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Vandall v. Wells Fargo Bank, N.A.

United States District Court, S.D. West Virginia, Beckley Division

July 3, 2018

WELLS FARGO BANK, N.A., Defendant.



         The Court has reviewed the Defendant Wells Fargo Bank, N.A.'s Motion for Summary Judgment (Document 49) and Memorandum in Support (Document 50), the Plaintiff's Response in Opposition (Document 51), and the Defendant's Reply in Support (Document 52), as well as the Plaintiff's Complaint (Document 1-2) and all attached exhibits. For the reasons stated herein, the Court finds that the motion should be granted.


         The Plaintiff, Mr. Ernest Vandall, initiated this action with the filing of a complaint in the Circuit Court of Greenbrier County, West Virginia, on May 17, 2017. Mr. Vandall named Wells Fargo Bank, N.A. (“Wells Fargo”) as the sole Defendant. Pursuant to its Notice of Removal (Document 1), Wells Fargo removed the case to this Court on July 6, 2017, citing diversity jurisdiction.

         In 2009, Mr. Vandall purchased a home at 213 2nd Street, Rainelle, West Virginia. In order to purchase the home, Mr. Vandall sought a mortgage from Wells Fargo and eventually executed a promissory note and a Deed of Trust. (See, Def.'s Mot. for Sum. Judg., Ex A) (see also, Ernest Vandall Depo., at 12:2- 13:22, Document 51-2.) During the origination process, Wells Fargo determined that the property Mr. Vandall was purchasing was located in an area that the Federal Emergency Management Agency (“FEMA”) designated as a Special Flood Hazard Area (“SFHA”). (Def.'s Mot. for Sum. Judg., Ex. C.) Due to this designation, Wells Fargo required Mr. Vandall to purchase flood insurance on the home in order to obtain the mortgage. Shortly thereafter, Mr. Vandall acquired a flood insurance policy through Nationwide. Importantly, however, because Wells Fargo required Mr. Vandall to obtain the flood insurance, Wells Fargo would increase Mr. Vandall's monthly mortgage payment by one-twelfth of the total annual flood insurance premium, hold that money in an escrow account, and use it to pay the flood insurance premium when it became due. (Id. at Ex. B, Deed of Trust, ¶ 3.) This process continued through 2012, and Mr. Vandall received statements from Wells Fargo reflecting the payments being made from the escrow account. (Id. at Ex. G.)

         In October 2012, FEMA amended its Flood Insurance Rate Map for the Rainelle area, and subsequently determined that Mr. Vandall's property was no longer inside an SFHA. Due to this change, Wells Fargo determined that Mr. Vandall was no longer required to maintain flood insurance. On November 12, 2012, Wells Fargo generated a letter entitled “Flood Insurance Notification” sent via first-class mail to Mr. Vandall informing him of this update. (Id. at Ex. J.) This notification stated that, “[s]ince [Mr. Vandall's] property is no longer located in a required flood zone, your flood insurance is now OPTIONAL.” (Id.) (emphasis in original.) This notification did not affect the cancellation of Mr. Vandall's flood insurance policy, however. In fact, because of Wells Fargo's escrow method of payment, Mr. Vandall's 2012-2013 flood insurance premium had previously been paid and the policy remained in effect until September of 2013. On November 13, 2012, the very next day after sending the notification regarding the change in required flood insurance, Wells Fargo sent Mr. Vandall a correspondence providing his monthly payment and detailing the amount in his escrow account. (Id. at Ex. N.) Because the flood insurance premium for 2012 through 2013 had been paid in full, and because the insurance was no longer required, this November 2012 statement showed that Mr. Vandall's monthly mortgage payment would be reduced. (Id.) The statement also included a check refunding him the balance of the escrow account that had been deducted to pay for flood insurance which was no longer required. (Id.) Mr. Vandall alleges that, although he received and looked at all the mail delivered to the residence in question, he did not receive the notice from Wells Fargo informing him that flood insurance was no longer required. (Ernest Vandall Depo., at 35:10-23) (Document 51-2.) Mr. Vandall does not, however, dispute receiving the updated escrow notice reflecting the subtraction of the flood insurance payment and the refund check that was attached. (Id. at 38:17-39:2; 45:3-6.)

         On August 2, 2013, nearly nine months after Wells Fargo sent the flood insurance update notification and the updated escrow statement including a check, Nationwide sent Mr. Vandall a Flood Insurance Policy Renewal Premium Notice. (See, Def.'s Mot. for Sum. Judg., Ex. Q.) This notice included Mr. Vandall's address and policy number, and informed him that his flood insurance would expire on September 16, 2013. (Id.) The notice also included the amount of the premium he could owe to renew the insurance policy for the following year. (Id.) Mr. Vandall did not pay the premium to renew the flood insurance policy, and on September 17, 2013, Nationwide sent him a notice informing him that the flood insurance policy had expired, but that he could reinstate the policy by paying the annual premium. (Def.'s Mot. for Sum. Judg., Ex. R.) Mr. Vandall alleges that he did not receive either of these notices from Nationwide and never reinstated the policy. (Ernest Vandall Depo., at 51:1-52:7.)

         In June 2016, Rainelle and the surrounding areas of Greenbrier County “experienced catastrophic flooding, ” which severely damaged Mr. Vandall's home. (Compl., at ¶ 11-12.) After the water subsided, Mr. Vandall contacted the National Flood Insurance Program, administered by FEMA, “to make a claim for the extensive damage to his house and its contents.” (Id. at ¶ 12.) FEMA informed Mr. Vandall that he did not have flood insurance, however, and Mr. Vandall proceeded to call Wells Fargo. Wells Fargo informed Mr. Vandall that he did not have flood insurance because, as the 2012 notices sent to him stated, the flood insurance was no longer required on his mortgage, and he had allowed the flood insurance policy to lapse. Mr. Vandall alleges in his complaint that Wells Fargo canceled his flood insurance and continued to charge him for the cost of flood insurance even after the insurance had lapsed. He filed his complaint thereafter.


         The well-established standard in consideration of a motion for summary judgment is that “[t]he court shall grant summary judgment if the 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)-(c); see also Hunt v. Cromartie, 526 U.S. 541, 549 (1999); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Hoschar v. Appalachian Power Co., 739 F.3d 163, 169 (4th Cir. 2014). A “material fact” is a fact that could affect the outcome of the case. Anderson, 477 U.S. at 248; News & Observer Publ'g Co. v. Raleigh-Durham Airport Auth., 597 F.3d 570, 576 (4th Cir. 2010). A “genuine issue” concerning a material fact exists when the evidence is sufficient to allow a reasonable jury to return a verdict in the nonmoving party's favor. FDIC v. Cashion, 720 F.3d 169, 180 (4th Cir. 2013); News & Observer, 597 F.3d at 576.

         The moving party bears the burden of showing that there is no genuine issue of material fact, and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp., 477 U.S. at 322-23. When determining whether summary judgment is appropriate, a court must view all of the factual evidence, and any reasonable inferences to be drawn therefrom, in the light most favorable to the nonmoving party. Hoschar, 739 F.3d at 169. However, the non-moving party must offer some “concrete evidence from which a reasonable juror could return a verdict in his favor.” Anderson, 477 U.S. at 256. “At the summary judgment stage, the non-moving party must come forward with more than ‘mere speculation or the building of one inference upon another' to resist dismissal of the action.” Perry v. Kappos, No.11-1476, 2012 WL 2130908, at *3 (4th Cir. June 13, 2012) (unpublished decision) (quoting Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985)).

         In considering a motion for summary judgment, the court will not “weigh the evidence and determine the truth of the matter, ” Anderson, 477 U.S. at 249, nor will it make determinations of credibility. N. Am. Precast, Inc. v. Gen. Cas. Co. of Wis., 2008 WL 906334, *3 (S.D. W.Va. Mar. 31, 2008) (Copenhaver, J.) (citing Sosebee v. Murphy, 797 F.2d 179, 182 (4th Cir. 1986). If disputes over a material fact exist that “can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party, ” summary judgment is inappropriate. Anderson, 477 U.S. at 250. If, however, the nonmoving party “fails to make a showing sufficient to establish the existence of an element essential to that party's case, ” then summary judgment should be granted because “a complete failure of proof concerning an essential element . . . necessarily renders all other facts immaterial.” Celotex, 477 U.S. at 322-23.


         Wells Fargo moves for summary judgment as to each count of the Plaintiff's complaint. The Plaintiff alleged the following causes of action: Count I-Declaratory Relief, Count II- Breach of Contract, Count III-Breach of Covenants of Good Faith and Fair Dealing, Count IV- Negligence, Count V-Unjust Enrichment, Count VI-Conversion, Count VII-Detrimental Reliance, Count VIII-Fraud, and Count IX-Punitive Damages. Importantly, in each of these counts, Mr. Vandall claims that Wells Fargo ...

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