United States District Court, District of Columbia
ANDREA CANNON, on behalf of herself and all other similarly situated, Plaintiff,
WELLS FARGO BANK, N.A., et al., Defendants
For ANDREA CANNON, on behalf of herself and all others similarly situated, Plaintiff: Harry T. Spikes, Washington, DC.
For WELLS FARGO BANK, N.A., WELLS FARGO INSURANCE, INC., Defendants: Russell J. Pope, LEAD ATTORNEY, TREANOR, POPE & HUGHES, P.A., Towson, MD.
For QBE SPECIALTY INSURANCE CO., STERLING NATIONAL INSURANCE AGENCY, INC., Now Known As QBE FIRST INSURANCE AGENCY, INC., Defendants: Jennifer A. Slagle-Peck, Robyn Cort Quattrone, Buckley Sandler LLP, Washington, DC.
COLLEEN KOLLAR-KOTELLY, UNITED STATES DISTRICT JUDGE.
Plaintiff Andrea Cannon filed a putative class action suit against Defendants Wells Fargo Bank, N.A. and Wells Fargo Insurance, Inc., (collectively the " Wells Fargo Defendants" ), as well as QBE Specialty Insurance Co. and Sterling National Insurance Agency, Inc., now known as QBE First Insurance Agency, Inc. (" QBE First" ), in the Superior Court for the District of Columbia. The Defendants removed the action to this Court and upon the Defendants' respective motions to dismiss, dismissed all claims except for portions of the Plaintiff's breach of contract claim against the Wells Fargo Defendants. Presently before the Court is the Plaintiff's  Motion for Leave to File an Amended Complaint against the Wells Fargo Defendants, QBE First, and a new defendant, QBE Insurance Company (with QBE First, the " QBE Defendants" ). Upon consideration of the pleadings,  the relevant legal authorities, and the record as a whole, the Court finds that with the exception of the proposed amendments to the Plaintiff's breach of contract claim, which the Wells Fargo Defendants do not oppose, the Plaintiff's proposed amendments would not survive a motion to dismiss, and thus amending the Complaint would prove futile. Accordingly, the Plaintiff's motion is GRANTED IN PART and DENIED IN PART. The Plaintiff may amend her breach of contract claim as proposed in the Amended Complaint, but otherwise the Plaintiff's request for leave to amend is DENIED.
For purposes of the Plaintiff's motion, the Court presumes the well-pleaded factual allegations in the Plaintiff's proposed Amended Complaint are true.  The Court notes that the Plaintiff's proposed Amended Complaint includes a number of extraneous factual allegations, but the factual summary set forth below addresses only those allegations relevant to the disposition of the Plaintiff's motion. Moreover, the Plaintiff's motion for leave to amend at various points contains new or different allegations than those set forth in the proposed complaint. The Court's analysis is based solely on the allegations set forth in the proposed Amended Complaint. See Arbitraje Casa de Cambio, S.A. de C.V. v. U.S. Postal Serv., 297 F.Supp.2d 165, 170 (D.D.C. 2003).
A. Factual Allegations
The Plaintiff obtained a mortgage from Wachovia Bank, predecessor in interest to Defendant Wells Fargo Bank, on property located at 1235 Queen Street, Northeast, Washington, D.C., 20002, in December 2007. Am. Compl., ECF No. [34-1], ¶ 9; Pl.'s Ex. 10, ECF No. [34-13] (Deed of Trust) at 1. The Deed of Trust indicates that if the borrower fails to maintain sufficient insurance coverage on the mortgaged property, the lender " may obtain insurance coverage, at Lender's option and Borrower's expense," and " the cost of the insurance coverage so obtained might significantly exceed the cost of insurance" that the borrower might have obtained. Pl.'s
Ex. 10 ¶ 5. The Deed of Trust further provides that the amount of the premium(s) paid by Wells Fargo Bank to obtain coverage under this provision " shall become additional debt of Borrower," and " shall bear interest at the rate applicable" to the mortgage. Id. ; Am. Compl. ¶ ¶ 11-12. Between July 16, 2005, and July 16, 2008, the Plaintiff maintained property and liability insurance on the Queen Street property through Scottsdale Insurance Company. Am. Compl. ¶ 18; Pl.'s Ex. 1, ECF No. [34-4] (2/16/12 Ltr. Old Dominion Ins. Agency to Pl.). From July 16, 2008 through at least February 16, 2012, Great American Insurance Company provided commercial property and liability insurance coverage for the Queen Street property. Am. Compl. ¶ 18; Pl.'s Ex. 1; see also Pl.'s Ex. 9-A, ECF No. [34-12] (Great Am. Ins. Co. Policy Decl.) (reflecting coverage of Queen Street Property from July 16, 2011 until July 16, 2012).
1. Correspondence from the Wells Fargo Defendants
On August 31, 2011, the Plaintiff received a letter from Wells Fargo Bank, which stated in relevant part:
Previously we wrote to inform you that we did not have evidence of homeowners/hazard insurance coverage to protect your property per the terms of your [Deed of Trust]. We requested that you provide current evidence of homeowners/hazard insurance coverage to us. We have not received a homeowners/hazard policy covering your dwelling.
Therefore, Wells Fargo Bank N.A., has secured temporary insurance coverage in the form of a binder effective as of [July 16, 2011]. This insurance is provided by QBE Insurance Corporation. This binder cannot be renewed.
Pl.'s Ex. 6, ECF No. [34-9], (8/31/11 Ltr. Wells Fargo Bank to Pl.) at 1; Am. Compl. ¶ 40. The letter indicated that the Plaintiff had the right to purchase insurance from the company of her choice, and that if she already had coverage on the property, she could submit that information to Wells Fargo Bank. Pl.'s Ex. 6 at 1. Moreover, " [u]pon prompt receipt of your policy, this binder will be cancelled. There is no charge to you if there has been no lapse in coverage." Id. With respect to the temporary insurance coverage Wells Fargo had obtained on the property, the letter stated that " [t]he full year premium for this policy is shown on the enclosed binder. This premium will be advanced by Wells Fargo Bank, N.A. and will be added as a fee to your account." Id. The Plaintiff does not indicate whether a copy of the binder was attached to the August 31, 2011, letter.
The letter went on to indicate that " [i]n nearly all instances, the insurance coverage we obtain may be more expensive than a policy you could obtain from an agent or insurance company of your choice." Pl.'s Ex. 6 at 2. The letter further disclosed that " [t]he insurance we obtain will be arranged by Wells Fargo Insurance, Inc., a licensed insurance agency and an affiliate of Wells Fargo Bank, N.A. Wells Fargo Insurance, Inc. will receive a commission on the insurance we obtain. Wells Fargo Bank, N.A., is not affiliated with the insurance company." Id. The Plaintiff's Amended Complaint does not indicate how she responded to the August 31, 2011 letter, if at all. QBE First informed the Plaintiff on September 28, 2011, that at Wells Fargo Bank's request, the LPI was cancelled effective July 16, 2011--the day on which the policy issued. 9/28/11 Ltr. QBE Ins. Corp. to Pl., ECF No. [10-2]. 
The Plaintiff received a substantively identical letter to the August 31, 2011, letter from Wells Fargo Bank on February 9, 2012. Pl.'s Ex. 7, ECF No. [34-10] (2/9/12 Ltr. Wells Fargo Bank to Pl.). Attached to the letter was a 90-day binder from QBE Insurance Corporation,  disclosing a premium of $3,064.32. Am. Compl. ¶ 41; Pl.'s Ex. 8, ECF No. [34-11]. The binder indicated the " policy term" ran from July 16, 2011, until July 16, 2012, and stated that
[W]e have secured temporary coverage in the form of a 90-day binder through the Company shown above and you will be charged for the policy premium. This binder covers the described property for risks of direct loss subject to the terms, conditions, and limitations of the policy in current use by the company. If evidence of acceptable coverage is received during this binder period, you will be charged only for any lapse in coverage. This coverage will be cancelled back to the original effective date, with no premium charge applying, if you provide coverage effective on or before the effective date of this binder.
Pl.'s Ex. 8. The Plaintiff notes that the premium for the 90-day binder from QBE Insurance Corp., if applied to a 12-month policy, exceeded the premium charged by Great American Insurance by $6,487.28. Am. Compl. ¶ ¶ 41-44; cf. Pl.'s Ex. 8 with Pl.'s Ex. 9-A. The Defendants previously suggested that despite the " 90-day" moniker, $3,064.32 represented the yearly premium for the policy. Wells Fargo Defs.' Reply, ECF No.  at 3 n.2; QBE Defs.' Reply, ECF No.  at 5-6. The parties (and the Court) generally refer to the policy reflected in the 90-day binder as the " force-placed," " lender-placed," or " LPI" policy. QBE First informed the Plaintiff on March 8, 2012, that at Wells Fargo Bank's request, the LPI was cancelled effective July 16, 2011. 3/8/12 Ltr. QBE ...