Foley v. Wells Fargo Bank, N.A. ( 2018 )

Not for Publication in West's Federal Reporter
United States Court of Appeals
For the First Circuit
No. 17-1631
JONATHAN FOLEY,
Plaintiff, Appellant,
v.
WELLS FARGO BANK, N.A., s/b/m Wells Fargo Bank Southwest, N.A.,
f/k/a Wachovia Mortgage FSB, f/k/a World Savings Bank FSB,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Leo T. Sorokin, U.S. District Judge]
Before
Lynch, Circuit Judge,
Souter, Associate Justice,
and Kayatta, Circuit Judge.
David Hadas, with whom Drohan, Hitt & Hadas, LLC was on
brief, for appellant.
David M. Bizar, with whom Dallin R. Wilson, Robert J.
Carty, Jr., and Seyfarth Shaw LLP were on brief, for appellee.
July 24, 2018

Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
SOUTER, Associate Justice. The plaintiff, Jonathan
Foley, appeals from summary judgment entered for Wells Fargo
Bank, N.A., in an action seeking to enjoin the bank's threatened
foreclosure under Foley's existing mortgage, and alleging that
the bank was in breach of contract in denying his application to
rewrite the mortgage contract. We affirm.
This is the second plaintiff's appeal in this action,
the first having been for dismissing the case by treating the
bank's motion to dismiss under FRCP Rule 12(b)(6) as one for
summary judgment under Rule 56, but without affording Foley the
full opportunity to adduce evidence that a summary judgment
motion allows. See Foley v. Wells Fargo, 772 F.3d 63, 71-75
(1st Cir. 2014). On remand the required Rule 56 procedure was
observed, but with the same result. Our earlier opinion remains
useful in providing a detailed recitation of procedural history,
and our factual account this time will be limited to what is
strictly necessary to understand the case in its present
posture.
Over a decade ago, Foley obtained money for a
Massachusetts real estate purchase from a predecessor of Wells
Fargo under a "Pick-a-Payment" plan, providing for a variable-
rate mortgage allowing the borrower to choose from a range of
payment options. As the financial climate worsened, an action
was brought in California against the bank by a class including
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Foley upon a claim that the plan violated the federal Truth-in-
Lending Act, 15 U.S.C. § 1601 et seq. A class settlement
eventuated, which provided that the defendant bank would
consider defaulting borrowers for substitute terms under a
federal scheme with a name abbreviated as HAMP and under another
alternative devised specifically for purposes of the settlement
and known as MAP2R. One feature common to the criteria for each
was a limit on the percentage that a new monthly payment or
payments could bear to the borrower's monthly gross income: 42%
under HAMP, 31% under MAP2R. If an application was denied, the
bank was required to provide the borrower with a "written
explanation."
When Foley defaulted on his mortgage payments in 2010,
the bank gave notice of foreclosure and furnished materials to
apply for a superseding mortgage. What followed was a
complicated exchange of letters, including duplicate letters,
re-submitted applications, telephone conversations, and
intervention by the Attorney General of Massachusetts. But
there is no evidence or evidentiary proffer inconsistent with
the conclusion that, by the time the sequence of communications
was over, Foley had been told in writing that the bank had
considered and denied relief under both schemes. Foley,
dissatisfied, began this litigation in the Massachusetts courts,
from which it was removed to federal district court. The full
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details of the sequence of its procedural events need not be set
out here, for this appeal is limited to a claim that there is a
triable issue whether Wells Fargo's denial of Foley's
application for relief under the MAP2R scheme was a breach of
the settlement agreement, Foley being undisputedly a class
member. Because the case was decided on a motion for summary
judgment, we review de novo the district court's conclusion that
there was no genuine issue of fact that could have been found in
Foley's favor that would have stood in the way of concluding
that the bank was entitled to judgment as a matter of law. See
Prescott v. Higgins, 538 F.3d 32, 39-40 (1st Cir. 2008).
Throughout the course of this litigation, Foley has
charged that the bank has not complied with its obligations
under the settlement agreement, an argument that covers two
claims. First, he says that the bank failed to provide a
sufficiently clear "written explanation" specific to the MAP2R
application that went beyond a merely general and conclusory
statement that the application was denied. The second is an
argument that he satisfied the MAP2R criteria on the merits and
was thus entitled to relief. We find no genuine issue of
material fact on these points and agree with the district court
that the bank is entitled to judgment.
The controversy about adequacy of detail as raised in
the first claim risks submerging it in a dispute about whether a
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required explanation for denying relief must be "clear," as our
earlier opinion assumed in passing that it must be. See Foley,
772 F.3d at 69, 76. If clarity of explanation is required, so
Foley's argument implicitly goes, a failure to mention "MAP2R"
in the first denial letter and a subsequent letter's reference
to excessive monthly debt obligations, or an excessive
obligation-income ratio, could not suffice. In reply, the bank
argues that in drafting the settlement agreement a proposed
express clarity requirement was dropped, resulting in the final,
unadorned "written explanation" term, implying a relaxed
standard of explanation. Foley counters that by arguing that
California's parol evidence rule would bar the bank's argument
based on drafting history. We find the controversy irrelevant
to this case.
As for the bank's failure to refer expressly to the
MAP2R application in a denial letter, we have already held that
such express labeling is unnecessary so long as the reason for
the denial is conveyed, see Foley, 772 F.3d at 76, and Foley
offers no evidence raising a genuine doubt that it was.1 Indeed,
1 In the district court Foley presented a more general
argument for the inadequacy of the "written explanation," in
characterizing the first and subsequent letters as "vague" and
"contradictory." Although we do not see self-contradiction in
the cycle of notification letters, we agree that some of them
that were meant to refer to MAP2R were opaque on their face, and
we will be candid to say that the months spent by the two
parties arguing over the "written explanation" requirement tend
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the letter accurately stated that the bank was unable to offer a
loan modification because Foley had "excessive financial
obligations." In any event, a further denial letter some five
months later did make reference to each plan expressly.
As for the failure to specify more than debt
obligations, when the bank spoke of unacceptably high liability
for payment on debt, it could be understood only as referring to
the basis for calculating the percentage of monthly obligations
compared with monthly income. There can be no doubt that it
thus informed the borrower of the underlying facts and
computations he must revisit if he wished to appeal the bank's
denial.
In his submission to this court, Foley of course
recognizes this, as is clear from his final challenge to the
adequacy of the bank's explanation, in which he attacks the
to confirm the criticism of other courts that have expressed
doubts about Wells Fargo's capacity or willingness to rewrite
mortgage loans under the terms of the settlement. See, e.g., In
re Wachovia Corp."Pick-a-Payment" Mortg. Mktg. & Sales Practices
Litig., 2014 WL 2905056, at *4 (N.D. Cal. June 26, 2014); In re
Wachovia Corp. "Pick-A-Payment" Mortg. Mktg. & Sales Practices
Litig., 2013 WL 5424963, at *5-6 (N.D. Cal. Sept. 25, 2013).
But Foley's citations to these cases are beside the point in
this case, and in any event the explanatory cycle ended with a
letter that made it abundantly clear that Foley's applications
were denied for failure to show that the revised monthly
payments would be within the percentages of the borrower's
monthly gross income necessary to qualify under the two schemes
in question, HAMP and MAP2R. The time required to reach this
elementary degree of clarity has not been claimed as an
independent basis for awarding any relief to Foley.
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underlying figures used to compute the ultimate obligation-
income percentage calculation. If the figures he presented to
the district court were accepted, his monthly installment under
the new mortgage agreement would indeed be no more than 31% of
monthly gross income as allowed under the MAP2R plan. But one
of his numbers was patently wrong under the plan's terms, as the
district court came to realize in performing its own
determination of the crucial percentage. As to monthly income,
the court gave Foley the benefit of some doubt and used his
number, but Foley's monthly installment obligation figure was
too egregiously inaccurate to indulge. The MAP2R definition of
that monthly obligation included the monthly homeowners'
association fee and homeowners' insurance premium for the
mortgaged property, each of which Foley had omitted. When they
were added, the resulting installment came out above the
allowable 31%, thus mandating a finding of ineligibility.
We are unable to find any basis to dispute the court's
correction; Foley has not responded on the record by challenging
the definition as the court understood it or the factual
correctness of the two numbers added to the figure Foley himself
had used. The consequence is that by accepting Foley's own
assumptions, subject to the undisputed correction, Foley is
shown to be ineligible for MAP2R relief, based on a computation
about which there is no genuine dispute.
Affirmed.
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