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Jones v. BAC Home Loans Servicing, LP

Court of Appeals of Tennessee, Jackson

July 12, 2017

DANNY JONES, ET AL.
v.
BAC HOME LOANS SERVICING, LP, ET AL.

          Session April 25, 2017

         Appeal from the Chancery Court for Shelby County No. CH-12-0817 James R. Newsom, Chancellor

         The Plaintiffs' home was sold at foreclosure in May 2011. By way of a suit filed in the Shelby County Chancery Court, the Plaintiffs sought rescission of the foreclosure sale and asserted claims for breach of contract, violation of the covenant of good faith and fair dealing, violation of the Tennessee Consumer Protection Act, promissory estoppel, and negligent misrepresentation. The trial court dismissed these claims following the filing of a motion for summary judgment by the Defendants. Discerning no error based on our review of the record, we affirm the action of the trial court for the reasons expressed herein.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed and Remanded

          Webb A. Brewer and Allison S. Raines, Memphis, Tennessee, for the appellants, Danny Jones and DeEtta Jones.

          Lauren Paxton Roberts, Memphis, Tennessee, for the appellees, BAC Homes Loans Servicing, LP, and Wells Fargo Bank, N.A.

          Arnold B. Goldin, J., delivered the opinion of the Court, in which Richard H. Dinkins, J., and J. Steven Stafford, P.J., W.S., joined.

          OPINION

          ARNOLD B. GOLDIN, JUDGE.

         Background and Procedural History

         In March 2004, Danny and DeEtta Jones obtained a $180, 000.00 loan from Decision One Mortgage Company, LLC in order to purchase a home in Germantown, Tennessee. The subject note was a three-year adjustable rate mortgage, and initial monthly payments were set at $1, 240.15. Contemporaneous with the loan transaction, the Joneses executed a deed of trust granting Mortgage Electronic Registration Systems, Inc., as nominee for Decision One Mortgage Company, LLC, its successors and assigns, a security interest in the acquired Germantown property. There is no dispute that the note and deed of trust are valid and enforceable contracts.

         Subsequent to the execution of the loan, servicing rights were acquired by Bank of America, N.A. ("BANA"), [1] and in 2009, the Joneses began to get behind on their regular loan payments. Although they sought a loan modification from BANA, it is undisputed that no BANA representative stated to the Joneses that they would qualify for a loan modification. Moreover, in December 2010, BANA sent a letter to the Joneses informing them that they were not eligible for a loan modification under the Home Affordable Modification Program ("HAMP"). Specifically, the Joneses were denied a HAMP loan modification because their monthly housing expense was less than or equal to 31% of their gross monthly income.

         Although a "Notice of Intent to Accelerate" was sent to the Joneses in November 2010 informing them that they could cure their default by making a payment in the sum of $7, 006.48 by December 17, 2010, the Joneses failed to take this action. Instead, they submitted two payments totaling $3, 313.26 on December 14, 2010. No further payments were made on the loan.

         On April 19, 2011, the Joneses received a notice of foreclosure from BANA indicating that a foreclosure sale was scheduled to take place in May 2011. The notice sent to the Joneses indicated that they were in arrears in the amount of $9, 000.00. Although there is no dispute that the Joneses were incapable of paying the $9, 000.00 delinquency on the date they received the notice of foreclosure, Mr. Jones claims that he spoke to a BANA representative on April 19, whereupon he offered to pay $7, 800.00 that day and the remaining balance by the end of the week. Mr. Jones further claims that, notwithstanding his offer, the BANA representative informed him that if he sent a payment of $6, 000.00, he would qualify for a six-month repayment plan that would stop the foreclosure sale. The BANA representative also allegedly informed Mr. Jones that he could possibly qualify for a one-year repayment plan if additional authorization was secured. In accordance with these alleged representations, Mr. Jones asserts that he went to Western Union on April 19 to send $6, 000.00 to BANA. He claims that he attempted to send this sum by two separate transfer payments, one in the amount of $1, 000.00, the other in the amount of $5, 000.00. According to Mr. Jones, however, he later learned that his transfer payments had been declined.

         Despite the asserted representations made by the BANA representative, it is undisputed that there is no writing that evidences an agreement to enter into a repayment plan/postpone foreclosure. On May 6, 2011, the Joneses' Germantown property was sold at foreclosure to Wells Fargo Bank, N.A. ("Wells Fargo"), for the sum of $177, 008.05. This litigation subsequently ensued.

         On May 14, 2012, the Joneses filed a petition in the Shelby County Chancery Court to set the foreclosure sale aside. The suit was brought against BANA, [2] Wilson & Associates, PLLC, and Wells Fargo, the last of which was alleged to have acquired the underlying loan following its origination with Decision One Mortgage Company, LLC.[3]Wilson and Associates, PLLC would eventually be dismissed from the case pursuant to an agreed order.

         Following the filing of the petition, the Chancery Court entered a temporary restraining order preventing the Defendants and any of their agents from proceeding with an eviction regarding the property. A few months thereafter, on July 16, 2012, a consent order was entered enjoining the Defendants from attempting to evict the Joneses as long as the Joneses made timely payments into the Court as rent. The order specified that the Joneses would have a grace period such that "any monthly payment made between the 15th and 30th day of that respective month will be deemed to be timely made."

         On September 24, 2012, the Joneses filed an amended petition asserting various claims for relief. In addition to seeking rescission of the foreclosure sale, the amended petition alleged claims for breach of contract, breach of the covenant of good faith and fair dealing, violation of the Tennessee Consumer Protection Act, promissory estoppel, and negligent misrepresentation. BANA and Wells Fargo filed their respective answers to the amended petition on November 12, 2012. Therein, both Defendants denied that the Joneses were entitled to any of the relief sought.

         On July 29, 2015, BANA and Wells Fargo collectively filed a motion for summary judgment. The motion was supported by a memorandum of law and a statement of undisputed material facts. On October 20, 2015, the Joneses responded to

          BANA and Wells Fargo's summary judgment motion and statement of undisputed material facts and filed their own statement of additional undisputed material facts. BANA and Wells Fargo responded to the Joneses' separate statement of undisputed material facts on October 23, 2015.

         A hearing on the motion for summary judgment was held on October 28, 2015. On February 29, 2016, the Chancery Court entered an order granting the Defendants summary judgment with respect to all of the claims asserted against them. An amended final order was entered soon thereafter on March 2, 2016. In addition to restating the prior rulings from the February 29 order, the March 2 order specifically denied "[a]ny claims, motions or outstanding issue[s] not specifically addressed in the Court's prior orders." The Joneses then timely appealed, leading to our present review.[4]

         Issues Presented

         In their appellate brief, the Joneses raise six issues for our review, which we reword as follows:

1. Whether the Statute of Frauds justifies summary judgment on the breach of contract claim.
2. Whether BANA's breach of an agreement to cancel a foreclosure sale constituted a breach of the covenant of good faith and fair dealing that attaches to all Tennessee contracts.
3. Whether summary judgment was appropriate with respect to the Tennessee Consumer Protection Act claim.
4. Whether summary judgment was appropriate with respect to the promissory estoppel claim.
5. Whether summary judgment was appropriate with respect to the negligent ...

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