United States District Court, S.D. Texas, Houston Division
Kirk L. Kern and Jacqueline Kern, Plaintiff,
Wells Fargo Bank, N.A., Defendant.
MEMORANDUM OPINION AND ORDER
H. MILLER SR. DISTRICT JUDGE
before the court is defendant Wells Fargo Bank, N.A.'s
(“Wells Fargo”) motion for summary judgment. Dkt.
12. Also pending before the court are Wells Fargo's
objections to the summary judgment evidence plaintiffs Kirk
L. Kern and Jacqueline Kern (collectively, the
“Kerns”) submitted in response to Wells
Fargo's motion for summary judgment. Dkt. 21. After
considering the motions, responses, replies, and applicable
law, the court is of the opinion that the motion for summary
judgment should be GRANTED and Wells Fargo's objections
should be OVERRULED AS MOOT.
Kerns had a mortgage loan with Wells Fargo. Dkt. 12-1 (Exh.
A). The Kerns allege that in October 2008, Wells Fargo
employees told the Kerns to send half of their monthly
payment amount in order to qualify for a loan modification.
Dkt. 1-2 at 10; Dkt. 14-1 at 2. From November 2008 to March
2008, the Kerns made their monthly payments on their mortgage
but only sent half the amount owed each month. Dkt. 12-5
(Exh. E). In April 2009, the parties entered into a Temporary
Modification Agreement. Dkt. 12-8 (Exh. H). The Temporary
Modification Agreement reduced the Kerns' monthly payment
until April 2010. Dkt. 1-2 at 5; Dkt. 12-9 (Exh. I). From May
2009 through April 2010, the Kerns made payments in
accordance with the Temporary Modification Agreement. Dkt.
12-5 (Exh. E).
the Temporary Modification Agreement period ended, the Kerns
made payments in accordance with the original terms from May
2010 to April 2011. Id. Beginning in May 2011, the
Kerns made no payments to their mortgage loan. Id.
In July 2011, Wells Fargo sent the Kerns a letter regarding
modifications to loans under the Home Affordable Modification
Program (“HAMP”). Dkt. 12-11 (Exh. 11). However,
the Kerns continued to not make any payments on their
mortgage loan, and in August 2011 the Kerns defaulted on
their mortgage. Dkt. 12-5 (Exh. E); Dkt. 12-10 (Exh. J).
Kerns have now sued Wells Fargo for fraud. Dkt. 1-2. The
Kerns allege that Wells Fargo: (1) instructed the Kerns to
default on the mortgage so that they would be eligible for
HAMP eligibility; (2) falsely informed the Kerns several
times that Wells Fargo did not have the required
documentation for a HAMP application and had the Kerns
re-submit their documentation numerous times; (3) made
misrepresentations regarding approval of a “temporary
modification of their mortgage with reduced ‘trial
payments' pursuant to” the HAMP program; and (4)
omitted the fact it was conducting inspections and charging
for those inspections. Id. at 10-16.
Fargo has moved for summary judgment on the Kerns' fraud
claim. Dkt. 12.
shall grant summary judgment when a “movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). “[A] fact is genuinely in dispute
only if a reasonable jury could return a verdict for the
nonmoving party.” Fordoche, Inc. v. Texaco,
Inc., 463 F.3d 388, 392 (5th Cir. 2006). The moving
party bears the initial burden of demonstrating the absence
of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548 (1986). If
the moving party meets its burden, the burden shifts to the
non-moving party to set forth specific facts showing a
genuine issue for trial. Fed.R.Civ.P. 56(e). The court must
view the evidence in the light most favorable to the
non-movant and draw all justifiable inferences in favor of
the non-movant. Envtl. Conservation Org. v. City of
Dallas, 529 F.3d 519, 524 (5th Cir. 2008).
prevail on a common law fraud claim, a plaintiff must prove:
(1) that a material representation was made; (2) the
representation was false; (3) the representation was either
known to be false or asserted without knowledge of the truth
when made; (4) the representation was intended to be acted
upon; (5) the representation was relied upon; and (6) the
representation caused injury. Allstate Ins. Co. v.
Receivable Fin. Co., 501 F.3d 398, 406 (5th Cir. 2007)
(quoting In re FirstMerit Bank, N.A., 52 S.W.3d 749,
758 (Tex. 2001)). Wells Fargo challenges certain elements for
each of the Kerns' fraud allegations. Dkt. 12 at 11-12.
The Kern's Allegation that Wells Fargo Induced the Kerns
Fargo argues that the Kerns did not rely on Wells Fargo's
representations. Dkt. 12 at 12. Wells Fargo argues that the
summary judgment evidence proves that the Kerns defaulted on
the loan because they could no longer afford it, not ...