Sheen v. Wells Fargo Bank

Summary

The California Supreme Court held that a mortgage lender owes no tort duty under general negligence principles to carefully and completely process, review, and respond to a borrower's loan-modification application when the claim seeks recovery for purely economic losses arising from the parties' mortgage relationship. The court concluded that the economic loss rule barred the negligence claim, that the applicable multifactor duty analysis did not apply between contractual parties in these circumstances, and that policy choices concerning mortgage servicing were better left to the Legislature. The court affirmed the judgment sustaining Wells Fargo's demurrer.