Kesling v. Countrywide Home Loans, Inc., Slip Copy, 2011 WL 227637, (S.D.W.Va. 2011). In this action, plaintiff Gilbert Kesling (“Kesling”) alleges that Countrywide engaged in abusive loan servicing practices and wrongfully foreclosed on his property. In early 2007, Kesling began to fall behind on his loan payments. After the trustee scheduled a foreclosure sale, Kesling initiated this action in the Circuit Court of Kanawha County. Defendants removed, invoking the court's diversity jurisdiction. Kesling asserted, inter alia, a Count against defendants for breach of the duty of good faith and fair dealing. Countrywide moved for summary judgment, including the count asserting that defendants breach of the duty of good faith and fair dealing.
The Kesling Court observed that Count II of Plaintiff’s Complaint asserted that defendants breached their duty of good faith and fair dealing by refusing to work with Kesling to modify his loan and stop foreclosure. Countrywide moved for summary judgment on the grounds that the law recognizes no such duty, and that an implied duty cannot conflict with express provisions of the contract.
The Kesling Court acknowledged that West Virginia law “implies a covenant of good faith and fair dealing in every contract for purposes of evaluating a party's performance of that contract.” However, the Kesling Court found that the West Virginia Supreme Court of Appeals has “declined to recognize an independent claim for a breach of the common law duty of good faith,” and has instead held that such a claim sounds in breach of contract (“it has been held that an implied covenant of good faith and fair dealing does not provide a cause of action apart from a breach of contract claim.”)). Because such a claim must be predicated on a breach of contract, it follows that “[t]he implied covenant of good faith and fair dealing cannot give contracting parties rights which are inconsistent with those set out in the contract.” Citations omitted.
The Kesling Court concluded that Kesling did not allege any breach of contract. Rather, Count II plainly asserted an independent claim for breach of the implied covenant of good faith and fair dealing. The implied covenant, as noted above, cannot give Kesling rights which are inconsistent with the express provisions of the contract. Consequently, the Kesling Court granted Countrywide summary judgment as to Count II.