VIRGINIA: 

 In the Supreme Court of Virginia held at the Supreme Court 

Building in the City of Richmond, on Thursday, the 16th day of 

April, 2015. 

Edwin M. Ramos, et al., Appellants, 

 against Record No. 141080 

 Circuit Court No. CL2013-10944 

Wells Fargo Bank, NA, et al., Appellees. 

 Upon an appeal from a 

judgment rendered by the Circuit 

Court of Fairfax County. 

Upon consideration of the record, briefs, and argument of 

counsel, the Court is of the opinion that the circuit court did not 

err in sustaining a demurrer to the second amended complaint of 

appellants, Edwin M. Ramos and Evelyn S. Gill, against appellees, 

Wells Fargo Bank, N.A. ("Wells Fargo"), ALG Trustee, LLC ("ALG") 

and Potomac Relocation Services, LLC ("Potomac"). Therefore, the 

Court will affirm the judgment of the circuit court. 

 Appellants filed this action challenging the foreclosure sale 

of their residence. They claimed that Wells Fargo wrongfully 

initiated the foreclosure under the deed of trust securing the 

promissory note for their loan to purchase the property. After 

their original and first amended complaints were dismissed on 

demurrers, with leave to amend, appellants filed the second amended 

complaint asserting a single claim for breach of contract. 

 Appellants allege in the second amended complaint as follows: 

The loan to purchase their residence was insured by the Federal 
2

Housing Administration. Certain federal Department of Housing and 

Urban Development ("HUD") regulations were incorporated into the 

accompanying purchase money deed of trust, including 24 C.F.R 

§ 203.604. This regulation sets forth requirements for the 

acceleration of a loan and subsequent foreclosure in the event of a 

borrower's payment default. According to the appellants, after it 

received the assignment of appellants' loan, Wells Fargo failed to 

comply with this regulation by not having, or attempting to have, a 

"face-to-face meeting" with appellants following their payment 

default. Because this meeting was a condition precedent to 

foreclosing on their property, appellants theorized that Wells 

Fargo's "authority to call a default had not accrued" and thus the 

foreclosure it initiated was unlawful. Furthermore, while Potomac 

was the highest bidder at the foreclosure sale, settlement on the 

sale had not yet taken place. ALG, as the substitute trustee, 

could therefore refund Potomac's security deposit and release 

Potomac from its purchase. Based on these allegations of a breach 

of contract, appellants asked for compensatory damages and 

rescission of the foreclosure sale. 

 Wells Fargo filed a demurrer to the second amended complaint, 

asserting that appellants did not state a cause of action for 

breach of contract because, among other things, they (i) failed to 

identify the injury caused by any contractual breach; (ii) failed 

to allege any specific damages incurred and to include an ad damnum

clause stating the amount of damages sought; and (iii) failed to 

allege facts indicating that the foreclosure sale was 

unconscionable, a product of fraud, or otherwise voidable, thus 

negating rescission as an equitable remedy. The circuit court 
3

sustained the demurrer and dismissed the second amended complaint 

with prejudice. On appeal, appellants argue that the circuit court 

erred in this ruling. 

 In reviewing a circuit court's decision sustaining a demurrer, 

we address the same issue that the circuit court addressed: whether 

the facts alleged in a complaint are legally sufficient to state a 

cause of action upon which the requested relief may be granted. 

Assurance Data, Inc. v. Malyevac, 286 Va. 137, 143, 747 S.E.2d 804, 

807 (2013); Dunn, McCormack & MacPherson v. Connolly, 281 Va. 553, 

557, 708 S.E.2d 867, 869 (2011)). Like the circuit court, we 

accept as true all facts properly pleaded and all reasonable 

inferences that may be drawn from those facts. Assurance Data, 286 

Va. at 143, 747 S.E.2d at 807; Concerned Taxpayers v. County of 

Brunswick, 249 Va. 320, 323, 455 S.E.2d 712, 713 (1995). A 

demurrer, however, does not admit the correctness of the pleader's 

legal conclusions. Murayama 1997 Trust v. NISC Holdings, LLC, 284 

Va. 234, 245, 727 S.E.2d 80, 86 (2012); Arogas, Inc. v. Frederick 

Cnty. Bd. of Zoning Appeals, 280 Va. 221, 224, 698 S.E.2d 908, 910 

(2010). Because this presents an issue of law, we review the 

circuit court's decision de novo. Assurance Data, 286 Va. at 143, 

747 S.E.2d 808; Dunn, McCormack & MacPherson, 281 Va. at 557, 708 

S.E.2d at 869. 

 "The elements of a breach of contract action are (1) a legally 

enforceable obligation of a defendant to a plaintiff; (2) the 

defendant's violation or breach of that obligation; and (3) injury 

or damage to the plaintiff caused by the breach of obligation." 

Filak v. George, 267 Va. 612, 619, 594 S.E.2d 610, 614 (2004). 
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Here, appellants rely upon Squire v. Virginia Housing 

Development Authority, 287 Va. 507, 758 S.E.2d 55 (2014), and 

Mathews v. PHH Mortgage Corp., 283 Va. 723, 724 S.E.2d 196 (2012), 

in asserting their breach of contract action. In those cases, we 

held that the subject HUD regulation, 24 C.F.R § 203.604, created a 

condition precedent to foreclosure under the respective Virginia 

deeds of trust at issue, both of which incorporated the regulation. 

Appellants allege that Wells Fargo breached the present deed of 

trust, which likewise incorporated the regulation, by failing to 

conduct a face-to-face meeting with appellants, as the regulation 

requires, before initiating foreclosure on their property. 

 We assume without deciding that appellants have made 

sufficient allegations of causation for their breach of contract 

action. Nonetheless, we conclude that appellants have failed to 

set forth allegations supporting their requests for relief in the 

form of both money damages and rescission of the foreclosure sale. 

 As indicated above, an essential element in a breach of 

contract action is that the defendant's breach of a contractual 

obligation caused injury or damage to the plaintiff. Sunrise 

Continuing Care, LLC v. Wright, 277 Va. 148, 154, 671 S.E.2d 132, 

135 (2009); Filak, 267 Va. at 619, 594 S.E.2d at 614. Accordingly, 

the plaintiff must allege facts setting forth the injury or damage 

incurred as a result of defendant's breach. See Squire, 287 Va. at 

518, 758 S.E.2d at 61 (holding plaintiff sufficiently alleged 

damages resulting from foreclosure sale conducted in breach of deed 

of trust based on lender's failure to conduct face-to-face meeting 

required by HUD regulation). 
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 In the second amended complaint, appellants fail to set forth 

a single factual allegation of any injury or damage they incurred 

as a result of Wells Fargo's alleged breach. And their second 

amended complaint contains no ad damnum clause stating the amount 

of any damages claimed, in violation of Rule 3:2(c)(ii) ("Every 

complaint requesting an award of money damages shall contain an ad 

damnum clause stating the amount of damages sought."). 

 As to rescission, appellants allege that after defaulting on 

their loan Wells Fargo and ALG initiated the foreclosure sale in 

breach of the deed of trust, and that their property was then sold 

at the foreclosure sale to Potomac as the highest bidder. However, 

as appellants further allege, no closing on the sale had occurred 

at the time they filed the present action. Appellants point to 

this allegation to argue that, absent the closing, the foreclosure 

sale can still be "unwound," i.e., rescinded, by this action. That 

is not so under Virginia law. 

Upon foreclosure under a Virginia deed of trust, "'[t]he 

contract of sale [is] consummated when the auctioneer crie[s] the 

property out to the person making the highest and last bid. The 

only power remaining in the trustees, so far as the purchaser [is] 

concerned, [is] to collect the purchase money and execute a proper 

deed conveying such property and title as had been conveyed to [the 

purchaser].'" Feldman v. Rucker, 201 Va. 11, 21, 109 S.E.2d 379, 

386 (1959) (quoting Powell v. Adams, 179 Va. 170, 174-75, 18 S.E.2d 

261, 263 (1942)). Therefore, because the sale of the property to 
6

Potomac was so consummated, appellants are not entitled to 

rescission of the foreclosure sale.*

In sum, appellants' second amended complaint "does not satisfy 

the pleading requirement of alleging facts upon which relief can be 

granted" and is thus "insufficient to withstand a demurrer." Dean, 

263 Va. at 490, 561 S.E.2d at 690. 

For these reasons, we affirm the judgment of the circuit court 

sustaining Wells Fargo's demurrer to the second amended complaint 

and dismissing it with prejudice. The appellants shall pay to the 

appellees two hundred fifty dollars damages. 

This order shall be certified to the said circuit court and 

shall be published in the Virginia Reports. 

 A Copy, 

 Teste: 

 

 Patricia L. Harrington, Clerk 

 *

 As we addressed in Squire, potential exceptions to the 

inapplicability of rescission as a remedy in the present context 

would include cases involving fraud, collusion with the purchaser, 

and a foreclosure sale price of such "gross inadequacy" that it 

"shock[s] the conscience" of the court. 287 Va. at 519, 758 S.E.2d 

at 61-62 (citing Jones v. Jones, 249 Va. 565, 573, 457 S.E.2d 365, 

370 (1995) Musgrove v. Glasgow, 212 Va. 852, 854, 188 S.E.2d 94, 96 

(1972); Cromer v. De Jarnette, 188 Va. 680, 687-88, 51 S.E.2d 201, 

204 (1949); Schweitzer v. Stroh, 182 Va. 842, 848, 30 S.E.2d 689, 

692 (1944); Dunn v. Silk, 155 Va. 504, 509, 155 S.E. 694, 695 

(1930)). In this case, no such allegations have been made.