Court Opinion

ID: 4185344
Source: CourtListenerOpinion
Date Created: 2017-07-12 13:01:20.230608+00
Date Added: 2024-06-11T07:46:56.655985
License: Public Domain

Case: 16-15369   Date Filed: 07/12/2017   Page: 1 of 8

                                                        [DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________

                            No. 16-15369
                        Non-Argument Calendar
                      ________________________

                  D.C. Docket No. 2:13-cv-01744-SLB

FEDERAL HOME LOAN MORTGAGE CORPORATION,

                                        Plaintiff-Counter Defendant-Appellee,

                                  versus

MARGARET WILSON,

                                      Defendant-Counter Claimant-Appellant,

WELLS FARGO BANK N.A.,

                                                 Counter Defendant-Appellee.

                      ________________________

               Appeal from the United States District Court
                  for the Northern District of Alabama
                      ________________________

                             (July 12, 2017)

Before TJOFLAT, MARCUS and WILLIAM PRYOR, Circuit Judges.

PER CURIAM:
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      Margaret Wilson appeals from the district court’s grant of summary

judgment in favor of the Federal Home Loan Mortgage Corporation (“Freddie

Mac”) and Wells Fargo Bank N.A. (“Wells Fargo”) on their claim for ejectment

and Wilson’s counterclaims for breach of contract, wrongful foreclosure,

negligence, slander of title, defamation, invasion of privacy, and violations of the

Fair Credit Reporting Act. On appeal, Wilson argues that the district court erred

in: (1) granting summary judgment on the ejectment claim because (a) Wells Fargo

lacked authority to conduct the foreclosure sale of her home in its own name, (b) it

is disputed whether the sale took place during the legal hours of sale under

Alabama law, and (c) Freddie Mac and Wells Fargo were estopped from claiming

a proper foreclosure based on Wells Fargo’s conduct; and (2) granting summary

judgment on her counterclaims for breach of contract, wrongful foreclosure,

negligence, and slander of title. After careful review, we affirm.

      We review a district court’s order granting summary judgment de novo,

viewing the material presented and drawing all factual inferences in the light most

favorable to the nonmoving party. Brooks v. Cnty. Comm’n of Jefferson Cnty.,

Ala., 446 F.3d 1160, 1161–62 (11th Cir. 2006). Summary judgment is proper

where “the movant shows that 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).

“A mere scintilla of evidence supporting the nonmoving party’s position will not

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suffice.”   Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997)

(alteration adopted) (quotations omitted).

      The district court did not err in determining that the foreclosure sale was

proper. As for Wilson’s claim that Wells Fargo lacked the authority to conduct the

sale in its own name because Wells Fargo sold the mortgage to Freddie Mac, we

are unpersuaded. The Alabama Code provides that a note can be enforced by

(1) the holder of the instrument, (2) a nonholder who is in possession of the

instrument and who has the rights of a holder, or (3) a person not in possession of

the instrument who is entitled to enforce it. Ala. Code § 7-3-301. A “holder” is

“[t]he person in possession of a negotiable instrument that is payable either to

bearer or to an identified person that is the person in possession.”            Id.

§ 7-1-201(21)(A). A negotiable instrument that has been endorsed in blank is

payable to bearer. Id. § 7-3-205(b). Moreover, “[a] person may be a person

entitled to enforce the instrument even though the person is not the owner of the

instrument or is in wrongful possession of the instrument.”          Id. § 7-3-301.

“Possession of a note payable to order and indorsed in blank is prima facie

evidence of ownership.” Thomas v. Wells Fargo Bank, N.A., 116 So. 3d 226, 233

(Ala. Civ. App. 2012).

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       The undisputed evidence showed that Wells Fargo originated the loan and

subsequently assigned both the mortgage and note to Freddie Mac. 1 In conjunction

with the assignment, Wells Fargo endorsed the note in blank, but retained physical

possession of the note and mortgage, and agreed to act as the loan servicer and

document custodian for Freddie Mac. Thus, because of the assignment, Freddie

Mac held legal title to the mortgage, and Wells Fargo possessed the right to

enforce the remedies in the note, including the power of sale, as the entity in

possession of the note. See Ala. Code § 7-3-301. Because the note was endorsed

in blank, Wells Fargo was properly considered the holder of the note and of the

power of sale in the note by virtue of possession of the note.                         See id.

§§ 7-1-201(21)(A), § 7-3-205(b); Thomas, 116 So. 3d at 233. So even though

Wells Fargo only possessed the note as document custodian for Freddie Mac,

ownership of the note is not required. See Ala. Code § 7-3-301.

       Wilson also claims that Wells Fargo’s agreement with Freddie Mac required

it to fill out a form, as the loan servicer, to obtain the note from the document

custodian in order to become the holder of the note. We disagree. To the extent

Wilson argues that Wells Fargo lacked authority to foreclose in its own name

because it violated its agreement with Freddie Mac, Wilson was not a party to that

       1
          Wells Fargo Home Mortgage, Inc. (“WFHMI”) originated the loan. The foreclosure
deed stated that Wells Fargo is the “successor by merger” to WFHMI. Wilson asserted before
the district court that WFHMI and Wells Fargo were not the same entity, but she did not present
any evidence to support that assertion.
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agreement and cannot raise a violation of its terms. See Dunning v. New England

Life Ins. Co. 890 So. 2d 92, 97 (Ala. 2003). Further, the undisputed evidence

showed that Wells Fargo was both the document custodian and the loan servicer.

A representative of Freddie Mac and Wells Fargo testified that Wells Fargo had

possession of the note and mortgage since the year it was originated. He further

said that Wells Fargo would not have submitted a form since it already possessed

the note as the document custodian. Thus, the district court did not err in holding

that Wells Fargo had authority to initiate the foreclosure sale in its own name.

      We are also unpersuaded that there was a genuine dispute of material fact

about whether the foreclosure sale occurred during the hours allowed by Alabama

law. Alabama requires a foreclosure sale to be held between the hours of 11 A.M.

and 4 P.M. Ala. Code § 35-10-14. Freddie Mac and Wells Fargo presented the

foreclosure deed, signed by the auctioneer, which indicated that the sale was held

during the lawful hours of sale. Alabama courts have held that a foreclosure deed

that contains recitals showing compliance with mortgage terms is “prima facie

evidence of facts stated therein,” and the statements in the deed establish the fact

and validity of the foreclosure sale “in the absence of evidence to show that the

recitals are untrue.” Garst v. Johnson, 37 So. 2d 183, 185 (Ala. 1948). Wilson

argues that the evidence showed that the statement about the time of sale was

untrue because the auctioneer’s certificate of the sale said the sale took place at

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either 10:49 a.m. or 11:49 a.m. 2 Viewing this evidence in the light most favorable

to Wilson, it merely demonstrated that the auctioneer’s certificate was ambiguous.

Brooks, 446 F.3d at 1161–62. This ambiguity did not affirmatively show that the

statement in the foreclosure deed was untrue. Garst, 37 So. 2d at 185. Because

Wilson failed to rebut the prima facie showing of Freddie Mac and Wells Fargo,

the district court did not err in concluding that the foreclosure sale was proper.

       Finally, we are unconvinced that the doctrine of equitable estoppel bars the

ejectment action because Wells Fargo’s previous postponements of the foreclosure

sale and continued attempts to work with Wilson to mitigate the loss “lull[ed] her

into a false sense of security.”          Under Alabama law, equitable estoppel is

warranted when:

       [t]he actor, who usually must have knowledge of the true facts,
       communicates something in a misleading way, either by words,
       conduct or silence. The other relies upon that communication. And the
       other would be harmed materially if the actor is later permitted to
       assert any claim inconsistent with his earlier conduct.

Mazer v. Jackson Ins. Agency, 340 So. 2d 770, 773 (Ala. 1976) (citation and

internal quotation marks omitted).

       Wilson notes that the foreclosure sale was postponed several times, and

Wells Fargo requested documents from her to assess whether she was eligible for a

       2
         For the time of sale, the auctioneer either wrote “10:49” and then overwrote the “0”
with a “1” to make “11:49,” or wrote “11:49” and then overwrote the second “1” with a “0” to
make “10:49.”
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third loan modification up to the time of the foreclosure sale. However, Wilson’s

deposition testimony revealed that no one at Wells Fargo guaranteed her a loan

modification or foreclosure postponement, she knew that she had been denied a

third modification and her appeal had been unsuccessful, and she knew it was too

late. She had been told that the sale would go forward, but she hoped that she

would be granted a modification or postponement because she was doing

everything Wells Fargo asked her to do. Thus, nothing in the record suggested that

Wells Fargo misled Wilson to believe that she would be granted a modification or

that the sale would be postponed. Id. Accordingly, the district court properly

declined to apply the doctrine of equitable estoppel in this case.

      Moreover, the district court properly granted summary judgment in favor of

Freddie Mac and Wells Fargo on their ejectment claim. Wilson argues that she

demonstrated that Freddie Mac’s right to possess the property is in dispute because

the foreclosure sale was invalid.      Under Alabama law, “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.”

Steele v. Fed. Nat’l Mortg. Ass’n, 69 So. 3d 89, 93 (Ala. 2010) (quotation

omitted).   Freddie Mac demonstrated that it had legal title by presenting the

foreclosure deed, and it is undisputed that Wilson has not vacated the premises.

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Where there is a collateral attack on the foreclosure process in an ejectment action,

only a wrongful foreclosure that renders the sale void can overcome the right to

assert ejectment. Campbell v. Bank of Am., N.A., 141 So. 3d 492, 494-95 (Ala.

Civ. App. 2012). As we’ve discussed, Wilson failed to demonstrate that the

foreclosure was wrongful.       Accordingly, she also failed to show that the

foreclosure rendered the sale void.

      Wilson’s arguments that the district court erred in granting Freddie Mac and

Wells Fargo summary judgment on her counterclaims for breach of contract,

wrongful foreclosure, negligence, and slander of title are based on her assertions

that Wells Fargo lacked the authority to conduct the foreclosure sale in its own

name, and the sale did not take place during the legal hours of sale. Because we

have rejected those claims, her challenges to the district court’s decision as to her

counterclaims also fail.

      Accordingly, we affirm.

      AFFIRMED.

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