Austin v. Wells Fargo Home Mortgage
MEMORANDUM OPINION re 25 Order on 3 Motion to Dismiss for Failure to State a Claim. Signed by Senior Judge Glen H. Davidson on 4/22/2015. (dlh)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
QUA S. AUSTIN
CNIL ACTION NO.: 1:14-cv-00190-GHD-DAS
WELLS FARGO HOME MORTGAGE
MEMORANDUM OPINION DENYING DEFENDANT'S MOTION TO DISMISS
Presently before the Court is a motion to dismiss for failure to state a claim  filed by
Defendant Wells Fargo Home Mortgage. Plaintiff Qua S. Austin has not filed a response, and
the time to do so has now passed. The motion is ripe for review. Upon due consideration, the
Court finds that the motion is not well taken and should be denied.
A. Factual and Procedural Background
On September 8, 2014, Plaintiff Qua S. Austin ("Plaintiff") filed a wrongful foreclosure
suit in the Chancery Court of Lowndes County, Mississippi. Plaintiff alleges that she was the
owner of certain real property located in Lowndes County and that Defendant Wells Fargo Home
Mortgage ("Wells Fargo")) acquired the subject property at a foreclosure sale by virtue of a
Substituted Trustee's Deed, which was filed in the Office of the Chancery Clerk of Lowndes
County. Plaintiff further alleges that the purchase price was $84,989.62, but the amount owed
and past due under the deed of trust was much less than that amount. Plaintiff avers that the
foreclosure was wrongful because Wells Fargo acquired the subject property in an amount in
excess of the amount of the debt, but failed make an accounting of the property to Plaintiff and
I Wells Fargo maintains it is incorrectly identified as "Wells Fargo Home Mortgage" in Plaintiffs
complaint and that its correct name is "Wells Fargo Bank, N.A." Throughout this opinion, the Court will refer to the
defendant as "Wells Fargo."
failed to notify Plaintiff of the pending foreclosure orally or in writing and failed to notify
Plaintiff of the foreclosure sale date as required by statute.
Plaintiff seeks a preliminary
injunction and permanent injunction to enjoin and stay the foreclosure of the real property by
Plaintiff additionally seeks damages for her alleged injuries and reasonable
attorney's fees associated with the bringing of this action.
On September 17, 2014, Wells Fargo was served with a copy of the summons and
complaint. See Notice of Servo of Process  at 5. Subsequently, on October 10, 2014, Wells
Fargo timely removed the action to this Court on the basis of diversity jurisdiction. Plaintiff is a
Mississippi citizen; Wells Fargo is a national bank and a citizen of South Dakota. The amount in
controversy exceeds $75,000, because the subject property serves as collateral for a loan in the
amount of $84,989.62. That same day, Wells Fargo filed the present motion to dismiss for
failure to state a claim  to which Plaintiff has not filed a response.
B. Federal Rule ofCivil Procedure 12(b)(6) Standard
Motions to dismiss pursuant to Rule 12(b)(6) "are viewed with disfavor and are rarely
Cuna Mut. Ins. Soc'y, 459 F. App'x 371, 373 (5th Cir. 2012) (citing
Zurich Am. Ins. Co., 322 F.3d 883, 885 (5th Cir. 2003)). When deciding a Rule
12(b)(6) motion to dismiss, the Court is limited to the allegations set forth in the complaint and
any documents attached to the complaint. Walker
Webco Indus., Inc., -
F. App'x - - ,
2014 WL 1388923, at *1 (5th Cir. 2014) (per curiam) (citing Kennedy v. Chase Manhattan Bank
USA, NA, 369 F.3d 833, 839 (5th Cir. 2004)); Roebuck v. Dothan Sec., Inc., 515 F. App'x 275,
280 (5th Cir. 2013) (per curiam).
"[A plaintiffs] complaint therefore 'must contain sufficient factual matter, accepted as
true, to "state a claim to relief that is plausible on its face." , " Phillips v. City ofDallas, Tex.,
- F.3d - , 2015 WL 1449903, at *1 (5th Cir. 2015) (quoting Ashcroft v. Iqbal, 556 U.S. 662,
678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007))). A claim is facially plausible when the
pleaded factual content "allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S. Ct. 1937 (citing Twombly, 550
U.S. at 556, 127 S. Ct. 1955). "[P]laintiffs must allege facts that support the elements of the
cause of action in order to make out a valid claim." Webb v. Morella, 522 F. App'x 238, 241
(5th Cir. 2013) (per curiam) (quoting City of Clinton, Ark. v. Pilgrim's Pride Corp., 632 F.3d
148, 152-53 (5th Cir. 2010) (internal quotation marks omitted)). "[C]onclusory allegations or
legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to
dismiss." Id. (quoting Fernandez-Montes v. Allied Pilots Ass 'n, 987 F.2d 278, 284 (5th Cir.
1993) (internal quotation marks omitted)). "Dismissal is appropriate when the plaintiff has not
alleged 'enough facts to state a claim to reliefthat is plausible on its face' and has failed to 'raise
a right to relief above the speculative level.' " Emesowum v. Hous. Police Dep't, -
F.3d - - ,
2014 WL 1347029, at *1 (5th Cir. Apr. 7,2014) (quoting Twombly, 550 U.S. at 555, 570, 127 S.
C. Analysis and Discussion
Wells Fargo argues that Plaintiffs complaint fails to satisfy the Rule 12(b)(6) standard,
because it asserts two moot causes of action with no factual support and makes a mere passing
reference to an alleged tortious act.
Wells Fargo maintains that Plaintiff snow-deceased
husband executed a promissory note in the amount of $84,989.62 from Wells Fargo, along with a
corresponding deed of trust executed by both Plaintiff and her late husband. Wells Fargo further
maintains that Plaintiff and her late husband defaulted on the loan which triggered an
acceleration clause in the deed of trust, and as a result, Wells Fargo referred the loan to
foreclosure. Plaintiff filed this suit to enjoin the foreclosure in the Chancery Court of Lowndes
County. Wells Fargo removed the suit to this Court. Wells Fargo argues that the foreclosure sale
was properly conducted on July 3, 2014; Wells Fargo's bid of $84,989.62 was the best and
highest bid; and on July 9, 2014, the substituted trustee conveyed the property to Wells Fargo.
Plaintiff filed this suit on September 8, 2014, approximately two months after the foreclosure
sale was complete. Thus, Wells Fargo maintains that the relief sought by Plaintiff-to enjoin the
foreclosure sale-is now moot. As stated above, Plaintiff has not filed a response to the motion
to dismiss and the time for doing so has now passed.
"Once the right to foreclose is established, there cannot be a claim for wrongful
foreclosure." Smith v. Bank ofAm., NA., No. 2:11CVI20-MPM-JMV, 2012 WL 4320845, at
*4 (N.D. Miss. Sept. 20, 2012) (citing Merchants Nat'/ Bank, Vicksburg v. Se. Fire Ins. Co., 854
F .2d 100, 105 (5th Cir. 1988)). "So long as the lender complies with the terms of the note and
Mississippi law-by following the statutory notice requirements and providing the borrower
with an accounting of the sums necessary to cure the default-the foreclosure is valid." Id.
(citing Merchants Nat'/ Bank, 854 F.2d at 105) (citing Miss. Code Ann. §§ 89-1-55, 89-1-57,
& 89-1-59); West v. Nationwide Tr. Servs., Inc., No.1 :09cv295, 2009 WL 4738171, at *3 (S.D.
Miss. Dec. 4, 2009)). "Mississippi recognizes a claim for wrongful foreclosure where 'an
unlawful foreclosure is attempted solely from a malicious desire to injure the mortgagor; or ...
where the foreclosure is conducted negligently or in bad faith, to his detriment.'" Stewart v.
GMAC Mortg., LLC, No. 2:1O-cv-OOI49-DCB-JMR, 2011 WL 1296887, at *11 (S.D. Miss.
Mar. 31, 2011) (quoting Nat 'I Mortg. Co. v. Williams, 357 So. 2d 934, 935-36 (Miss. 1978)
(quoting 59 C.J.S. Mortgages § 535 (1971) (quotation marks omitted». For a viable wrongful
foreclosure claim to lie, an actual foreclosure must have taken place. See Hopson v. Chase
Home Fin. LLC, 14 Supp. 3d 774, 794-95 (S.D. Miss. 2014) (citing McKinley v. Lamar Bank,
919 So. 2d 918,930 (Miss. 2005); Temple-Inland Mortg. Corp. v. Jones, 749 So. 2d 1161, 1167
(Miss. Ct. App. 1999». "A wrongful-foreclosure claim may. ..
lie based on procedural
shortcomings in the foreclosure process." Brisby v. Moynihan, No. 3:14cv47-DPJ-FKB, 2014
WL 2940874, at *2 (S.D. Miss. June 30, 2014) (quotation marks and citation omitted);
Teeuwissen v. JP Morgan Chase Bank, NA., 902 F. Supp. 2d 826, 835 (S.D. Miss. 2011); West,
2009 WL 4738171; Chase Home Fin., L.L.C. v. Hobson, 81 So. 3d 1097, 1101 (Miss. 2012).
Plaintiffs allegations of wrongful foreclosure include two assertions of wrongdoing on
the part of Wells Fargo. The Court will examine each assertion of wrongdoing in turn.
First, Plaintiff alleges that Wells Fargo "failed to notify Plaintiff of the pending
foreclosure orally or in writing and failed to notify Plaintiff of the foreclosure sale date as
required by statute." Pl.'s State-Ct. CompI. 
XI. This allegation has no legal basis. The
United States District Court for the Southern District of Mississippi has explained:
Mississippi is a non-judicial foreclosure state.
Mississippi law does not require the mortgagee to directly notify
the mortgagor of an impending foreclosure. EB, Inc. v. Allen, 722
So. 2d 555, 561 (Miss. 1998); Admin. of May v. First Fed. Bank
for Sav., 32 So. 3d 1227, 1229 (Miss. Ct. App. 2010); see Jeffrey
Jackson & Mary Miller, 6 Encyc. Miss. Law. § 51:12. The
Mississippi Code requires only that a notice be posted in the
courthouse of the county where the land is situated, and that a
notice of sale be published in a paper of general circulation. Miss.
Code Ann. § 89-1-55.
Pennell v. Wells Fargo Bank, NA., 2012 WL 2873882, at *6 (S.D. Miss. July 12,2012).
The Substituted Trustee's Deed attached to the complaint states that the foreclosure sale
was conducted "after posting and publication of the Notice of Sale and [sic] required by the
tenus of said Deed of Trust and the law of the State of Mississippi, within legal hours (being
between the hours of 11 :00 a.m. and 4:00 p.m.)."
See Substituted Tr. 's Deed  at 7.
Furthermore, the notice of the sale is also attached to the complaint and provides that notice was
made in the Commercial Dispatch four times consecutively, specifically on June 11,2014; June
18, 2014; June 25, 2014; and July 2, 2014. See Notice of Sale  at 9. Clearly, Wells Fargo
properly followed the posting and publishing requirements of the statute. Any additional notice
requirements would have stemmed from the note and deed of trust. Plaintiff fails to point to any
provision of the note and deed of trust that required personal notice of the foreclosure sale and
instead references only the statutory requirements. Accordingly, these allegations do not state a
claim for relief.
Next, Plaintiff alleges that Wells Fargo purchased the subject property at the foreclosure
sale for an amount greater than what was owed and past due under her deed of trust and "failed
to properly account for payments made on the indebtedness of acquired subject property." Pl.'s
State-Ct. Compi. 
VI, XI. Wells Fargo fails to address this allegation in its motion to
The deed of trust is not attached to Plaintiff s state-court complaint. Taking the
allegation as true, as this Court must do on a Rule 12(b)(6) motion, the allegation supports a
wrongful foreclosure claim based on "procedural shortcomings in the foreclosure process." See
Brisby, 2014 WL 2940874, at *2. "[A] mortgagee such as [Wells Fargo] has a duty to account to
the mortgagors for all sums due to bring the mortgage current prior to foreclosure, and . . .
[Plaintiff has] stated a claim for wrongful foreclosure based on [Wells Fargo's] alleged failure to
provide [Plaintiff] an accounting prior to foreclosure." See Teeuwissen, 894 F. Supp. 2d at 909
& n.6 (S.D. Miss. 2012) (citing West, 2009 WL 4738171). Under Mississippi law, an accounting
is a "statement in writing of debits and credits or of receipts and payments." Ward v. Life
Investors Ins. Co. ofAm., 383 F. Supp. 2d 882,885 (S.D. Miss. 2005) (quoting State ex rei. King
v. Harvey, 214 So. 2d 817,819 (Miss. 1968)).
An aggrieved mortgagor ordinarily "may recover damages or have the foreclosure set
aside." West, 2010 WL 3122801, at *3 (citing Nat 'I Mortg. Co., 357 So. 2d at 936). "The
purpose of a preliminary injunction is to prevent irreparable injury so as to preserve the court's
ability to render a meaningful decision on the merits." Miss. Power & Light Co. v. United Gas
Pipe Line Co., 760 F.2d 618,627 (5th Cir. 1985). The Court finds that, as Wells Fargo argues in
its motion to dismiss, Plaintiff s request for a preliminary and permanent injunction against the
foreclosure proceedings came after the foreclosure sale was complete, and is thus relief that
cannot be granted.
However, Plaintiff also seeks damages and attorney's fees.
Mississippi law, the measure of damages allowable to a mortgagor for a wrongful foreclosure
sale fully executed, is the difference between the amount of his debt and the value of the land on
the day of sale." Blair v. GMAC Mortg., LLC, No. 3:09CVlO-SA-SAA, 2009 WL 324053, at *2
(N.D. Miss. Feb. 9,2009) (citing Fed. Land Bank v. Robinson, 134 So. 180 (Miss. 1931)).
Therefore, this measure of damages is available in the case sub judice.
For all of the foregoing reasons, the Court finds that Plaintiff has stated a wrongful
foreclosure claim for damages, specifically, the difference between the amount of her debt and
the value of the land on the day of sale, based on Wells Fargo's alleged failure to provide her
with an accounting prior to foreclosure. To the extent she has attempted to urge any other
allegations or claims, those allegations or claims are not well taken.
ACCORDINGLY, Wells Fargo's motion to dismiss for failure to state a claim  is
An order in acc~j?ance with this opinion shall issue this day.
J,'J day of April, 2015.
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