MARK A. GOLDSMITH, District Judge.
In this case, Plaintiff Tonya Knight, proceeding
The factual background and legal standards governing this case have been sufficiently set forth by the Magistrate Judge in his R&R, and need not be repeated in full here. Plaintiff is the owner of a rental property located at 14818 Washburn Street, Detroit, Michigan; Defendant held a mortgage upon the property securing a loan. Mortgage (Dkt. 47-5). After the rental property sustained fire damage, Plaintiff's insurance company issued a check to her and to Defendant jointly. Knight Dep. at 19-20, 26 (Dkt. 47-3); Northfield Insurance Co. Check (Dkt. 24 at 39 of 78). Plaintiff claims that Defendant's agents made fraudulent misrepresentations to her, leading her to sign a document authorizing the use of the insurance proceeds to pay off the balance of her mortgage loan. Am. Compl. at 10-14 (Dkt. 24). Plaintiff asserts that she wanted to use the insurance proceeds to repair the property, not to pay off her loan.
For the reasons that follow, the Court concludes that, although there is a genuine issue of fact as to whether Defendant's agents made the claimed oral misrepresentations to Plaintiff, there is no genuine issue of fact that Plaintiff's reliance on the asserted misrepresentations was not reasonable. Because Plaintiff cannot demonstrate reasonable reliance, Defendant is entitled to summary judgment on the fraud claim. Accordingly, the Court will accept the recommendation contained in the R&R, overrule Plaintiff's objections (Dkt. 63), grant Defendant's motion for summary judgment (Dkt. 47), and deny as moot Plaintiff's motion for leave to file a motion for summary judgment (Dkt. 58) and proposed motion for summary judgment (Dkt. 57).
Plaintiff raises four objections to the R&R. She asserts (i) that she has sufficiently demonstrated the elements of fraud in the inducement; (ii) that she has shown that her intent was to use the insurance proceeds to pay for repairs; (iii) that Defendant has destroyed or concealed evidence; and (iv) that many lawsuits asserting fraud claims have been filed against Defendant. The Court addresses each objection in turn.
Regarding the fraud claim, the R&R concludes that the record demonstrates that the fax Defendant sent to Plaintiff, which contained the document she signed authorizing the use of insurance proceeds to pay off her loan, was sent in the correct order, so the order of pages in the fax cannot be the basis for a fraud claim. R&R at 13. The R&R further concludes that there is a genuine issue of fact as to whether Plaintiff was directed to sign the last signature page of the fax to begin receiving repairs.
Plaintiff objects to the R&R's analysis of her fraud-in-the-inducement claim. She contends that the fax was sent to her with the pages out of order and was "convoluted and confusing." Pl. Obj. at 2-3. Plaintiff argues that she has demonstrated the elements of fraud in the inducement: (i) Defendant made certain material misrepresentations by telling Plaintiff she was required to pay off the loan and advising Plaintiff to sign the last, blank signature page of the fax it had sent her; (ii) the representations were false because it did not allow Plaintiff to use the insurance proceeds as she desired, which was to bring her mortgage payment current and use the balance on repairs for the property; (iii) Defendant knew or should have known the representations were false, because she made her intentions clear to Defendant's agents; (iv) Defendant made the representations with the intent Plaintiff would act on them; and (v) Plaintiff relied on Defendant's representations and, as a result, had to spend over $40,000 of her own money to pay for repairs.
Defendant responds that Plaintiff has not established a
"Fraud in the inducement occurs where a party materially misrepresents future conduct under circumstances in which the assertions may reasonably be expected to be relied upon and are relied upon."
Having carefully reviewed the R&R and the parties' arguments, the Court agrees with the R&R that, although there is a genuine issue of fact as to whether Defendant's agents made the claimed oral representations to Plaintiff, there is no issue of fact that Plaintiff's reliance on the claimed representations was not reasonable. Therefore, Plaintiff cannot prevail on her fraud claim.
Plaintiff maintains that Defendant sent the fax to her with the fax's pages deliberately out of order. However, the record contradicts Plaintiff's contention. Defendant submitted a copy of the fax, with the fax transmittal line printed across the bottom (Dkt. 47-2). The fax transmittal line indicates that the fax was sent on November 22, 2010. The fax contains various documents relating to Plaintiff's options for applying the insurance proceeds:
The fax transmittal line and the copy of the fax establish that the pages of the fax were sent to Plaintiff in the above-established order, containing documents and instructions pertaining to two options for application of the insurance funds: (i) applying the funds to repairs of the property or (ii) using the funds to pay off the mortgage loan. Plaintiff's assertions that the pages of the fax were sent out of order to confuse her are contradicted by the clear record evidence.
Accordingly, there is no genuine issue of fact that the pages of the fax were sent in the order described above, and to the extent Plaintiff's claim of fraud is premised on the assertion that the pages of the fax were sent out of order, such claim lacks merit.
Plaintiff next argues that Defendant's agents made oral misrepresentations to her by directing her to sign the last signature page of the fax to begin applying the insurance proceeds toward repairs, because Defendant knew that the signature page would, instead, authorize Defendant to use the insurance funds to pay off the loan. Plaintiff asserts that on November 22, 2010 — the day that the fax was sent to her — she engaged in numerous telephone conversations with Defendant's agents regarding her desire to repair the property. Pl. Obj. at 3. She contends that Defendant has produced a recording of only one of these conversations.
The recording to which Plaintiff refers is an audio recording of a telephone conversation between herself and an individual named Elaine, a representative of Defendant (Ex. 5, submitted as audio disc). During this conversation, Plaintiff and Elaine discussed options for using the insurance proceeds to either pay off the loan or repair the property. Elaine informed Plaintiff that she was behind on her mortgage payments; Plaintiff expressed uncertainty as to how she wanted to proceed, and she inquired as to the possibility of a loan modification. Elaine explained that Defendant was not inclined to assist Plaintiff in reducing the amount owed on the loan. In addition, after initially mentioning the possibility of doing a short sale, Elaine told Plaintiff that a short sale would not be an option after all. The recording ends when Elaine transferred Plaintiff to another representative.
In her affidavit, Plaintiff asserts that she and her contractor only followed the instructions of Defendant's representatives in filling out the forms included in the fax. Pl. Aff. ¶ 5 (Dkt. 63). She asserts that after following the instructions, she and her contractor mailed "forms LD423/B[O]6/2/[O]S1, LD716/B[O]6/1, and LD715/B[O]6/2/OS1, along with the contractors' information, and other documents requested in letter LD716."
As an exhibit to its response to Plaintiff's objections, Defendant submits call process notes regarding calls Plaintiff made to Defendant on November 22, 2010 and December 1, 2010 (Dkt. 64-1).
The Court concludes that there is a genuine issue of fact as to whether Defendant made the claimed oral misrepresentations to Plaintiff. Although Defendant submitted a recording of a conversation in which Defendant's representative, Elaine, did not instruct Plaintiff to sign any pages of the fax, there is evidence in the record that this conversation was only one of several between Plaintiff and Defendant's representatives. Plaintiff and her contractor have stated, in affidavits, that Plaintiff signed and mailed the loan payoff signature page, LD423/BO6/2/OS1, because Defendant's representative directed her to do so to begin applying the insurance funds to the cost of repairs. At this stage, there remains a genuine issue of material fact as to whether such representations were made. Accordingly, the Court sustains Plaintiff's objections as to the existence of the oral misrepresentations.
To prevail on her fraud claim, Plaintiff must demonstrate that she reasonably relied on the claimed misrepresentations.
Here, the faxed loan payoff documents sent to Plaintiff expressly state:
Fax at 9 of 12 (Dkt. 47-2). As the Court determined above, there is no genuine issue of fact that the fax was sent in the correct order, i.e., with the loan payoff signature page immediately following the loan payoff letter. Therefore, there was no ambiguity in the plain language of the documents that by signing the attachment (LD423/BO6/2/OS1), Plaintiff was authorizing Defendant to use the insurance proceeds to pay off the mortgage loan. Because the plain language of the written document expressly contradicted the claimed oral misrepresentation, Plaintiff's reliance on the oral statement was not reasonable.
In her sur-reply, Plaintiff argues, "[t]his court must determine that Plaintiff did not disregard the plain language of the fax. Page 9 clearly specified that Page 9 should accompany the check, if Plaintiff choose [sic] to pay off the mortgage. Plaintiff did not accompany page 9 and 10 together with the check." Pl. Sur-reply at 3. In the R&R, the Magistrate Judge rejected Plaintiff's "argument that her signed LD 423 Signature Page was not effective because she returned only that page, and not the entire two-page LD 423 document. The Fax makes clear that the operative document for her to elect to pay off her Loan was the LD 423 Signature Page." R&R at 16 n.9. It is true that the loan payoff document directs Plaintiff to send "the endorsed settlement check(s)
Further, Plaintiff's assertion that the fax is facially unclear because there was no "signature page" for the repair authorization lacks merit. Form LD716/BO6/2/OS1, titled "Conditional Waiver of Lien," which is part of the repair documentation package, contains a signature block for Plaintiff. Moreover, regardless of whether the "Conditional Waiver of Lien" page clearly fits the description of a signed authorization page, it is apparent, as explained above, that the LD423 form authorized Defendant to use the insurance proceeds to pay off the loan. Thus, Plaintiff's reliance on the oral statement was not reasonable.
For these reasons, the Court concludes that Plaintiff cannot demonstrate that she reasonably relied on the claimed oral misrepresentations, and the Court rejects Plaintiff's objections as to the reasonable reliance element.
Plaintiff argues that the record evidence clearly demonstrates that her intent was not to pay off her mortgage, but rather to use the insurance proceeds toward repairs to the property; she further maintains that she made her intent clear to Defendant's representatives. She contends that the Magistrate Judge erred in not referencing an unsigned form, which Plaintiff argues demonstrated her intent not to pay off the loan.
In a footnote to the R&R, the Magistrate Judge noted,
R&R at 17 n.10. The Court agrees with the Magistrate Judge.
Plaintiff has presented persuasive evidence of her subjective intent to use the insurance proceeds to repair the property. In her deposition testimony, she maintains that her desire was to repair the property, not to pay off the loan.
Plaintiff argues that Defendant has failed to provide all of the recordings of her telephone calls with Defendant. Pl. Obj. at 4. She contends that pursuant to the doctrine of spoliation of evidence, she will "request the trier of fact" to draw a negative inference against Defendant "in the event this matter proceeds to trial."
"Spoliation of evidence occurs when a party either deliberately or accidentally destroys or loses crucial evidence, or when a party fails to preserve such evidence when it is under a duty to preserve evidence that it knows or reasonably should know is relevant to the action."
The Court need not address whether Plaintiff's spoliation claim is meritorious, because the claim is moot. Regarding spoliation, Plaintiff seeks only an adverse jury inference "in the event the matter proceeds to trial." Because the Court is granting summary judgment in favor of Defendant and dismissing the case, it need not reach whether Plaintiff would be entitled to an adverse inference. Therefore, the Court rejects Plaintiff's objections as to spoliation.
Plaintiff cites multiple cases in which, she asserts, claims of fraudulent practices and misleading statements were made against Defendant. Pl. Obj. at 6-7. Plaintiff maintains that she is "another victim of Wells Fargo's long-standing history of misrepresentations and fraudulent behavior."
For the reasons stated above, the Court grants Defendant's motion for summary judgment (Dkt. 47).
SO ORDERED.
Further, in her sur-reply brief, Plaintiff contends as follows:
Pl. Sur-reply at 2 (Dkt. 68) (emphasis in original). From this argument, it appears that Plaintiff is no longer asserting that the copy of the fax, attached as Defendant's Exhibit 1, is an inaccurate reproduction of the fax. Rather, she seems to be saying that the oral representations made to her by Defendant's agents did not accurately reflect the contents of the fax. The Court will address Plaintiff's arguments as to the claimed oral misrepresentations infra. Regardless, as explained above, the Court concludes that the record evidence demonstrates that the fax was sent with the pages in the above-specified order.
Taken in the light most favorable to Plaintiff, the emails indicate that Defendant was aware, after Plaintiff submitted the payoff authorization, that Plaintiff did not in fact wish to pay off the loan; Defendant proceeded with the loan payoff on the ground that the payoff could not be retracted. However, the emails are immaterial to the question of whether Defendant made oral misrepresentations regarding the payoff documents, on which Plaintiff reasonably relied. Thus, the emails — and Plaintiff's argument that Defendant was aware of Plaintiff's intent — do not support a fraud claim. Although Plaintiff's argument may support other claims, any such claims are not set forth in any current pleading.