Wigod v. Wells Fargo Bank, N.A. - 673 F.3d 547 (7th Cir. 2012)

Rule:

The Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) protects consumers against unfair or deceptive acts or practices, including fraud, false promise, and the misrepresentation or the concealment, suppression or omission of any material fact. 815 ILCS 505/2. The Act is liberally construed to effectuate its purpose. The elements of a claim under the ICFA are: (1) a deceptive or unfair act or practice by the defendant; (2) the defendant's intent that the plaintiff rely on the deceptive or unfair practice; and (3) the unfair or deceptive practice occurred during a course of conduct involving trade or commerce. In addition, a plaintiff must demonstrate that the defendant's conduct is the proximate cause of the injury. 

Facts:

The U.S. Department of the Treasury implemented federal Home Affordable Mortgage Program (HAMP) to help homeowners avoid foreclosure amidst the sharp decline in the nation's housing market in 2008. In 2009, Wells Fargo issued Wigod a four-month "trial" loan modification, under which it agreed to permanently modify the loan if she qualified under HAMP guidelines. Lori Wigod alleged that she did qualify and that Wells Fargo refused to grant her a permanent modification. She brought this putative class action alleging violations of Illinois law under common-law contract and tort theories and under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA). The district court dismissed the complaint in its entirety under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Wigod v. Wells Fargo Bank, N.A., No. 10 CV 2348, 2011 U.S. Dist. LEXIS 7314, 2011 WL 250501 (N.D. Ill. Jan. 25, 2011). The court reasoned that Wigod's claims were premised on Wells Fargo's obligations under HAMP, which does not confer a private federal right of action on borrowers to enforce its requirements. Wigod appealed.

Issue:

Did Wigod plausibly allege that Wells Fargo engaged in unfair or deceptive business practices in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2?

Answer:

Yes.

Conclusion:

The court held that Wigod’s allegations that Wells Fargo agreed to permanently modify her home loan, deliberately misled her into believing it would do so, and then refused to make good on its promise, supported claims for breach of contract or promissory estoppel. Wigod’s claims for negligent hiring or supervision and for negligent misrepresentation or concealment were barred by Illinois's economic loss doctrine because she alleged only economic harms arising from a contractual relationship. Wigod plausibly alleged that Wells Fargo engaged in unfair or deceptive business practices in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2, because it was enough to allege that Wells Fargo committed a deceptive or unfair act and intended that the borrower rely on that act.