Title: Jeffery Steele v. Federal National Mortgage Association

State: alabama

Issuer: Alabama Supreme Court

Document:

REL: 12/03/2010
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2010-2011
____________________
1091441
____________________
Jeffery Steele
v.
Federal National Mortgage Association
Appeal from Jefferson Circuit Court, Bessemer Division
(CV-09-900069)
STUART, Justice.
The Federal National Mortgage Association ("Fannie Mae")
initiated an ejectment action against Jeffery Steele and his
wife, Matilda Steele, in the Jefferson Circuit Court after
acquiring title to the Steeles' house pursuant to a
1091441
Jeffery's wife Matilda is not a party to this appeal.
1
2
foreclosure deed.  The Steeles failed to file an answer to
Fannie Mae's complaint, and the trial court entered a default
judgment in favor of Fannie Mae.  Jeffery thereafter moved to
set aside the default judgment; however, his motion was denied
by operation of law pursuant to Rule 59.1, Ala. R. Civ. P.
Jeffery now appeals.   We affirm.
1
I.
On May 16, 2005, the Steeles executed a mortgage on their
house in Hueytown ("the property") with NetBank; NetBank
thereafter assigned the mortgage to Everhome Mortgage Company.
The Steeles subsequently defaulted on the mortgage, and, on
June 30, 2009, Fannie Mae purchased the property from Everhome
Mortgage at a foreclosure sale.  On that same date, an
attorney with Sirote & Permutt, P.C., which apparently
represented both Fannie Mae and Everhome Mortgage, sent the
Steeles a certified letter demanding possession of the
property and informing them, pursuant to § 6-5-251, Ala. Code
1975, that the failure to deliver possession of the property
within 10 days would result in the forfeiture of the right of
redemption and the filing of an ejectment action against them.
1091441
3
The letter, however, erroneously stated that the property had
been purchased by Everhome Mortgage at the foreclosure sale
instead of by Fannie Mae and purported to make the demand for
possession on behalf of Everhome Mortgage.
On September 28, 2009, Fannie Mae filed an ejectment
action against the Steeles in the Jefferson Circuit Court.
They were served on September 30, 2009; however, after they
failed to file an answer within the 30-day period following
service as required by Rule 12(a), Ala. R. Civ. P., Fannie Mae
moved the trial court to enter a default judgment pursuant to
Rule 55, Ala. R. Civ. P.  On November 10, 2009, the trial
court granted Fannie Mae's motion and entered a default
judgment against the Steeles.  On November 24, 2009, Jeffery
filed a handwritten motion with the trial court asking it to
set aside the default judgment and requesting a hearing.
Jeffery subsequently obtained legal counsel, and, on February
3, 2010, he filed a second motion asking the trial court to
set aside the default judgment, arguing that Fannie Mae had
failed to make a demand for possession before initiating the
ejectment action and that it therefore had no right to
possession and no right to eject the Steeles from the
1091441
4
property.  Fannie Mae opposed Jeffery's motion, arguing that
there was no statutory requirement that it make a demand for
possession before filing an ejectment action.  
The trial court thereafter scheduled a hearing  for March
3, 2010, on Jeffery's motion to set aside the default
judgment.  However, on February 22, 2010 –– before that
hearing was held –– Jeffery's original motion to set aside the
default judgment, filed on November 24, 2009, was denied by
operation of law pursuant to Rule 59.1, Ala. R. Civ. P.,
because the trial court had failed to rule on it within 90
days.  On March 31, 2010, the trial court nevertheless entered
an order purporting to deny the motion and, on that same day,
Jeffery filed his notice of appeal.
II.
Typically, this Court reviews a trial court's decision
granting or denying a motion to set aside a default judgment
to determine whether the trial court, in so deciding, exceeded
its discretion.  Kirtland v. Fort Morgan Auth. Sewer Serv.,
Inc., 524 So. 2d 600, 603 (Ala. 1988).  However, this Court
has previously determined that the judgment that results from
a trial court's failure to rule on a motion subject to denial
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5
by operation of law under Rule 59.1 is not automatically
entitled to the same deference that is afforded a judgment
arrived at after due deliberation.  Edgar v. State, 646 So. 2d
683, 686-87 (Ala. 1994); and Perdue v. Gates, 403 So. 2d 165
(Ala. 1981).  Although in this case the trial court entered an
order purporting to affirmatively deny Jeffery's motion to set
aside the default judgment entered against him and his wife,
that motion had already been denied by operation of law
pursuant to Rule 59.1; the order purporting to deny the motion
was therefore void, and it is without effect.  See Rabb v.
Estate of Harris, 953 So. 2d 401, 403 (Ala. 2006) ("However,
[the trial court's] order was void for lack of jurisdiction
because, pursuant to Rule 59.1, Ala. R. Civ. P., [the
appellant's] postjudgment motion had already been denied by
operation of law ....").  Accordingly, because the trial court
took no valid action indicating that the decision to deny
Jeffery's motion was the product of due deliberation, we
review Jeffery's motion to set aside the default judgment de
novo, applying the analysis mandated by Kirtland.
"Under Kirtland, the trial court must first
presume that cases should be decided on the merits
whenever it is practicable to do so.  This
presumption exists because the right to have a trial
1091441
Although Jeffery has framed this argument in standing
2
terms, Fannie Mae's standing to bring this action has not
actually been implicated.  See Wyeth, Inc. v. Blue Cross &
Blue Shield of Alabama, 42 So. 3d 1216, 1220 (Ala. 2010)
("'[The appellee] appears to argue that plaintiffs lack
standing because they have no legal right to the relief they
seek. [The appellee] has confused standing with failure to
state a claim.  The two are conceptually distinct:  when
standing is at issue, the court asks whether the plaintiffs
are the proper parties to bring the action, whereas failure to
state a claim focuses not on the parties but on the existence
of a cause of action (i.e., on the merits).  Kirby v.
Department of HUD, 675 F.2d 60, 63-64 (3d Cir. 1982); Bowman
v. Wilson, 672 F.2d 1145, 1151 n. 10 (3d Cir. 1982).'"
(quoting Angleton v. Pierce, 574 F. Supp. 719, 726 (D.N.J.
6
on the merits ordinarily outweighs the need for
judicial economy.  Second, the trial court must
apply a three-factor analysis in determining whether
to set aside a default judgment:  it must consider
'1) whether the defendant has a meritorious defense;
2) whether the plaintiff will be unfairly prejudiced
if the default judgment is set aside; and 3) whether
the default judgment was a result of the defendant's
own culpable conduct.'  Kirtland, 524 So. 2d at
605."
Sampson v. Cansler, 726 So. 2d 632, 633 (Ala. 1998).
III.
On appeal, Jeffery argues that Fannie Mae was required to
serve a written demand for possession upon him before
proceeding with its ejectment action and that its failure to
do so deprived it of standing; accordingly, he argues, the
default judgment entered by the trial court is void for lack
of subject-matter jurisdiction.   Jeffery also argues that the
2
1091441
1983))).
 
7
default judgment should be set aside under Kirtland because,
he argues, he has a meritorious defense to the ejectment
action based on Fannie Mae's failure to serve him with a
demand for possession before filing its ejectment action.  He
further asserts that Fannie Mae will not be prejudiced if the
default judgment is set aside and that the default judgment is
not the result of his own culpable conduct.  The success of
these arguments ultimately hinges on the same issue –– whether
Fannie Mae was required to serve Jeffery with a written demand
for possession before filing the instant ejectment action –-
and we accordingly focus our analysis on that inquiry.
In support of his argument that Fannie Mae was required
to serve him with a demand for possession before initiating an
ejectment action, Jeffery cites Jones v. Butler, 286 Ala. 69,
71, 237 So. 2d 460, 462 (1970), in which this Court stated:
"We here note that when this, the original
mortgage and foreclosure deed, or certified copies
of the record thereof, were introduced in evidence,
coupled with proof of demand for possession, and
failure to deliver possession, such introduction
made out a prima facie case for appellee in the
ejectment trial.  Title 62, Sec. 129, Code 1940,
Recompiled in 1958; Act No. 327, General Acts 1931,
p. 370; Ex. Sess. 1933, pp. 122, 183."
1091441
8
(Emphasis added.)  Jones v. Butler therefore, Jeffery argues,
indicates that a demand for possession is required, and
Jeffery cites subsequent opinions of both this Court and the
Court of Civil Appeals that have reaffirmed that principle.
See, e.g., Muller v. Seeds, 919 So. 2d 1174, 1177 (Ala. 2005);
Taylor v. Bryars, 602 So. 2d 378, 380 (Ala. 1992); Thompson v.
Wachovia Bank, Nat'l Ass'n, 39 So. 3d 1153, 1161-62 (Ala. Civ.
App. 2009); and Thompson v. First State Bank of Alabama, 503
So. 2d 858, 860 (Ala. Civ. App. 1987).  
Fannie Mae, however, argues that Jones v. Butler is
inapplicable to the present case because it brought its
ejectment action against the Steeles under the modern
ejectment statute, § 6-6-280, Ala. Code 1975, and Jones v.
Butler involved an ejectment action brought under § 129, Title
62, Code of Alabama 1940 (Recomp. 1958), which is not the
predecessor statute to § 6-6-280 and which has no counterpart
in the 1975 Code.  Fannie Mae further argues that subsequent
opinions of this Court and the Court of Civil Appeals relying
on Jones v. Butler after the enactment of § 6-6-280 did so in
error and are accordingly due to be overruled.  For the
reasons that follow, we agree with Fannie Mae.
1091441
9
Actions in ejectment or actions in the nature of an
action in ejectment are governed by § 6-6-280, and we are
bound to interpret the language of that statute to mean
exactly what it says.  Blue Cross & Blue Shield of Alabama,
Inc. v. Nielsen, 714 So. 2d 293, 296 (Ala. 1998).  Section 6-
6-280 provides:
"(a) A plaintiff commencing an action for the
recovery of lands or the possession thereof has an
election to proceed by an action of ejectment or by
an action in the nature of an action of ejectment as
is provided in subsection (b) of this section.
"(b) An action for the recovery of land or the
possession thereof in the nature of an action in
ejectment may be maintained without a statement of
any lease or demise to the plaintiff or ouster by a
casual or nominal ejector, and the complaint is
sufficient if it alleges that the plaintiff was
possessed of the premises or has the legal title
thereto, properly designating or describing them,
and that the defendant entered thereupon and
unlawfully withholds and detains the same.  This
action must be commenced in the name of the real
owner of the land or in the name of the person
entitled to the possession thereof, though the
plaintiff may have obtained his title thereto by a
conveyance made by a grantor who was not in
possession of the land at the time of the execution
of the conveyance thereof.  The plaintiff may
recover in this action mesne profits and damages for
waste or any other injury to the lands, as the
plaintiff's interests in the lands entitled him to
recover, to be computed up to the time of the
verdict."
1091441
Having concluded that Jeffery has not alleged a
3
meritorious defense, we need not consider whether Fannie Mae
10
This language is clear, and there is no requirement in § 6-6-
280 that a party with superior title to the land make any
demand for possession to an unlawful possessor before
initiating an ejectment action.  Rather, the statute
unambiguously states that a complaint seeking ejectment "is
sufficient if it alleges that the plaintiff was possessed of
the premises or has the legal title thereto, properly
designating or describing them, and that the defendant entered
thereupon and unlawfully withholds and detains the same."  In
the present case, there is no dispute that the complaint filed
by Fannie Mae complied with § 6-6-280 inasmuch as it alleged
(1) that Fannie Mae held legal title to the property and (2)
that the Steeles were nevertheless unlawfully withholding
possession of it.  Accordingly, the mere fact that Fannie Mae
failed to formally demand possession of the property from the
Steeles before initiating the ejectment action does not
provide Jeffery with a meritorious defense to that action.
The trial court accordingly did not err by failing to grant
Jeffery's motion to set aside the default judgment entered
against him.3
1091441
would be prejudiced if the default judgment is set aside or
whether the entry of the default judgment was the result of
Jeffery's own culpable conduct.  See Kirtland, 524 So. 2d at
605.
11
We note that Jones v. Butler was correctly decided
because § 129, Title 62, Code of Alabama 1940 (Recomp. 1958),
which it was construing, does indicate that a demand for
possession should be made before an action for ejectment may
be maintained in certain jurisdictions; however, Muller,
Taylor, Thompson v. Wachovia Bank, and Thompson v. First State
Bank of Alabama, to the extent they relied upon Jones v.
Butler for the proposition that such a demand for possession
is required even after the enactment of § 6-6-280, which on
its face contains no such requirement, were not.  We,
therefore, overrule those cases in that regard.  Thompson v.
Wachovia Bank is also overruled to the extent that it relied
on § 6-5-251 to conclude that a demand for possession must be
made before initiating an ejectment action.  39 So. 3d at 1162
("Based on § 6-5-251(a) and the quote from Jones v. Butler, we
conclude that Wachovia did not have a right to immediate
possession of the property until 10 days after it made demand
for possession of the property on September 25, 2007, and that
its ejectment claim did not accrue until [the parties in
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possession] failed to deliver possession 10 days after
Wachovia made that demand for possession.").  Section 6-5-251
concerns redemption rights, not an action for ejectment, and
provides only that a party failing to deliver possession
within 10 days after receiving a written demand for possession
forfeits his statutory right to redeem the property.
IV.
The trial court entered a default judgment in favor of
Fannie Mae and against Jeffery in the ejectment action filed
by Fannie Mae.  On appeal, Jeffery has argued that the default
judgment should have been set aside because Fannie Mae failed
to serve him with a formal demand for possession before
initiating the ejectment action.  However, because the
ejectment statute, § 6-6-280, does not require that such a
demand be made, the trial court did not err by failing to set
aside the default judgment, and the judgment is hereby
affirmed.
AFFIRMED.
Cobb, C.J., and Lyons, Woodall, Smith, Bolin, Parker,
Murdock, and Shaw, JJ., concur.