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Jacobs v. Bank of America

United States District Court, D. Montana, Missoula Division

May 22, 2017

JOHN G. JACOBS, Plaintiff,


          Donald W. Molloy, District Judge United Stages District Court

         Pending 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 Court agrees.

         Parties 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[1]). As the parties are familiar with the factual background, it will not be restated here.


         Plaintiffs John G. Jacobs ("Jacobs") objects to five of Judge Lynch's findings and conclusions:[2]

(1) Jacobs and defendants were in equal bargaining positions such that there was no special relationship created under the settlement;
(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 foreclosure; and
(5) Jacobs is not entitled to punitive damages. Those objections are addressed in turn.

         I. Equal Bargaining Positions

         The 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 (Cal.App. 1984)).

         Because 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.[3] Jacobs' objection is not well taken.

         In 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 ...

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