R. Brooke Jackson, United States District Judge.
This matter is before the Court on plaintiff's motion for summary judgment against Wells Fargo Bank, N.A. ("Wells Fargo") [ECF No. 134]; plaintiff's motion for summary judgment against U.S. Bank National Association, as Trustee for Structured Asset Investment Loan Trust Mortgage Pass Through Certificates, Series 2006-4 ("U.S. Bank") [ECF No. 138]; and defendants' joint motion for summary judgment against plaintiff [ECF No. 136]. For the reasons stated herein, plaintiff's motion for summary judgment against Wells Fargo is denied, plaintiff's motion for summary judgment against U.S. Bank is denied, and defendants' motion for summary judgment is granted.
The heart of this case is plaintiff Mary Mayotte's allegation that Wells Fargo, as an agent of U.S. Bank, promised modified loan terms, rejected Ms. Mayotte's attempts to pay her existing loan, and then reneged on its promise and foreclosed on her home. This series of unfortunate
On February 13, 2006, Ms. Mayotte took out a $481,650 loan with New Century Mortgage Corp. See ECF No. 136 ¶ 1. Her obligation to repay the loan was documented in a promissory note and secured by a deed of trust on the property. See ECF No. 114 ¶¶ 21-22. New Century Mortgage Corp. subsequently assigned the loan to U.S. Bank. See ECF No. 136 ¶ 1. Wells Fargo began servicing the loan on June 1, 2006, doing business as America's Servicing Company ("ASC"). See ECF No. 136 ¶ 2.
In the summer of 2007, believing that the terms of the note she signed differed from what she had been told, Ms. Mayotte contacted Wells Fargo and informed a customer representative of her desire to modify the terms of the loan. See ECF No. 114 ¶¶ 22-25. The customer service representative told her that she had to miss three loan payments in order to qualify for a loan modification. See id. ¶ 25. The representative also told Ms. Mayotte that Wells Fargo "can't really work with [her] on any options unless [she is] in arrears on payments for three months," and that she "would be considered for a modification" if she missed the payments. See ECF No. 136 ¶¶ 3-4.
For a time she continued to make her payments, but by the summer of 2008 she had decided to follow Wells Fargo's advice and withhold the three payments. See ECF No. 114 ¶ 29. Thus, Ms. Mayotte purposefully missed both her July 2008 and August 2008 monthly loan payments. See ECF No. 134 ¶ 11. After missing these two payments, Ms. Mayotte called Wells Fargo on September 2, 2008 to discuss modification. See id. ¶ 8. Wells Fargo again advised her "don't make the [September] payment" because "they would apply it as a down payment on a new loan." See id. In discovery, Wells Fargo produced a call note that a customer service representative created subsequent to this September 2, 2008 phone call. The call note acknowledged that Ms. Mayotte wanted to make a payment, but that the representative told her "to hold on to [sic] it and use as in[i]tial down [payment]." Id. at 2 n.1; ECF No. 136-6. Ms. Mayotte does not recall how long she was "supposed to hold onto the payment." ECF No. 136 ¶ 8. This call note was first disclosed during discovery in the instant case; it was not disclosed in the state court proceedings discussed below. See ECF No. 134 ¶ 6; ECF No. 142 ¶¶ 5-6.
On October 8, 2008 U.S. Bank's foreclosure lawyers advised Ms. Mayotte that they were retained to initiate foreclosure proceedings. See ECF No. 136 ¶ 9. Wells Fargo filed a Rule 120 proceeding in the District Court for Denver County, Colorado. See ECF No. 134 ¶ 4. Pursuant to the Colorado Rules of Civil Procedure, a Rule 120 proceeding requires creditors pursuing nonjudicial foreclosure to first obtain a ruling by a Colorado trial court that there is a reasonable probability that a default exists. C.R.C.P. 120. On October 29, 2008 Ms. Mayotte requested a loan modification by submitting a financial worksheet. See ECF No. 136 ¶ 10. Subsequently, on March 7, 2009 "ASC postponed the foreclosure sale ... to assist Ms. Mayotte while working with [their] offices in an effort to obtain approval for a loan modification." See ECF No. 142 ¶ 4. Wells Fargo ultimately declined this modification request in April 2009. See id. ¶ 11.
On August 23, 2009 Wells Fargo mailed two letters to Ms. Mayotte noting that she
Ms. Mayotte timely paid the first two TPP payments and made her third TPP payment one day late. See ECF No. 134 ¶ 16; ECF No. 142 ¶ 16; ECF No. 136-1 at WF001054. Ms. Mayotte also signed and returned all required HAMP documents, including the TPP form. See ECF No. 134 ¶¶ 17, 19. However, in their final review, Wells Fargo found that Mayotte's submitted documentation reflected income substantially less than the $12,000 per month upon which the TPP was offered, and her income did not support modifications that Wells Fargo was authorized to offer. See ECF No. 136 ¶ 15. Wells Fargo ultimately declined to permanently modify Ms. Mayotte's loan via the TPP in March 2010. See id. ¶ 12.
Before being informed that her modification was denied, Ms. Mayotte made two TPP payments in January 2010 and February 2010. See ECF No. 134 ¶¶ 22-23. Wells Fargo did not tell Ms. Mayotte that because her modification had not yet been accepted, she was still required to make the full monthly payment on her original loan rather than the reduced TPP payment. See id. Wells Fargo instead applied these two payments to Ms. Mayotte's original loan and charged her late fees for not paying the full amount. See id.; see ECF No. 136-5 at 194:6-19.
On March 25, 2010 Wells Fargo and Ms. Mayotte entered into the first of two separate Special Forbearance Agreements. See ECF No. 136 ¶ 17. This first agreement allowed Ms. Mayotte to make reduced payments between May 15, 2010 and July 15, 2010. See id. The agreement states that it "is an agreement to temporarily accept reduced payments," that "upon completion of this plan, the loan must be brought current," and "[a]ll of the provisions of the note and security instrument, except as herein provided, shall remain in full force and effect." Id. ¶ 18. Ms. Mayotte did not make the July 15, 2010 payment. See id. ¶ 19.
Ms. Mayotte submitted a third request for loan modification on September 30, 2010. See id. ¶ 20; ECF No. 136-1 at 102:19-103:21. Sometime in November 2010, Ms. Mayotte testified that Wells Fargo advised her on the phone that if she paid her Homeowners Association lien and made another payment on her original loan, then Wells Fargo would modify her loan. See ECF No. 134 ¶ 23. However, on December 30, 2010 Wells Fargo denied this final request for a modification. See id. ¶ 25; ECF No. 136-1 at 101:6-17.
Meanwhile, on November 2, 2010—before Wells Fargo denied Ms. Mayotte's third modification request—Wells Fargo and Ms. Mayotte entered into a second Special Forbearance Agreement. See ECF No. 136 ¶ 21. This agreement similarly
In May 2011, Ms. Mayotte filed for bankruptcy. See ECF No. 136 ¶ 27.
On August 13, 2013 U.S. Bank's foreclosure lawyers informed Ms. Mayotte that if she failed to cure her default by September 12, 2013, they would accelerate the loan and proceed with foreclosure. See id. ¶ 30. Ms. Mayotte did not make any additional payments. See id. ¶ 24. Accordingly, on November 6, 2014 the District Court for Denver County, Colorado held a Rule 120 hearing. See id. ¶ 31. Wells Fargo objected to discovery in this hearing based on the hearing's narrow scope and limited purpose. See ECF No. 142 ¶ 7. The state court agreed. As such, the September 2, 2008 call note was not part of the record. See ECF No. 134 ¶ 5. The state court ultimately entered an Order Authorizing Sale of Property on November 12, 2014. See ECF No. 136 ¶ 31.
The following day on November 13, 2014, while state court proceedings were ongoing, Ms. Mayotte filed the instant suit in federal court. See id. ¶ 32. She proceeded pro se. See Mayotte, 880 F.3d at 1171.
In December 2014 U.S. Bank foreclosed on the property. See id. ¶ 34. Pursuant to the foreclosure, U.S. Bank initiated a forcible entry and detainer action in the District Court for Denver County, Colorado in August 2016 (the "FED Action"). See id. ¶ 35. In that FED Action, Ms. Mayotte asserted counterclaims and third-party claims against U.S. Bank and Wells Fargo for: (1) abuse of process; (2) declaratory judgment; (3) violations of the Colorado Consumer Protection Act; and (4) fraudulent misrepresentation. See id. ¶ 36. The state court granted U.S. Bank and Wells Fargo's joint motion to dismiss all four of Ms. Mayotte's claims with prejudice on May 30, 2017. See id.
Trial in the FED Action proceeded on September 13, 2017. See id. ¶ 38. Following that trial, the state court entered its Order and Judgment for Possession ("Possession Order") finding that U.S. Bank had established ownership of the subject property and entering judgment against Ms. Mayotte. See id. Ms. Mayotte appealed both the May 30th dismissal of her claims and the September 13th Possession Order. See id. ¶ 39. The Colorado Court of Appeals affirmed both of the trial court's decisions in an opinion dated February 7, 2019. See id. ¶ 40. The Court of Appeals subsequently issued its mandate on May 30, 2019. See id. ¶ 40. Ms. Mayotte petitioned for certiorari review, but the Colorado Supreme Court denied her petition on May 28, 2019. See Mayotte v. U.S. Bank Nat'l Ass'n as Tr. for Structured Asset Inv. Loan Tr. Mortg. Pass-Through Certificates, Series 2006-4, No. 19SC208, 2019 WL 2266491, at *1 (Colo. May 28, 2019).
As noted above, Ms. Mayotte filed her federal complaint on November 13, 2014 while state court proceedings were ongoing. See ECF No. 136 ¶ 32; ECF No. 1. Still proceeding pro se, she amended her complaint, see ECF No. 12, and later she filed a second amended complaint, see ECF No. 31. The second amended complaint
In March 2016, this Court dismissed six of Ms. Mayotte's claims from her second amended complaint without prejudice, and one claim with prejudice.
Ms. Mayotte obtained counsel and appealed the dismissal. See ECF No. 66; ECF No. 71. On January 23, 2018, the Tenth Circuit reversed this Court's holding in part.
Following the remand, Ms. Mayotte filed a third amended complaint, see ECF No. 89, and finally a fourth amended complaint, see ECF No. 114. Her fourth amended complaint asserts four claims: (1) negligence against both defendants; (2) negligent supervision and hiring against U.S. Bank; (3) violations of the Colorado Consumer Protection Act ("CCPA"), West's C.R.S.A. § 6-1-101 et seq., against both defendants; and (4) declaratory judgment against both defendants. See ECF No. 114 ¶¶ 133-184.
Currently pending before this Court are three motions for summary judgment on Ms. Mayotte's fourth amended complaint. Ms. Mayotte herself filed two separate motions for summary judgment, one against each defendant. See ECF No. 134; ECF No. 138. In her motion for summary judgment against Wells Fargo, Ms. Mayotte asserts that (1) Wells Fargo is a negligent servicer and (2) Wells Fargo's actions violate the CCPA. See ECF No. 134 at 7, 18. In her motion for summary judgment against U.S. Bank, Ms. Mayotte asserts that (1) U.S. Bank is liable for Wells Fargo's illegal acts as its principal, (2) U.S. Bank is liable for the negligent supervision and ongoing retention of Wells Fargo, (3) U.S. Bank is independently liable for negligence, and (4) U.S. Bank is independently liable under the CCPA. See ECF No. 138.
Defendants' joint motion for summary judgment asserts seven defenses. Defendants
The Court may grant summary judgment 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). The moving party has the burden to show that there is an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The nonmoving party must "designate specific facts showing that there is a genuine issue for trial." Id. at 324, 106 S.Ct. 2548. A fact is material "if under the substantive law it is essential to the proper disposition of the claim." Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A material fact is genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. The Court will examine the factual record and make reasonable inferences therefrom in the light most favorable to the party opposing summary judgment. Concrete Works of Colo., Inc. v. City & Cty. of Denver, 36 F.3d 1513, 1517 (10th Cir. 1994).
Defendants first argue that claim preclusion bars Ms. Mayotte's claims. See ECF No. 136 at 8. Claim preclusion prevents "relitigation of matters that have already been decided as well as matters that could have been raised in a prior proceeding but were not." Lobato v. Taylor, 70 P.3d 1152, 1165 (Colo. 2003). In determining whether to give preclusive effect to state-court judgments, federal courts apply the preclusion law of the state from which the judgment emerged. See Allen v. McCurry, 449 U.S. 90, 96, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980) (citing 28 U.S.C. § 1738 (1976)).
Under Colorado law, a claim in a second judicial proceeding is precluded by a previous judgment when there exists: "(1) finality of the first judgment, (2) identity of subject matter, (3) identity of claims for relief, and (4) identity or privity between parties to the actions." Argus Real Estate, Inc. v. E-470 Pub. Highway Auth., 109 P.3d 604, 608 (Colo. 2005) (citations and quotations omitted). An exception to claim preclusion applies where the plaintiff was not afforded a full and fair opportunity to litigate the issue in the first proceeding. See Byrd v. People, 58 P.3d 50 (Colo. 2002). However, this exception bars claim preclusion only where there was a denial of due process. See Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 847 F.3d 1221, 1243 (10th Cir. 2017). Notably, claim preclusion does not require actual litigation. See S.O.V. v. People in Interest of M.C., 914 P.2d 355, 358-59 (Colo. 1996).
Here, defendants assert that the prior FED Action in Colorado state court, specifically Ms. Mayotte's counterclaims in that case, precludes Ms. Mayotte's instant claims. See ECF No. 136 at 8. Ms. Mayotte does not dispute any of the four elements of claim preclusion. Instead, she argues that claim preclusion cannot apply here because she did not have a full and fair opportunity to litigate her claims in the FED Action. See ECF No. 144 at 3-4.
Although Ms. Mayotte does not dispute any of the elements of claim preclusion,
Second, the subject matter of the claims is identical. Both the FED Action and the instant case involve "the same parcel of land and the same agreement," namely the house and the loan. Argus Real Estate, Inc., 109 P.3d at 608.
Third, the claims are identical. The inquiry regarding identity of claims "does not focus on the specific claim asserted or the name given to the claim," but rather whether the claims are "bounded by the injury for which relief is demanded." Id. at 608-09. In the instant case, Ms. Mayotte brings claims for negligence, negligent supervision and hiring, violations of the CCPA, and declaratory judgment. See ECF No. 136 ¶ 41. In the FED Action, Ms. Mayotte brought counterclaims for fraudulent misrepresentation, violations of the CCPA, and declaratory judgment. See ECF No. 136-9 at 3. Some of these claims are the same specific claims, but more to the point, all of the claims focus on the same allegations and injury: that defendants instructed Ms. Mayotte to withhold payments on her loan while promising a loan modification, that defendants denied Ms. Mayotte a loan modification, and that the defendants subsequently illegally foreclosed on Ms. Mayotte's home.
Fourth and finally, the claims involve the same parties: Ms. Mayotte, U.S. Bank, and Wells Fargo.
Having established that the four elements of claim preclusion are met, I consider whether Ms. Mayotte was nevertheless not afforded a full and fair opportunity to litigate her claims in the FED Action. Ms. Mayotte makes two arguments on this point. First, she claims that the state court expressly held that it would not litigate the claims, instead relying on the Rule 120 hearing that held that Ms. Mayotte was in default. Ms. Mayotte cites language from the Possession Order stating: "[I]t is not the proper purview of this Court to unwind the consequences of the Rule 120 action in 2013CV35162, and to litigate the purported malfeasance of Wells Fargo Bank and its role, if any, in the subsequent foreclosure action." ECF No. 136-10 at 4. Although Ms. Mayotte does not provide argument in her response as to why such reliance on the Rule 120 action would be inappropriate, her fourth amended complaint asserts that the Rule 120 hearing was a non-judicial proceeding that "did not conclusively establish the legal status of any party." ECF No. 114 ¶¶ 180-183. As such, she argues, "[t]he ultimate right to foreclose, the amount owed by Ms. Mayotte, whether a contract existed that was breached, and whether the entities that foreclosed had a legal right to foreclose have never been adjudicated."
Second, Ms. Mayotte also claims that she was denied a full and fair opportunity to litigate her claim because Wells Fargo fraudulently concealed the September 2, 2008 call note in the FED Action, not producing it until discovery in the instant case. See ECF No. 144 at 5. The discovery of new evidence which was fraudulently concealed or could not have been discovered with due diligence can bar the application of claim preclusion to a new claim if "the plaintiff did not know the full dimensions of the claim at the time of the first action." Lenox MacLaren Surgical Corp., 847 F.3d at 1243-44 (noting that "under certain circumstances, the later filing
Defendants note, however, that Ms. Mayotte did assert this argument in the FED Action. See ECF No. 147 at 2 n.1. In her March 21, 2019 petition for certiorari to the Colorado Supreme Court, Ms. Mayotte argued that she had newly "discovered smoking gun documents," including the call note. ECF No. 147-1 at 4-5. She argued that this evidence "defeat[s] any argument that the [CCASF] bars Mayotte's claims or defenses." Id. at 5-6. In response, the Colorado Supreme Court denied Ms. Mayotte's petition. See Mayotte, 2019 WL 2266491, at *1.
That said, Ms. Mayotte's claim raises three questions: (1) whether the call note was fraudulently concealed or could not have been discovered with due diligence; (2) whether the discovery of the call note altered the dimensions of Ms. Mayotte's claim, and (3) whether a denied petition for certiorari that has timely raised newly discovered evidence constitutes a full and fair opportunity to litigate an issue. See Lenox MacLaren Surgical Corp., 847 F.3d at 1243-44.
First, I find that Ms. Mayotte could not have discovered the call note with due diligence. The call note was in Wells Fargo's possession, and the state court denied general discovery "due to the narrow scope of the FED hearing." See ECF No. 144-1 at 6-8. Ms. Mayotte had access to general discovery only during the instant case. See ECF No. 144 at 5.
Second, I find that the discovery of the call note alters the dimensions of Ms. Mayotte's claims. Ms. Mayotte argues that the call note constitutes a writing that precludes application of the CCASF. The state court's dismissal of Ms. Mayotte's claims in the FED Action turned entirely on the CCASF. Thus, the discovery of a writing alters Ms. Mayotte's arguments on whether the CCASF bars her four instant claims.
Third, I agree with Ms. Mayotte that a denied petition for certiorari does not constitute a full and fair opportunity to litigate an issue. That is not to say that the Colorado Supreme Court was wrong to deny certiorari or that the Colorado Supreme Court denied Mayotte due process in so doing. The Colorado Supreme Court has discretion in accepting petitions for certiorari, and it usually does not do so simply to correct an erroneous decision that will affect only the parties to that case. See C.A.R. 49-50. It grants petitions "only where there are special and important reasons." C.A.R. 49. The Colorado Supreme Court's denial of Ms. Mayotte's petition let stand the Court of Appeals' decision dismissing Ms. Mayotte's claims,
Accordingly, Ms. Mayotte's four claims are not barred by claim preclusion to the extent that she presents claims that she did not have a full and fair opportunity to litigate. See infra note 8. Ms. Mayotte did not have a full and fair opportunity to litigate any of her four claims because she did not have a full and fair opportunity to litigate whether the call note constitutes a writing under the CCASF. I therefore address Ms. Mayotte's argument that the call note constitutes a writing under the CCASF.
Colorado law prohibits any claim founded upon unwritten changes to a credit agreement. See C.R.S. § 38-10-124(2) (2017) ("Notwithstanding any statutory or case law to the contrary ... no debtor or creditor may file or maintain an action or a claim relating to a credit agreement involving a principal amount in excess of twenty-five thousand dollars unless the credit agreement is in writing and is signed by the party against whom enforcement is sought."). Defendants assert that because Ms. Mayotte's suit is premised upon an alleged oral promise of modification to her loan, the CCASF bars her suit. See ECF No. 136 at 11.
Ms. Mayotte asserts that the call note constitutes a "writing" sufficient to survive the CCASF.
Yet Ms. Mayotte's argument on what constitutes a "signed" writing under the CCASF misses the point. The call note is insufficient under the CCASF, not because it is not signed, but because it does not indicate that there was any meeting of the minds between Ms. Mayotte and Wells Fargo about granting her a loan modification. The call note is two lines in a customer service representative's call log noting that Ms. Mayotte "want[ed] to make a [payment]" but was "advised to hold on to
The call note does not indicate that Wells Fargo promised that they would modify Ms. Mayotte's loan. It does not indicate that Wells Fargo promised not to foreclose on Ms. Mayotte if she ultimately failed to cure her default. It does not indicate that Wells Fargo promised Ms. Mayotte anything except that they would consider her for a loan modification— which they did, three times. The fact that they subsequently denied those loan modification requests does not contradict the call note. The call note therefore does not count as a "signed writing" that proves that Wells Fargo promised to modify Ms. Mayotte's loan.
Because Ms. Mayotte premises all four of her claims on an alleged oral promise to modify her loan, and because she has not presented a signed writing to prove that oral promise, the CCASF bars each of her claims. Accordingly, defendants' joint motion for summary judgment is granted and all four of Ms. Mayotte's claims are dismissed.
In the interest of finality, I also address defendants' argument that Ms. Mayotte's claims are barred by the economic loss doctrine. See id. at 13. Under Colorado law, "a party suffering only economic loss from the breach of an express or implied contractual duty may not assert a tort claim for such a breach absent an independent duty of care under tort law." Town of Alma v. AZCO Const., Inc., 10 P.3d 1256, 1264 (Colo. 2000). A duty of care is considered independent of a contractual duty when it: (1) "arise[s] from a source other than the relevant contract" and (2) is not "a duty also imposed by the contract." Haynes Trane Serv. Agency, Inc. v. Am. Standard, Inc., 573 F.3d 947, 962 (10th Cir. 2009) (citing Town of Alma, 10 P.3d at 1263).
The economic loss doctrine can also apply to statutory claims such as the CCPA. See Electrology Labs., Inc. v. Kunze, 169 F.Supp.3d 1119, 1152 (D. Colo. 2016) (applying Colorado law and holding that "[a]lthough stated to preclude `tort' actions, depending on the facts and circumstances of a case, the economic loss rule may be applied to bar statutory claims as well"); see also Nero v. Am. Family Mut. Ins. Co., No. 11-CV-02717-PAB-MJW, 2013 WL 5323147, at *6 (D. Colo. Sept. 23, 2013) (finding that plaintiff's CCPA claim is barred by economic loss doctrine); but see Christenson v. CitiMortgage, Inc., No. 12-cv-02600-CMA-KLM, 2015 WL 1757076, at *5 (D. Colo. April 14, 2015) (finding that plaintiff's CCPA claim is not barred by economic loss doctrine). In response, Ms. Mayotte argues that her claims arise independently in tort law, not in contract law.
See ECF No. 144 at 12-13. Yet Ms. Mayotte's argument ends there; she does not explain how any of the proffered duties are independent of the underlying loan agreement. Indeed, I find that none of these duties "arise from a source other than the relevant contract," and that rather all of them are "dut[ies] also imposed by the contract." Haynes Trane Serv. Agency, Inc., 573 F.3d at 962. The loan agreement itself imposes a duty of care on defendants in the servicing of that loan. All of Ms. Mayotte's proffered duties arise out of defendants' role as servicers of Ms. Mayotte's loan. Ms. Mayotte even expressly frames many of these duties with reference to "the borrower" and "the promissory note and the deed."
Because she cannot identify an independent duty, the economic loss doctrine applies facially to Ms. Mayotte's tort claims for negligence and negligent supervision. I find that it also applies to her CCPA claim and her declaratory judgment claim. See Electrology Lab., Inc. v. Kunze, 169 F.Supp.3d 1119, 1152-53 (D. Colo. 2016) (noting that "an independent evaluation of the reach of the [economic loss] rule is necessary as to any given claim"). Ms. Mayotte bases her CCPA claim on Wells Fargo's alleged "fail[ure] to admit that it waived payment on the loan for the last ten years" and its provision of "wrong information and wrong documents." See ECF No. 134 at 19. These allegations are contractual in nature and "arise[s] out of duties imposed by the [loan] contract." Nero, 2013 WL 5323147, at *6 (finding that the economic loss doctrine bars plaintiff's CCPA claim because the relevant duty "to comply with its contracts" and "to pay [insurance] claims in a timely fashion" arises out of the contract); cf. Christenson, 2015 WL 1757076, at *5 (finding that the economic loss doctrine did not bar plaintiff's CCPA claim because the relevant duty to evaluate and implement loss mitigation options arises not out of the relevant contract but out of Department of Housing and Urban Development regulations).
The declaratory judgment claim is also contractual in nature. It seeks to assign contractual rights under the loan agreement, including whether Ms. Mayotte was in default at the time of foreclosure, "who is secured regarding the subject property, how much is owed, and to whom [Ms.] Mayotte owes any remaining amounts."
Accordingly, the economic loss doctrine bars all four of Ms. Mayotte's claims.
In the interest of finality I will also consider Ms. Mayotte's claims to the extent that they arise in contract law. I have already addressed the application of the CCASF to Ms. Mayotte's claims. I now address defendants' argument that the two Special Forbearance Agreements supersede any alleged prior agreement for modification. See ECF No. 136 at 12.
Novation is "[t]he extinguishment of an old contract by the substitution of a new contract." Moffat Cty. State Bank v. Told, 800 P.2d 1320, 1323 (Colo. 1990). Under Colorado law, a contract of novation has four prerequisites: (1) a previous valid obligation, (2) an agreement between the parties to abide by the new contract, (3) a valid new contract, and (4) the extinguishment of the old obligation by the substitution of the new one. See id. "[I]f the essential elements or terms of the contract have been transformed, a new contract will be deemed to supersede the old." Phoenix Power Partners, L.P. v. Colorado Pub. Utilities Comm'n, 952 P.2d 359, 364-65 (Colo. 1998). Ms. Mayotte does not respond to defendants' novation argument except to state that her claims arise in tort rather than contract. See ECF No. 144 at 12.
Ms. Mayotte alleges that Wells Fargo promised her a loan modification in September 2008. See ECF No. 134 ¶ 1. It is undisputed that Ms. Mayotte thereafter signed two separate Special Forbearance Agreements in March 2010 and November 2010. See ECF No. 136 ¶¶ 17, 21. Both of these agreements expressly held that the "indebtedness of the referenced loan is in default," that the respective Special Forbearance Agreement "is an agreement to temporarily accept reduced payments," that "upon completion of this plan, the loan must be brought current," and that "[a]ll of the provisions of the note and security instrument, except as herein provided, shall remain in full force and effect." ECF No. 136 ¶¶ 18, 22.
Even assuming that Wells Fargo's alleged promise to modify Ms. Mayotte's loan is valid, the Special Forbearance Agreements extinguish that promise. The Special Forbearance Agreements are valid contracts by which both Ms. Mayotte and Wells Fargo agreed to abide. Defendants did not foreclose on Ms. Mayotte until after she entered the Special Forbearance Agreements. The Special Forbearance Agreements supersede any alleged promise to modify Ms. Mayotte's loan by expressly reaffirming Ms. Mayotte's obligations under the original loan.
Accordingly, novation bars all of Ms. Mayotte's claims to the extent that she premises them on an alleged contractual promise to modify her loan.
Finally, again in the interest of finality, I address defendants' argument that Ms. Mayotte has failed to show compensable damages. See ECF No. 136 at 19. Ms. Mayotte's complaint alleges that she lost equity in her home, attorney's fees, reputational harm and emotional distress, credit injury, and diminished business opportunities. See ECF No. 114 ¶¶ 128-131.
Yet Ms. Mayotte has not provided any evidence that her damages outweigh the benefit that she has derived. Ms. Mayotte made her last loan payment in December 2010. See ECF No. 136 ¶ 24. She lived in the house for over ten years without payment.
Accordingly, Ms. Mayotte has not presented a genuine dispute of material fact as to damages and I find that she has failed to allege compensable damages as a matter of law.
