Gibson et al v. Mortgage Electronic Registrations Systems, Inc. et al

Filing 65

ORDER granting 51 Defendants' Motion for Summary Judgment; denying Plaintiffs' Cross-Motion for Summary Judgment. Signed by Judge S. Thomas Anderson on 5/19/14. (Anderson, S.)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
______________________________________________________________________________
SUZANNE GIBSON and
RALPH GIBSON,

)
)
)
Plaintiffs,
)
)
v.
)
No. 11-2173-STA-cgc
)
MORTGAGE ELECTRONIC
)
REGISTRATION SYSTEMS, INC.;
)
GMAC MORTGAGE LLC OF TN;
)
RESIDENTIAL FUNDING
)
CORPORATION; RESIDENTIAL
)
FUNDING COMPANY LLC,
)
)
Defendants.
)
______________________________________________________________________________
ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
ORDER DENYING PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT
______________________________________________________________________________
Before the Court is Defendants Mortgage Electronic Registration Systems, Inc.; GMAC
Mortgage, LLC; and Residential Funding, LLC f/k/a Residential Funding Corporation’s Motion for
Summary Judgment (D.E. # 51) filed on February 17, 2014. Plaintiffs Ralph and Suzanne Gibson
have filed a Cross-Motion for Summary Judgment (D.E. # 61). The Cross-Motions for Summary
Judgment are now fully briefed and therefore ripe for disposition. For the reasons set forth below,
Defendants’ Motion is GRANTED, and Plaintiffs’ Motion is DENIED.
BACKGROUND
The following facts are not in dispute for purposes of the Cross-Motions for Summary
Judgment unless otherwise noted. Plaintiffs Ralph and Suzanne Gibson signed a Note dated January
1

3, 2003, in favor of National Bank of Commerce in the amount of $360,000.00. (Defs.’ Statement
of Undisputed Fact ¶ 1.) In connection with their loan, Plaintiffs also executed a Deed of Trust dated
January 3, 2003, whereby Plaintiffs pledged their property located at 4450 Park Avenue, Memphis,
Tennessee 38117 (“the property”) as security for the Deed of Trust and payment of the Note. (Id.
¶ 3.) National Bank of Commerce endorsed the Note to Residential Funding Corporation. (Id. ¶ 5.)
National Bank of Commerce also executed an Assignment of Mortgage, assigning the Deed of Trust
to Residential Funding Corporation. (Id. ¶ 6.) Residential Funding Company, LLC then succeeded
Residential Funding Corporation by merger. (Id. ¶ 7.)
Plaintiffs dispute the assertion that Residential Funding Company, LLC succeeded
Residential Funding Corporation by merger. Plaintiffs argue that Defendants have adduced no
documentary proof of any merger of the two entities, only the declaration of Frederick Denson, a
former GMAC employee. Denson’s declaration simply states that the merger occurred and that
Denson’s knowledge of the declaration is based on the contents of the files of Ocwen Loan
Servicing, LLC, Denson’s current employer and the holder of the loan servicing rights to Plaintiffs’
mortgage since February 2013.1 The Court finds no support for Plaintiffs’ argument that Defendants
must also adduce documentary proof of the merger. The Federal Rules of Evidence do not require
a party to introduce additional documentary support for a fact simply because “the document
contains facts that are also testified to by a witness.”2 Plaintiffs further object to Defendants’

1

Sealed Denson Decl. ¶ 8 (D.E. # 53).

2

O’Brien v. Ed Donnelly Enter., Inc., 575 F.3d 567, 598–99 (6th Cir. 2009) (citing Allstate
Ins. Co. v. Swann, 27 F.3d 1539, 1543 (11th Cir. 1994) (“Rule 1002 requires production of an
original document only when the proponent of the evidence seeks to prove the content of the writing.
It does not, however, require production of a document simply because the document contains facts
that are also testified to by a witness.”).
2

assertion about the merger because there was no assignment of the Deed of Trust from Residential
Funding Corporation to Residential Funding Company, LLC. The Court finds that this is actually
an additional fact and that Plaintiffs’ claim does not demonstrate why a genuine dispute exists
concerning the fact of the merger. Therefore, the Court finds that the merger is undisputed for
purposes of summary judgment.
As of August 2010, Plaintiffs were in default of their Note and Deed of Trust by failing to
make payments as required under the Note. (Id. ¶ 8.) Plaintiffs admit that while Defendants
considered their loan to be in default at that time, Plaintiffs were seeking an accounting from
Defendants concerning $15,000 in overcharges on their loan. (Pls.’ Resp. to Statement of Fact ¶ 8.)
On or about August 5, 2010, GMAC in its capacity as loan servicer referred Plaintiffs’ loan to
foreclosure counsel to proceed with foreclosure of the property. (Defs.’ Statement of Undisputed
Fact ¶ 9.) On August 13, 2010, Patrick Taggart, foreclosure counsel for GMAC, forwarded a notice
of default to Plaintiffs. (Id. ¶ 10.) Thereafter, Plaintiffs did not cure their default, and on August 20,
2010, Taggart forwarded Plaintiffs a notice of foreclosure sale via first class regular and certified
mail. (Id. ¶ 11.)3 The notice included a letter from Mr. Taggart informing Plaintiffs that the lender
had accelerated the amounts due under the Note and was invoking the power of sale as set forth in
the Deed of Trust. (Id.)
The notice also provided a copy of the notice of Substitute Trustee’s Sale scheduled for
September 16, 2010, 12:00 p.m. at the Southwest Corner, Adams Avenue Entrance to the Shelby
County Courthouse, Memphis, Tennessee. (Id. ¶ 12.) The notice further advised as follows:

3

As previously noted, Plaintiffs dispute that they were actually in default. (Pls.’ Resp. to
Statement of Fact ¶ 11.)
3

“Substitute Trustee reserves the right to adjourn the day of the sale to another day, time and place
certain without further publication, upon announcement at the time and place for the sale set forth
above.” (Id. ¶ 13.)4 Notice of the trustee’s sale was published in The Commercial Appeal on August
23, 2010, August 30, 2010, and September 6, 2010. (Id. ¶ 14.)
Prior to the original foreclosure sale set for September 16, 2010, Plaintiffs submitted a loan
modification application under the federal HAMP loan modification program. (Id. ¶ 15.) Plaintiffs’
application was denied in late August 2010, and the foreclosure sale was postponed and rescheduled
for September 30, 2010. (Id. ¶ 16.) Foreclosure paralegal Carolyn Bernard attended the cry of the
original sale date on September 16, 2010, where she announced that the sale was postponed and
rescheduled for September 30, 2010, 12:00 p.m. at the same location. (Id. ¶ 17.)5 Plaintiffs then
submitted a second HAMP loan modification application prior to the foreclosure sale set for
September 30, 2010. (Id. ¶ 18.) As a result, the September 30, 2010 foreclosure sale was postponed
until November 4, 2010, while Plaintiffs’ application was pending. (Id. ¶ 19.) At the September 30,
2010 cry, Ms. Bernard again attended and announced that the sale had been postponed and

4

Plaintiffs argue in response to this statement that this reservation of rights only addressed
the need for further publication of the rescheduled sale. (Pls.’ Resp. to Statement of Fact ¶ 13.) The
term did not permit the substitute trustee to forego further written notices to Plaintiffs. (Id.) The
Court holds that Plaintiffs’ arguments concern the proper construction of the Deed of Trust, a
question of law for the Court and not an issue of fact. Hughes v. New Life Dev. Corp., 387 S.W.3d
453, 480 (Tenn. 2012). Plaintiffs do not actually dispute that the Deed of Trust contained the
language cited by Defendants. Therefore, the Court finds that Defendants’ statement about the
language from the Deed of Trust is undisputed. The Court fully considers the proper construction
and legal effect of the language below.
5

Plaintiffs respond to Defendants’ claim about the sale rescheduled for September 30, 2010,
that they are without sufficient information to admit or deny the statements because they were never
informed of a postponement of the sale and the rescheduled date. (Pls.’ Resp. to Statement of Fact
¶¶ 16, 17, 19–22.) For purposes of summary judgment then, the Court finds that Defendants’
statements about the postponements of the sale are undisputed.
4

rescheduled for November 4, 2010, 12:00 p.m. at the same location. (Id. ¶ 20.) Plaintiffs’ second
loan modification application was subsequently denied. (Id. ¶ 21.)
The foreclosure sale was postponed and rescheduled a final time for December 9, 2010. (Id.)
At the November 4, 2010 cry, Ms. Bernard announced that the sale had been postponed and
rescheduled for December 9, 2010, 12:00 p.m. at the same location. (Id. ¶ 22.) At the December
9, 2010 sale, the Property was sold to Defendant RFC, as evidenced by the Substitute Trustee’s
Deed. (Id. ¶ 23.) Plaintiffs add that the property was sold to Residential Funding Company, LLC
and that this entity never had an interest in the property. (Pls.’ Resp. to Statement of Fact ¶ 23.)
Plaintiffs have submitted their own statement of undisputed facts in support of their CrossMotion for Summary Judgment. With respect to the notice issue, Plaintiffs state that they decided
to take advantage of the HAMP modification program in 2010 after unsuccessfully attempting to get
GMAC to conduct a proper accounting of the overcharges on Plaintiffs’ loan. (Pls.’ Statement of
Undisputed Fact ¶ 1.) Plaintiffs concluded that the terms of a modified loan would be more
advantageous than a refund of the overcharges. (Id.) While Plaintiffs’ request for modification was
under consideration by GMAC in August 2010, Plaintiffs received notice of the foreclosure sale set
for September 16, 2010. (Id.) Plaintiffs immediately contacted GMAC and received assurances that
the foreclosure was cancelled and not merely postponed. (Id.) Defendants dispute the admissibility
of Plaintiffs’ claims about their contact with GMAC, arguing that Plaintiffs have failed to provide
the particulars of the conversation with GMAC in August 2010. Defendants argument, however, is
premised on the pleading requirements for claims sounding in fraud set forth in Federal Rule of Civil
Procedure 9(b), and not the burden of proof at summary judgment. Defendants further argue that
the foreclosure sale complied with the notice requirements of the Deed of Trust and Tennessee’s
5

foreclosure statute. These are questions of law for the Court to decide, and not issues of fact.
Therefore, the Court finds that Plaintiff’s contentions are undisputed for purposes of summary
judgment.
On at least three occasions throughout 2010, Plaintiffs submitted requests for loan
modification under HAMP. (Pls.’ Statement of Undisputed Fact ¶ 2.) GMAC rejected Plaintiffs’
first modification request on the grounds that Plaintiffs’ income was too high under the terms of the
program. (Id.) GMAC rejected Plaintiffs’ second modification request because Plaintiffs’ income
was too low for a modification. (Id.) On December 5, 2010, Plaintiffs submitted a third request for
modification to GMAC after receiving encouragement from a representative in GMAC’s loss
mitigation department. (Id. ¶ 3.) On December 6, 2010, Plaintiffs contacted GMAC to verify that
their request was received, at which time Plaintiffs were informed for the first time that a foreclosure
sale was set for December 9, 2010. (Id.) Plaintiffs had not received mailed, written notice of the
December 9, 2010 foreclosure sale. (Id. ¶ 4.) The GMAC representatives with whom Plaintiffs
spoke assured Plaintiffs that their loan modification request would be reviewed to see if the
foreclosure sale could be cancelled while the request for modification was under consideration. (Id.)
On December 7, 2010, Plaintiffs again contacted GMAC and received assurances that the foreclosure
sale was cancelled and that GMAC would render a decision on their loan modification request within
30 days. (Id. ¶ 5.)6 Plaintiffs believed that because GMAC had cancelled the September 2010 sale

6

Plaintiffs’ original Statement of Undisputed Facts were numbered serially but omitted
numbers 5 and 6 (D.E. # 61-3). Plaintiffs have submitted a revised brief, which corrected the
numbering error (D.E. # 64-1).
6

as promised, GMAC would likewise cancel the December 2010 as promised. (Id.)7
Plaintiffs first learned that the December 9, 2010 foreclosure sale had occurred as planned
when Plaintiffs received a letter from the law firm for Defendant Residential Funding Company,
LLC, threatening to file a forcible entry and detainer action against Plaintiffs if they did not
voluntarily vacate the property. (Id. ¶ 8.) Plaintiffs were never given notice in writing or otherwise
that the September 16, 2010 foreclosure sale date was postponed to September 30, 2010, or that the
September 30, 2010 sale was postponed to November 4, 2010, or that the November 4, 2010 sale
was postponed to December 9, 2010, until Plaintiffs learned of the December 9 sale on December
6, 2010, and were told the sale was cancelled on December 7, 2010. (Id. ¶ 9.)
In their Motion for Summary Judgment, Defendants argue that they are entitled to judgment
as a matter of law on the following claims: fraudulent or wrongful foreclosure (Count I), slander of
title (Count II), conversion (Count III), breach of the deed of trust (Count IV), and promissory
estoppel (Count V). Defendants first argue that Plaintiff’s fraudulent or wrongful foreclosure,
slander of title, and conversion claims are barred by the law of the case doctrine. In deciding
Plaintiffs’ motion to amend their pleadings, the Court previously denied Plaintiffs leave to add a
claim to quiet title. The Court held that Plaintiffs had not alleged facts to show that Defendant
Residential Funding Company, LLC lacked legal authority to conduct the foreclosure sale.
Defendants argue that the same reasoning defeats Plaintiffs’ claims for wrongful foreclosure, slander

7

Defendants dispute that the Deed of Trust required written notice of the December 2010
foreclosure sale because Plaintiffs had previously received written notice of the original September
2010 sale date. (Defs.’s Resp. to Pls’s Undisputed Fact ¶ 3.) According to Defendants, the original
sale was adjourned pursuant to announcements made at each of the scheduled sales for Plaintiffs’
property. (Id.) The parties’ arguments on the notice issue present questions of law for the Court to
decide, and not issues of fact.
7

of title, and conversion, all based on Plaintiffs’ theory that Residential Funding Company, LLC
lacked legal authority to conduct the foreclosure sale. As a result, the Court should grant Defendants
judgment as a matter of law on each of these claims.
Next, Defendants argue that Plaintiffs cannot prove a breach of the Deed of Trust. The initial
notice of the foreclosure sale undisputedly complied with the notice terms of the Deed of Trust and
the requirement that written notice be given to Plaintiffs. According to Defendants, the Deed of
Trust did not specify any notice requirements for the postponement of the sale. The original notice
of the foreclosure sale, which Plaintiffs received, reserved to the substitute trustee “the right to
adjourn the day of the sale to another day, time, and place certain without further publication” so
long as the rescheduled date was announced at the time and place of the originally noticed sale.
Defendants argue then that the oral postponement of the sale at each successive sale date did not
breach the terms of the Deed of Trust.
As for Plaintiffs’ remaining claim for promissory estoppel, Defendants contend that the claim
is barred by the statute of frauds. Plaintiffs allege that GMAC through a representative granted
Plaintiffs a forebearance of the foreclosure sale while GMAC considered Plaintiffs’ third loan
modification request in December 2010. However, Plaintiffs never received the forbearance in
writing as required under Tennessee’s statute of frauds, Tenn. Code Ann. § 29–2–101(b)(1).
Defendants contend that the oral promise to postpone the sale is unenforceable. Defendants argue
in the alternative that Plaintiffs have failed to plead any conduct akin to fraud to support their
promissory estoppel claim and that Plaintiffs cannot show they reasonably relied on any promise by
GMAC to their detriment. The undisputed evidence shows that Plaintiffs were in default, their
previous attempts at loan modification were unsuccessful, and Plaintiffs knew about the impending
8

sale. Plaintiffs have not shown that but for the alleged promise to cancel the sale Plaintiffs could
have been the high bidder at the foreclosure sale. Plaintiffs have only suggested in a previous filing
with this Court that they could have enjoined the foreclosure sale in Tennessee chancery court. For
these reasons, Defendants argue that the Court should grant their Motion for Summary Judgment on
all claims.
Plaintiffs have responded in opposition to Defendants’ Rule 56 Motion and have filed their
own Cross-Motion for Summary Judgment. Plaintiffs begin by answering Defendants’ law-of-thecase argument about the claims for wrongful foreclosure, slander to title, and conversion. Plaintiffs
note that the Court granted them leave to amend their pleadings to add these claims. As for the claim
for breach of the Deed of Trust, Plaintiffs argue that under Tennessee law a trustee must act in strict
compliance with the terms of the Deed of Trust. Plaintiffs assert that the trustee may postpone a
properly noticed sale only with the consent of all parties. The statute of frauds prevents trustees from
relying on an oral announcement at a foreclosure sale to alter the written terms of the Deed of Trust.
Plaintiffs also point out that in an earlier submission to the Court, Defendants claimed that they had
published notice of the December 9, 2010 sale in the Commercial Appeal for three consecutive
weeks in November and December 2010. Plaintiffs argue that if Defendants had the right to
announce the postponement of the sale orally, then published notice would be unnecessary.
Plaintiffs further argue that Defendants should be judicially estopped from taking inconsistent
positions in its different filings with the Court. Plaintiffs request then that the Court declare the
foreclosure sale void and return the parties to the positions each occupied before the December 2010
sale. For the same reasons, Plaintiffs argue they are entitled to summary judgment on their claims
for wrongful foreclosure, slander to title, and conversion. Concerning Plaintiffs’ claim for
9

promissory estoppel, Plaintiffs respond that Defendants do not deny that a GMAC representative
gave Plaintiffs assurances that the December 2010 sale would not go forward. The promise did not
violate the statute of frauds, according to Plaintiffs, because the representation did not alter the terms
of the Deed of Trust. Therefore, Plaintiffs argue that they are entitled to summary judgment on all
claims.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 56(a) provides that a party is entitled to summary judgment
if the moving party “shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”8 The Supreme Court has stated that “[t]hough
determining whether there is a genuine issue of material fact at summary judgment is a question of
law, it is a legal question that sits near the law-fact divide.”9 In reviewing a motion for summary
judgment, the evidence must be viewed in the light most favorable to the nonmoving party,10 and the
“judge may not make credibility determinations or weigh the evidence.”11 When the motion is
supported by documentary proof such as depositions and affidavits, the nonmoving party may not
rest on his pleadings but, rather, must present some “specific facts showing that there is a genuine
issue for trial.”12 It is not sufficient “simply [to] show that there is some metaphysical doubt as to

8

Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Canderm
Pharmacal, Ltd. v. Elder Pharms, Inc., 862 F.2d 597, 601 (6th Cir. 1988).
9

Ashcroft v. Iqbal, 556 U.S. 662, 674 (2009).

10

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

11

Adams v. Metiva, 31 F.3d 375, 379 (6th Cir. 1994).

12

Celotex, 477 U.S. at 324.
10

the material facts.”13 These facts must be more than a scintilla of evidence and must meet the
standard of whether a reasonable juror could find by a preponderance of the evidence that the
nonmoving party is entitled to a verdict.14 In this Circuit, “this requires the nonmoving party to ‘put
up or shut up’ [on] the critical issues of [her] asserted causes of action.”15
When determining if summary judgment is appropriate, the Court should ask “whether the
evidence presents a sufficient disagreement to require submission to a jury or whether it is so oneside that one party must prevail as a matter of law.”16 Summary judgment must be entered “against
a party who fails to make a showing sufficient to establish the existence of an element essential to
that party’s case, and on which that party will bear the burden of proof at trial.”17
ANALYSIS
I. Claims against MERS
Defendants argue in their Motion for Summary Judgment that Plaintiffs have not shown how
MERS should be liable for wrongful foreclosure, breach of the Deed of Trust, or promissory
estoppel. As such, MERS seeks judgment as a matter of law as to these claims. Plaintiffs have not
responded in their summary judgment briefing to Defendants’ argument about MERS’s liability to
Plaintiffs. District courts in this Circuit routinely grant summary judgment as to claims a plaintiff

13

Matsushita, 475 U.S. at 586.

14

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).

15

Lord v. Saratoga Capital, Inc., 920 F. Supp. 840, 847 (W.D. Tenn. 1995) (citing Street v.
J.C. Bradford & Co., 886 F.2d 1472, 1478 (6th Cir. 1989)).
16

Anderson, 477 U.S. at 251–52.

17

Celotex, 477 U.S. at 322.
11

fails to support or address in a response to a motion for summary judgment.18 Therefore, the Court
holds that MERS is entitled to judgment as a matter of law on Plaintiffs’ claims against it for
wrongful foreclosure, breach of the Deed of Trust, and promissory estoppel. Therefore, Defendants’
Motion for Summary Judgment is GRANTED as to these claims against MERS.
III. Breach of the Deed of Trust
As is clear from the parties’ summary judgment briefing, the parties hotly dispute whether
Defendants complied with the Deed of Trust and provided Plaintiffs with proper notice of the
foreclosure sale. Defendants maintain that the Deed of Trust required written notice mailed to
Plaintiffs’ address of record for the initial sale. The trustee reserved the right in the written notice
of sale to adjourn the noticed sale by oral announcement at the date, time, and place of the sale and
to give oral notice that the sale was rescheduled for a later date and time certain. According to the
proof, the crier followed this procedure at the properly notice sale. As such, no breach of the Deed
of Trust’s notice requirements occurred in this case. Plaintiffs respond that the Deed of Trust
required written notice of a sale not only for the initial sale date but for any and all rescheduled sale
dates. Otherwise, the trustee was not permitted to alter the notice term of the Deed of Trust.
Under Tennessee law, a foreclosure sale may be set aside where the trustee fails to comply
18

Burress v. City of Franklin, Tenn., 809 F. Supp. 2d 795, 809 (M.D. Tenn. 2011); Anglers
of the Au Sable v. U.S. Forest Serv., 565 F. Supp. 2d 812, 839 (E.D. Mich. 2008); Dage v. Time
Warner Cable, 395 F. Supp. 2d 668, 679 (S.D. Ohio 2005); Kattar v. Three Rivers Area Hosp. Auth.,
52 F. Supp. 2d 789, 798 n.7 (W.D. Mich. 1999). See also Clark v. City of Dublin, No. 05-3186,
2006 WL 1133577, at *3 (6th Cir. Apr. 27, 2006) (where the appellant did not properly respond to
the arguments asserted against his ADEA and ADA claims by the appellees in their motion for
summary judgment, the appellant had abandoned his ADEA and ADA claims); Conner v. Hardee’s
Food Sys., No. 01-5679, 2003 WL 932432, at *4 (6th Cir. Mar. 6, 2003) (finding that “[b]ecause
Plaintiffs failed to brief the issue before the district court . . . Plaintiffs abandoned their . . . claim.”);
Hazelwood v. Tenn. Dept. of Safety, No. 3:05-cv-356, 2008 WL 3200720, at *8 (E.D. Tenn. Aug.
5, 2008).
12

with the notice requirements of the deed of trust.19 The Tennessee Supreme Court long ago held that
When, by the terms of the deed, the trustee is required before making sale to give
notice to the bargainor of the time and place of sale, the giving of such notice is in
the nature of a condition precedent, and, if not complied with, the sale is
unauthorized and void and will communicate no title to the purchaser. And if the
requirement be that personal notice shall be given, the trustee cannot substitute notice
by advertisement in a newspaper, or at some public place or places, because not
within the scope of his authority and also because such a departure on the part of the
trustee might be made to defeat the very object of the requirement by enabling him
to sell the property without the knowledge of the party making the deed.20
Where “the terms are sufficiently clear and originate in the deed of trust, the law demands strict
compliance for the conveyance to be valid.”21
The issue presented is whether the substitute trustee complied with the terms of the Deed of
Trust when the trustee adjourned the sale by oral announcement at the time and place given in the
original notice, and then adjourned the sale two more times thereafter. Section 22 of the Deed of
Trust provides as follows:
If Lender invokes the power of sale, Trustee shall give notice of sale by public
advertisement in the county in which the Property is located for the time and in the
manner provided by Applicable law, and Lender or Trustee shall mail a copy of the
notice of sale to Borrower in the manner provided in Section 15. Trustee, without
demand on Borrower, shall sell the Property at public auction to the highest bidder
at the time and under the terms designated in the notice of sale.22
Section 15 of the Deed of Trust required that all notices under the Deed of Trust be given in writing

19

Federal Nat. Mortg. Ass’n v. Robilio, W2007-01758-COA-R3-CV, 2008 WL 2502114,
at *7 (Tenn. Ct. App. June 24, 2008) (citation omitted).
20

Henderson v. Galloway, 27 Tenn. 692, 695–96 (Tenn. 1848).

21

Robilio, 2008 WL 2502114, at *7 (citing Progressive Bldg. & Loan Ass’n v. McIntyre, 89
S.W.2d 336, 336 (Tenn. 1936)).
22

Deed of Trust, ex. 2 to Denson Decl. (D.E. # 53-2).
13

and mailed by first class mail to the borrower’s address of record. The parties do not dispute that
Defendants complied with the Deed of Trust’s notice provisions when the law firm representing
Residential Funding Company, LLC caused notice of the sale set for September 16, 2010 to be
published in the Commercial Appeal and mailed a copy of the published notice to Plaintiffs at their
address of record. There is no genuine dispute that the substitute trustee then adjourned the properly
noticed sale three times on September 16, 2010, September 30, 2010, and November 4, 2010, all by
oral announcement at the time and place previously announced for the sale.
The Court holds that Defendants’ conduct of the December 2010 foreclosure sale complied
with the notice provisions of the Deed of Trust. The Deed of Trust required that in the event the
Lender invoked the power of sale, the trustee should give “notice of sale” by public advertisement
and mail a copy of the notice of sale to Plaintiffs at their address of record. There appears to be no
dispute that the substitute trustee complied with this requirement. The record shows that the sale
noticed for September 16, 2010, was postponed, though Plaintiffs claim that GMAC told them the
sale would be cancelled outright, not merely postponed. The Deed of Trust did not contain any
specific terms about the procedures for adjourning or postponing the foreclosure sale as noticed.
Some states have statutory requirements for giving notice of the postponement of a non-judicial
foreclosure sale. For example, pursuant to Michigan Compiled Laws § 600.3220, “an adjournment
of one week or less is valid if notice of the adjournment is posted before or at the time of the sale and
at the place where the sale is to be made. If the adjournment is for more than one week, however,
notice must also be published in the newspaper in which the original notice was published.”23 Other

23

Bramlage v. Wells Fargo Home Mortg., Inc., 144 F. App’x 489, 491 (6th Cir. 2005)
(construing Mich. Comp. Laws § 600.3220).
14

states have adopted common law standards for giving notice of the postponement of the sale. Under
North Carolina law, for instance, “in the absence of some statutory or contract provision to the
contrary, a notice of postponement, made in good faith, and reasonably calculated to give proper
publicity of the time and place, has been deemed sufficient.”24 Tennessee, whose substantive law
governs the dispute in this case, has adopted no such statutory or common law requirements for
noticing an adjournment or postponement, despite the fact that “[o]ral postponement of foreclosure
sales is a fairly common practice in Tennessee.”25
In the case at bar, the Court need not look beyond the Deed of Trust or the notice itself to
decide whether the substitute trustee gave proper notice of the adjournments of the sale. The Deed
of Trust provided that the substitute trustee was to sell the property at public auction “at the time and

24

Ferebee v. Sawyer, 83 S.E. 17, 18 (N.C. 1914); see also Craig v. Buckley, 21 P.2d 430,
431 (Calif. 1933) (“[The trustee] may from time to time postpone such sale by such advertisement
as it may deem reasonable, or without further advertisement by proclamation made to the persons
assembled at the time and place previously appointed and advertised for such sale.”); 55 Am. Jur.
2d Mortgages § 507 (2d ed.) (“While the question must depend on the particular case, it seems that
unless a statute or some stipulation of the contract provides otherwise, a reasonable notice of the
postponement may suffice without the necessity of giving an entirely new notice. Any notice of
postponement made in good faith and reasonably calculated to give proper publicity of the time and
place is generally deemed sufficient.”).
25

In re Reels, No. 03-17134, 2007 WL 1138436, at *2 (Bankr. E.D. Tenn. Apr. 13, 2007).
Other Tennessee cases could be construed to endorse simple oral announcement of a postponement
or adjournment of a properly noticed foreclosure sale. New S. Fed. Sav. Bank v. Pugh,
E200902150COAR3CV, 2010 WL 4865606, at *7 (Tenn. Ct. App. Nov. 29, 2010) (affirming the
lower court’s holding that “a foreclosure sale properly advertised according to the terms of the
foreclosure statutes may be postponed without readvertisement in accordance with the precise terms
of the statute”); Conway v. E. Sav. Bank, FSB, W2005-02919-COA-R3CV, 2006 WL 3613605, at
*6 (Tenn. Ct. App. Dec. 11, 2006) (affirming the lower court’s “holding that the Bank’s failure to
re-advertise three times, twenty days prior to the rescheduled foreclosure date does not render the
sale irregular or unfair, and it does not warrant setting aside the foreclosure sale”). However, the
Court finds that these cases are not directly on point because they only specifically addressed
whether oral notice complied with Tennessee’s statutory notice requirements, and not the
requirements under a deed of trust.
15

under the terms designated in the notice of sale.” As such, the parties agreed in the Deed of Trust
that the notice of sale would state the time for the sale and set forth additional terms governing the
sale of the property. The notice, which Plaintiffs received by letter dated August 20, 2010, stated
that the foreclosure sale would occur September 16, 2010, but also reserved for the substitute trustee
“the right to adjourn the day of the sale to another day, time and place certain without further
publication, upon announcement at the time and place for the sale set forth” in the notice.26 In other
words, the Deed of Trust provided that the sale would take place in accordance with the terms of the
notice itself, and the notice in turn granted the substitute trustee the right to adjourn the noticed sale
by oral announcement and without additional publication or formal notice to Plaintiffs.
Construing the Deed of the Trust together with the written notice of sale, the Court holds that
Defendants were not required to provide a separate written notice of sale each time the sale was
adjourned or postponed. Importantly, there was but one noticed sale in this case and several
adjournments of that sale. “A sale regularly adjourned, so as to give notice to all persons present of
the time and place to which it is adjourned, is, when made, in effect the sale of which previous public
notice was given.”27 Defendants have adduced evidence that the substitute trustee convened the
September 16, 2010 sale only to adjourn it to September 30, 2010. Plaintiffs admit they have no
proof to dispute this evidence or show that the sale was not adjourned pursuant to the trustee’s oral
announcement of the rescheduled date and time for the sale. Therefore, the Court concludes that no
breach of the Deed of Trust occurred in this case, and Defendants are entitled to judgment as a matter
of law on Plaintiffs’ claim for breach of the Deed of Trust.

26

Notice, ex. 2 to Taggart Decl. (D.E. # 54-2).

27

Richards v. Holmes, 59 U.S. 143, 147 (1855).
16

Plaintiffs have shown GMAC made oral representations to them prior to the sale that the sale
would be cancelled and not postponed. According to Plaintiff Ralph Gibson’s declaration, a GMAC
representative assured him that the September 16, 2010 sale was cancelled, and not simply
postponed.28 Accepting for purposes of summary judgment that GMAC told Mr. Gibson the sale
was cancelled, however, Plaintiffs have not shown how GMAC’s oral representations amounted to
a breach of the Deed of Trust. Moreover, while Plaintiffs have alleged a claim for promissory
estoppel based on GMAC’s December 2010 representations about the foreclosure sale set for that
month, Plaintiffs have not alleged any promissory claims related to the September 2010
representations. The Court holds then that GMAC’s promise that the September 2010 would be
cancelled was not a breach of the notice provisions of the Deed of Trust.
Plaintiffs further argue that the oral announcements adjourning the foreclosure sale are
subject to Tennessee’s statute of frauds. Tennessee’s statute of frauds requires that any contract for
the sale of land be in writing and signed by the party against whom enforcement is sought.29 The
Tennessee Supreme Court long ago held that the statute of frauds applies to the sale of property
under the terms of a deed of trust at nonjudicial foreclosure sales.30 Plaintiffs assert that “oral
announcements made by a trustee at a foreclosure sale . . . are also subject to the Statute of Frauds.”31

28

R. Gibson Decl. ¶ 3 (D.E. # 61-2).

29

Tenn. Code Ann. § 29–2–101(a)(4); Waddle v. Elrod, 367 S.W.3d 217, 222 (Tenn. 2012)
(“The Statute of Frauds precludes actions to enforce certain types of parol contracts unless the action
is supported by written evidence of the parties’ agreement.”).
30

Adams v. Scales, 67 Tenn. 337, 340–41 (1872).

31

Pl.’s Resp. in Opp’n and Cross-Mot. for Summ. J. 5 (citing John A. Walker, Jr., Simple
Real Estate Foreclosures Made Complex: The Byzantine Tennessee Process, 62 Tenn. L. Rev. 231,
258 (1995)).
17

Plaintiffs cite for support an unreported decision of the Tennessee Court of Appeals, in which the
court held that a substitute trustee’s oral representations at a foreclosure sale about the former
owner’s right of redemption were unenforceable under the statute of frauds.32 The Court finds that
Plaintiffs’ reliance on this case is misplaced. Jackson never considered the issue presented here,
whether the statute of frauds applied to a trustee’s oral announcement of the adjournment of a sale.
Moreover, the Court finds no statute of frauds problem with the oral announcement of the
adjournment of the sale. The parties had agreed in the Deed of Trust that the notice of sale would
designate the terms of the sale and among the terms designated in the notice was the trustee’s
reserved right “to adjourn the day of the sale to another day, time and place certain without further
publication.” Therefore, the Court is not persuaded that an oral announcement at a properly noticed
nonjudicial foreclosure sale runs afoul of the Statute of Frauds.
Plaintiffs further argue that Defendants should be estopped from advancing inconsistent
positions in this case under the doctrine of judicial estoppel. In briefing their motion for judgment
on the pleadings, Defendants argued that they satisfied the notice requirements of the Deed of Trust
by publishing notice of the December 2010 foreclosure sale on three consecutive weeks in the
Commercial Appeal. Now at summary judgment, Defendants claim that no further notice of the
December 2010 sale was even required. “The doctrine of judicial estoppel seeks to preserve the
integrity of the courts by generally preventing a party from prevailing in one phase of a case on an
argument and then relying on a contradictory argument to prevail in another phase.”33 Judicial

32

Jackson v. Broussard, 1991 WL 136234 (Tenn. Ct. App. July 26, 1991).

33

Javery v. Lucent Techs., Inc. Long Term Disability Plan for Mgmt. or LBA Emps., 741
F.3d 686, 697 (6th Cir. 2014) (citing New Hampshire v. Maine, 532 U.S. 742, 749 (2001)) (other
citations and internal punctuation omitted).
18

estoppel prevents a party from taking a position that is contrary to one that the party asserted under
oath in a prior proceeding, where the prior court adopted the contrary position either as a preliminary
matter or as part of a final judgment.34 The Court should apply the doctrine of judicial estoppel
“with caution to avoid impinging on the truth-seeking function of the court because the doctrine
precludes a contradictory position without examining the truth of either statement.”35 The Sixth
Circuit has adopted the following factors to “guide the application of judicial estoppel”: (1) whether
the party’s present position is “clearly inconsistent” with the position it took previously; (2) whether
the earlier court actually accepted the party’s position; and (3) whether the party against whom
judicial estoppel is invoked would “derive an unfair advantage or impose an unfair detriment on the
opposing party if not estopped.”36
Applying these principles in this case, the Court holds that the doctrine of judicial estoppel
does not operate to estop Defendants from arguing that no further notice of the December foreclosure
sale was required under the Deed of Trust. Assuming without deciding that the two positions are
“clearly inconsistent,” the Court finds that Defendants’ earlier position was never accepted and
therefore no unfair advantage would accrue to Defendants. Defendants’ argument about the
published notice of the December 2010 sale was made at the pleadings stage in support of a Rule
12(c) motion. Defendants specifically asserted that the Court could take judicial notice of the fact
that notice of the December 2010 foreclosure sale was published for three consecutive weeks in the

34

Bonkowski v. Allstate Ins. Co., 544 F. App’x 597, 602 (6th Cir. 2013) (citation omitted).

35

Id.

36

Watkins v. Bailey, 484 F. App’x 18, 25 (6th Cir. 2012) (citing New Hampshire, 532 U.S.
at 750–51)).
19

Commercial Appeal.37 The Court finds that Defendants did not rely in any way on the published
notice to support their Rule 12(c) motion. More importantly, the Court denied Defendants’
Rule12(c) motion when the Court granted Plaintiffs leave to amend their pleadings on May 7, 2012.
The Court never adopted Defendants’ position about the published notice of the December 2010 sale
and actually denied Defendants any relief in connection with the motion for judgment on the
pleadings. Therefore, the Court concludes that Defendants are not judicially estopped from arguing
that Plaintiffs had proper notice of the December 2010 sale under the terms of the Deed of Trust.
Having consider the parties’ briefing of the notice issue and Plaintiffs’ claim for breach of
the Deed of Trust, the Court concludes that no genuine issues of material fact remain. Therefore,
Defendants’ Motion for Summary Judgment is GRANTED on this claim, and Plaintiffs’ CrossMotion for Summary Judgment must be DENIED.
II. Fraudulent or Wrongful Foreclosure
Defendants next seek summary judgment on Plaintiffs’ claim for fraudulent or wrongful
foreclosure. According to Defendants, Plaintiffs base their claim on the theory that none of the
Defendants possessed legal authority to foreclose on the property. Defendants argue, however, that
Plaintiffs’ claim is barred under the law-of-the-case doctrine because the Court held at the pleadings
stage that Defendant Residential Funding Corporation was the holder of the note for purposes of the
UCC and therefore entitled to foreclose. Plaintiffs respond that the Court specifically granted them
leave to include their claim for wrongful foreclosure in their amended pleadings. Additionally,
Plaintiffs state that they are entitled to judgment as a matter of law on the wrongful foreclosure claim

37

Defs.’ Mem. in Support for Mot. J. on the Pleadings 3–4 (D.E. # 13-1). A copy of the
notice was attached to Defendant MCC TN, LLC’s Verified Answer.
20

should the Court also grant Plaintiffs summary judgment on their claim for breach of the Deed of
Trust. “Issues decided at an early stage of the litigation, either explicitly or by necessary inference
from the disposition, constitute the law of the case.”38 The law of the case doctrine is “not an
inexorable command,” and courts must use “common sense” in applying it.39 Accordingly, the law
of the case doctrine is discretionary “when applied to a coordinate court or the same court’s own
decisions.”40 “[A] court’s power to reach a result inconsistent with a prior decision reached in the
same case is to be exercised very sparingly, and only under extraordinary conditions.”41
The issue presented is whether the law-of-the-case doctrine requires the dismissal of
Plaintiffs’ claim for wrongful foreclosure. Defendants argue that the Court’s rulings at the pleadings
stage, and specifically in denying Plaintiffs leave to add a claim to quiet title in an amended pleading,
constitutes the law of the case and require the dismissal of the wrongful foreclosure claim.42 On
March 16, 2012, Defendants filed a motion for judgment on the pleadings pursuant to Rule12(c) of

38

Static Control Components, Inc. v. Lexmark Int’l, Inc., 697 F.3d 387, 400 (6th Cir. 2012)
(quoting Hanover Ins. Co. v. Am. Eng’g Co., 105 F.3d 306, 312 (6th Cir. 1997)).
39

Bench Billboard Co. v. City of Covington, Ky., 547 F. App’x 695, 703–704 (6th Cir. 2013).

40

Bowles v. Russell, 432 F.3d 668, 677 (6th Cir. 2005) (internal punctuation and citation

omitted).
41

In re Kenneth Allen Knight Tr., 303 F.3d 671, 677 (6th Cir. 2002) (citation and internal
quotation marks omitted).
42

In point of fact, Defendants’ contention about the Court’s holding that “Residential
Funding Corporation was the holder of the note for purposes of the UCC and therefore entitled to
foreclose” is without merit. The Court never made such a holding. In its order granting in part and
denying in part Plaintiffs’ motion to amend, the Court stated that “Plaintiffs have cited no legal
authority to show that a party must be a holder in due course in order to enforce a negotiable
instrument.” The Court did not, and likely could not, conclude as a matter of law that based on the
pleadings alone, Residential Funding Corporation was the holder of the note under Tennessee’s
UCC.
21

the Federal Rules of Civil Procedure. In response to Defendants’ Rule 12(c) motion, Plaintiffs
sought leave to amend their complaint, dropping some of their original claims and adding new
claims including a claim to quiet title. In support of the quiet title claim, the proposed amended
complaint alleged that Residential Funding Company, LLC lacked legal authority to foreclose on
Plaintiffs’ property. According to the proposed amended pleadings, Defendant was not the owner
or holder in due course of the note and was never assigned a beneficial interest in the Deed of Trust.
Plaintiffs also alleged that the Deed of Trust became a nullity when it was not assigned to the
purchaser of Plaintiffs’ note. The Court held that a quiet title claim based on these factual predicates
would not withstand a motion to dismiss. Plaintiffs had failed to allege facts showing why
Defendants lacked authority to conduct the foreclosure. Therefore, the Court denied Plaintiffs leave
to amend the pleadings to assert the quiet title claim.
Plaintiffs alleged a substantially identical set of facts to support their wrongful foreclosure
claim, that is, that no Defendant had any legally enforceable right to conduct the foreclosure. The
wrongful foreclosure claim was actually raised in Plaintiffs’ initial pleadings and was retained in the
proposed amended complaint. Importantly, the Court never assessed the sufficiency of Plaintiffs’
wrongful foreclosure pleadings in deciding Plaintiffs’ motion for leave to amend. In granting in part
and denying in part Plaintiffs’ motion to amend, the Court granted Plaintiffs leave to file an amended
complaint retaining the wrongful foreclosure claim, even though the claim was premised on the same
theory that Defendants had no legally enforceable right to foreclosure. The Court found that
Defendants had not directly opposed Plaintiffs’ motion to amend their pleadings and retain the claim
for wrongful foreclosure. The Court stated in its order that “Defendants have not argued the futility
of the other claims asserted in the proposed amended complaint, including the claim for wrongful
22

foreclosure in Count II, the claim for slander to title in Count IV, and the conversion claim in Count
V.” As such, the Court declined to consider whether those claims could survive a motion to dismiss
and granted Plaintiffs leave to make those claims in their amended pleadings.
Even though Defendants had not argued the futility of the wrongful foreclosure claim in their
opposition to Plaintiffs’ motion to amend, Defendants had sought judgment as a matter of law on
the wrongful foreclosure claim as part of their Rule 12(c) motion. Defendants’ motion for judgment
on the pleadings argued that Plaintiffs’ initial complaint failed to state a claim for wrongful
foreclosure based on the theory that Defendants lacked any right to foreclose on Plaintiffs’ property.
The Court denied Defendants’ motion for judgment on the pleadings at the same time that it allowed
Plaintiffs to amend their complaint. The Court found Defendants’ motion to be moot in light of
Plaintiffs’ filing an amended pleading and stated that Defendants’ Rule 12(c) motion was denied
without prejudice “to present any and all issues raised in their Motion in a subsequent dispositive
motion.” It is clear then that the Court has never reached the sufficiency of the pleadings on the
wrongful foreclosure claim.43
Defendants did not immediately re-file their Rule 12(c) motion but now seek judgment as
a matter of law on the claim under Rule 56. Defendants’s Motion for Summary Judgment on the
wrongful foreclosure claim is in its essence a renewed motion for judgment on the pleadings under
Rule 12(c). Defendants’ Motion seeks judgment on the facts alleged in the Amended Complaint and
not the evidentiary record (or lack thereof) related to Plaintiffs’ claim for wrongful foreclosure.
43

Plaintiffs’ argument in opposition to summary judgment that the Court “specifically
granted Plaintiffs the right to include” the wrongful foreclosure claim in its amended pleadings is
true as far as it goes. The Court did grant Plaintiffs leave to file an amended complaint alleging the
wrongful foreclosure claim. However, the issue of whether the pleadings stated a plausible claim
for relief was never considered.
23

Defendants cite no evidence, affidavits, depositions, or other discovery materials to show that no
genuine factual dispute exists as to Plaintiffs’ wrongful foreclosure theory. Rather Defendants
contend that even accepting as true the factual averments of the pleadings, Defendants are entitled
to judgment as a matter of law.44
Whether the Court analyzes Defendants’ request under Rule 12(c) or Rule56, the Court holds
that Defendants are entitled to judgment as a matter of law on Plaintiffs’ wrongful foreclosure
claim.45 In this case the Court has already held that Plaintiffs’ theory about Defendants’ lack of legal
authority to foreclose on Plaintiffs’ property fails as a matter of law. In denying Plaintiffs leave to
add the quiet title claim, the Court necessarily decided at the pleadings stage that Plaintiffs’ theory
about Defendants’ lack of legal authority to foreclosure failed as a matter of law. The Court’s
holding, whether applied to a claim to quiet title or the claim for wrongful foreclosure, is now the
law of the case.
Plaintiffs have made largely the same allegations in support of their claim for wrongful
foreclosure, namely, that no Defendant was lawfully appointed as trustee or had the original note
assigned to it and that no Defendant was the note holder, owner, or beneficiary of the note. The
Court has already considered and rejected these allegations as a matter of law. Under Tennessee law,
a special assignment of the Deed of Trust is not required and the validity of the Deed of Trust is not

44

In considering a Rule 12(c) motion, the Court must accept all well-pleaded material
allegations of the opposing party as true, and the motion may be granted only if “no material issue
of fact exists and the party making the motion is entitled to judgment as a matter of law.” Henry v.
Chesapeake Appalachia, L.L.C., 739 F.3d 909, 912 (6th Cir. 2014).
45

The Sixth Circuit has held that a party may seek judgment on the pleadings under Rule
12(c) at any time after the pleadings are closed and that the “untimeliness of the motion is no bar to
the dismissal of [a] suit.” Gen. Elec. Co. v. Sargent & Lundy, 916 F.2d 1119, 1131 (6th Cir. 1990).
24

affected simply because “the lien of a mortgage or trust deed passes, without a special assignment
thereof, to the endorsee of a note or transferee of the debt secured by the instrument.”46 And as the
Court explained in its previous order on the pleadings, Defendants need not be the owners or holders
in due course of Plaintiffs’ note in order to enforce it. Plaintiffs have not shown why the Court
should reconsider these holdings or how their wrongful foreclosure claim otherwise survives. The
Court holds then that the wrongful foreclosure claim is now barred under the law-of-the-case
doctrine and that Defendants are entitled to judgment as a matter of law on Plaintiff’s claim about
Defendants’ lack of legal authority to foreclose. Therefore, Defendants’ Motion is GRANTED as
to Plaintiffs’ wrongful foreclosure claim.
III. Promissory Estoppel
Finally, Defendants seek summary judgment on Plaintiffs’ claim for promissory estoppel
based on GMAC’s alleged promise to cancel the December 2010 foreclosure sale. Defendants argue
that the Tennessee statute of frauds bars the claim. In the alternative, Defendants argue that
Plaintiffs have failed to plead that any Defendant engaged in fraudulent conduct and that Plaintiffs
have no evidence they reasonably relied on the oral promise to cancel the foreclosure sale. Plaintiffs
respond that the statute of frauds does not apply to the oral promise to cancel the sale because
GMAC’s representation did not modify the terms of the Deed of Trust. According to Plaintiffs, a
lender has the right, and even a duty under HAMP, to cancel a foreclosure sale while a homeowner
attempts to modify a loan.47

46

Order Granting in Part, Denying in Part Mot. to Amend 8 (quoting W.C. Early Co. v.
Williams, 186 S.W. 102, 103–104 (Tenn. 1916)).
47

In their reply brief, Plaintiffs state that “the sale date as required under HAMP
modification regulations was required to be cancelled while a loan modification was pending.” Pls.’
25

The Tennessee Supreme Court has defined promissory estoppel as “a promise which the
promisor should reasonably expect to induce action or forbearance on the part of the promisee or a
third person and which does induce such action or forbearance.”48 The court has added that the
promise “is binding if injustice can be avoided only by enforcement of the promise.”49 The court in
Alden defined the following limits of the theory: “(1) the detriment suffered in reliance must be
substantial in an economic sense; (2) the substantial loss to the promisee in acting in reliance must
have been foreseeable by the promisor; (3) the promisee must have acted reasonably in justifiable
reliance on the promise as made.”50 The doctrine of promissory estoppel is also known as
“detrimental reliance” because the plaintiff must show that a promise was made and that the plaintiff
reasonably relied on the promise to his detriment.51 Tennessee does not liberally apply the doctrine
of promissory estoppel. Rather, the doctrine is available only in exceptional cases where the
circumstances border on actual fraud.52
The Tennessee statute of frauds prohibits actions against a lender or creditor for the
enforcement of oral promises to “lend money or to extend credit, or upon any promise or

Reply 4–5.
48

Alden v. Presley, 637 S.W.2d 862, 864 (Tenn. 1982) (quoting Restatement of Contracts

49

Id.

50

Id. (quoting Simpson, Law of Contracts § 61 (2d ed. 1965)).

51

Engenius Entm’t, Inc. v. Herenton, 971 S.W.2d 12, 19–20 (Tenn. Ct. App. 1997)

§ 90).

52

Baliles v. Cities Serv., 578 S.W.2d 621 (Tenn. 1979); Shedd v. Gaylord Entm’t Co., 118
S.W.3d 695, 700 (Tenn. Ct. App. 2003) (limiting the application to “exceptional cases where to
enforce the statute of frauds would make it an instrument of hardship and oppression, verging on
actual fraud”).
26

commitment to alter, amend, renew, extend or otherwise modify or supplement any written promise,
agreement or commitment to lend money or extend credit.”53 Here Plaintiffs’ claim for promissory
estoppel derives from GMAC’s oral promise to cancel the foreclosure sale while Plaintiffs’ request
for a loan modification was pending. Courts construing the statute of frauds adopted in other states
have held that oral promises to delay a foreclosure sale are subject to the statute of frauds.54 For
purposes of Tennessee’s statute of frauds, GMAC’s oral promise to cancel the sale was arguably a
promise “to alter, amend, renew, extend or otherwise modify or supplement” the terms of the
agreement between Plaintiffs and Defendant GMAC because the promise concerned Plaintiffs’
request to modify their loan.55 However, this Court has previously highlighted some uncertainty over
the doctrine of promissory estoppel and the statute of frauds.56
The Court need not resolve the statute of frauds issue here because the Court holds that

53

Tenn. Code Ann. § 29–2–101(b)(1).

54

E.g. Williams v. Pledged Prop. II, LLC, 508 F. App’x 465, 468 (6th Cir. 2012) (holding
that an oral promise to delay a foreclosure sale was “a financial accommodation” and unenforceable
under the Michigan statute of frauds); see also Bracewell v. U.S. Bank Nat. Ass’n, No. 13-1164, 2014
WL 1356850, at *2–3 (8th Cir. Apr. 4, 2014) (holding that claim for promissory estoppel based on
oral promise to postpone foreclosure sale was unenforceable under the Minnesota Credit Agreement
Statute); Milton v. U.S. Bank Nat. Ass’n, 508 F. App’x 326, 328-29 (5th Cir. 2013) (“An agreement
to delay foreclosure is subject to the Texas statute of frauds, and, accordingly, must be in writing to
be enforceable.”); McFadden v. Fed. Nat. Mortgage Ass’n, 525 F. App’x 223, 231 (4th Cir. 2013)
(holding that an oral promise to delay a foreclosure sale was unenforceable under Virginia’s statute
of frauds).
55

Launius v. Wells Fargo Bank, N.A., 3:09-CV-501, 2010 WL 3429666 (E.D. Tenn. Aug.
27, 2010) (“Plaintiff is not seeking to modify the Loan agreement. The Statute of Frauds only bars
claims that attempt to modify a written agreement through oral statements.”).
56

Carbon Processing & Reclamation, LLC v. Valero Mktg. & Supply Co., 823 F. Supp. 2d
786, 823 (W.D. Tenn. 2011) (“Based on the number of unresolved issues concerning promissory
estoppel under Tennessee law, the Court finds that the appropriate course is to certify questions to
the Tennessee Supreme Court.”).
27

Defendants are entitled to judgment as a matter of law on other grounds.57 Defendants have moved
for summary judgment in the alternative because Plaintiffs have no proof they reasonably relied on
the GMAC employee’s oral representations about the foreclosure sale. “Whether a person’s reliance
on a representation is reasonable generally is a question of fact requiring the consideration of a
number of factors” such as “the plaintiff’s sophistication and expertise in the subject matter of the
representation, the type of relationship—fiduciary or otherwise—between the parties, the availability
of relevant information about the representation, any concealment of the misrepresentation, any
opportunity to discover the misrepresentation, which party initiated the transaction, and the
specificity of the misrepresentation.”58 In other words, as the parties with the burden of proof on this
claim, Plaintiffs must adduce some evidence of their reasonable reliance on GMAC’s promise and
specifically how GMAC’s promise to delay the foreclosure induced “substantial change of position
by [Plaintiffs] in reliance on the promise.”59
The Court holds that based on the record at summary judgment, Plaintiffs have no proof of
reasonable reliance. In fact, Plaintiffs have not even addressed Defendant’s argument on this point
in their briefing. At summary judgment Plaintiffs rely solely on the declaration of Mr. Gibson, in
which he avers as follows: “[a]s an attorney, I could have taken a number of actions to remedy the
harsh result of the foreclosure sale on December 9, 2010, had I known that it was going forward

57

The Court also declines to reach Defendants’ argument that Plaintiffs’ Amended
Complaint fails to plead promissory estoppel, and specifically Defendants’ intent to defraud, with
the requisite particularity. The Court addressed the sufficiency of the pleadings in this regard in
deciding Plaintiffs’ motion for leave to file an amended complaint.
58

Davis v. McGuigan, 325 S.W.3d 149, 158 (Tenn. 2010).

59

Alden, 637 S.W.2d at 864.
28

despite what the GMAC representative represented to me.”60 Mr. Gibson’s declaration does not
establish how GMAC’s oral promise to delay the sale induced a “substantial change of position” on
Plaintiffs’ part. Construing the evidence in the light most favorable to Plaintiffs, Mr. Gibson appears
to say that he could have sought court intervention to enjoin the sale.61 However, pursuant to Tenn.
Code Ann. § 29–23–201, a Tennessee state court cannot “grant an injunction to stay the sale of real
estate conveyed by deed of trust or mortgage, with a power of sale, executed to secure the payment
of a loan of money, unless the complainant gives five (5) days’ notice to the trustee or mortgagee of
the time when, place where, and of the judge or chancellor before whom, the application for
injunction is to be made.”62 What is more, section 29–23–202 requires the party seeking the
injunction to “distinctly state how, when, and to whom the debt or any part of the debt secured
aforementioned has been paid, or any circumstances of fraud which vitiate the contract.”63 Mr.
Gibson’s declaration does not indicate how he could have satisfied these requirements and
successfully enjoined the December 2010 sale. Without more, Plaintiffs have no proof that GMAC’s
promise to delay the sale induced “substantial change of position by [Plaintiffs] in reliance on the
promise.”64 Therefore, Defendants’ Motion for Summary Judgment is GRANTED on this claim,

60

Gibson Decl. ¶ 10.

61

Plaintiffs have also asserted in their reply brief that they could have sought bankruptcy
protection “although Plaintiffs would certainly do everything to avoid such action.” Pl.’s Reply 4
(D.E. # 64). In an earlier brief, Plaintiffs also stated that they “would have sought relief from the
Chancery Court.” Pls.’ Reply in Support of Mot. for Leave to Amend 11 (D.E. # 26).
62

Tenn. Code Ann. § 29–23–201

63

§ 29–23–202.

64

Alden, 637 S.W.2d at 864.
29

and Plaintiffs’ Cross-Motion for Summary Judgment is DENIED.
IV. Remaining Claims and the Partial Stay
As the parties acknowledge, Plaintiffs’ claims for monetary relief as to Defendants GMAC
Mortgage, LLC, Residential Funding Corporation and Residential Funding Company, LLC, are
currently subject to the automatic stay pursuant to 11 U.S.C. § 362(a). On July 16, 2012, the Court
entered an agreed order partially staying the proceedings (D.E. # 33) against these Defendants for
monetary relief, including the refund of Plaintiffs’ payments to Defendants, compensatory damages,
punitive damages, and reasonable attorney’s fees, expenses and costs. The agreed order also stayed
all proceedings as to Plaintiffs’ claims for slander of title (Count II) and conversion (Count III).
However, Plaintiffs’ claims for injunctive relief, including the setting aside of the foreclosure sale
as relief for wrongful foreclosure (Count I), breach of the Deed of Trust (Count IV), and promissory
estoppel (Count V) were allowed to proceed.
Based on the operation of the partial stay, the Court concludes that at summary judgment only
Plaintiffs’ claims for wrongful foreclosure, breach of the Deed of Trust, and promissory estoppel
may be addressed. To the extent that both parties seek judgment as a matter of law on Plaintiffs’
claims for slander to title or conversion, the Court declines to reach the merits of those claims at this
time. The partial stay as to those claims remains in place. A bench trial in this matter was set for
June 16, 2014, on Plaintiffs’ claims for wrongful foreclosure, breach of the Deed of Trust, and
promissory estoppel. In light of the Court’s summary judgment rulings, the bench trial is hereby
continued.

30

CONCLUSION
The Court holds that Defendants are entitled to judgment as a matter of law on Plaintiffs’
claims for breach of the Deed of Trust, wrongful foreclosure, and promissory estoppel. The partial
stay remains in effect as to Plaintiffs’ other claims. Therefore, Defendants’ Motion for Summary
Judgment is GRANTED, and Plaintiffs’ Cross-Motion for Summary Judgment is DENIED.
IT IS SO ORDERED.
s/ S. Thomas Anderson
S. THOMAS ANDERSON
UNITED STATES DISTRICT JUDGE
Date: May 19, 2014.

31