
Next to these four options, the payment coupon included lines for McDevitt to specify: (1) the amount of his payment, (2) any "Additional Amount to go to Principal/Deferred Interest, " and (3) the "Total Amount Enclosed." On the first line, McDevitt wrote "4, 400" to indicate his payment amount. On the second line, McDevitt crossed out the words "Deferred Interest, " left unchanged the word "Principal, " and added the words "one year payments, " such that (construed in the light most favorable to McDevitt) the text read "Additional Amount to go to Principal/ one year payments: $25, 000" On the third line, he entered [$]29, 400 for the total payment enclosed with his payment coupon.
McDevitt asked the Wachovia Bank personnel with whom he dealt for a receipt of his payment, and he received a single page photocopy of the two checks along with his payment coupon. The photocopy was date-stamped by Wachovia Bank and initialed by the branch manager.
3. Wachovia's Application of the April 14 Payment
Wachovia Mortgage subsequently applied the $4, 400 check to McDevitt's regular monthly payment and the $25, 000 check to reduce his principal balance. When McDevitt received his monthly mortgage statement in June 2 008, he learned that his $25, 000 payment had not been held for future monthly payments, as he requested, but applied to reduce his principal balance. He then contacted Wachovia Mortgage to correct the application of his payment, and was advised to "continue making payments until we've resolved this." There is no evidence that McDevitt made a record of the date on which this conversation took place or the name of the individual with whom he spoke.
McDevitt continued to make his monthly mortgage payments throughout all of 2008, 2009, and January 2 010. During this time, McDevitt made multiple telephone calls to Wachovia Mortgage and Wells Fargo and was given the same advice each time: continue making his monthly payments until the application of his $25, 000 payment was resolved. Again, McDevitt did not present evidence of the dates on which these conversations took place, the names of the individuals with whom he spoke, or whether such individuals worked for Wachovia Mortgage or Wells Fargo.
In or around January 2010, McDevitt spoke by telephone with a customer service representative who told him "Don't worry, its handled" and implied that "[his] problem had been resolved." This conversation left McDevitt with the impression that he was not required to make any more loan payments for approximately 12 months starting in early 2010, although Wells Fargo Bank did not send him anything in writing to confirm that his payment scheduled had been modified. As with the other telephone calls, McDevitt does not appear to ...