Harrison v. Wells Fargo Bank

Background

Patrina Harrison, who represented herself, applied around June 4, 2018, for pre-approval of a 30-year, fixed-rate, $1 million mortgage on an unspecified $2.5 million San Francisco property. The application reported monthly income of approximately $1,303 and liquid assets of approximately $170. Wells Fargo preliminarily denied the application on June 6 and an underwriter denied it on June 13, both citing Harrison’s loan-to-income ratio. Wells Fargo later sent her a letter explaining the denial.

On June 18, Harrison visited a Wells Fargo branch at 1183 Ocean Avenue in San Francisco. She testified that she intended to provide additional documents for the mortgage application and make two deposits: an Internal Revenue Service check and $10,000 in cash that her boyfriend had loaned her as proof of assets. She alleged that the branch manager asked what she was doing in the bank and said, “You’re black.” She also alleged that the manager limited where she could deposit money and said she could not see a banker. Harrison testified that a teller asked what she was doing in the neighborhood and why she was at that bank. The teller completed Harrison’s $42.12 check deposit, but Harrison did not complete the cash deposit.

Harrison brought claims under 42 U.S.C. § 1981, which addresses racial discrimination in private contracts; 42 U.S.C. § 1982, which protects equal rights to purchase and hold property; the Equal Credit Opportunity Act, which prohibits discrimination in credit transactions; and the Fair Housing Act, which prohibits discrimination in residential real-estate-related transactions. Wells Fargo and the branch manager moved for summary judgment. Summary judgment is a decision without a trial when the evidence shows that no reasonable jury could find for the opposing party on a legally important issue.

Mortgage-related claims

The court held that Harrison’s claims under § 1982 and the Equal Credit Opportunity Act failed because she was not qualified for the mortgage she sought. The court accepted Wells Fargo’s conclusion that Harrison could not afford a $1 million loan with monthly income of $1,303.

The court analyzed the Fair Housing Act claim under a framework requiring a protected status, a distinct injury, and discriminatory conduct causing that injury. It found that Harrison established the initial requirements because she was a member of a protected class and suffered the injury of being denied home-loan pre-approval. The burden then shifted to Wells Fargo to provide a legitimate, non-discriminatory reason. The court found that the bank did so by relying on Harrison’s inability to afford the loan. The court stated that Harrison did not contend this reason was a pretext, meaning a false explanation hiding discrimination, so the Fair Housing Act claim failed.

The court also stated that Harrison appeared to contest whether the mortgage application described in the evidence was hers, although she admitted that it contained her name and telephone number. The court credited that testimony for summary-judgment purposes but noted that Harrison supplied no alternative mortgage application. Without another application, the court concluded, she could not show that she was denied credit for a different home loan. The court said her Equal Credit Opportunity Act, Fair Housing Act, and § 1982 claims would fail for that additional reason.

Contract-related claims

Section 1981 prohibits purposeful racial discrimination in making and enforcing private contracts. The court applied a burden-shifting framework requiring a plaintiff first to show an initial case of discrimination, after which the defendant must give a legitimate, non-discriminatory reason and the plaintiff must show that reason was pretextual.

The court concluded that Harrison did not provide enough evidence to show that Wells Fargo denied her service. It found that she successfully completed the check deposit, so the bank did not deny that service. Although Harrison intended to make a cash deposit and testified that the teller’s remark discouraged further interaction, the court found that she never actually asked the teller to complete the cash deposit. Therefore, the bank did not refuse that transaction.

The court also considered whether Harrison had a separate claim based on her inability to submit additional mortgage documents. It found that she had not produced the email she said requested the documents, and that her testimony about the email’s contents was insufficient evidence that the bank had provided an opportunity to contract.

The court stated that it accepted Harrison’s account that the branch manager and teller made hateful racial remarks, but concluded that the remarks did not prevent the completed check deposit and would not have prevented a cash deposit had Harrison tendered the cash for deposit.

Other requests and disposition

The court denied as moot Wells Fargo’s request for judicial notice of a docket summary from Harrison’s unsuccessful 2017 bankruptcy petition. It denied as moot Harrison’s request for judicial notice of exhibits submitted with her declaration because submitting them with the declaration was sufficient. The court also denied as moot Wells Fargo’s objection that those exhibits lacked foundation and were irrelevant because the court did not rely on Harrison’s declarations in its analysis.

The court granted the motion for summary judgment. It concluded that Harrison’s § 1982, Equal Credit Opportunity Act, and Fair Housing Act claims failed because she was unqualified for the mortgage, and that her § 1981 claims failed because she did not provide sufficient evidence that Wells Fargo actually denied her service.