Alison Brisbin v. Aurora Loan Services, LLC, et al

Filing

OPINION FILED - THE COURT: RAYMOND W. GRUENDER, DUANE BENTON and BOBBY E. SHEPHERD. Raymond W. Gruender, Authoring Judge (PUBLISHED) [3913489] [11-2218]

United States Court of Appeals
FOR THE EIGHTH CIRCUIT

___________
No. 11-2218
___________
Alison Brisbin,

*
*
Appellant,
*
*
v.
* Appeal from the United States
* District Court for the District of
Aurora Loan Services, LLC; Mortgage * Minnesota.
Electronic Registration Systems, Inc.; *
Federal Home Loan Mortgage
*
Corporation,
*
*
Appellees.
*
___________
Submitted: February 15, 2012
Filed: May 21, 2012
___________
Before GRUENDER, BENTON, and SHEPHERD, Circuit Judges.
___________

GRUENDER, Circuit Judge.
Alison Brisbin filed this lawsuit in Minnesota state court against Aurora Loan
Services, LLC; Mortgage Electronic Registration Systems, Inc.; and Federal Home
Loan Mortgage Corporation (collectively “lender”), seeking legal and equitable relief
from the lender’s foreclosure and sale of her home. She alleged three legal theories
for invalidation of the foreclosure sale (respectively Counts I through III): failure to
comply with the notice requirements of the Minnesota foreclosure-by-advertisement

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statute, promissory estoppel, and breach of the lender’s United States Department of
the Treasury Home Affordable Modification Program (“HAMP”) Participation
Agreement, which Brisbin alleged was intended to benefit her as a third-party
beneficiary. She also alleged two legal theories for the recovery of damages resulting
from the foreclosure sale (respectively Counts IV and V): negligent misrepresentation
and intentional misrepresentation. The lender removed the case to federal court and
subsequently moved for summary judgment on all Counts. The district court1 granted
the motion, and Brisbin appeals. We affirm.
I.

BACKGROUND

Brisbin purchased five homes in the Minneapolis-St. Paul area between 2000
and 2006. This case involves her home on Emerson Avenue, which she purchased in
2006 for $310,000 using a $248,000 mortgage from the lender. Brisbin also obtained
a second mortgage in the amount of $62,000. During the housing crisis of 2008,
Brisbin became delinquent on her mortgages on this house as well as on three of her
other properties. The lender sent Brisbin a letter disclosing alternatives to foreclosure
in April 2009. Brisbin contacted the lender in July to seek a forbearance, which the
lender denied in early August. Shortly thereafter, however, the lender placed Brisbin
into a trial forbearance program. In mid-September, the lender returned Brisbin’s
payment under the forbearance program, informed her that she did not qualify for
forbearance, and served her with foreclosure documents, including a notice scheduling
a foreclosure sale for October 23, 2009.
Brisbin contacted the lender on September 25, 2009, to request a loan
modification. The lender concedes that it told Brisbin the foreclosure sale would be
postponed to give it time to consider her request for a loan modification.

1

The Honorable Richard H. Kyle, United States District Judge for the District
of Minnesota.
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Nevertheless, the lender did not postpone the foreclosure sale, and it purchased the
house at the foreclosure sale on the originally scheduled day. The lender’s records
indicate that it denied Brisbin’s loan modification request on October 26, 2009,
because “the foreclosure sale ha[d] already been completed.” The records also
indicate that Brisbin called on October 30 to find out why the loan modification was
denied, that the lender then began a review of why the modification was denied, and
that the lender did not advise Brisbin that her house had been sold. The lender then
arranged for Brisbin to reapply for a loan modification, and she submitted an
application on November 23, 2009. On April 16, 2010, the lender informed Brisbin
that the foreclosure sale had occurred in October, that she would not receive a loan
modification, and that her redemption period would expire on April 23, 2010. On
either April 22 or 23, the lender offered to rescind the sale if Brisbin could settle the
account that day. Brisbin did not pay, and the foreclosure sale was not rescinded.
On April 23, 2010, Brisbin filed this lawsuit. The lender subsequently moved
for summary judgment, arguing that it had provided proper notice of foreclosure, that
the Minnesota Credit Agreement Statute (“MCAS”) precluded enforcement of its oral
promise to postpone the foreclosure sale, and that Brisbin had not demonstrated that
she had detrimentally relied on the promise to postpone the sale. Brisbin argued in
response that the foreclosure sale was invalid because the lender did not publish notice
of the postponement it promised her as required by the foreclosure-by-advertisement
statute, that the MCAS did not bar her claims, and that she did detrimentally rely on
the lender’s promise by failing to attempt to sell the home or borrow money to
reinstate the mortgage.
The district court granted the lender’s motion for summary judgment in its
entirety. In granting summary judgment on Count I, the district court stated that the
Minnesota foreclosure-by-advertisement statute provided no basis to invalidate the
foreclosure sale, concluding that there was no genuine question of fact that Brisbin
was the “party requesting the postponement” and that the lender therefore had no
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statutory obligation to publish notice of the postponement. Regarding Count II’s
claim for promissory estoppel, the district court concluded that the MCAS bars
enforcement of the lender’s oral promise to postpone the sale. In disposing of Count
III, the court held that Brisbin was not a third-party beneficiary of the lender’s HAMP
Participation Agreement. With respect to Counts IV and V, the court concluded that
there was no genuine question of fact as to whether Brisbin detrimentally relied on the
lender’s promise because she provided no evidence that she would have been able to
borrow money to reinstate the mortgage or sell the home if she had tried.
In appealing the grant of summary judgment on Count I, Brisbin contends that
the district court erred in concluding that there was no genuine question of material
fact as to whether she requested the postponement. With respect to Count II, she
contends that the district court erred in concluding that the MCAS bars enforcement
of the lender’s oral promise to postpone the foreclosure sale. With respect to Counts
IV and V, Brisbin contends that the district court erred in concluding that there was
no genuine question of material fact as to whether she detrimentally relied on the
lender’s promise to postpone the foreclosure sale. She does not appeal the decision
on Count III.
II.

DISCUSSION

We review the district court’s grant of summary judgment de novo. Taylor v.
St. Louis Cnty. Bd. of Election Comm’rs, 625 F.3d 1025, 1026 (8th Cir. 2010) (per
curiam). “Summary judgment is appropriate where, viewing the record in the light
most favorable to the nonmoving party, there are no genuine issues of material fact
and the moving party is entitled to judgment as a matter of law.” Id. at 1026. The
parties agree that we are to apply Minnesota law. See Kaufmann v. Siemens Med.
Solutions USA, Inc., 638 F.3d 840, 843 (8th Cir. 2011). We review de novo the
district court’s interpretation of Minnesota law, Triton Corp. v. Hardrives, Inc., 85
F.3d 343, 345 (8th Cir. 1996), and, unless the outcome of the case is dictated by
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Minnesota Supreme Court precedent, we “must attempt to predict what that court
would decide if it were to address the issue,” Raines v. Safeco Ins. Co. of Am., 637
F.3d 872, 875 (8th Cir. 2011).
A.

Postponement Under the Foreclosure-by-Advertisement Statute

Minnesota’s foreclosure-by-advertisement statute allows a mortgagee to
postpone a previously scheduled foreclosure sale but requires “[t]he party requesting
the postponement” to publish notice of the postponement “as soon as practicable” at
the party’s own expense. Minn. Stat. § 580.07, subdiv. 1. The district court
concluded that this requirement did not apply to the lender’s foreclosure of Brisbin’s
house because there was no genuine question of fact as to whether Brisbin requested
the postponement when she called the lender to request a loan modification. Brisbin
contends that there is a genuine question of fact as to whether she or the lender
requested the postponement of the foreclosure sale. She also argues that the
requirements of Minn. Stat. § 580.07, subdiv. 1 apply to a mortgagee arranging the
postponement of a foreclosure sale regardless of who initially requested the
postponement, but she cites no authority construing Minn. Stat. § 580.07, subdiv. 1.
Even if Brisbin is correct that there is a genuine question of fact as to whether
she requested the postponement or that the notice requirements in Minn. Stat.
§ 580.07, subdiv. 1 would apply even if she initially did request the postponement, the
requirements of § 580.07, subdiv. 1 were never triggered in this case. A plain reading
of the statute indicates that notice of postponement is only required when a foreclosure
sale actually is postponed by the mortgagee. See Minn. Stat. § 580.07, subdiv. 1.
Here, Brisbin’s complaint is that the foreclosure sale was not postponed. Brisbin
offers no authority for construing the statute to invalidate a foreclosure sale that was
properly noticed as an original matter and for which no postponement ever occurred.
“When the language of a statute is plain and unambiguous, it is assumed to manifest
legislative intent and must be given effect.” Beardsley v. Garcia, 753 N.W.2d 735,

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737 (Minn. 2008) (quoting Burkstrand v. Burkstrand, 632 N.W.2d 206, 210 (Minn.
2001)). Thus, because there is no dispute as to whether the foreclosure was actually
postponed, § 580.07, subdiv. 1 is inapplicable, and we affirm the district court’s grant
of summary judgment to the lender on Count I.
B.

Promissory Estoppel

In Count II of her complaint, Brisbin sought to enforce the lender’s oral promise
to postpone the foreclosure sale under the doctrine of promissory estoppel in order to
invalidate the foreclosure sale. She alleged that the lender “affirmatively” told her
that “it had put the ‘foreclosure on hold’ until the modification . . . was approved or
denied,” and that Brisbin relied on this statement to her detriment by “not attempting”
to reinstate or redeem the mortgage. The district court granted the lender summary
judgment on this claim because the MCAS prohibits a debtor from “maintain[ing] an
action on a credit agreement unless the agreement is in writing, expresses
consideration, sets forth the relevant terms and conditions, and is signed by the
creditor and the debtor.” Minn. Stat. § 513.33, subdiv. 2. Brisbin contends that the
district court erred in concluding that the lender’s oral promise to postpone the
foreclosure sale was a “credit agreement” governed by the MCAS and rendered
invalid for failure to comply with the MCAS’s requirements. She argues that the
promise to postpone the foreclosure sale is not a “credit agreement” because it “does
not concern the actual extension of credit or any financial accommodation.” See
Carlson v. Estes, 458 N.W.2d 123, 127 (Minn. Ct. App. 1990).
We reject Brisbin’s argument that a promise to postpone a foreclosure sale is
not a “financial accommodation” within the meaning of the MCAS. The MCAS
defines “credit agreement” as “an agreement to lend or forbear repayment of
money, . . . to otherwise extend credit, or to make any other financial
accommodation.” Minn. Stat. § 513.33, subdiv. 1(1). Although the phrase “any other
financial accommodation” does not expand the application of the statute to all

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agreements favoring the debtor, it “must be interpreted to mean a financial
accommodation in the nature of [a] lending or forbearance agreement.” Rural Am.
Bank of Greenwald v. Herickhoff, 473 N.W.2d 361, 362-63 (Minn. Ct. App. 1991)
(holding that an agreement to apply payments to one loan before another “is not an
agreement to lend or forbear repayment of money”). For example, a promise not to
record a mortgage is not a financial accommodation under the statute. See Carlson,
458 N.W.2d at 127. In contrast, “promises to forebear repayment . . . or to make any
other financial accommodation” include promises to satisfy a loan from equity in the
security property before enforcing a personal guaranty, promises to allow an
opportunity to cure a loan default, and promises to accept a corporate guaranty instead
of a personal guaranty in restructuring a loan. BankCherokee v. Insignia Dev., LLC,
779 N.W.2d 896, 902 (Minn. Ct. App. 2010). The term “forbearance” means “[t]he
act of refraining from enforcing a right, obligation, or debt.” Black’s Law Dictionary
717 (9th ed. 2009). Because foreclosure is a means of enforcing a debt, a promise to
postpone the foreclosure sale falls squarely within the plain meaning of a forbearance
agreement and is thus a “credit agreement” within the meaning of the MCAS. “[S]uch
an interpretation is consistent with the statute’s broad application.” See
BankCherokee, 779 N.W.2d at 902.
Brisbin contests this reading of the MCAS because the lender “would still retain
its contractual right to foreclose on the Subject Property once the review process for
Brisbin’s mortgage note was complete.” This argument is not persuasive because the
nature of a forbearance agreement, an agreement to temporarily refrain from enforcing
a debt, is such that the agreement does not necessarily negate the underlying
contractual obligation for eventual repayment. That the oral promise did not
permanently preempt foreclosure proceedings does not remove the promise from the
realm of “credit agreements” within the meaning of the statute.

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Brisbin also contends that the oral agreement to postpone the foreclosure sale
was not a “credit agreement,” claiming the MCAS expressly excludes it in subdivision
3. See Minn. Stat. § 513.33, subdiv. 3(a). Contrary to Brisbin’s contention,
subdivision 3 does not carve out exceptions to the definition of “credit agreement”
given in subdivision 1. Instead, subdivision 3 provides examples of agreements
specifically covered by the statute. Subdivision 3 states: “The following actions do
not give rise to a claim that a new credit agreement is created, unless the agreement
satisfies the requirements of subdivision 2: . . . (3) the agreement by a creditor to take
certain actions, such as . . . forbearing from exercising remedies under prior credit
agreements . . . .” Id. Rather than excluding agreements to forbear exercising
remedies under prior credit agreements from the definition of “credit agreement,”
subdivision 3 expressly subjects them to the requirements of the statute. See id. Thus,
this argument is also unpersuasive.
Finally, Brisbin contends that the legislature did not intend the MCAS to bar
enforcement of oral promises when there is no dispute that the oral promise was made.
Brisbin argues that the purpose of the statute is to prevent debtors from defrauding
lenders and that no such purpose can be served here because the lender’s own records
confirm its promise that the foreclosure sale would be postponed. However, “[w]e can
disregard a statute’s plain meaning only in rare cases where the plain meaning utterly
confounds a clear legislative purpose.” Toth v. Arason, 722 N.W.2d 437, 442 (Minn.
2006) (alteration in original) (quoting Weston v. McWilliams & Assocs. Inc., 716
N.W.2d 634, 639 (Minn. 2006)). Minnesota courts have recognized a clear legislative
purpose behind the MCAS to “prevent borrowers from using an ongoing lending
relationship with a lender to enforce unwritten agreements” extending credit or
promising forbearance of repayment. Herickhoff, 473 N.W.2d at 363. Here, applying
the statute according to its plain meaning would not “utterly confound” this clear
legislative purpose.

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Thus, we conclude that the MCAS prohibits the enforcement of an oral promise
to postpone a foreclosure sale and that the lender was entitled to summary judgment
on Brisbin’s promissory estoppel claim. See BankCherokee, 779 N.W.2d at 903
(holding that “an oral promise that constitutes a ‘credit agreement’ under section
513.33 cannot be enforced under a theory of promissory estoppel”).
C.

Negligent and Intentional Misrepresentation

The district court rejected Brisbin’s negligent and intentional misrepresentation
claims, concluding that her affidavit testimony that she would have “attempted” to
borrow money from friends, obtain a loan, or sell her home was “little more than
conjecture insufficient to defeat summary judgment.” The court explained that her
“conclusory assertion lacks any factual support, such as affidavits from individuals
indicating a willingness to lend money to her.” The court reasoned that Brisbin had
admitted to being thousands of dollars behind on her payments and presumed that if
she had the ability to borrow such a large sum she would have done so long before the
foreclosure sale was imminent. Brisbin contends on appeal that her affidavit raised
a genuine question of material fact on this issue.
Although Brisbin swore in her affidavit that the lender’s promise to postpone
the foreclosure sale induced her not to ask friends to lend her money, that she would
have attempted to borrow money from friends if not for the lender’s promise, and that
she was “very confident” that she would have been able to borrow a sufficient amount
of money from friends to reinstate the loan, this self-serving affidavit was not
sufficiently specific to raise a genuine question of material fact in the face of
uncontradicted facts in the record. Brisbin was at least $8,000 in arrears on her
payments at the time she received notice of the foreclosure sale in September 2009,
and she admitted in her deposition that she could not reinstate the loan with personal
or family funds. Furthermore, Brisbin admitted that she lost two other homes to
foreclosure during this period despite marketing them for sale and subsequently was

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denied bank loans that were a prerequisite to establishing a payment plan with the
Internal Revenue Service for delinquent taxes. Her conclusory statement that she is
“very confident” that unnamed friends would have loaned her sufficient money to
reinstate the loan is belied by her inability to address her mounting debts during this
same period. Thus, in the context of the entirety of the record, Brisbin’s affidavit
provides no more than “mere speculation, conjecture, or fantasy” that she would have
been able to raise the thousands of dollars necessary to reinstate the loan. See Binkley
v. Entergy Operations, Inc., 602 F.3d 928, 931 (8th Cir. 2010) (quoting Godfrey v.
Pulitzer Publ’g Co., 276 F.3d 405, 412 (8th Cir. 2002)). Without a more concrete
statement of how she would have raised such large amounts of money to contradict
the overwhelming evidence that reinstatement of the mortgage was impracticable,
Brisbin did not raise a genuine question of material fact as to whether she
detrimentally relied on the lender’s promise.2
III.

CONCLUSION
For the foregoing reasons, we affirm.
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2

Brisbin argues for the first time on appeal that she detrimentally relied on the
lender’s promise to postpone the foreclosure sale by foregoing her statutory right to
postpone the foreclosure sale for five months, see Minn. Stat. § 580.07, subdiv. 2, and
by not filing for bankruptcy before the redemption period on her home ended.
“Absent exceptional circumstances,” not present here, “we cannot consider issues not
raised in the district court.” Shanklin v. Fitzgerald, 397 F.3d 596, 601 (8th Cir. 2005).
Moreover, Brisbin identifies no evidence in the record, including her affidavit,
indicating that she considered declaring bankruptcy or invoking her statutory right to
postpone the foreclosure, or that the lender’s promise specifically induced her to
forego these options.
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