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Thornley v. U.S. Bank, N.A.

Court of Appeals of Tennessee, Nashville

June 30, 2015

TONYA D. THORNLEY
v.
U.S. BANK, N.A., ET AL.

December 10, 2014 Session

Appeal from the Circuit Court for Coffee County No. 39644 Vanessa A. Jackson, Judge

Jonathan L. Miley (at oral argument), Nashville, Tennessee, and Carol A. Molloy (on brief), Lynnville, Tennessee, for the appellant, Tonya D. Thornley.

John R. Wingo and Lauren Paxton Roberts, Nashville, Tennessee, for the appellees, U.S. Bank, N.A., Federal Home Loan Mortgage Corp., and Mortgage Electronic Registration Systems, Inc.

W. Neal McBrayer, delivered the opinion of the Court, in which Andy D. Bennett and Richard H. Dinkins, JJ. joined.

OPINION

W. NEAL MCBRAYER, JUDGE

I. Factual and Procedural Background

On March 24, 2004, Plaintiff, Tonya D. Thornley, refinanced the loan on her residence, located in Tullahoma, Tennessee, with U.S. Bank, N.A. In connection with the refinancing, Ms. Thornley executed a promissory note and a deed of trust for her residence. For the promissory note, U.S. Bank used a standard Federal National Mortgage Association ("Fannie Mae")/Federal Home Loan Mortgage Corporation ("Freddie Mac") form.[1] The promissory note called for monthly payments commencing on May 1, 2004, and continuing for the next thirty years. The deed of trust, which secured repayment of the promissory note, named Mortgage Electronic Registrations Systems, Inc. ("MERS") beneficiary, solely as nominee[2] for U.S. Bank and its successors and assigns.

According to Ms. Thornley, U.S. Bank sold the promissory note to "a securitized trust" shortly after it was executed. She claimed that she later attempted to obtain a modification of the loan but was told by U.S. Bank that, in order to qualify for a modification, she would have to stop making loan payments. She admitted to having ceased payments in 2009. On March 27, 2009, U.S. Bank sent Ms. Thornley a letter declaring a breach under the promissory note, stating the amount necessary to cure the breach, and advising that a foreclosure sale would follow if the note was not brought current within thirty days. Notwithstanding the letter, Ms. Thornley claimed, and still claims, that she is not in default under the promissory note.

Over two years later, in a letter dated July 1, 2011, Phillip Jones, a Nashville attorney, advised Ms. Thornley that he had been instructed by U.S. Bank to foreclose on her residence. The letter also advised Ms. Thornley that she should contact him if she desired to bring the note current. U.S. Bank named Mr. Jones substitute trustee under the deed of trust on August 8, 2011.

The foreclosure sale took place on November 22, 2011. U.S. Bank submitted a bid on behalf of Freddie Mac, which ultimately acquired the residence. According to Ms. Thornley, the bid by Freddie Mac was improper because it was a credit bid.

On June 18, 2012, Ms. Thornley filed an action in the Circuit Court of Coffee County challenging the foreclosure. The complaint named U.S. Bank, MERS, Freddie Mac, Mr. Jones, and John Does 1 through 10 as defendants. The complaint asserted nine separate causes of action: (1) to quiet title; (2) fraudulent misrepresentation; (3) violation of the Fair Debt Collection Practices Act, Title 15 of the United States Code, §§ 1692–1692p; (4) violation of the Tennessee Consumer Protection Act, Tennessee Code Annotated §§ 47-18-101 to -129; (5) unjust enrichment; (6) civil conspiracy; (7) usury and fraud; (8) slander of title; and (9) promissory estoppel.

U.S. Bank, MERS, Freddie Mac, and Mr. Jones filed answers to the complaint. Mr. Jones also moved to dismiss the complaint for failure to state a claim upon which relief can be granted. In responding to the motion to dismiss, Ms. Thornley conceded that certain of the causes of action did not apply to Mr. Jones and that they should be dismissed. However, she maintained that causes of action were stated against Mr. Jones for violations of the Tennessee Consumer Protection Act and the Fair Debt Collection Practices Act and civil conspiracy. The trial court dismissed all causes of actions against Mr. Jones except for the claim under the Fair Debt Collection Practices Act.

Ms. Thornley requested and obtained leave to amend her complaint. The amended complaint, which was filed on June 19, 2013, added a cause of action for wrongful foreclosure/breach of contract, but otherwise was substantially similar to the original complaint. Once answers were filed to the amended complaint, Ms. Thornley filed a motion for partial summary judgment on the claim for wrongful foreclosure/breach of contract against U.S. Bank, MERS, and Freddie Mac. U.S. Bank, MERS, and Freddie Mac filed a motion for judgment on the pleadings or for dismissal for failure to state a claim upon which relief can be granted.

The trial court denied Ms. Thornley's request for partial summary judgment but granted the request of U.S. Bank, MERS, and Freddie Mac for judgment on the pleadings.[3] Ms. Thornley then voluntarily dismissed her claims ...


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