PROVIDENCE, R.I. (Legal Newsline) – The Rhode Island Supreme Court on May 25 upheld a lower court's ruling that cleared Wells Fargo Bank of any wrongdoing in a home foreclosure that began in 2009.

Joanne C. Miller had alleged that Wells Fargo breached federal guidelines regarding loan modification review and improperly foreclosed on her home, located in Warwick, Rhode Island.

Associate Justice Maureen McKenna Goldberg wrote the opinion for the court.

After losing her job in 2009, Miller fell behind in her payments and contacted Wells Fargo about a loan modification, the opinion states.

The process started that September, when Miller received a packet from Wells Fargo that contained financial forms that she needed to complete and return by Sept. 18, 2009, in order to begin the application process.

In accordance with the federal Home Affordable Modification Program (HAMP) guidelines, Miller was required to submit current and verifiable evidence of income as proof of her eligibility for the program.

Making a request for loan modification would not stay the foreclosure process because Wells Fargo "reserved the right to declare default on the mortgage and, according to HAMP, to proceed with the foreclosure until the loan modification request was evaluated," the opinion states.

On Sept. 14, 2009, Wells Fargo sent Miller a letter informing her that she needed to pay the loan delinquency amount in full by Oct. 14, 2009, or else the bank would proceed with the foreclosure.

Miller alleged she did not receive a notice that her loan modification application had been denied until Oct. 29, 2009.

The bank claimed it denied the modification plan because Miller had allegedly failed "to provide the necessary information within the timeframe required by her trial modification period workout plan," according to the opinion.

"Miller contends that there was no evidence that she agreed to a trial modification period workout plan or that such a plan had been prepared," the opinion states.

A subsequent letter from Wells Fargo requested that certain financial information must be submitted within 10 days, in spite of the previous rejection.

The two sides went back and forth and in 2010, Miller sought rescission of the foreclosure, which was denied.

Miller, acting pro se, filed a lawsuit against Wells Fargo in Kent County Superior Court in 2011, alleging fraudulent representation. She later amended her complaint to allege the bank had violated the Deceptive Trade Practices Act.

A bench trial was held in November 2014, during which Miller again represented herself.  

"Wells Fargo moved for judgment as a matter of law on all six counts, which the Superior Court granted in a written decision," the opinion states. "On March 30, 2015, the Superior Court justice found that, although Miller testified at trial that she had provided the necessary financial documents before Sept. 18, 2009, she failed to submit any documentary evidence to corroborate her testimony."

The Superior Court also noted that prior to the Oct. 29, 2009, letter denying the requested loan modification, "Wells Fargo had received a significant amount of information sufficient to have verified Miller’s sources of income and to have evaluated the loan modification request," the suit states.

The Superior Court issued a ruling in favor of Wells Fargo on all counts.

In that opinion, the justices maintained that the bank was "under no contractual obligation to modify or consider a loan modification, there were no facts to support a finding that Wells Fargo breached its duty of good faith and fair dealing," the suit states.

Additionally, because Miller failed to produce evidence that an employee had promised rescission, the court was not satisfied that any promises to rescind the foreclosure were made, the opinion states..

In the appeal, Miller maintained that that the Superior Court erred in finding for Wells Fargo because bank violated Treasury Directive 09-01 in noticing and conducting the foreclosure sale.

The appeal also alleged that Wells Faro breached the implied covenant of good faith and fair dealing and was “estopped from conducting [the] foreclosure sale due to [Miller’s] submission of over one hundred pages of financial documentation in accordance with the HAMP program and communications between the parties relating thereto.”

“We note at the outset that the numerous and unfortunate miscommunications and misunderstandings between the parties to this controversy have not escaped our review,” Goldberg wrote in the opinion. “As explained by the Superior Court justice, Wells Fargo is a large institution, with multiple locations, and Miller, unfortunately, was caught in the midst of the communications from the various branches. The record demonstrates that this case does not represent Wells Fargo’s finest hour.”

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