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Mbakpuo v. Wells Fargo Bank, N.A.

United States District Court, D. Maryland

July 21, 2015

WELLS FARGO BANK, N.A., Defendant.


ROGER W. TITUS, District Judge.

Like many Americans, Plaintiff C. Victor Mbakpuo experienced financial difficulties while the country was in the throes of the Great Recession, which resulted in his defaulting on his mortgage loan. Also like many Americans, Mbakpuo lays the blame for his financial woes at the feet of his mortgage lender, Defendant Wells Fargo Bank, N.A., and sues it for $39 million in damages, as well as equitable relief in the form of reformation of his mortgage contract. While mortgage lenders may bear some, most, or all of the blame for many of the mortgages gone bad during the recent economic crisis, that is not the case here. In order to survive summary judgment, Mbakpuo needed to produce some evidence that would allow a reasonable jury to conclude that Defendant Wells Fargo violated his legal rights. Mbakpuo has produced pages of vitriolic rhetoric directed at the mortgage lending industry in general, and Wells Fargo in particular, but has produced no evidence that Wells Fargo violated any of his legal rights. Accordingly, Wells Fargo's motion for summary judgment will be granted, Mbakpuo's will be denied, and judgment will be entered in favor of Wells Fargo.[1]


I. Facts

On December 13, 1999, Plaintiff C. Victor Mbakpuo executed an adjustable rate note secured by a deed of trust (the note and deed of trust, collectively, the "Mortgage") to purchase a home in Bowie, Maryland, from World Savings Bank, F.S.B. ("World Savings"). ECF No. 2-1. The Mortgage provided that, beginning on January 31, 2000, and every other Monday thereafter, World Savings would adjust the interest rate of the Mortgage. Id. at 1. The adjustment was tied to the Golden West Index, a proprietary index which reflected the weighted average of the interest rates in effect on the last day of each month on the deposit accounts of the depositary subsidiaries of Golden West Financial Corporation, the holding company of World Savings. Id. at 2. The interest rate on the loan at each adjustment was determined by taking the Golden West Index rate and adding a 3.4 percentage point margin. Id. The maximum interest rate World Savings could charge Mbakpuo was 11.95%. Id. The Mortgage provided that, if the Golden West Index became unavailable, World Savings could choose another national, regional, or other index approved by World Savings' regulator as a substitute index. Id. The Mortgage required World Savings to give notice to Mbakpuo in the event of a substitution. Id.

In connection with Wachovia's acquisition of Golden West, the Golden West Index ceased to exist in 2007, and Wachovia's own proprietary index, the Wachovia COSI, was substituted as the index used to determine Mbakpuo's rate. ECF No. 39-3 at 4. In 2009, Defendant Wells Fargo acquired Wachovia, and when the Wachovia COSI ceased to exist, the Wells Fargo COSI was substituted. Id. at 5-6. Wells Fargo submits evidence that it sent notice of each of these substitutions to Mbakpuo. ECF No. 39-3 at 48; ECF No. 39-3 at 55-56. Mbakpuo claims never to have received the notices. ECF No. 2 at 4.

Due to a series of misfortunes and financial difficulties, Mbakpuo defaulted on the Mortgage on February 19, 2008. ECF No. 2-1 at 8. Mbakpuo applied for multiple loan modifications from 2008-2013. He was initially offered a loan modification, but rejected its terms. ECF No. 39-4 at 30. Thereafter, he continued to apply for modifications under the federal Home Affordable Modification Program ("HAMP"), [2] but Wells Fargo determined that he was ineligible each time. Without rehashing the details of the back and forth between Mbakpuo and Wells Fargo over these applications, Wells Fargo at each turn explained in depth the reasoning for its determination that Mbakpuo was not eligible for a HAMP modification, and at each turn Mbakpuo disagreed vehemently with Wells Fargo's explanations. ECF No. 2-1 at 8-80. Based on the correspondence between Mbakpuo and Wells Fargo, it is apparent that he never believed any of the representations made by Wells Fargo regarding his eligibility for a HAMP modification.

The Mortgage required that Mbakpuo purchase and maintain hazard insurance on the home. ECF No. 39-3 at 31-32. It also gave Wells Fargo the right to take any steps necessary to protect its interest in the home. Id. at 32. In 2013, Mbakpuo realized that insurance had been placed on the property by Wells Fargo pursuant to this provision. ECF No. 2 at 18-19. Mbakpuo made this realization several years after Wells Fargo had sent him multiple letters requesting that he provide proof of insurance and warning that if he did not, insurance would be purchased on his behalf. ECF No. 52-2 at 24. Upon making this discovery, Mbakpuo purchased his own insurance at a lower rate, at which time Wells Fargo cancelled the policy it had purchased. Id. at 105.

II. Mbakpuo's Claims

On the basis of these facts, Mbakpuo has asserted 11 counts against Wells Fargo. Counts I, II, III and IV are fraud claims; in Counts I and II, Mbakpuo claims that Wells Fargo fraudulently calculated his interest rate, and in Counts III and IV, Mbakpuo claims that Wells Fargo fraudulently denied his request for a HAMP modification by misrepresenting his income and expenses. ECF No. 2 at 4-13. Count V is a breach of contract claim, alleging that Wells Fargo failed to provide Mbakpuo with notice of the index used to calculate his interest rate. Id. at 13-15. Count VI alleges various statutory violations due to Wells Fargo's alleged failure to respond adequately to written requests regarding the servicing of his mortgage. Id. at 15-16. Counts VII and VIII allege negligent hiring, training, and retention on Wells Fargo's part based on a myriad of failures by its employees to deal with Mbakpuo's demands. Id. at 16-18. Count IX alleges "Forced Insurance/Dodd-Frank" and challenges Wells Fargo's placement of insurance on Mbakpuo's home. Id. at 18-19. Count X alleges "Negative Amortization/Dodd Frank, " and claims that Wells Fargo "added the delinquencies and recapitalized at the balance at $344, 742.16" in violation of the Dodd-Frank Act's proscription on negative amortization. Id. at 19-21. Count XI seeks reformation of the mortgage. Id. at 21.

III. Procedural History

Mbakpuo filed the Complaint pro se in the Circuit Court for Prince George's County, Maryland.[3] ECF No. 1. Wells Fargo timely removed the case to this Court on July 30, 2013. Id. Following discovery, the parties filed cross-motions for summary judgment.[4] ECF Nos. 39 and 41. Oppositions and replies have been filed, and the motions are now ripe for decision.


Summary judgment is appropriate if "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "A material fact is one that might affect the outcome of the suit under the governing law.'" Spriggs v. Diamond Auto Glass, 242 F.3d 179, 183 (4th Cir. 2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Disputes of material fact are genuine if, based on the evidence, "a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248.

In order to avoid summary judgment, the nonmoving party "may not rest upon the mere allegations or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Id. at 256. While the court must view the evidence in the light most favorable to the nonmoving party, Francis v. Booz, Allen & Hamilton, Inc., 452 F.3d 299, 302 (4th Cir. 2006), it must also "prevent factually unsupported claims and defenses from proceeding to trial, " Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir. 1993) (quoting Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir. 1987)) (internal quotation marks omitted).


I. Wells Fargo is Entitled to Summary Judgment on Mbakpuo's Fraud Claims

Counts I, II, III, and IV of Mbakpuo's Complaint contain allegations of fraud against Wells Fargo. Specifically, Mbakpuo claims in Counts I and II that Wells Fargo committed common law fraud by miscalculating Mbakpuo's interest rate, in Count III that Wells Fargo committed common law fraud by refusing to grant him a HAMP loan modification, and in Count IV that Wells Fargo committed fraudulent misrepresentation under the Maryland Consumer Protection Act[5] (the "MCPA") by refusing to grant him a HAMP loan modification. In Maryland, to prevail on a common law fraud claim, a plaintiff must establish:

(1) that the defendant made a false representation to the plaintiff; (2) that its falsity was either known to the defendant or that the representation was made with reckless indifference as to its truth; (3) that the misrepresentation was made for the purpose of defrauding the plaintiff; (4) that the plaintiff relied on the misrepresentation and had the right to rely on it, and (5) that the plaintiff suffered compensable injury resulting from the misrepresentation.

Nails v. S & R, 639 A.2d 660, 668-69 (Md. 1994). Similar to a common law fraud claim, to prevail on a fraudulent misrepresentation claim under the MCPA, a plaintiff must establish (1) an unfair or deceptive practice or misrepresentation that (2) is relied upon, and (3) causes an identifiable loss as a result of his or her reliance on the purported misrepresentations. Bank of Am., N.A. v. Jill P. Mitchell Living Trust, 822 F.Supp.2d 505, 531-32 (D. Md. 2011). Mbakpuo has failed to ...

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