ELLEN LIPTON HOLLANDER, District Judge.
Abdou-Malik Yacoubou Adam ("Yacoubou"),
On August 26, 2011, I issued a Memorandum Opinion, ruling on cross-motions for summary judgment.
Mr. Yacoubou noted an appeal of my summary judgment ruling to the United States Court of Appeals for the Fourth Circuit, although my summary judgment ruling was not a final judgment that disposed of all claims in the suit. The Fourth Circuit dismissed the appeal in April 2012, as premature. See Yacoubou Adam v. Wells Fargo Bank, 471 Fed.Appx. 121, 122 (4th Cir.2012) ("The orders Adam seeks to appeal are neither final orders nor appealable interlocutory or collateral orders. Accordingly, we ... dismiss the appeal for lack of jurisdiction.").
Thereafter, the parties filed renewed cross-motions for summary judgment,
The facts underlying the parties' claims were fully discussed in my prior Memorandum Opinion (ECF 60). Although the parties have adduced some additional evidence in connection with the renewed motions, none of the additional evidence has called into dispute any of the factual background set forth in the earlier opinion. Accordingly, I expressly incorporate my earlier Memorandum Opinion into this ruling, and assume the reader's familiarity with it. I reiterate only the facts that are most salient to the issues that remain in dispute.
Mr. Yacoubou purchased the Property in January 2005, and refinanced the Property in October 2007. Under the refinancing agreement, Mr. Yacoubou's total monthly mortgage payment was $1,652.50 (inclusive of principal, interest on the loan, and amounts to be escrowed for insurance and real estate taxes). Shortly after the refinancing, the mortgage lender for the refinancing agreement transferred the servicing of the mortgage to Wells Fargo. See ECF 49-3.
Beginning in June or July 2008, financial difficulties on Mr. Yacoubou's part and a payment dispute that arose between Mr. Yacoubou and Wells Fargo caused the mortgage loan to become delinquent. The nature of the dispute is not relevant to the issues now at hand. As a result of the dispute, Wells Fargo proposed a modification of Mr. Yacoubou's loan.
On November 3, 2008, Wells Fargo sent Mr. Yacoubou a letter to "confirm [Wells Fargo's] formal approval of a loan modification/restructure of [Yacoubou's] mortgage loan," along with a "Loan Modification Transmittal Form" and a proposed "Loan Modification Agreement" (the "Modification"). See ECF 50-13. The letter asked Mr. Yacoubou to "sign the enclosed loan modification agreement and return it." The letter also stated: "This proposal is valid for five (5) days from the date of this letter." The Modification contained two blank signature lines, one for Yacoubou and one for "Wells Fargo Bank, N A, Officer." Id. Mr. Yacoubou signed the Modification on November 10, 2008, and returned it to Wells Fargo.
Wells Fargo asserts that it sent another proposed modification agreement to Mr. Yacoubou on or about November 28, 2008. According to Wells Fargo, the second modification was sent to plaintiff after Wells Fargo "determined that there was a minor error in the monthly payment calculation" set forth in the Modification. ECF 50-1 at 5. The only difference between the first offer and the second offer was that Mr. Yacoubou's monthly payment was seven cents more ($1,357.81 rather than $1,357.74) under the second offer.
At the time I considered the original cross-motions for summary judgment, the alleged second modification offer was not contained in the record. After I issued my Memorandum Opinion in August 2011, Wells Fargo was able to locate an electronic copy of the second modification offer, and submitted it as an exhibit to a status report filed on November 1, 2011. See ECF 72-1.
In any event, on January 6, 2009, having not received further communication from Wells Fargo or a confirmation regarding the original loan Modification, Mr. Yacoubou sent Wells Fargo a check for $1,357.74, the monthly payment specified in the Modification. On January 15, 2009, Wells Fargo sent Yacoubou a letter advising him that his "request for Loan Modification has been denied" because the parties were "unable to come to a mutual agreement regarding [Mr. Yacoubou's] request for a workout." On January 19, 2009, Wells Fargo returned Yacoubou's $1,357.74 check to him, stating that "the funds do not represent the total amount due to reinstate the account." On or about February 9, 2009, Mr. Yacoubou sent Wells Fargo a check for $2,715.48 (i.e., two monthly payments of $1,357.74). Again, on February 13, 2009, Wells Fargo returned the check to Yacoubou, stating that it was insufficient "to reinstate the account." The February 2009 check was Mr. Yacoubou's last attempt to send payment to Wells Fargo.
On April 8, 2009, Wells Fargo, through substitute trustees, initiated a foreclosure action against Mr. Yacoubou in the Circuit Court for Baltimore City, captioned Buonassissi v. Yacoubou Adam, Civ. No. 24-O-09-001553 ("Buonassissi I"). A foreclosure sale of the Property was scheduled for July 28, 2009. However, on June 15, 2009, Mr. Yacoubou filed a motion to enjoin the foreclosure sale. According to Wells Fargo, Mr. Yacoubou also "threatened litigation." On June 18, 2009, before the circuit court ruled on Mr. Yacoubou's motion, Wells Fargo's substitute trustees voluntarily dismissed Buonassissi I.
On July 28, 2009, Mr. Yacoubou filed his complaint in the case sub judice. The next day, Ashley Kenney, an employee of the law firm representing the substitute trustees in Buonassissi I, wrote to Yacoubou, offering on behalf of Wells Fargo to "honor" the original Modification, to which plaintiff had initially agreed. See ECF 50-17. Ms. Kenney wrote:
Mr. Yacoubou rejected Wells Fargo's offer, and this litigation continued. Meanwhile, on March 4, 2010, the substitute trustees initiated another foreclosure proceeding against Mr. Yacoubou in the Circuit Court for Baltimore City, captioned Buonassissi v. Yacoubou Adam, Civ. No. 24-O-10-000968 ("Buonassissi II"). However, according to the public, unofficial docket for that case, available via the Maryland Judiciary's "Case Search" website (http://casesearch.state.md.us/), the substitute trustees voluntarily dismissed Buonassissi II, without prejudice, in October 2011. No foreclosure sale of the Property has occurred.
As noted, at least until the Modification was executed, plaintiff was in default as to his mortgage payments. Moreover, it is undisputed that plaintiff has not made any mortgage payments since his unsuccessful attempts in January and February 2009. The last payment that was actually applied to plaintiff's mortgage was made in September 2008 (this payment was applied to the payments that had been due in June and July 2008). See ECF 60 at 7-9.
Additional facts are included in the Discussion.
I incorporate by reference the discussion of the summary judgment standard of review and the governing substantive law in my earlier Memorandum Opinion. As I previously held, the state law claims in this diversity action are governed by the substantive law of Maryland.
As noted, I previously denied summary judgment to both parties as to Mr. Yacoubou's breach of contract claim and his defamation/RESPA claim. As to the contract claim, I ruled that it was ambiguous whether the Modification became a binding contract upon Mr. Yacoubou signing it, or whether it required the additional signature of an officer of Wells Fargo, because of the otherwise unexplained blank signature line for an officer of Wells Fargo. I further recapitulate the basis for my ruling as to ambiguity, infra.
But, assuming the Modification became a binding contract upon the parties after it was executed by Mr. Yacoubou, I ruled that Wells Fargo breached the contract by refusing Mr. Yacoubou's tender of monthly payments in January and February 2009. See Farmer v. Jamieson, 31 Md.App. 37, 44-45, 354 A.2d 225, 230 (1976) ("The hindrance by one contracting party which impedes or prevents performance by the other constitutes a breach.") (citing Funger v. Mayor of Somerset, 249 Md. 311, 330, 239 A.2d 748, 759 (1968)); accord Dexter v. Dexter, 105 Md.App. 678, 684-85, 661 A.2d 171, 174, cert. denied, 341 Md. 27, 668 A.2d 36 (1995); see also Catalan v. GMAC Mortg. Corp., 629 F.3d 676, 690 (7th Cir. 2011).
Moreover, I ruled that, after Wells Fargo rejected Mr. Yacoubou's payments, Mr. Yacoubou was not required to continue to tender monthly payments, because Wells Fargo made clear that tendering further payments would be futile. See Cochran v.
Wells Fargo argued that, even if it was not entitled to summary judgment as to breach of contract, it was entitled to partial summary judgment as to damages. As Wells Fargo notes, the plaintiff has the burden to prove his damages, and it claims that Yacoubou cannot demonstrate any actual damages. However, Wells Fargo expressly conceded that, "[i]f Plaintiff had a viable breach of contract claim, which [Wells Fargo maintained] he does not, he could recover nominal damages for the breach." ECF 50-1 at 9 n. 2. Because I decided, for reasons recounted, infra, to permit a period of additional discovery as to plaintiff's defamation and RESPA claim, I declined to rule on whether plaintiff had established actual damages until after further discovery.
Mr. Yacoubou's defamation and RESPA claim are both based on alleged negative reports regarding Mr. Yacoubou's mortgage repayment status and creditworthiness, which plaintiff claimed Wells Fargo had sent to credit reporting agencies or creditors of Mr. Yacoubou. Under Maryland law, a defamation claim consists of four elements: "`(1) that the defendant made a defamatory statement to a third person, (2) that the statement was false, (3) that the defendant was legally at fault in making the statement, and (4) that the plaintiff thereby suffered harm.'" Norman v. Borison, 418 Md. 630, 645 n. 10, 17 A.3d 697, 705 n. 10 (2011) (citation omitted). "`A defamatory statement is one which tends to expose a person to public scorn, hatred, contempt or ridicule, thereby discouraging others in the community from having a good opinion of, or associating with, that person.'" Id. (citation omitted).
Unlike the defamation tort, which depends in part on the truth or falsity of communications, RESPA governs the timing of communications. It imposes limits on when a mortgage servicer may communicate with third parties. Within sixty days after receipt of a "qualified written request" from a borrower,
At the time of my earlier summary judgment ruling, Mr. Yacoubou had presented evidence that his other creditors declined to extend further credit from him, but he had not presented any direct evidence that Wells Fargo had communicated with his creditors or credit reporting agencies. Proof that such communications were made would be a necessary predicate to liability for either defamation or violation of RESPA.
However, Wells Fargo had presented no evidence affirmatively indicating that it had not made such communications, and one would expect that information as to what communications Wells Fargo made was within its possession and control. Moreover, it was apparent that Mr. Yacoubou had conducted essentially no discovery, and the court was concerned that he had failed to do so because of his misunderstanding of an earlier ruling by Judge Motz that may not have been entirely clear to a self-represented litigant.
Following a period of further discovery, Wells Fargo has renewed its motion for summary judgment as to defamation and RESPA. Among other arguments, Wells Fargo asserts that it did not make any communications whatsoever regarding Mr. Yacoubou to any consumer reporting agency between October 8, 2008 and April 6, 2009, which includes the time period in which Mr. Yacoubou's other consumer credit accounts were closed, and includes the time period during which the Modification was transmitted to and signed by Mr. Yacoubou. In support of its factual assertion, Wells Fargo has submitted an affidavit of Bryan Drummond, an Assistant Vice President and Loan Administration Manager for Wells Fargo, whose "job responsibilities include managing credit reporting and credit disputes for Wells Fargo with respect to home mortgages." Ex. F to Second Wells Fargo MSJ (ECF 87-7). According to Mr. Drummond, during the applicable time period, "all reporting to credit agencies (consumer reporting agencies) was suppressed, meaning that no information was submitted by Wells Fargo to the credit agencies during this time period." Id. ¶ 5. Mr. Yacoubou has not submitted any evidence to contradict Mr. Drummond's sworn assertion.
Moreover, as I discuss below in the context of the breach of contract claim, Mr. Yacoubou is unable to prove any actual damages. That, too, is fatal to his defamation and RESPA claims. It is a necessary element of the defamation tort "`that the plaintiff ... suffered harm'" from a defamatory statement. Norman, 418 Md. at 645 n. 10, 17 A.3d at 705 n. 10 (citation omitted). Likewise, RESPA only permits recovery of the plaintiff's "actual damages," unless the plaintiff can demonstrate entitlement to a maximum of $1,000 in statutory damages for a "pattern or practice of noncompliance" with the statute. 12 U.S.C. § 2605(f). There is no evidence as to a pattern or practice in this case on the part of defendant.
Accordingly, Wells Fargo is entitled to summary judgment with respect to Count III of plaintiff's complaint, which encompasses both the defamation and RESPA claims.
As noted, in my previous Memorandum Opinion, I concluded that it was ambiguous whether the Modification required the signature of an officer of Wells Fargo in order to become binding or, instead, whether it became binding immediately upon Mr. Yacoubou's signing of the Modification and transmission of it back to Wells Fargo. The ambiguity arose from the otherwise unexplained blank signature line in the Modification for an officer of Wells Fargo. My analysis was as follows, ECF 60 at 23-26:
Wells Fargo has renewed its motion for summary judgment as to damages. However, Wells Fargo has not advanced any evidence bearing on the ambiguity in the Modification.
Under Maryland law, "interpretation of a contract, including the determination of whether a contract is ambiguous, is a question of law...." Sy-Lene of Wash., Inc. v. Starwood Urban Retail II, LLC, 376 Md. 157, 163, 829 A.2d 540, 544 (2003); see also Myers v. Kayhoe, 391 Md. 188, 198, 892 A.2d 520, 526 (2006); Towson Univ. v. Conte, 384 Md. 68, 78, 862 A.2d 941, 946 (2004); Lema v. Bank of Am., N.A., 375 Md. 625, 641, 826 A.2d 504, 513 (2003). When a contract is clear and unambiguous, "its construction is for the court to determine." Wells v. Chevy Chase Bank, F.S.B., 363 Md. 232, 251, 768 A.2d 620, 630 (2001) (citation omitted). Notably, a contract is not ambiguous merely because the parties do not agree on its meaning. Fultz v. Shaffer, 111 Md.App. 278, 299, 681 A.2d 568, 578 (1996). Rather, contractual language is considered ambiguous when the words are susceptible of more than one meaning to a reasonably prudent person. Cochran, supra, 398 Md. at 17, 919 A.2d at 710; Auction & Estate Representatives, Inc. v. Ashton, 354 Md. 333, 340, 731 A.2d 441, 444-45 (1999); Calomiris v. Woods, 353 Md. 425, 436, 727 A.2d 358, 363 (1999). To determine whether
Ordinarily, when a trial court finds that a contract is ambiguous, "the meaning of the contract is a question to be determined by the trier of fact." Iz, 123 Md.App. at 162, 716 A.2d at 1121; see First Union Nat'l Bank v. Steele Software Sys. Corp., 154 Md.App. 97, 171, 838 A.2d 404, 447 (2003), cert. denied, 380 Md. 619, 846 A.2d 402 (2004). Extrinsic evidence, such as evidence of the parties' prior agreements, negotiations, or articulations of the agreement's meaning, is admissible to clarify the meaning of an ambiguous contract. See Beale v. Am. Nat'l. Lawyers Ins. Reciprocal, 379 Md. 643, 660, 843 A.2d 78, 89 (2004); Sy-Lene, supra, 376 Md. at 167, 829 A.2d at 547; Bushey v. N. Assurance, 362 Md. 626, 632, 766 A.2d 598, 601 (2001). But, where there is no relevant extrinsic evidence, or "if ambiguity is determined to remain after consideration of extrinsic evidence, it will ordinarily be resolved against the party who drafted the contract,' where no material evidentiary factual dispute exists." Clendenin Bros., Inc. v. U.S. Fire Ins. Co., 390 Md. 449, 459-60, 889 A.2d 387, 394 (2006); accord John L. Mattingly Const. Co. v. Hartford Underwriters Ins. Co., 415 Md. 313, 327, 999 A.2d 1066, 1074 (2010) ("`It is a basic principle of contract law that, in construing the language of a contract, ambiguities are resolved against the draftsman of the instrument.'") (quoting Burroughs Corp. v. Chesapeake Petroleum & Supply Co., Inc., 282 Md. 406, 411, 384 A.2d 734, 737 (1978)).
In the absence of any extrinsic evidence that could resolve the ambiguity in the Modification, this case presents, in my view, a classic example of a situation in which an ambiguous contract must be construed against its drafter. The Modification was drafted solely by Wells Fargo. If Wells Fargo wished, it could have included an express provision that its officer's signature was a condition precedent to enforceability of the Modification. However, it did not do so. Moreover, several statements that Wells Fargo did include in the Modification pointed in the other direction: the Modification stated that it would "confirm our formal approval of a loan modification," and simply asked Yacoubou to "sign the enclosed loan modification agreement and return it." Mr. Yacoubou did exactly as he was instructed.
At the hearing on September 27, 2012, I inquired of counsel for Wells Fargo as to what extrinsic evidence Wells Fargo might be able to muster that would create a triable issue as to the meaning of the Modification. Counsel suggested (although Wells Fargo chose not to address this issue in its written motions) that Mr. Yacoubou's acceptance was ineffective because he signed the Modification on November 10, 2008, more than five days after the date that it was issued (November 3, 2008), and the Modification contained the statement: "This proposal is valid for five
In my view, Wells Fargo has failed to present evidence or argument sufficient to create an issue for resolution by a finder of fact. Construing the Modification against its drafter, as a matter of law, I conclude that the Modification was effective and binding on the parties when Mr. Yacoubou signed it and mailed it to Wells Fargo. Accordingly, Wells Fargo breached the Modification agreement when it refused to accept Mr. Yacoubou's mortgage payments under the Modification in January and February 2009. To that extent, Mr. Yacoubou is entitled to summary judgment as to Count I of his complaint.
As to the issue of actual damages, however, I completely agree with Wells Fargo. "To recover compensatory damages, the amount must be proved with reasonable certainty and may not be based upon speculation or conjecture." Brock Bridge Ltd. P'ship v. Dev. Facilitators, Inc., 114 Md.App. 144, 157, 689 A.2d 622, 628 (1997). Plaintiff has advanced no evidence of any quantifiable damages he suffered due to Wells Fargo's breach of the contract. Indeed, as Wells Fargo points out, he has had possession of the Property since before this suit was filed and has not made any mortgage payments during that time period. This includes the period following the bank's offer, in July 2009, of its willingness to abide by the Modification. Any damages that Mr. Yacoubou suffered by continuing to litigate the issue after that point were surely self-inflicted. But, even as to the time period between January and July 2009, plaintiff has not submitted evidence that could substantiate a compensatory damages claim.
Plaintiff's claim appears to be one seeking damages for emotional distress. Mr. Yacoubou has claimed that incessant collections calls from Wells Fargo caused him sleeplessness and anxiety. At his deposition, he testified that "fear ... hits me, the phone becomes like a needle somebody is pointing into my heart. The phone rings. It's like, oh no, it's them again. You pick it up. Nobody is there. Just a message." ECF 49-1 at 120. However, aside from his own statements regarding his anxiety, he has submitted no evidence (such as documentation of a medical condition or the testimony of others who have observed him) to substantiate that he suffered physical manifestations of injury or that such damages were caused by Wells Fargo's breach. Indeed, Wells Fargo took a second deposition of Mr. Yacoubou during the period of additional discovery, at which Mr. Yacoubou expressly stated that he did not intend to present any further evidence as to his damages. See ECF 87-4.
At the hearing on September 27, 2012, Mr. Yacoubou spoke eloquently about the frustration he experienced by the lack of "decency" shown by Wells Fargo in refusing to accept his tenders of payment and then initiating foreclosure proceedings
As the Maryland Court of Appeals explained in Hoffman v. Stamper, 385 Md. 1, 32-38, 867 A.2d 276, 295-98 (2005), Maryland adheres to the so-called "modern rule" articulated in Vance v. Vance, 286 Md. 490, 408 A.2d 728 (1979), which permits "recovery of damages for emotional distress if there was at least a consequential' physical injury," in the sense that "`the injury for which recovery is sought is capable of objective determination.'" Hoffman, 385 Md. at 34, 867 A.2d at 296 (quoting Vance). This "physical" injury standard permits recovery for "such things as depression, inability to work or perform routine household chores, loss of appetite, insomnia, nightmares, loss of weight, extreme nervousness and irritability, withdrawal from socialization, fainting, chest pains, headaches, and upset stomachs," id. at 34-35, 867 A.2d at 296, but excludes recovery "based on the plaintiff simply saying, `This made me feel bad; this upset me.'" Id. at 34, 867 A.2d at 296. The Fourth Circuit takes a similar view. As that Court explained in Ross v. FDIC, 625 F.3d 808 (4th Cir.2010): "[B]ecause `emotional distress [is] fraught with vagueness and speculation, it is easily susceptible to fictitious and trivial claims.' And this is precisely why `conclusory statements that the plaintiff suffered emotional distress ... [do not] support[] an award of compensatory damages.'" Id. at 818 (quoting Price v. City of Charlotte, 93 F.3d 1241, 1250, 1254 (4th Cir.1996), cert. denied, 520 U.S. 1116, 117 S.Ct. 1246, 137 L.Ed.2d 328 (1997)).
To be sure, the Court empathizes with Mr. Yacoubou's frustration. But, it would be a violation of my oath to decide this case on the basis of sympathy. The law requires a plaintiff to provide concrete proof of damages for breach of contract, and no such evidence has been presented by Mr. Yacoubou. Moreover, he has made clear that he does not intend to present such evidence. Under these circumstances, there is no factual issue for a jury to resolve. Therefore, I will grant partial summary judgment to Wells Fargo with respect to liability for compensatory damages as to Count I of the complaint.
Nevertheless, in light of Wells Fargo's breach of the Modification, Mr. Yacoubou is entitled to an award of nominal damages. "[I]t is well settled that where a breach of contract occurs, one may recover nominal damages even though he has failed to prove actual damages." Taylor v. NationsBank, N.A., 365 Md. 166, 175, 776 A.2d 645, 651 (2001).
Despite its prior concession that Mr. Yacoubou would be entitled to nominal
In Brown v. Smith, 173 Md.App. 459, 920 A.2d 18 (2007), Judge Sally D. Adkins, writing for the Maryland Court of Special Appeals,
The Brown Court reviewed decisions that had overturned, as excessive, nominal damages awards of $15,000, $10,000, $2,500, $1,500, and $530. See id. at 481-82, 920 A.2d at 30-31 (citing cases). In the case before it, the Brown Court vacated a nominal damages award of $8,350, stating:
In this case, I conclude that an amount of nominal damages appropriate to recognize "the violation of a right, not to compensate for actual injury," id., is $250. The Court will enter judgment for Mr. Yacoubou in that amount.
An Order implementing my ruling follows.
