Foley v. Wells Fargo Bank, N.A., 1st Cir. (2014)

7/26/2019 Foley v. Wells Fargo Bank, N.A., 1st Cir. (2014)

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United States Court of AppealsFor the First Circuit

No. 13- 2527

J ONATHAN FOLEY,

Pl ai nt i f f , Appel l ant ,

v.

WELLS FARGO BANK, N. A. ,

Def endant , Appel l ee.

APPEAL FROM THE UNI TED STATES DI STRI CT COURTFOR THE DI STRI CT OF MASSACHUSETTS

[ Hon. F. Denni s Sayl or , I V, U. S. Di st r i ct J udge]

Bef or e

Tor r uel l a, Dyk, * and Thompson,Ci r cui t J udges.

Val er i ano Di vi acchi f or appel l ant .Davi d M. Bi zar , wi t h whomSeyf ar t h Shaw LLP was on br i ef , f or

appel l ee.

November 14, 2014

* Of t he Feder al Ci r cui t , si t t i ng by desi gnat i on.


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THOMPSON, Circuit Judge. J onat han Fol ey sued Wel l s

Far go, N. A. ( "Wel l s Far go") f or f ai l i ng t o consi der hi m f or a

mor t gage l oan modi f i cat i on, whi ch a cl ass act i on set t l ement

agr eement r equi r ed t he bank t o do bef ore at t empt i ng t o f orecl ose on

Fol ey' s home. The di st r i ct cour t di smi ssed t he f our - count

compl ai nt , and Fol ey appeal s t he di smi ssal of t hr ee count s, ar i si ng

under st ate common and st at ut ory l aw, on var i ous gr ounds. 1 Wel l s

Far go i nsi st s t hat t he di st r i ct cour t r i ght l y di smi ssed t he

compl ai nt because Fol ey f ai l ed t o st at e a cl ai m f or any of t he

causes of act i on. Wel l s Far go al so ar gues that t wo of Fol ey' s

cl ai ms are pr eempted by a f ederal l aw governi ng home mor t gage

l endi ng.

Af t er a del i ber at e r evi ew, we f i nd t hat t he di st r i ct

cour t i mpr oper l y consi der ed evi dence out si de of t he pl eadi ngs t o

r esol ve Wel l s Far go' s mot i on t o di smi ss, war r ant i ng a r evi val of

Fol ey' s common l aw cl ai ms. Fol ey' s st at ut or y causes of act i on,

however , br ought under Mass. Gen. Laws ch. 244, 35A and 35B, di d

f al l shor t of st at i ng a cogni zabl e cl ai m, and t her ef or e, we af f i r m

t hei r di smi ssal .

Accor di ngl y, we vacat e i n par t t he j udgment ent ered i n

Wel l s Fargo' s f avor , and r emand Fol ey' s cl ai ms f or br each of

cont r act ( Count One) and br each of t he i mpl i ed covenant of good

1 Fol ey di d not appeal t he di st r i ct cour t ' s di smi ssal of hi sMass. Gen. Laws ch. 93A cl ai m ( Count Thr ee) , and so we wi l l notdi scuss i t .

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f ai t h and f ai r deal i ng ( Count Four ) . We af f i r m t he di smi ssal of

Count Two, vi ol at i on of Mass. Gen. Laws ch. 244.

I. BACKGROUND

To set t he f act ual st age f or t hi s case, we r el y on t he

al l egat i ons set f or t h i n Fol ey' s compl ai nt , t he document s at t ached

t o t he compl ai nt , and r el evant publ i c recor ds. Wat t er son v. Page,

987 F. 2d 1, 3 ( 1st Ci r . 1993) . See al so Medi na- Vel zquez v.

Hernndez- Gr egorat , No. 12- 2492, 2014 WL 4628506, at *3 ( 1st Ci r .

Sept . 17, 2014) ( " [ W] e const r ue t he wel l - pl eaded f act s i n t he l i ght

most f avor abl e t o t he pl ai nt i f f s, . . . accept i ng t hei r t r ut h and

dr awi ng al l r easonabl e i nf er ences i n pl ai nt i f f s' f avor . ") .

A. Foley's Home Loan

Fol ey appl i ed f or a home mor t gage l oan f r om Wor l d

Savi ngs, FSB, 2 on March 7, 2005. The bank of f ered Fol ey a

"Pi ck- a- Payment " l oan- - a mont hl y, adj ust abl e- r at e mor t gage that

al l owed t he bor r ower t o choose one of var i ous payment ar r angement s,

based on a mi ni mum payment amount det er mi ned by the bor r ower .

Fol ey accept ed t he $455, 000 l oan, and hi s mont hl y mor t gage payment

was approxi mat el y $1, 600.

But Fol ey, l i ke so many ot her bor r ower s, was af f ect ed by

t he housi ng cr ash of 2008. The val ue of hi s home dr opped

2 Wel l s Far go Bank, N. A. i s t he successor - by- mer ger t o Wel l sFargo Bank Sout hwest , N. A. , f ormer l y known as Wachovi a Mor t gage,FSB, f ormer l y known as Wor l d Savi ngs Bank, FSB. We r ef er t o t heent i t i es i nt er changeabl y, as do t he par t i es, as "Wel l s Far go" or" t he bank. "

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si gni f i cant l y, pr event i ng hi m f r om r ef i nanci ng wi t h a mor e

f avor abl e i nt er est r at e. He l ost hi s j ob ar ound Oct ober 2008, but

used hi s savi ngs t o cont i nue maki ng mort gage payment s f or t wo

year s.

Come Oct ober 2010, Fol ey succumbed t o hi s f i nanci al

hardshi p and st opped maki ng t i mel y payment s i n- f ul l , but di d make

some part i al payment s t hr ough Apr i l 2011. He sought a l oan

modi f i cat i on f r omt he bank, and i n Apr i l 2011, Wel l s Far go i nf or med

hi m he mi ght qual i f y f or t he Home Af f or dabl e Modi f i cat i on Pr ogr am

( "HAMP") , a f eder al pr ogr am t hat al l ows qual i f i ed homeowner s t o

r educe t hei r mont hl y mort gage payment s. Fol ey asked t o

par t i ci pat e, and t he bank' s r epr esent at i ves sai d t hey woul d send

hi m an appl i cat i on.

B. Pick-a-Payment Settlement

I n t he meant i me, Wel l s Far go set t l ed a Cal i f or ni a cl ass

act i on l awsui t i n May 2011. The pl ai nt i f f s i n t hat sui t had

al l eged that Pi ck- a- Payment l oans vi ol at ed t he Tr ut h- i n- Lendi ng Act

because t he l oan document s f ai l ed t o adequat el y di scl ose t o

bor r ower s cer t ai n l oan condi t i ons, i ncl udi ng i nt er est r at es and

payment schedul es. The cl ass act i on set t l ement agr eement speci f i ed

t hr ee cat egor i es of Pi ck- a- Payment bor r ower s, and t he par t i es agr ee

t hat Fol ey i s a member of "Set t l ement Cl ass B. "

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A f ew of t he set t l ement agr eement ' s t erms, as t hey appl y

t o Set t l ement Cl ass B member s, ar e r el evant t o Fol ey' s case. The

agr eement pr ovi des:

Set t l ement Cl ass B Member s . . . f i r st shal lbe consi der ed f or a HAMP modi f i cat i on. . . .[ Those] who do not qual i f y f or or el ect not t oaccept a HAMP modi f i cat i on shal l be consi der edf or a MAP2R modi f i cat i on.

"MAP2R" was a new pr opr i etary modi f i cat i on pr ogr amWel l s

Far go cr eat ed speci f i cal l y f or t he set t l ement , and t he step- by- st ep

el i gi bi l i t y det er mi nat i on pr ocess f or MAP2R ( cal l ed t he "wat er f al l "

pr ocess) was spel l ed out i n t he agr eement . The bank was r equi r ed

t o appl y seven speci f i c ( and r at her compl i cat ed) sequent i al st eps

unt i l a debt - t o- i ncome r at i o of 31 per cent was r eached f or t he

bor r ower . But i f t he bank f ol l owed t he wat er f al l and coul d not

r each 31 per cent , i t was not r equi r ed t o of f er a MAP2R

modi f i cat i on.

The set t l ement agr eement al so i mposed cer t ai n "ser vi ci ng

commi t ment s, " cr eat ed, accor di ng t o t he agr eement , " [ i ] n or der t o

ensure that Bor r ower s ar e appr opr i at el y consi der ed f or a MAP2R

Modi f i cat i on i n a t i mel y manner . " The agr eement r equi r ed, f or

i nst ance, t hat Wel l s Far go pr ovi de cl ass member s wi t h cl ear ,

wr i t t en expl anat i ons of modi f i cat i on deni al s, and i n any

f or ecl osur e- r el at ed communi cat i ons, a not i f i cat i on t hat t he

bor r ower was st i l l bei ng consi der ed f or a modi f i cat i on.

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C. Foley's Continued Pursuit

I n t he mi dst of t he cl ass act i on' s r esol ut i on, Fol ey,

pr esumabl y st i l l unawar e of t he cl ass act i on set t l ement , pr essed on

wi t h HAMP, whi ch Wel l s Far go cont i nued t o t el l hi mt hr ough November

2011 ( si x mont hs af t er t he Cal i f or ni a cl ass act i on went i nt o

ef f ect ) was t he onl y modi f i cat i on f or whi ch he mi ght qual i f y.

Af t er numerous f ol l ow- up phone cal l s t o Wel l s Far go ( whi ch Fol ey

st ar t ed maki ng on t he heel s of hi s Apr i l 2011 cal l wi t h t he bank' s

r epr esent at i ves) , Fol ey f i nal l y recei ved a HAMP appl i cat i on f r om

t he bank i n November 2011- - some seven mont hs af t er t hey had

pr omi sed t o send i t - - whi ch he pr ompt l y compl eted and r etur ned.

Ar ound J anuar y 2012, Fol ey r ecei ved a l et t er f r om Wel l s

Far go st at i ng i t had not r ecei ved hi s compl et ed appl i cat i on. I n

2012, Fol ey made many addi t i onal cal l s t o Wel l s Far go' s " Home

Pr eser vat i on Speci al i st " ( and, af t er she l ef t t he posi t i on, her

r epl acement ) t o i nqui r e about hi s appl i cat i on st at us, but hi s cal l s

wer e never r et ur ned. I n an Or wel l i an t ur n of event s, he i nst ead

r ecei ved l et t er s expl ai ni ng hi s "shor t sal e" or "deed i n l i eu of

f or ecl osur e" opt i ons- - nei t her of whi ch woul d act ual l y al l ow Fol ey

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t o "pr eserve" ownershi p of hi s home. 3 Meanwhi l e, Wel l s Far go

schedul ed f or ecl osur e.

Af t er sever al mont hs of per i odi c, unr et ur ned phone cal l s

t o t he Speci al i st , a di ssat i sf i ed Fol ey spoke t o t he Home

Pr eservat i on super vi sor , who t ol d hi m hi s HAMP appl i cat i on was

ei t her l ost or never r ecei ved, and t hat he woul d be sent a new

appl i cat i on. Fol ey r ecei ved t he appl i cat i on i n November or

December 2012 and r etur ned i t t oward t he end of t he year .

Al most t wo year s af t er Fol ey f i r st asked f or a

modi f i cat i on, Wel l s Far go sent hi m t wo l et t er s ar ound Febr uar y

2013. One l et t er not i f i ed hi m t hat he was rej ect ed f r omHAMP, and

t he ot her i nf or med hi m t hat he woul d not be of f er ed "a

modi f i cat i on" ( t hough t he l et t er di d not speci f y f or whi ch

modi f i cat i ons Fol ey was consi der ed) because of hi s " excessi ve

f i nanci al obl i gat i ons. " The l et t er s, whi ch Fol ey at t ached t o hi s

compl ai nt , pr ovi ded no f ur t her expl anat i on f or t he modi f i cat i on

deni al s. Wel l s Far go agai n schedul ed f or ecl osur e.

Af t er numer ous f ur t her f ai l ed at t empt s t o di scuss a l oan

modi f i cat i on wi t h Wel l s Far go, Fol ey sought assi st ance f r om t he

Massachuset t s At t or ney Gener al ' s Of f i ce ( "AG' s Of f i ce" ) ar ound

3 Bot h a "shor t sal e" and "deed i n l i eu of f or ecl osur e" ar eal t er nat i ves t o f or ecl osur e t hat st i l l r equi r e t he homeowner t of or ego owner shi p of hi s home. I n a shor t sal e, t he l ender agr eest o al l ow t he borr ower t o sel l t he home f or l ess t han what he oweson t he mor t gage. Opt i ng f or a deed i n l i eu of f or ecl osure meanst he homeowner hands over hi s i nt er est i n the pr oper t y t o t he bank.

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Apr i l 8, 2013. The AG' s Of f i ce cont act ed Wel l s Far go and suggest ed

t hat because of a change i n Fol ey' s f i nanci al si t uat i on, 4 a new

modi f i cat i on appl i cat i on mi ght be war r ant ed. Ther eaf t er , t he bank

post poned the i mpendi ng f or ecl osure, and Fol ey r eappl i ed f or HAMP.

Ar ound J ul y 5, 2013, Fol ey r ecei ved t wo l et t er s dat ed

J une 27, 2013 denyi ng hi s r equest f or a l oan modi f i cat i on, agai n

due t o "excessi ve f i nanci al obl i gat i ons. " These l et t er s wer e

subst ant i vel y i dent i cal t o t he deni al l et t er s he r ecei ved i n

Febr uar y, despi t e t he f act t hat Fol ey demonst r at ed " l essened

har dshi p" t he second go- r ound. Fol ey cal l ed Wel l s Far go t o di scuss

t he l et t er s, and t he Speci al i st t ol d hi m he woul d need a mont hl y

i ncome of $10, 000 t o qual i f y f or a modi f i cat i on. Fol ey was

"perpl exed" by t hi s expl anat i on because he woul d not have needed a

l oan modi f i cat i on wer e hi s i ncome t hat hi gh. Fol ey t her eaf t er

cont act ed t he AG' s Of f i ce agai n, i nf or mi ng i t t hat Wel l s Far go had

not pr ovi ded an expl anat i on f or hi s modi f i cat i on deni al s. A f ew

days l at er , he r ecei ved anot her f or ecl osur e not i ce f r om t he bank.

The car ousel kept spi nni ng, and ar ound J ul y 15, 2013, t he

AG' s Of f i ce yet agai n cont act ed Wel l s Fargo, aski ng t he bank t o

pr ovi de a wr i t t en expl anat i on of Fol ey' s modi f i cat i on deni al s and

t he speci f i c names of t he modi f i cat i ons f or whi ch he had been

4 Fol ey al l eged t hat he f aced " l essened har dshi p" t he secondt i me he appl i ed f or a modi f i cat i on, but i t i s not cl ear f r om t hecompl ai nt exact l y how hi s f i nanci al si t uat i on changed at t hat poi nti n t i me.

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deni ed. Af t er a coupl e of days, Fol ey got a cal l f r om J ust i n

For bes, of Wel l s Far go' s Execut i ve Compl ai nt Depar t ment . For bes

expl ai ned t hat Fol ey was r ej ect ed f or al l l oan modi f i cat i ons,

i ncl udi ng HAMP and t he "Mor t gage Ass i st ance Pr ogr am. " At some

poi nt t hat i s not cl ear f r om t he recor d, Fol ey became awar e of hi s

r i ght s under t he set t l ement agr eement ; armed wi t h thi s knowl edge,

he asked For bes " speci f i cal l y whet her he was consi der ed f or

MAP2R[ , ] and [ ] For bes responded ' no. ' " Then, For bes waf f l ed, and

"[ u] pon f ur t her quest i oni ng[ , ] [ ] st at ed [ Fol ey] was al so r ej ect ed

f or [ MAP2R] . " When Fol ey expr essed hi s vi ew t hat he "was not

af f orded t he pr ocedur al pr ocess under t he MAP2R pr ogr am, [ ] For bes

st at ed he wi l l make i nqui r y t o t he Wel l s Far go l egal t eam. " When

Fol ey asked f or a "wr i t t en expl anat i on regar di ng t he MAP2R pr ogr am

r ej ect i on, " For bes gave t he same r esponse about needi ng t o consul t

t he bank' s l awyer s.

I n a f ol l ow- up cal l on J ul y 30, 2013- - a year and a hal f

af t er Fol ey f i r st appl i ed f or a modi f i cat i on, and mor e t han t wo

year s af t er Fol ey f i r st asked t o appl y- - For bes t ol d Fol ey he woul d

r ecei ve det ai l ed deni al l et t er s i n a f ew days. Fol ey f i l ed hi s

compl ai nt on August 1, 2013 bef or e r ecei vi ng any such l et t er .

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D. Foley's Lawsuit

Wi t h t he t hr eat of f or ecl osur e l oomi ng, Fol ey f i l ed a pr o

se sui t i n Pl ymout h Super i or Cour t i n Massachuset t s. 5 The

compl ai nt al l eged br each of cont r act ( Count One) , vi ol at i on of

Mass. Gen. Laws ch. 244, 35A and 35B ( Count Two) , vi ol at i on of

Mass. Gen. Laws ch. 93A ( Count Thr ee) , and br each of t he i mpl i ed

covenant of good f ai t h and f ai r deal i ng ( Count Four ) f or t he bank' s

al l eged mi shandl i ng of Fol ey' s l oan modi f i cat i on r equest s. Namel y,

Fol ey al l eged t hat t he bank mi sl ed hi m about hi s r i ght s under t he

set t l ement agr eement , mi sgui ded hi m dur i ng the modi f i cat i on

pr ocess, and al t oget her i gnor ed hi s modi f i cat i on request s. Fol ey' s

compl ai nt ul t i mat el y sought speci f i c per f or mance of t he set t l ement

agr eement and some unspeci f i ed damages. Fol ey al so moved f or a

t empor ar y r est r ai ni ng or der and pr el i mi nar y i nj unct i on, i n an

ef f or t t o st ave of f t he f or ecl osur e schedul ed t o take pl ace about

a week l at er .

Wel l s Far go r emoved t he case t o f ederal cour t , where

Fol ey r enewed hi s mot i on f or pr el i mi nar y i nj unct i ve r el i ef . I n

opposi ng t he i nj unct i on mot i on, Wel l s Far go submi t t ed a l et t er

dat ed J ul y 30, 2013. The l et t er st at ed t hat Fol ey was deni ed HAMP

r el i ef because hi s mont hl y l oan payment woul d amount t o 58 percent

of hi s gr oss mont hl y i ncome. As t o MAP2R, t he l et t er i ndi cat ed:

5 Fol ey pr oceeded i n bot h t he st at e and f eder al t r i al cour t spr o se, but obt ai ned counsel f or hi s appeal .

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MAP2R pr ovi des gui del i nes t o reduce abor r ower ' s mont hl y mor t gage payment t o 34. 00%of t hei r gr oss mont hl y i ncome. Under t heMAP2R gui del i nes, we were unabl e t osuf f i ci ent l y adj ust t he t er ms of t he l oan t oachi eve an af f ordabl e housi ng payment

r ef l ect i ve of 34. 00% of your gr oss mont hl yi ncome. [ 6]

E. The District Court's Rulings

Af t er a hear i ng on Fol ey' s mot i on f or i nj unct i ve r el i ef ,

t he di st r i ct cour t t empor ar i l y enj oi ned Wel l s Far go f r om

f or ecl osi ng on Fol ey' s home, pendi ng an evi dent i ar y hear i ng on t he

mot i on. Whi l e t he i nj unct i on mot i on was i n abeyance, Wel l s Far go

moved t o di smi ss Fol ey' s compl ai nt f or f ai l ur e t o st at e a cl ai m,

pur suant t o Fed. R. Ci v. P. 12( b) ( 6) , t o whi ch Fol ey f i l ed a

wr i t t en opposi t i on.

The case was r eassi gned t o anot her t r i al j udge, who

conduct ed t he evi dent i ar y hear i ng on the pr el i mi nar y i nj unct i on.

At t he cl ose of t he hear i ng, t he j udge or al l y deni ed Fol ey' s mot i onf or i nj unct i ve r el i ef , and st at ed t hat he was "not goi ng t o t ake

up" t he pendi ng mot i on t o di smi ss because he deemed i t "appr opr i ate

t o consi der t hat on t he paper s. " The cour t l at er ent er ed a wr i t t en

or der al l owi ng Wel l s Far go' s mot i on t o di smi ss and di sposi ng of al l

of Fol ey' s cl ai ms, wi t hout conduct i ng a hear i ng.

Thi s t i mel y appeal f ol l owed.

6 The set t l ement agr eement r equi r ed t he bank t o reduce t hemort gage payment t o 31 percent of t he bor r ower ' s i ncome, not 34per cent .

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II. DISCUSSION

A. Foley's Contract Claims (Counts One and Four)

We begi n by addr essi ng Fol ey' s cl ai ms f or br each of

cont r act and br each of t he i mpl i ed covenant of good f ai t h and f ai r

deal i ng. Fi r st , we expl ai n how t he t r i al j udge appl i ed t he

i ncor r ect st andar d of r evi ew, and why thi s er r or war r ant s a remand

of t hese cont r act - based cl ai ms. Then, we di scuss why we ar e al so

unmoved by Wel l s Fargo' s al t ernat e pr oposed gr ounds f or af f i r mi ng

t he di smi ssal of t hese cl ai ms. I n so doi ng, we addr ess Wel l s

Far go' s appar ent mi sappr ehensi on of Fol ey' s pl eaded gr i evances- - an

i ssue r ai sed i n bot h par t i es' br i ef s and r el evant t o Wel l s Far go' s

asser t i on t hat cer t ai n ar gument s brought by Fol ey' s counsel on

appeal are wai ved.

1. I mpr oper Rul e 56 Conver si on

We st ar t our anal ysi s by l ayi ng out t he appr opr i at e

st andar d of r evi ew f or a Rul e 12( b) ( 6) mot i on t o di smi ss f or

f ai l ur e t o st at e a cl ai m. A cour t ' s goal i n r evi ewi ng a Rul e

12( b) ( 6) mot i on i s t o det er mi ne whet her t he f act ual al l egat i ons i n

t he pl ai nt i f f ' s compl ai nt set f or t h "a pl ausi bl e cl ai m upon whi ch

r el i ef may be gr ant ed. " Woods v. Wel l s Far go Bank, N. A. , 733 F. 3d

349, 353 ( 1st Ci r . 2013) . The cour t must t ake al l of t he pl eaded

f act ual al l egat i ons i n t he compl ai nt as t r ue. Wat t er son, 987 F. 2d

at 3. Bar r i ng "nar r ow except i ons, " cour t s t asked wi t h t hi s f eat

usual l y consi der onl y t he compl ai nt , document s at t ached t o i t , and

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document s expr essl y i ncor por at ed i nt o i t . I d. Thus, a pr i mar y

pur pose of a Rul e 12( b) ( 6) mot i on i s t o weed out cases t hat do not

war r ant r eachi ng t he ( of t ent i mes) l abor i ous and expensi ve di scover y

pr ocess because, based on t he f actual scenar i o on whi ch t he case

r est s, t he pl ai nt i f f coul d never wi n. I n shor t , pl ai nt i f f s ar e not

r equi r ed t o submi t evi dence t o def eat a Rul e 12( b) ( 6) mot i on, but

need onl y suf f i ci ent l y al l ege i n t hei r compl ai nt a pl ausi bl e cl ai m.

Compar e t hat t o a Rul e 56 mot i on f or summar y j udgment ,

where t he cour t must determi ne whether " t here i s no genui ne di sput e

as t o any mat er i al f act and t he movant i s ent i t l ed t o j udgment as

a mat t er of l aw. " Fed. R. Ci v. P. 56( a) . Def endant s t ypi cal l y

br i ng Rul e 56 mot i ons af t er some, i f not al l , of t he di scover y

pr ocess has concl uded because t o pr evai l on t he mot i on, t he movant

must di r ect t he cour t t o speci f i c, admi ssi bl e evi dence i n t he

r ecor d i n or der t o show t hat t he ot her si de coul d not wi n at t r i al .

See Fed. R. Ci v. P. 56( c) .

Somet i mes, t hough, wai t i ng unt i l af t er di scover y i s over

t o di spose of a cl ai m on summar y j udgment i s an asi ni ne exer ci se,

i f def endant s possess some document t hat coul d hel p a cour t do so

ear l i er on i n t he l i f e of t he case. Pr omot i ng j udi ci al ef f i ci ency,

t he Rul es account f or ci r cumst ances l i ke t hese and al l ow di st r i ct

cour t s t he l eeway t o consi der document s out si de t he compl ai nt ( as

wel l as t he "nar r ow except i ons" we i dent i f i ed above) by conver t i ng

a def endant ' s Rul e 12( b) ( 6) mot i on i nt o a Rul e 56 mot i on. Fed. R.

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Ci v. P. 12( d) . Thi s conver si on need not be expr ess, but t he cour t

must gi ve bot h si des "a r easonabl e oppor t uni t y to pr esent al l t he

mat er i al t hat i s per t i nent t o t he mot i on. " I d. ; Bar t l et t v. Dep' t

of t he Tr easur y ( I . R. S. ) , 749 F. 3d 1, 12 ( 1st Ci r . 2014) .

Gi ven t hat pr ocedur al f r amework, we di scuss why, i n our

vi ew, t he di st r i ct cour t i n t he i nst ant case conver t ed Wel l s

Far go' s mot i on t o di smi ss Fol ey' s cont r act - based cl ai ms i nt o a

mot i on f or summary j udgment - - t hough not expr essl y- - and di d so

i mpr oper l y, war r ant i ng a r emand of t hose cl ai ms. 7

The mot i on t o di smi ss proceedi ngs bef or e t he di st r i ct

cour t pr ovi de t he backdr op f or our anal ysi s.

The cl ass act i on set t l ement agreement r equi r ed t hat Wel l s

Far go "consi der" Fol ey f or a HAMP and MAP2R modi f i cat i on. As f ar

as we can t el l , nei t her par t y has di sput ed t hat f act t hr oughout t he

l i f e of t hi s case.

7 Fol ey does not ci t e Rul e 12( d) i n hi s br i ef i ng. We,however , consi der t he i ssue of t he di st r i ct cour t ' s i mpr operconver si on of t he mot i on t o di smi ss suf f i ci ent l y r ai sed. Fol eyasser t s t hat t he di st r i ct cour t mi sappl i ed t he st andar d of r evi ewf or a mot i on t o di smi ss i n r eachi ng i t s ul t i mat e concl usi on t hatWel l s Fargo "per f or med i t s obl i gat i on under t he set t l ementagr eement t o consi der Pl ai nt i f f f or MAP2R. " He ar gues that t hedi st r i ct cour t ' s "concl usi on t hat Wel l s Far go actual l y met i t sobl i gat i on t o consi der Mr . Fol ey f or MAP2R i s whol l y unsuppor t ed by

t he avai l abl e evi dence, whi ch r ai ses unr esol ved f act ual quest i onsabout how and when Mr . Fol ey was consi dered f or a l oanmodi f i cat i on. " Fol ey' s counsel cryst al i zed t hese cont ent i ons ator al ar gument , compar i ng t he di st r i ct cour t ' s t r eat ment of t he caset o a summary j udgment hear i ng, and not i ng t hat i t r emai ned adi sput ed i ssue of f act whet her Fol ey was consi der ed f or amodi f i cat i on, despi t e t he cont ent s of t he J ul y 30 l et t er .

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But t he par t i es di ver ge on whet her Fol ey, i n dr af t i ng hi s

pr o se compl ai nt , under st ood t he extent of Wel l s Fargo' s

obl i gat i ons under t he set t l ement agr eement . As Wel l s Far go

expl ai ned i n i t s mot i on t o di smi ss, i t i nt er pr et ed Fol ey' s

al l egat i ons t o amount t o a "gr i evance [ ] t hat he was not appr oved

f or a l oan modi f i cat i on. " But , Wel l s Far go ur ged, "not hi ng i n t he

Set t l ement Agr eement r equi r ed Wel l s Fargo t o appr ove hi m. " I n

r esponse, Fol ey ar gued t o t he di st r i ct cour t i n hi s wr i t t en

opposi t i on t o t he mot i on t o di smi ss t hat Wel l s Far go mi sunder st ood

t he nat ur e of hi s al l egat i ons, and t hat i n f act , he pl eaded t hat

Wel l s Far go di d not consi der hi mf or a modi f i cat i on, as r equi r ed by

t he set t l ement agr eement , and di d not compl y wi t h t he agr eement ' s

other pr ocedur al mandates.

I n i t s or der , t he di st r i ct cour t agr eed wi t h Fol ey and

hel d t hat " def endant r eads the compl ai nt t oo nar r owl y. I n f act ,

pl ai nt i f f asser t s not onl y t hat def endant f ai l ed t o pr ovi de hi m a

MAP2R modi f i cat i on, but al so t hat i t f ai l ed t o even consi der hi m

f or one. " Si mi l ar l y, as t o t he cl ai m f or br each of t he i mpl i ed

covenant of good f ai t h and f ai r deal i ng, t he cour t f ound t hat

Fol ey' s " al l egat i ons t hat def endant ' s i nabi l i t y t o communi cat e

ef f ect i vel y about MAP2R pr event ed pl ai nt i f f f r om bei ng consi der ed

f or such a modi f i cat i on coul d st at e a cl ai m f or br each of t he

i mpl i ed covenant of good f ai t h and f ai r deal i ng. "

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And so i t seems t he di st r i ct cour t concl uded t hat Fol ey

successf ul l y pl eaded both a br each of t he set t l ement agr eement and

a br each of t he i mpl i ed covenant of good f ai t h and f ai r deal i ng.

Thus, on a Rul e 12( b) ( 6) mot i on, t he di st r i ct cour t ' s i nqui r y

shoul d have ended.

Unf or t unat el y, t he di st r i ct cour t ' s i nqui r y di d not st ar t

and end wi t h t he pl eadi ngs. Recal l t hat Wel l s Far go submi t t ed

dur i ng t he i nj unct i on pr oceedi ngs a l et t er dat ed J ul y 30, 2013. I n

t hat l et t er , Wel l s Fargo expl ai ned t hat Fol ey was deni ed HAMP and

MAP2R because he di d not f i t wi t hi n t he i ncome gui del i nes f or t hose

programs.

Rel yi ng on t hat l et t er , t he di st r i ct cour t di smi ssed

Fol ey' s br each of cont r act cl ai mbecause " i t appear s t hat def endant

per f or med i t s obl i gat i on under t he set t l ement agr eement t o consi der

pl ai nt i f f f or MAP2R. " The cour t al so di smi ssed t he good f ai t h and

f ai r deal i ng cl ai m on t he t heor y that "def endant di d consi der

pl ai nt i f f f or MAP2R, and i t s poor communi cat i on does not appear t o

have ul t i mat el y and subst ant i al l y i nt er f er ed wi t h pl ai nt i f f ' s

r i ght s under t he cont r act . " Thus, despi t e i dent i f yi ng t he cor r ect

st andar d of r evi ew f or a Rul e 12( b) ( 6) mot i on ( and i t s r equi r ement

t hat t he cour t be l i mi t ed t o consi der i ng t he compl ai nt and i t s

at t achment s) , t he di st r i ct cour t si de- st epped t he st andar d, r el i ed

on a document ext r aneous t o t he pl eadi ngs, and deci ded Fol ey' s

cl ai ms on t he mer i t s. That ser i es of event s, i n our est i mat i on,

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equates t o conver t i ng a mot i on t o di smi ss i nt o a mot i on f or summary

j udgment .

St i l l , Rul e 12( d) says t he di st r i ct cour t woul d have been

per mi t t ed t o make t hi s conver si on i f i t had gi ven t he par t i es a

r easonabl e oppor t uni t y t o pr esent mat er i al s per t i nent t o the

mot i on. Fed. R. Ci v. P. 12( d) . Al as, t he cour t di d not .

Di scover y never st ar t ed i n t hi s case, and, as Fol ey not ed dur i ng

t he i nj unct i on hear i ng, Wel l s Far go possessed t he i nf or mat i on he

woul d need t o determi ne whether t he bank f ai r l y r evi ewed hi s

el i gi bi l i t y f or a modi f i cat i on. When di scover y has not "begun and

t he nonmovant has had no reasonabl e oppor t uni t y t o obt ai n and

submi t addi t i onal evi dent i ar y mat er i al s t o count er t he movant ' s

[ evi dence] , conver si on of a Rul e 12 mot i on t o a Rul e 56 mot i on i s

i nappr opr i at e. " Whi t i ng v. Mai ol i ni , 921 F. 2d 5, 7 ( 1st Ci r .

1990) . Fol ey was gi ven no oppor t uni t y, l et al one a r easonabl e one,

t o col l ect and pr esent evi dence t hat woul d cont r adi ct Wel l s

Fargo' s. Fol ey had no way t o even chal l enge what ever numbers t he

bank used t o make i t s cal cul at i ons. Thus, Fol ey was pr ovi ded no

r easonabl e oppor t uni t y t o gat her or pr esent act ual evi dence

per t i nent t o hi s cl ai ms.

We r ecogni ze t hat we have extended l eni ency t oward a

di st r i ct cour t ' s f ai l ur e t o pr ovi de expr ess not i ce of i t s i nt ent i on

t o conver t a mot i on t o di smi ss when such f ai l ur e was harml ess. See

Boat eng v. I nt er Amer i can Uni v. , I nc. , 210 F. 3d 56, 60- 61 ( 1st Ci r .

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2000) . But "we t r eat [ ] any er r or i n f ai l i ng t o gi ve expr ess not i ce

as harml ess when t he opponent has . . . had an opport uni t y t o

r espond t o [ t he r el i ed- upon evi dence] . " Bar t l et t , 749 F. 3d at 12

( quot i ng Boat eng, 210 F. 3d at 60) . And, as we di scussed above, i t

appear s f r om t he cour t ' s deci si on t hat Fol ey' s cl ai ms woul d have

sur vi ved, had t he cour t appl i ed t he cor r ect st andar d of r evi ew.

St r i ki ngl y her e, t he j udge al so speci f i cal l y t ol d t he par t i es at

t he i nj unct i on hear i ng t hat he was not hear i ng t hem on t he mot i on

t o di smi ss and r at her , woul d resol ve t hat mot i on "on t he paper s. "

Based on t hi s r epr esent at i on, Fol ey had no r eason t o know t he cour t

woul d be consi der i ng document s f i l ed by Wel l s Far go i n opposi t i on

t o t he i nj unct i on mot i on t o r esol ve t he mot i on t o di smi ss. I n i t s

wr i t t en deci si on, t he cour t al so expl i ci t l y penal i zed Fol ey because

he "of f er ed no evi dence" t o r ef ut e t he r epr esent at i ons Wel l s Far go

made i n t he J ul y 30 l et t er . I f Fol ey had some not i ce of t he

cour t ' s t hi nki ng, he may have at t empt ed t o pr ovi de such evi dence

( keepi ng i n mi nd t he pr act i cal l i mi t at i ons Fol ey f aced even

accessi ng r el evant i nf or mat i on wi t hout di scover y) . Thi s r ecor d

makes abundant l y cl ear t hat t he di st r i ct cour t ' s conver si on t o a

summary j udgment mot i on was premat ur e, and t hat t he f ai l ur e t o

expr essl y conver t t he mot i on t o di smi ss was not harml ess.

We must al so addr ess anot her wr i nkl e i n t hi s pr ocedur al l y

compl i cat ed mat t er . Bot h Wel l s Far go and t he di st r i ct cour t have

suggest ed t hat t he J ul y 30 l et t er was proper t o consi der on a Rul e

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12( b) ( 6) mot i on because, even t hough i t was not at t ached t o t he

compl ai nt , i t was a par t of t he pl eadi ngs.

Cour t s are per mi t t ed, i n some i nst ances, t o consi der on

a Rul e 12( b) ( 6) mot i on document s t hat were not at t ached t o t he

compl ai nt . We have f ound t hese "narr ow except i ons" t o i ncl ude

"document s t he aut hent i ci t y of whi ch are not di sput ed by t he

par t i es; . . . document s cent r al t o pl ai nt i f f s ' cl ai m; or . . .

document s suf f i ci ent l y r ef er r ed t o i n t he compl ai nt . " Wat t er son,

987 F. 2d at 3.

I n i t s deci s i on, t he di str i ct cour t r el i ed on t he

t heor i es t hat Fol ey "di d not cont est t he aut hent i ci t y of t he

l et t er " and t hat he r ef er r ed t o t he l et t er i n hi s compl ai nt . Wel l s

Far go f ur t her asser t s t hat t he l et t er was " i nt egr al " t o Fol ey' s

pl eadi ng.

But we ar e not so convi nced. Concer ni ng t he f i r st

cat egor y (document s of undi sput ed aut hent i ci t y) , we r ei t er at e t hat

Fol ey had no oppor t uni t y t o chal l enge the document i n quest i on.

What ' s more, Fol ey made cl ear on t he r ecor d dur i ng t he pr el i mi nary

i nj unct i on hear i ng t hat he was suspi ci ous of t he document . The

J ul y 30 l et t er was an exhi bi t t o an af f i davi t submi t t ed i n

opposi t i on t o t he i nj unct i on mot i on, and t he af f i ant , Wel l s Far go

Oper at i ons Anal yst Mi chael Dol an, at t est ed t hat t he l et t er was a

" t r ue and accur at e copy. " Fol ey t ol d t he cour t dur i ng t he

evi dent i ary hear i ng t hat Dol an was " not t r ust wor t hy and not

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bel i evabl e, " based on, accor di ng t o Fol ey, f i ndi ngs by a j udge i n

anot her mat t er t hat Dol an' s st at ement s wer e "unr el i abl e. " Fol ey,

i n f act , l abel ed t he af f i davi t i t sel f " f aul t y. " I t f ol l ows t hat

Fol ey cal l ed i nt o quest i on t he i nt egr i t y of t he at t ached document s,

t he aut hent i ci t y of whi ch Dol an at t est ed t o.

As t o t he second category ( document s cent r al t o t he

cl ai ms) , we do not see how t he l et t er i s i nt egr al t o any of Fol ey' s

cl ai ms. Most especi al l y, t he sur vi vi ng cont r act cl ai ms r evol ve

ar ound Wel l s Far go' s al l eged f ai l ur e t o f ai r l y consi der Fol ey' s

modi f i cat i on el i gi bi l i t y over t he cour se of t he year and a hal f

pr i or t o t he l et t er ' s exi st ence.

Fi nal l y, as t o t he t hi r d cat egor y ( document s suf f i ci ent l y

r ef er r ed t o i n t he compl ai nt ) , t he di st r i ct cour t r ecogni zed i n i t s

or der t hat Fol ey had not yet r ecei ved t he l et t er when he f i l ed hi s

compl ai nt . 8 The cl osest t he compl ai nt comes to r ef er enci ng t he

l et t er i s i n r el ayi ng For bes' s J ul y 30, 2013 st at ement t hat Fol ey

"woul d be r ecei vi ng det ai l ed modi f i cat i on l et t er s i n a f ew days. "

Fol ey coul d not have suf f i ci ent l y ref er r ed t o a document he had yet

seen, or t he exi st ence of whi ch he had yet l ear ned. Thus, t he J ul y

30 l et t er was not a par t of Fol ey' s pl eadi ngs.

8 Whi l e t he or der st at es t hat t he l et t er was " somet hi ng t hatdef endant had not yet seen" ( emphasi s added) , gi ven t he cont ext oft he di scussi on, we assume t hi s was a st enogr aphi c er r or and thecour t i nt ended t o say t hat pl ai nt i f f had not seen t he l et t er .

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Gi ven al l of t hese consi der at i ons, we concl ude that t he

di st r i ct cour t er r oneousl y conver t ed Wel l s Far go' s mot i on t o

di smi ss i nt o a mot i on f or summary j udgment wi t hout pr ovi di ng Fol ey

a r easonabl e oppor t uni t y t o pr esent mat er i al per t i nent t o t he

mot i on.

2. Ot her Gr ounds f or Di smi ssal

Wel l s Far go al so ar gues t hat r egar dl ess of t he J ul y 30

l et t er , di smi ssal of t he cont r act cl ai ms was pr oper on t wo ot her

gr ounds: ( 1) t he br each of t he i mpl i ed covenant cl ai mi s pr eempt ed

by t he f ederal Home Owners Loan Act ( "HOLA") , and ( 2) nei t her

cont r act cl ai m was suf f i ci ent l y pl eaded i n t he compl ai nt .

We qui ckl y di spense of t he f i r st ar gument . The di st r i ct

cour t di d not addr ess t hi s pot ent i al al t er nat i ve gr ound f or

di smi ssal , and we al so decl i ne t o del ve i nt o i t . See Town of

Amher st , N. H. v. Omni poi nt Commc' ns Ent er s. , I nc. , 173 F. 3d 9, 16

( 1st Ci r . 1999) ( decl i ni ng t o af f i r m di smi ssal on an al t er nat i ve

gr ound not addr essed by t he di st r i ct cour t ) ; Pi l gr i mBadge & Label

Cor p. v. Bar r i os, 857 F. 2d 1, 4 ( 1st Ci r . 1988) ( same) ; see al so

Cl i f f or d v. M/ V I sl ander , 751 F. 2d 1, 9 n. 4 ( 1st Ci r . 1984)

( "Wi t hout t he benef i t of any di st r i ct cour t . . . l egal di scussi on

concerni ng t hese mat t ers, i t woul d be i dl e f or us t o comment

f ur t her about t hem. " ) .

Gi ven, however , t hat t he di st r i ct cour t ' s deci si on di d at

l east t o some extent speak t o Fol ey' s pl eadi ngs, we wi l l addr ess

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Wel l s Far go' s suf f i ci ency ar gument . 9 I n sum, we concl ude t hat

Fol ey di d st at e a cl ai m f or bot h of hi s cont r act - based causes of

act i on.

i. Standard of Review

I n anal yzi ng whet her a compl ai nt has s t at ed a cl ai m

suf f i ci ent t o sat i sf y Rul e 12( b) ( 6) , we "[ s] et [ ] asi de any

st atement s t hat are merel y concl usor y, " and, as we touched on

above, l ook at t he f act ual al l egat i ons t o "det er mi ne i f t her e

exi st s a pl ausi bl e cl ai mupon whi ch r el i ef may be gr ant ed. " Woods,

733 F. 3d at 353. We make r easonabl e i nf erences, dr awn f r om t he

al l eged f act s, i n t he pl eader ' s f avor . Ocasi o- Her nndez v.

For t uo- Bur set , 640 F. 3d 1, 12 ( 1st Ci r . 2011) . And we const r ue

pr o se compl ai nt s, l i ke Fol ey' s, l i ber al l y. Er i ckson v. Par dus,

551 U. S. 89, 94 ( 2007) ( per cur i am) .

ii. Breach of Contract

Nei t her par t y di sput es t hat t he set t l ement agr eement

i t sel f di ct at es our use of Cal i f or ni a l aw. Thus, Fol ey need have

pl eaded: " ( 1) exi st ence of a cont r act ; ( 2) [ hi s] per f or mance or

excuse f or non- per f or mance; ( 3) [ Wel l s Far go' s] br each; and ( 4)

r esul t i ng damages to [ hi m] . " Bel l evue v. Pr udent i al I ns. Co. of

Am. , 23 F. App' x 809, 810- 11 ( 9t h Ci r . 2001) ( ci t i ng Car eau & Co.

9 I n so doi ng, we onl y addr ess t he por t i ons of Wel l s Far go' sar gument s t hat do not t ur n on t he J ul y 30 l et t er , whi ch, as wedi scussed above, i s not pr oper t o consi der on t he Rul e 12( b) ( 6)mot i on.

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v. Sec. Pac. Bus. Cr edi t , I nc. , 272 Cal . Rpt r . 387, 395 ( Cal . Ct .

App. 1990) ) . Wel l s Far go ar gues that Fol ey f ai l ed t o adequat el y

pl ead bot h a breach of t he set t l ement agr eement and damages. We

f i r st t ackl e t he br each.

Wel l s Fargo cont ends t hat t he onl y ar gument Fol ey r ai sed

bel ow ( and t hus, pr eserved f or appeal ) was t hat "Wel l s Far go shoul d

have af f or ded hi m t he ri ght t o appl y f or MAP2R separ at el y f r om

HAMP, and shoul d have known t hat he was doi ng so. " Wel l s Far go

asser t s t hat t hese gr i evances do not st at e a cogni zabl e br each of

t he set t l ement agr eement because t her e i s "no pr ovi si on i n t he

set t l ement agr eement t hat obl i gat es Wel l s Fargo t o obt ai n t wo

di f f er ent appl i cat i ons f r ombor r ower s t o consi der t hemf or HAMP and

MAP2R, " and "no t er m of t he agr eement obl i gat es Wel l s Fargo t o

not i f y bor r ower s t hat i t i s consi der i ng bot h pr ogr ams under a

si ngl e appl i cat i on, or t o pr ovi de a deni al l et t er speci f i cal l y

r ef er enci ng ' MAP2R. ' " Fol ey, on t he ot her hand, count er s t hat

Wel l s Far go mi si nt er pr et s hi s beef wi t h t he bank- - i n addi t i on t o

f ai l i ng t o f ai r l y consi der hi m f or MAP2R, t he bank shi r ked i t s

obl i gat i on t o t i mel y i nf or mhi mof t he r easons f or t he modi f i cat i on

deni al .

We agr ee t hat Wel l s Far go underest i mates t he ext ent of

i t s obl i gat i ons under t he set t l ement agr eement . The agr eement

r equi r ed the bank t o:

Pr ovi de Set t l ement Cl ass Member s who do notqual i f y f or HAMP or MAP2R Modi f i cat i ons,

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wi t hi n t hi r t y [] cal endar days of t heDef endant s' r ecei pt of al l r equi r eddocument at i on f r om t he Set t l ement Cl assMember , wi t h a wr i t t en expl anat i on, whi chshal l be copi ed t o Lead Cl ass Counsel , whi chcl ear l y expl ai ns t he r easons t hat t he

modi f i cat i on was deni ed.

Thus, Wel l s Far go i s cor r ect t hat t he set t l ement

agr eement di d not per se r equi r e t he bank t o "pr ovi de a deni al

l et t er speci f i cal l y r ef er enci ng ' MAP2R' . " But - - assumi ng t he bank

r evi ewed Fol ey' s MAP2R el i gi bi l i t y, as i t cl ai med- - t he agr eement

di d r equi r e Wel l s Far go t o cl ear l y communi cat e t o Fol ey, i n wr i t i ng

and wi t hi n t hi r t y days, why he was deni ed f or MAP2R. Fol ey pl eaded

t hat nei t her t he Febr uar y nor J une 2013 deni al l et t er s he r ecei ved

even ment i oned MAP2R. The AG' s Of f i ce cal l ed t he bank on Fol ey' s

behal f and r equest ed a wr i t t en expl anat i on of t he deni al s,

i ncl udi ng t he speci f i c names of t he modi f i cat i ons Fol ey had been

consi der ed f or . When Fol ey t her eaf t er spoke t o For bes i n J ul y and

asked whether he had been consi dered f or t he pr ogr am, he coul d not

get a st r ai ght answer . I n f act , For bes, an agent of t he bank,

i ni t i al l y t ol d Fol ey out r i ght t hat he had not been consi der ed f or

MAP2R. Gi ven t hese f act s, Fol ey has suf f i ci ent l y al l eged, at t he

l east , t hat t he bank br eached t he set t l ement agr eement t hr ough ( as

Fol ey speci f i cal l y al l eged i n hi s compl ai nt ) "non- di scl osur e of

r easons f or rej ect i on of modi f i cat i on. " Thus, despi t e Wel l s

Far go' s cont ent i ons, t he "al l egedl y conf usi ng conver sat i on wi t h a

bank r epr esent at i ve" i s, i n f act , mat er i al t o Fol ey' s cl ai ms.

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Whet her or not t he expl anat i ons Wel l s Fargo pr ovi ded i n t he deni al

l et t er s wer e cl ear ( as was al so r equi r ed by t he cont r act ) i s a

f act ual di sput e that cannot be resol ved on a Rul e 12( b) ( 6) mot i on.

Thus, Fol ey has adequat el y pl eaded a breach of t he set t l ement

agr eement .

iii. Breach of the Implied Covenant

Under Cal i f or ni a l aw, t he i mpl i ed covenant of good f ai t h

and f ai r deal i ng r equi r es t hat par t i es "i nvest ed wi t h di scret i onar y

power af f ect i ng t he r i ght s of anot her " exer ci se such power i n good

f ai t h, "t o assur e t hat t he pr omi ses of t he cont r act ar e ef f ect i ve

and i n accor dance wi t h t he par t i es' l egi t i mat e expect at i ons. "

El l swor t h v. U. S. Bank, N. A. , 908 F. Supp. 2d 1063, 1086 ( N. D. Cal .

2012) ( quot i ng McNear y- Cal l oway v. J P Morgan Chase Bank, N. A. , 863

F. Supp. 2d 928, 957 ( N. D. Cal . 2012) ( appl yi ng Cal i f or ni a l aw) ) .

Wel l s Far go ar gues t hat Fol ey f ai l ed t o adequat el y al l ege a cl ai m

f or br each of t he i mpl i ed covenant because any "al l eged f ai l ur e t o

communi cate does not negate t he f act t hat Wel l s Far go consi dered

Fol ey f or HAMP and MAP2R modi f i cat i ons. " Si mi l ar l y, t he bank

ar gues t hat t he i mpl i ed covenant cl ai m f ai l s because Fol ey "must

i dent i f y a speci f i c cont r act ual obl i gat i on t hat t he def endant

br eached. "

As we di scussed above, nei t her of t hese cont ent i ons hol d

wat er . As Fol ey has asser t ed al l al ong, he bel i eves t he bank

f ai l ed t o pr ovi de hi mhi s due pr ocedur al r i ght s under t he cont r act .

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The obl i gat i on t o proper l y consi der Fol ey f or a modi f i cat i on l i es

separ at e and apar t f r om t he bank' s f ur t her r esponsi bi l i t y- - under

t he expr ess t er ms of t he set t l ement agr eement - - t o expl ai n a deni al

t o a bor r ower .

iv. Damages

Even t hough Fol ey suf f i ci ent l y pl eaded a br each of t he

cont r act , we r ecogni ze t hat he al so need have adequatel y pl eaded

damages. Wel l s Fargo argues that Fol ey di d not do so because he

"r epeat edl y pl eads t hat t he onl y har m he has suf f er ed i s t he

possi bi l i t y of f orecl osure. "

But Wel l s Fargo mi sconst r ues t he nat ur e of Fol ey' s

al l eged basi s of damages. Any har m Fol ey f el t as a r esul t of t he

bank' s br each of t he set t l ement agr eement woul d l i e i ndependent of

any f or ecl osur e, or t he t hr eat of one. We concede t hat Fol ey di d

not necessar i l y expl i ci t l y pl ead hi s damages i n det ai l , but he

needn' t have. Gi ven t he al l egat i ons i n t he compl ai nt , Fol ey' s

damages ar e obvi ous- - Wel l s Far go' s f ai l ur e t o consi der hi m f or

r ef i nanci ng ( or t o adequatel y and t i mel y expl ai n why he was not

el i gi bl e f or i t , t hus pr event i ng hi m f r om at t empt i ng t o become

el i gi bl e) woul d r esul t i n, f or i nstance, hi s l oan f al l i ng f ur t her

i nt o t he dept hs of def aul t , addi t i onal i nt er est accr ued and

penal t i es on t he l oan, and negat i ve ef f ect s on hi s cr edi t . The

al l eged har m coul d be r emedi ed wi t h t he equi t abl e r el i ef of

speci f i c per f or mance Fol ey seeks, or wi t h di r ect or consequent i al

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st at e a cl ai m under ei t her st at ut e. 10 See Rui z v. Bal l y Tot al

Fi t ness Hol di ng Cor p. , 496 F. 3d 1, 5 ( 1st Ci r . 2007) ( " [ W] e ar e not

bound by t he di st r i ct cour t ' s deci si onal cal cul us but r at her , may

af f i r m t he deci si on bel ow on any gr ound made mani f est by t he

record. ") .

Mass. Gen. Laws ch. 244, 35A( g) pr ohi bi t s a l ender f r om

accel er at i ng a mor t gage because of a def aul t "unt i l at l east 150

days af t er t he dat e a wr i t t en not i ce i s gi ven by t he [ l ender ] t o

t he [ bor r ower ] . " The next subsect i on, ( h) , pr ovi des f or no f ewer

t han t en el ement s t hat must be i ncl uded i n t he not i ce, 11 r angi ng

10 We acknowl edge t hat i n addi t i on t o t he di st r i ct cour t , atl east one ot her cour t has hel d t hat ( at l east ) 35A i s pr eempt edby HOLA. See Soverei gn Bank v. St ur gi s, 863 F. Supp. 2d 75, 103( D. Mass. 2012) . We have not answered t he quest i on of whether 35A and 35B ar e preempted, and we ar e not awar e of any ot herci r cui t s t hat have. I n any event , we need not deci de t hat l egali ssue t o r esol ve t he i nst ant appeal .

11

The requi r ement s t hat must be i ncl uded are:

( 1) t he natur e of t he def aul t cl ai med on such mort gage ofr esi dent i al r eal pr oper t y and of t he mor t gagor ' s r i ght t ocur e the def aul t by payi ng t he sum of money r equi r ed t ocur e the def aul t ; ( 2) t he dat e by whi ch t he mor t gagorshal l cur e t he def aul t t o avoi d accel er at i on . . . ; ( 3)t hat , i f t he mor t gagor does not cur e t he def aul t by thedat e speci f i ed, t he mor t gagee, or anyone hol di ngt hereunder , may t ake st eps t o t ermi nate t he mort gagor ' sowner shi p i n t he pr oper t y by a f or ecl osure pr oceedi ng orother act i on t o sei ze t he home; ( 4) t he name and addr ess

of t he mort gagee . . . and t he t el ephone number of ar epr esent at i ve of t he mor t gagee . . . ; ( 5) t he name ofany cur r ent and f ormer mort gage br oker or mor t gage l oanor i gi nat or f or such mor t gage or not e secur i ng t her esi dent i al pr oper t y; ( 6) t hat t he mor t gagor may beel i gi bl e f or assi st ance f r om t he Homeowner shi pPr eser vat i on Foundat i on or ot her f or ecl osur e counsel i ng

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f r om i nf or mat i on about t he l ender t o not i f i cat i on about t he

possi bi l i t y of a f or ecl osur e sal e. Mass. Gen. Laws ch. 244,

35A( h) .

I n hi s compl ai nt , Fol ey pl eads t hat Wel l s Far go "di d not

f ol l ow t he st r i ct compl i ance and per f or med i n accordance wi t h t he

st at ut e' s r equi r ement s. " He al so pl eads t hat he "di d not r ecei ve

any not i ces f r omDef endant r egardi ng compl i ance requi r ement s under

M. G. L. 244, sect i on 35A and B. " The compl ai nt does not i dent i f y

whet her Fol ey bel i eves subsect i on ( g) or ( h) was vi ol at ed, and,

whi l e t hi s i s not necessar i l y a f at al omi ssi on, we al so cannot

r eadi l y di scer n f r om t he pl eadi ngs whi ch vi ol at i on Fol ey i nt ended

t o al l ege. Fol ey' s br i ef i ng does not shed any l i ght , as i t does

not addr ess t he suf f i ci ency of hi s pl eadi ngs i n t hi s r egar d.

agency, and t he l ocal or t ol l f r ee tel ephone number s t hemor t gagor may cal l t o r equest t hi s assi st ance; ( 7) t hat

t he mor t gagor may sel l t he pr oper t y pr i or t o t hef or ecl osur e sal e and use the pr oceeds t o pay of f t hemort gage; ( 8) t hat t he mort gagor may redeemt he pr opert yby payi ng t he t ot al amount due, pr i or t o t he f or ecl osur esal e; ( 9) t hat t he mort gagor may be evi ct ed f r omt he homeaf t er a f or ecl osure sal e; and ( 10) t he mor t gagor may havet he f ol l owi ng addi t i onal r i ght s, dependi ng on t he ter msof t he r esi dent i al mor t gage: ( i ) t o r ef i nance t heobl i gat i on by obt ai ni ng a l oan whi ch woul d f ul l y r epayt he r esi dent i al mor t gage debt or ; and ( i i ) t o vol unt ar i l ygr ant a deed t o the resi dent i al mor t gage l ender i n l i euof f or ecl osur e. The not i ce shal l al so i ncl ude a

decl ar at i on, i n t he l anguage t he credi t or has r egul ar l yused i n i t s communi cat i on wi t h the bor r ower , appear i ng ont he f i r st page of t he not i ce st at i ng: "Thi s i s ani mpor t ant not i ce concer ni ng your r i ght t o l i ve i n yourhome. Have i t t r ansl at ed at once. "

Mass. Gen. Laws ch. 244, 35A( h) .

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I n hi s opposi t i on t o t he mot i on t o di smi ss, however ,

Fol ey cl ar i f i ed t hat he i nt ended t o aver onl y that t he cont ent of

Wel l s Far go' s def aul t not i ce was non- compl i ant , f al l i ng under

subsect i on ( h) . Even t aki ng t hat r epr esent at i on as t r ue,

pr obl emat i c i s t hat unl i ke hi s i dent i f i cat i on of document s i n t he

cont r act count s, Fol ey does not speci f y i n t he compl ai nt whi ch

pi ece of cor r espondence f r omt he bank he bel i eves vi ol at ed Sect i on

35A( h) . I n our r evi ew of t he more t han 100 pages appended t o t he

compl ai nt , we have i dent i f i ed a l et t er dat ed J anuar y 12, 2012 t hat

appear s t o be a not i ce of def aul t . Assumi ng t hi s i s t he document

Fol ey compl ai ns of , he st i l l does not hel p us by i dent i f yi ng i n hi s

compl ai nt , opposi t i on t o t he mot i on t o di smi ss, or any of hi s

br i ef i ng t o us whi ch of Sect i on 35A( h) ' s mul t i t ude of r equi r ement s

he bel i eves wer e not i ncl uded i n t he wr i t t en def aul t not i ce. And

we wi l l not guess. Thus, even const r ui ng Fol ey' s pr o se compl ai nt

l i ber al l y, we cannot concl ude t hat Fol ey' s Sect i on 35A cl ai m was

wel l - pl eaded, and we af f i r m i t s di smi ssal .

We encount er t he same pr obl ems wi t h Fol ey' s Sect i on 35B

cl ai m. Agai n, Fol ey does not speci f y i n hi s compl ai nt or br i ef i ng

whi ch subsect i on he bel i eves was vi ol at ed, but i n opposi ng t he

mot i on t o di smi ss, he asser t ed t hat "Sect i on 35( B) ( c) appl i es as a

mat t er of l aw. " That subsect i on r equi r es t hat " f or cer t ai n

mor t gage l oans, t he cr edi t or shal l send not i ce, concur r ent l y wi t h

t he not i ce r equi r ed by subsect i on ( g) of sect i on 35A, of t he

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bor r ower ' s r i ght s t o pur sue a modi f i ed mor t gage l oan. " The st at ut e

l ays out a f ol l ow- up pr ocess t he l ender must compl y wi t h af t er

sendi ng t he not i ce and r ecei vi ng a response f r om t he bor r ower

i ndi cat i ng hi s i nt ent t o pur sue a modi f i cat i on:

Not mor e than 30 days f ol l owi ng r ecei pt of t hebor r ower ' s not i f i cat i on t hat t he bor r oweri nt ends t o pur sue a modi f i ed mort gage l oan, acredi t or shal l pr ovi de t he bor r ower wi t h i t sassessment , i n wr i t i ng, under subsect i on ( b) .The assessment shal l i ncl ude, but not bel i mi t ed t o: ( i ) a wr i t t en st at ement of t hebor r ower ' s i ncome, debt s and obl i gat i ons asdet er mi ned by t he credi t or ; ( i i ) t hecredi t or ' s net pr esent val ue anal ysi s of t hemor t gage l oan; ( i i i ) t he credi t or ' sant i ci pat ed net r ecover y at f or ecl osur e; ( i v)a st at ement of t he i nt er est s of t he cr edi t or ;and ( v) a modi f i ed mort gage l oan of f er undert he r equi r ement s of t hi s sect i on or not i cet hat no modi f i ed mor t gage l oan wi l l beof f er ed.

Mass. Gen. Laws ch. 244, 35B( c) . Fol ey does not i dent i f y whi ch

not i ces he bel i eves wer e non- compl i ant , whet her he bel i eves t he

not i ces wer e never sent at al l , or whet her one of t he ot her

r equi r ement s i n t he st at ut e was vi ol at ed. Thi s l i es i n st ar k

cont r ast t o t he common l aw cont r act cl ai ms, wher e, as di scussed

above, Fol ey poi nt s t o speci f i c por t i ons of t he set t l ement

agr eement t hat wer e al l egedl y br eached by Wel l s Far go' s speci f i c

act i ons and/ or speci f i c act or s. As we have pr evi ousl y war ned i n

t he summary j udgment cont ext ( and as i s equal l y appl i cabl e to our

Rul e 12( b) ( 6) i nqui r y) , we ar e not "' pi gs[ ] hunt i ng f or t r uf f l es'

i n t he r ecor d. " Rodr guez- Machado v. Shi nseki , 700 F. 3d 48, 50

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( 1st Ci r . 2012) ( per cur i am) ( quot i ng Uni t ed St at es v. Dunkel , 927

F. 2d 955, 956 ( 7t h Ci r . 1991) ( per cur i am) ) . Whi l e we ar e

cer t ai nl y sympat het i c t o t he chal l enges pr o se pl ai nt i f f s may f ace

i n f i l i ng a l awsui t on t hei r own, i t i s not our j ob, i n an ef f or t

t o f er r et out t he adequacy of a pl ai nt i f f ' s pl eaded al l egat i ons, t o

haphazardl y mi ne document s appended t o a compl ai nt . Fol ey' s

Sect i on 35B cl ai m was not wel l - pl eaded, and i t s di smi ssal i s

af f i r med.

III. CONCLUSION

For al l of t hese r easons, we concl ude t hat t he di st r i ct

cour t di d not pr ovi de Fol ey wi t h suf f i ci ent not i ce pr i or t o

conver t i ng Wel l s Far go' s mot i on t o di smi ss i nt o a mot i on f or

summary j udgment on t he t wo cont r act - based cl ai ms. The di smi ssal

of t hese cl ai ms i s not war r ant ed on suf f i ci ency gr ounds.

Ther ef or e, we r emand Count s One and Four t o t he di st r i ct cour t f or

f ur t her pr oceedi ngs, consi st ent wi t h t hi s opi ni on. We af f i r m t he

di smi ssal of Fol ey' s st at ut or y cl ai mar i si ng under Mass. Gen. Laws

ch. 244, 35A and 35B, gi ven t hat t hose causes of act i on were not

adequatel y pl eaded. We al so award Fol ey hi s cost s of appeal .

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Foley v. Wells Fargo Bank, N.A., 1st Cir. (2014)

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