United States District Court, D. Montana, Missoula Division
JOHN G. JACOBS, Plaintiff,
BANK OF AMERICA; RECONTRUST COMPANY, N.A.; and SPECIALIZED LOAN SERVICING, LLC, Defendants.
ORDER ADOPTING FINDINGS AND RECOMMENDATION
W. Molloy, District Judge United Stages District Court
before the Court is Defendants Bank of America and Recontrust
Company's and Defendant Specialized Loan Servicing,
LLC's motions for summary judgment. (Docs. 61, 71.)
United States Magistrate Judge Lynch entered findings and
recommendations on April 19, 2017, recommending the Court
grant-in-part and deny-in-part the motions. (Doc. 94.) The
are entitled to de novo review of the specified
findings or recommendations to which they object. 28 U.S.C.
§ 636(b)(1). Those findings and recommendations not
specifically objected to are reviewed for clear error.
McDonnell Douglas Corp. v. Commodore Bus. Mach.,
Inc., 656 F.2d 1309, 1313 (9th Cir. 1981). Clear error
exists if the Court is left with a "definite and firm
conviction that a mistake has been committed."
Concrete Pipe & Prods. of Cal, Inc. v. Constr.
Laborers Pension Trust for S. Cal, 508 U.S. 602, 623
(1993) (internal quotation marks omitted). Jacobs filed
objections on May 3, 2017, (Doc. 96), and the defendants
filed responses to those objections on May 16, 2017, (Docs.
98, 99). As the parties are familiar with the
factual background, it will not be restated here.
John G. Jacobs ("Jacobs") objects to five of Judge
Lynch's findings and conclusions:
(1) Jacobs and defendants were in equal bargaining positions
such that there was no special relationship created under the
(2) Jacobs did not suffer an "ascertainable loss of
money or property";
(3) The defendants were not prohibited from sending Jacobs
the default notices and other communications he complains of;
(4) ReconTrust has no contractual duties with respect to the
(5) Jacobs is not entitled to punitive damages. Those
objections are addressed in turn.
Equal Bargaining Positions
tort-type damages sought by Jacobs under his claim for
tortious breach of the implied covenant of good faith and
fair dealing can be recovered only where there is a
"special relationship" between the parties.
Morrow v. Bank of Am., N.A., 324 P.3d 1167, 1176
(Mont. 2014). Under Montana law, the elements of a special
relationship are: (1) the contract must be such that the
parties are in inherently unequal bargaining positions; (2)
the motivation for entering the contract must be a
not-for-profit; (3) ordinary contract damages are not
adequate because (a) they do not require the party in the
superior position to account for its action, and (b) they do
not make the injured party whole; (4) one party is especially
vulnerable because of the type of harm it may suffer and of
necessity places trust in the other party to perform; and (5)
the other party is aware of this vulnerability. Story v.
City o/Bozeman, 791 P.2d 767, 776 (Mont. 1990) (citing
Wallis v. Superior Court, 207 Cal.Rptr. 123, 129
Judge Lynch determined the first element was not met, he did
not address the remaining elements. Jacobs objects to Judge
Lynch's determination, arguing that it reads an
additional element of proof into Story and that he
has presented substantial evidence as to question of unequal
bargaining position. Jacobs' objection is not well taken.
April 2014, Jacobs, represented by counsel, attended a
mediation before William Wagner, a neutral Settlement Master.
(Doc. 79 at ¶¶ 15, 16.) The mediation was
successful and the parties "settled with the advice of
their counsel." (Id. at ¶ 16.) Counsel for
Bank of America and ReconTrust drafted the Settlement
Agreement and Jacobs and his counsel were able review that
Agreement prior to signing. (Id. at ¶¶ 20,
22.) Other than to argue that he is a debtor and the
defendants are creditors, Jacobs does not dispute the fact he
attended a neutral mediation, was represented, and had
adequate time and advice of counsel in his consideration of
the Agreement. See Okun v. Morton, 250 Cal.Rptr.
220, 234 (Cal.App. 1988) (findings parties' "were
not in unequal bargaining position" where represented by
counsel, made decision on basis of advice of counsel, and had
adequate time to review the offer). Jacobs presents no
evidence as to give rise to a genuine dispute of fact
regarding the parties' bargaining positions. Compare
with McNeil v. Currie,830 P.2d 1241, 1249 (Mont. 1992)
(noting unequal position where lay person relies on
representations of insurance agent); Stephens v. Safeco
Ins. Co. of Am.,852 P.2d 565, 568 (Mont. 1993) (noting
inferior position of insured in part because "the