United States Court of Appeals

For the Eighth Circuit

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No. 16-2649

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Dale E. Wheatley; Stacy Franklin

lllllllllllllllllllllPlaintiffs - Appellants

v.

JPMorgan Chase Bank, N.A.; U.S. Bank, N.A.; Select Portfolio Servicing, Inc.

lllllllllllllllllllllDefendants - Appellees

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Appeal from United States District Court 

for the Western District of Missouri - St. Joseph

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Submitted: March 7, 2017

Filed: June 20, 2017

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Before RILEY, Chief Judge, GRUENDER, CircuitJudge, and GRITZNER, District 1 2

Judge.

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RILEY, Chief Judge.

The Honorable William Jay Riley stepped down as Chief Judge of the United

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States Court of Appeals for the Eighth Circuit at the close of business on March 10,

2017. He has been succeeded by the Honorable Lavenski R. Smith.

The Honorable James E. Gritzner, United States District Judge for the

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Southern District of Iowa, sitting by designation.
Dale Wheatley and his ex-wife Stacy Franklin sued several financial entities

for foreclosing on the mortgage loan Wheatley took out on Franklin’s house. The

district court held the foreclosure wasjustified and granted the defendants summary 3

judgment. Wheatley appeals with respect to his claims under the Missouri

Merchandising Practices Act (MMPA), Mo. Rev. Stat. § 407.020. Franklin appeals

on her claims for tortious interference with contract. With appellate jurisdiction

under 28 U.S.C. § 1291, we affirm the judgment.

I. BACKGROUND

In 2006, Franklin wanted to cash out her equity and refinance her house in

Cosby, Missouri, but her credit was not good enough to qualify for a loan. Wheatley

verbally agreed to help Franklin accomplish more or less the same result by taking

out a mortgage himself and buying the house from her, on the understanding that

Franklin would be responsible for paying off the loan and Wheatley would deed her

the property when she did. In 2009, Franklin missed several payments and the loan

went into default.

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After first agreeing to a repayment plan with the loan servicer, EMC Mortgage

Corporation, Wheatley applied for a loan modification. EMC ultimately offered

Wheatley a modification in May 2010. The modification agreement was conditioned

upon Wheatley affirming the truth of several statements, including: “I am

experiencing a financial hardship, and as a result, am either in default under the Loan

Documents or a default is imminent.” In an attached affidavit, Wheatley claimed he

The Honorable Robert E. Larsen, United States Magistrate Judge for the

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Western District of Missouri, to whom the case was referred for final disposition by

consent of the parties under 28 U.S.C. § 636(c).

This was actually the second default. The first default, about a year earlier, 4

was resolved when Wheatley convinced the loan servicer to modify the loan by

having Franklin’s stepfather falsely claim to be leasing the house.

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did not have enough cash on hand to afford his mortgage payments on top of his basic

living expenses. Wheatley also noted he did not live in the house and paid rent and

utilities elsewhere. And he repeatedly had told EMC representatives that Franklin

made the mortgage payments, not him.

Wheatley signed the modification agreement and returned it to EMC. EMC

also signed the agreement, but did not actually put the modification into effect. EMC

had miscalculated Wheatley’s unpaid balance—double-counting some interest that

had been capitalized—so the repayment terms in the agreement did not match the

(lower) amount Wheatley actually owed, which caused EMC’s automated computer

system to reject the modification. Thus, the changes to the loan were never

processed, EMC’s records showed the loan still being in default, and EMC continued

sending Wheatley notices of default and foreclosure. Wheatley spoke with EMC

representatives many times, but the issue was never resolved.

Starting in 2009, EMC’s loan-servicing portfolio was acquired by JPMorgan

Chase Bank, N.A. (Chase), which fully assumed servicing Wheatley’s loan in May

2011. Chase representatives tried to work with Wheatley to resolve the apparent

default, but by then he had become frustrated with his unsuccessful dealings with

EMC and stopped responding. About two years later, Chase brought in Select

Portfolio Servicing, Inc. (SPS), a sub-servicer, to handle Wheatley’s loan. SPS

briefly tried to work the issue out with Wheatley, but he was still not cooperating. 

Then, in August 2013, SPS held a foreclosure sale, where U.S. Bank, N.A., the

successor trustee for the trust that owned Wheatley’s loan (along with others), bought

the house with a full-credit bid.

Wheatley and Franklin sued Chase in Missouri state court. After Chase

removed the case, see 28 U.S.C. § 1441(a) (removal); id. § 1332(a)(1) (diversity

jurisdiction), Wheatley and Franklin amended their pleadings to add claims against

U.S. Bank and SPS. The operative complaint raised four counts, all by both plaintiffs

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against all three defendants: wrongful foreclosure, breach of contract, tortious

interference, and deceptive or unfair practicesin violation of the MMPA. The district

court granted summary judgment for the defendants on all four counts, but Wheatley

and Franklin only appeal the last two, each separately taking one count.

II. DISCUSSION

We review the grant of summary judgment de novo. See, e.g., Dupps v.

Travelers Ins. Co., 80 F.3d 312, 313 (8th Cir. 1996). The interpretation and

application of state law is also a legal issue we decide de novo. See id. Summary

judgment is appropriate if “there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The district

court held the defendants had the right to foreclose on the house, so Wheatley’s

MMPA claims failed as a matter of law because he could not prove his loss was

caused by any misconduct of the defendants, as opposed to his own “noncompliance

with the loan documents.” The legality of the foreclosure was likewise fatal to

Franklin’s tortious-interference claims, according to the district court, because it

meant Franklin could not establish the “absence of justification” that is a necessary

element of such a claim, see, e.g., Cmty. Title Co. v. Roosevelt Fed. Sav. & Loan

Ass’n, 796 S.W.2d 369, 372 (Mo. 1990). We agree as to both the foreclosure being

justified and the consequences of that fact for the plaintiffs’ claims.5

We reject the defendants’ suggestion that by not appealing the summary 5

judgment on the wrongful-foreclosure count, Wheatley and Franklin abandoned any

challenge to the legality of the foreclosure. The choice to let an adverse ruling stand

on a particular claim while appealing others does not constitute a binding concession

that the district court was right about every (or any) legal issue wrapped up in the

unappealed holding. There is no rule that Wheatley and Franklin needed to appeal

every theory of liability that might logically rest on a particular proposition—here,

that the foreclosure was not justified—to be able to advance that proposition on

appeal. Cases about treating a failure to raise an issue as a waiver or forfeiture, see,

e.g., Sidebottom v. Delo, 46 F.3d 744, 750 (8th Cir. 1995), are beside the point, for

the simple reason that Wheatley and Franklin do argue (clearly and at length) that the

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The modification agreement explicitly provided it would only “amend and

supplement” the existing loan documents “[i]f [Wheatley’s] representations . . .

continue[d] to be true in all material respects.” (Emphasis added). By clear

implication, if Wheatley’s material representations were not true, the agreement did

not “amend and supplement” anything, the existing version of the loan stayed in

default, and foreclosure remained an authorized remedy. That is what happened here.

In the modification agreement, Wheatley affirmed: “I am experiencing a

financial hardship, and as a result, am . . . in default under the Loan Documents.” At

its core, that statement was a representation about the reason for the default—that it

was “a result” of a financial hardship Wheatley was suffering. And in that key (and

material) respect it was untrue. The record, including Wheatley’s deposition

testimony, is clear that the missed payments and default were caused by Franklin’s

inability to pay, not Wheatley’s.

Wheatley protests because EMC knew it was Franklin who made the payments

on the house. Irrelevant. Nothing Wheatley might have told EMC about his

arrangement with Franklin could have made it true when he said the default was the

result of his own financial condition, or changed his clear statement into a

representation about Franklin’s financial condition. Nor does it make any difference

whether, as Wheatley claims, he could not have afforded the mortgage himself,

because there is no evidence Wheatley would have made the payments if he had the

money. By all indications, whether the debt was paid depended entirely on whether 6

foreclosure was not justified.

For the first time in his reply brief, Wheatley faults the district court for

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reading his allegations about his own “financial hardship” as addressing whether he

could have afforded the monthly mortgage payments. According to Wheatley, he

actually meant he could not have afforded the (much larger) lump sum due on the

defaulted loan. We find that explanation dubious and the point likely forfeited, but

in any event the distinction isimmaterial. There is no more evidence Wheatley would

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Franklin paid it. Because the amounts due apparently would have gone unpaid

regardless of whether Wheatley could afford them, Wheatley’s financial

condition—whatever it was and whatever EMC knew about it—had no bearing on the

truthfulness of his representation about the reason for the default.

Wheatley and Franklin make no argument that, even if Wheatley lied in the

modification agreement, the foreclosure wasstill unlawful. Thus we need not address

the district court’s other reason for upholding the foreclosure—that Wheatley’s

arrangement with Franklin violated the due on sale provision of his Deed of Trust. 

Nor do we need to consider the defendants’ arguments that there was not enough

evidence of what exactly each of them did to incur liability on each count, because

Wheatley and Franklin do not suggest any way their MMPA or tortious-interference

claims could survive the foreclosure being legal.

III. CONCLUSION

Summary judgment for the defendants was proper. Affirmed.

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have paid off the lump sum if he had the money than he would have made the

monthly payments.

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