Estate of Bunnie J Davis, Sr., The v. Wells Fargo Home Mortgage

Filing 21

MEMORANDUM OPINION. Signed by Magistrate Judge John E Ott on 2/2/2016. (KAM, )

FILED
2016 Feb-02 PM 02:34
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
THE ESTATE OF BUNNIE
DAVIS, SR.,

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Plaintiff,
v.
WELLS FARGO HOME
MORTGAGE, INC.,
Defendant.

Case No. 2:15-cv-00329-JEO

MEMORANDUM OPINION
In this action, the Estate of Bunnie Davis, Sr. (the “Plaintiff”) has alleged a
variety of state law claims against Wells Fargo Home Mortgage, Inc. 1 (“Wells
Fargo”), all related to Wells Fargo’s foreclosure of a mortgage that secured a loan
obtained by Bunnie Davis, Sr. prior to his death. (Doc. 1). Wells Fargo has moved
the court to enter a judgment on the pleadings pursuant to Rule 12(c) of the Federal
Rules of Civil Procedure. (Doc. 16). For the reasons discussed below, Wells
Fargo’s motion is due to be granted.
I.

STANDARD OF REVIEW

“Judgment on the pleadings is proper when no issues of material fact exist,
and the moving party is entitled to judgment as a matter of law based on the
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Wells Fargo Home Mortgage, Inc. is a division of Wells Fargo Bank, N.A. (Doc. 8 at 1, n. 1).

pleadings and any judicially noticed facts.” Cunningham v. Dist. Attorney’s Office
for Escambia County, 592 F.3d 1237, 1255 (11th Cir. 2010). The court “must
accept the facts alleged in the complaint as true and view them in the light most
favorable to the nonmoving party.” Id. In ruling on a Rule 12(c) motion, the court
may consider a document attached to the motion without converting the motion
into one for summary judgment, provided that the document is “(1) central to the
plaintiff’s claim; and (2) undisputed.” Horsley v. Feldt, 304 F.3d 1125, 1134 (11th
Cir. 2002).
II.

FACTS AND PROCEDURAL HISTORY

In 1998, Bunnie Davis, Sr. (“Mr. Davis”) obtained a loan from First Union
Home Equity Bank, N.A. The loan was evidenced by a promissory note and
secured by a mortgage on property located at 932 25th Street Southwest in
Birmingham, Alabama (the “Property”). The terms of the note required Mr. Davis
to make monthly payments of principal and interest. Wells Fargo serviced the
loan. 2 (Doc. 1 ¶¶ 4-6; Doc. 8 ¶¶ 5-6).
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The complaint alleges that Mr. Davis obtained the loan in 1993, that the principal amount of the
loan was $30,400.00, and that the amount of the monthly payment was $525.86. (Doc. 1 at ¶¶ 56). However, the note and mortgage reflect that the loan was obtained in 1998 in the principal
amount of $34,300.00 and that the amount of the monthly payment was $416.85. (Doc. 16-1 at
1-10). Although the Plaintiff did not attach copies of the note and mortgage to the complaint,
copies were attached as exhibits to Wells Fargo’s Rule 12(c) motion. (Id.) Because the note and
mortgage are central to the complaint and the Plaintiff has not disputed the authenticity of the
copies attached to Wells Fargo’s Rule 12(c) motion, the court may consider the documents
without converting the motion into one for summary judgment. Feldt, 304 F.3d at 1134.
Moreover, the date of the note and mortgage, the amount of the note, and the amount of the
2

On March 27, 2014, Mr. Davis died. (Doc. 1 ¶ 9). Although it is not clear
from the complaint, it appears that no payments were made on Mr. Davis’s loan
following his death.3
In his will, Mr. Davis named his wife, Robin Davis (“Mrs. Davis”), executor
and beneficiary of his estate. Mrs. Davis contacted Wells Fargo following Mr.
Davis’s death, informed Wells Fargo that her husband had died and that she had
been named executor of his estate, and asked how she was to proceed while the
estate was being probated. According to Mrs. Davis, she was told that she should
keep Wells Fargo informed of the status of the probate proceedings and that Wells
Fargo would not take any action to foreclose on or sell the Property until she had
received her letters testamentary from the probate court.4 (Doc. 1 ¶¶ 10-12; Doc.
18 at 2-3).
Over the next several months, Mrs. Davis kept Wells Fargo advised of the
status of the probate process. Nonetheless, Wells Fargo foreclosed on the Property
monthly payment under the note are not material to the resolution of Wells Fargo’s Rule 12(c)
motion.
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Attached as an exhibit to the Plaintiff’s response to Wells Fargo’s Rule 12(c) motion is a billing
statement from Wells Fargo dated December 9, 2014, and addressed to Mr. Davis. (Doc. 18-1).
The statement reflects overdue payments from May 24, 2014 through November 24, 2014. (Id.)
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The allegation that Wells Fargo told Mrs. Davis that it would not foreclose on or sell the
Property until she had received her letters testamentary is not stated in the complaint, but rather
in the Plaintiff’s response to Wells Fargo’s Rule 12(c) motion. However, the allegation can
certainly be inferred from the claims and other allegations in the complaint. In any event, Wells
Fargo has accepted the facts alleged in the Plaintiff’s pleadings as true for purposes of its Rule
12(c) motion. (Doc. 19 at 1, n.1).
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on December 10, 2014, even though the estate had not been probated and Mrs.
Davis had not received her letters testamentary. She was granted the letters
testamentary the following day, December 11, 2014. (Doc. 1 ¶¶ 14- 17).
On February 23, 2015, the Estate of Bunnie Davis, Sr. filed this action
against Wells Fargo, alleging claims for breach of contract (Count One), slander of
title (Count Two), wrongful foreclosure (Count Three), unjust enrichment (Count
Four), and fraud (Count Five).5 (Doc. 1). Specifically, the complaint alleges that
Wells Fargo breached the terms of Mr. Davis’s mortgage, slandered the title to the
Property, wrongfully foreclosed on the Property without notifying Mrs. Davis of its
intent to do so, was unjustly enriched from the sale of the Property, and concealed
its intent to foreclose on the Property.
Wells Fargo answered the complaint and then filed the pending motion for
judgment on the pleadings pursuant to Rule 12(c). (Doc. 16). In its motion, Wells
Fargo argues, in part, that the tort claims are due to be dismissed because they did
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The complaint identifies the “Plaintiff” as “The Estate of Bunnie Davis, Sr., resident of
Jefferson County, Alabama until his death.” (Doc. 1 ¶ 3). However, the complaint also uses the
term “Plaintiff” when referring to Mr. Davis himself. (See Doc. 1 at ¶¶ 5-11). To complicate
matters even further, “Plaintiff’s” response to Wells Fargo’s Rule 12(c) motion refers to “Mrs.
Davis’s” claims against Wells Fargo, which would seem to indicate that the Plaintiff is Mrs.
Davis. (See Doc. 18 at 2-4). Notwithstanding these inconsistencies, it is clear that (1) Mr. Davis
is not the Plaintiff because he is deceased, and (2) Mrs. Davis is not the Plaintiff because she has
not asserted any claims in her individual capacity. The complaint was filed by the Estate of
Bunnie Davis, Sr., which means that the Estate of Bunnie Davis, Sr. is the Plaintiff and that Mrs.
Davis is a party to this action only in her capacity as the personal representative of the estate.
The court also notes that, even if Mrs. Davis had brought this action in her individual capacity,
her claims would still be subject to dismissal for the reasons discussed below.
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not survive Mr. Davis’s death, and that the breach of contract claim is due to be
dismissed because Mrs. Davis was not a party to the mortgage and was not the
executor of her husband’s estate at the time the mortgage was allegedly breached.
The Plaintiff responded to Wells Fargo’s Rule 12(c) motion. (Doc. 18). In
the response, the Plaintiff clarifies that the tort claims against Wells Fargo “aren’t
brought on a claim of wrongdoing against the deceased. Instead they are brought
on a claim of wrongdoing against the heirs and/or the current owners of the
[P]roperty.” (Id. at 2). The Plaintiff also clarifies that the “contract” that Wells
Fargo allegedly breached is not “within the mortgage” but rather is an “implied
contract” with Mrs. Davis based on Wells Fargo’s promise not to foreclose on the
Property until Mr. Davis’s estate was probated. (Id. at 2-3). With these
clarifications, the Plaintiff argues that “Mrs. Davis’s” unjust enrichment claim is
sufficiently alleged to survive Wells Fargo’s motion, as is “Mrs. Davis’s” fraud
claim. (Id.at 3) The Plaintiff does not address the slander of title and wrongful
foreclosure claims.
Wells Fargo then filed a reply. (Doc. 19). In addition to arguing that the
claims as stated in the complaint are all due to be dismissed for the reasons
discussed in its Rule 12(c) motion, Wells Fargo argues that the claims as stated in
the Plaintiff’s response are due to be dismissed because Mrs. Davis is not a party to
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this action and the claims are all based on an alleged oral agreement that is barred
by the statute of frauds.
III.
A.

ANALYSIS

Slander of Title and Wrongful Foreclosure
As noted above, the Plaintiff’s response to Wells Fargo’s motion for

judgment on the pleadings does not address or even mention the slander of title and
wrongful foreclosure claims alleged in the complaint. Consequently, the Plaintiff
has effectively abandoned those claims and they are subject to dismissal. See
Coal. for the Abolition of Marijuana Prohibition v. City of Atlanta, 219 F.3d 1301,
1326 (11th Cir. 2000) (“[F]ailure to brief and argue this issue during the
proceedings before the district court is grounds for finding that the issue has been
abandoned.”); McMaster v. United States, 177 F.3d 936, 940–41 (11th Cir. 1999)
(noting that a claim may be considered abandoned when the allegation is included
in the plaintiff's complaint but he fails to present any argument concerning the
claim to the district court).
Additionally, even if the slander of title and wrongful foreclosure claims had
not been abandoned, the claims would still be subject to dismissal. Under
Alabama law, a slander of title claim has six elements: “(1) [o]wnership of the
property by plaintiff; (2) falsity of the words published; (3) malice of the defendant
in publishing the false statements; (4) publication to some person other than the
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owner; (5) the publication must be in disparagement of plaintiff’s property or the
title thereof; and (6) that special damages were the proximate result of such
publication (setting them out in detail).” Merchants Nat. Bank of Mobile v.
Steiner, 404 So. 2d 14, 21 (Ala. 1981) (quoting Womack v. McDonald, 121 So. 57,
59 (Ala. 1929)). Here, the complaint merely alleges that Wells Fargo’s conduct
“has caused a cloud to be placed on the title of the Plaintiff’s property” and that
Wells Fargo’s “slandering of the Plaintiff’s title was the proximate cause of
injuries and damages.” (Doc. 1 ¶¶ 26-27). Other than alleging ownership of the
Property, the Plaintiff has alleged none of the facts necessary to support a slander
of title claim, including the publication of false words by Wells Fargo, malice on
the part of Wells Fargo, publication to someone other than the Plaintiff, and special
damages suffered by the Plaintiff. The slander of title claim fails as a matter of
law.
Likewise, under Alabama law a claim for wrongful foreclosure arises
“whenever a mortgagee uses the power of sale given under a mortgage for a
purpose other than to secure the debt owed by the mortgagor.” Reeves Cedarhurst
Dev. Corp. v. First Am. Fed. Sav. & Loan. Ass'n, 607 So.2d 180, 182 (Ala. 1992).
Here, there is no allegation anywhere in the complaint that Wells Fargo foreclosed
on and sold the Property for any purpose other than to secure Mr. Davis’s overdue
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debt. Like the slander of title claim, the wrongful foreclosure claim fails as a
matter of law.
B.

Breach of Contract
The complaint alleges that Wells Fargo “breached the terms of the mortgage

agreement” between Mr. Davis and Wells Fargo. (Doc. 1 ¶¶ 20-23). However, as
noted above, the Plaintiff has now clarified that the “contract” that Wells Fargo
allegedly breached is not “within the mortgage” but rather is an “implied contract”
arising out of the alleged promise Wells Fargo made to Mrs. Davis that it would
not foreclose on the Property until Mr. Davis’s estate was probated. (Doc. 19 at 23). Indeed, the Plaintiff affirmatively states: “Mrs. Davis’s claim is not that the
express contract [(the mortgage agreement)] was breached [but] that the implied
contract was breached.” (Id. at 3). Accordingly, to the extent that the complaint
alleges a claim for breach of Mr. Davis’s mortgage, the claim has been abandoned
and is due to be dismissed.
That leaves the Plaintiff’s claim for breach of the alleged “implied contract”
between Mrs. Davis and Wells Fargo. Putting aside the fact that this claim is not
pleaded anywhere in the complaint, the claim fails for at least three reasons. First,
Mrs. Davis is not a party to this action in her individual capacity. To the extent she
is a party, it is only in her capacity as the personal representative of her husband’s
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estate, and it is undisputed that she did not have such capacity at the time the
alleged implied contract was created.
Second, “an implied contract must contain all of the essential elements of an
express contract. … The elements of a contract are: (1) agreement; (2)
consideration; (3) two or more contracting parties; (4) legal object; and (5)
capacity.” Freeman v. First State Bank of Albertville, 401 So. 2d 11, 13 (Ala.
1981). Here, even assuming that Wells Fargo and Mrs. Davis reached an
agreement that Wells Fargo would not take any foreclosure action until Mr.
Davis’s estate was probated, the Plaintiff has not shown any consideration flowing
to Wells Fargo. In the absence of any consideration passing from Mrs. Davis to
Wells Fargo in exchange for Wells Fargo’s agreement to postpone foreclosure, no
implied contract was created.
Third, even if an implied contract existed, it would be barred by Alabama’s
Statute of Frauds. The Plaintiff admits that Wells Fargo’s alleged promise not to
foreclose on the Property until the estate was probated was “never properly
produced in writing.” (Doc. 18 at 2). Alabama’s Statute of Frauds provides that
the following agreements, among others, are void unless in writing: “Every
agreement or commitment to lend money, delay or forebear payment thereof or to
modify the provision of such an agreement except for consumer loans with a
principal amount financed of less than $25,000.” ALA. CODE § 8-8-2(7). A
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promise to postpone foreclosure proceedings is subject to the Statute of Frauds and
must be in writing to be enforceable. See Coleman v. BAC Servicing, 104 So. 3d
195, 207 (Ala. Civ. App. 2012) (holding that the Statute of Frauds barred an
alleged oral agreement that “foreclosure would not go forward” as long as the
plaintiff was participating in a loss-mitigation program); Perry v. Fed. Nat. Mortg.
Ass’n, 100 So. 3d 1090, 1099-1100 (Ala. Civ. App. 2012) (following Coleman).
Because Wells Fargo’s alleged agreement to postpone foreclosure was not in
writing, it is void and unenforceable under the Statute of Frauds.
C.

Unjust Enrichment and Fraud
According to the Plaintiff’s response to Wells Fargo’s motion for judgment

on the pleadings, the Plaintiff’s unjust enrichment and fraud claims are both
premised on Wells Fargo’s alleged oral promise not to foreclose on the Property
until Mr. Davis’s estate was probated. With respect to unjust enrichment, the
Plaintiff asserts that Wells Fargo’s “failure to honor the commitment not to sell the
[P]roperty allowed [Wells Fargo] to profit from the sale and [it was] unjustly
enriched to the detriment of Mrs. Davis.” (Doc. 18 at 3). With respect to fraud,
the Plaintiff avers that a Wells Fargo representative falsely represented to Mrs.
Davis that “the bank would hold off on any action until she received the letters of
testamentary.” (Id.) The Plaintiff claims that Mrs. Davis “relied on” Wells
Fargo’s promise and “suffered damages” as a result. (Id.)
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Because Wells Fargo’s alleged oral promise to postpone foreclosure is
barred by the Statute of Frauds, the Plaintiff’s unjust enrichment and fraud claims,
which are based on that same oral promise, are likewise barred.6 See Coleman,
104 So. 3d at 207 (noting that “when a tort claim turns on an alleged agreement
that is unenforceable under the Statute of Frauds, the Statute of Frauds also bars
proof of that agreement to support a tort claim”); see also Branch Banking & Trust
Co. v. Nichols, 2015 WL 187766, *9 (Ala. Apr. 24, 2015) (holding that the
plaintiffs’ tort claims, including claims for fraud and unjust enrichment, failed as a
matter of law because they turned on the existence of an alleged oral agreement
that was invalid under the Statute of Frauds). The Plaintiff cannot pursue tort
claims that turn on proof of an alleged oral promise that is invalid under the Statute
of Frauds. 7
V. CONCLUSION
For the foregoing reasons, Wells Fargo’s motion for judgment on the
pleadings (doc. 16) is due to be granted and this action is due to be dismissed. An
order consistent with this opinion will be entered.
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The court also notes, again, that Wells Fargo’s alleged oral promise was allegedly made to Mrs.
Davis, who was not the representative of her husband’s estate at the time the promise was
allegedly made and is not a party to this action in her individual capacity.
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In the Plaintiff’s response to Wells Fargo’s Rule 12(c) motion, the Plaintiff requests leave to
amend her fraud claim in the event the court finds that the claim is not pleaded with sufficient
specificity. (Doc. 18 at 4). The Plaintiff’s request is denied. The court has dismissed the fraud
claim based on the Statute of Frauds, which is a legal and substantive issue that cannot be
corrected by repleading the claim.
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DONE, this the 2nd day of February, 2016.

_________________________________
JOHN E. OTT
Chief United States Magistrate Judge

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