Mayotte v. U.S. Bank National Ass’n.
No 20-1027. D.Colo. Judge Bacharach. Economic Loss Rule—Lender-Borrower Relationship—Forfeited Claims.
January 18, 2021
Plaintiff sought modification of her mortgage with U.S. Bank National Ass’n (U.S. Bank). She alleged that Wells Fargo Bank, N.A. (Wells Fargo), the loan’s servicer, had agreed to modify her loan if she withheld three payments. Plaintiff withheld three payments, but Wells Fargo denied agreeing to modify the loan, and U.S. Bank foreclosed. Plaintiff brought several tort claims against U.S. Bank and Wells Fargo (collectively, defendants), a statutory claim under the Colorado Consumer Protection Act (CCPA), and a claim for declaratory judgment. The district court granted defendants’ motion for summary judgment on all claims, relying on both the economic loss rule and plaintiff’s failure to present evidence of compensatory damages.
Plaintiff argued on appeal that the economic loss rule does not bar her claims, contending that defendants had duties outside of the contract with U.S. Bank. Under the economic loss rule, a plaintiff alleging an economic loss from a breach of contract lacks a cause of action for a tort unless the defendant has an underlying duty independent of the contractual duties. Here, plaintiff failed to show the existence of duties outside of the contract. Further, plaintiff’s argument that she had a special relationship with defendants to take the claims outside the ambit of the economic loss rule failed because Colorado law does not recognize a special relationship between lenders and borrowers. Therefore, the district court properly applied the economic loss rule.
Plaintiff also argued that the economic loss rule didn’t apply to her CCPA or declaratory judgment claims, but she failed to make this argument in district court or to urge plain error review, so the Tenth Circuit did not consider it.
Plaintiff further contended that even if the economic loss rule bars recovery for economic harm, she could still recover for non-economic harm such as emotional distress. However, plaintiff failed to present any evidence of non-economic harm in response to defendants’ motion for summary judgment.
The summary judgment was affirmed.