Court Opinion

ID: 822796
Source: CourtListenerOpinion
Date Created: 2013-02-28 20:07:31.931779+00
Date Added: 2024-06-11T15:25:13.662097
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 11-2419

ELAYNE WOLF,

                Plaintiff - Appellant,

           v.

FEDERAL NATIONAL MORTGAGE ASSOCIATION, a/k/a Fannie Mae; BAC
HOME   LOANS   SERVICING,   LP;   PROFESSIONAL   FORECLOSURE
CORPORATION OF VIRGINIA,

                Defendants - Appellees.

----------------------------------------

CONSUMER FINANCIAL PROTECTION BUREAU,

                Amicus Supporting Appellant,

AMERICAN BANKERS ASSOCIATION; CONSUMER BANKERS ASSOCIATION;
CONSUMER MORTGAGE COALITION,

                Amici Supporting Appellees.

Appeal from the United States District Court for the Western
District of Virginia, at Charlottesville.      Norman K. Moon,
Senior District Judge. (3:11-cv-00025-NKM-BWC)

Argued:   December 5, 2012                 Decided:    February 28, 2013

Before TRAXLER,   Chief   Judge,   and   FLOYD   and   THACKER,   Circuit
Judges.

Affirmed by unpublished per curiam opinion.
ARGUED: Peter G. Wilson, CONSUMER FINANCIAL PROTECTION BUREAU,
Washington, D.C., for Amicus Supporting Appellant.    Henry Woods
McLaughlin, III, LAW OFFICE OF HENRY MCLAUGHLIN, P.C., Richmond,
Virginia, for Appellant.    John Donley Adams, MCGUIREWOODS, LLP,
Richmond, Virginia, for Appellees. ON BRIEF: Seth A. Schaeffer,
Jeffrey D. McMahan, Jr., Matthew A. Fitzgerald, MCGUIREWOODS,
LLP, Richmond, Virginia, for Appellees Federal National Mortgage
Association and BAC Home Loans Servicing, LP; Peter I. Grasis,
Daniel M. Rathbun, RATHBUN & GOLDBERG, P.C., Fairfax, Virginia,
for Appellee Professional Foreclosure Corporation of Virginia.
Leonard J. Kennedy, General Counsel, To-Quyen Truong, Deputy
General Counsel, David M. Gossett, Assistant General Counsel,
Rachel   Rodman,  Senior Counsel,     Kristin  Bateman,  CONSUMER
FINANCIAL PROTECTION BUREAU, Washington, D.C., for Amicus
Supporting Appellant.    Kirk D. Jensen, Michael R. Williams,
Jeffrey P. Naimon, BUCKLEYSANDLER LLP, Washington, D.C., for
Amici Supporting Appellees.

Unpublished opinions are not binding precedent in this circuit.

                                2
PER CURIAM:

      Appellant         Elayne      Wolf        appeals         the   district        court’s

dismissal of her amended complaint with prejudice.                              Wolf brought

suit against Federal National Mortgage Association (Fannie Mae),

BAC     Home      Loans     Servicing,          L.P.      (BAC),         and    Professional

Foreclosure Corporation of Virginia (PFC), seeking rescission of

her home mortgage loan under the Truth in Lending Act (TILA), 15

U.S.C.     §§    1601-1667.         In    addition        to    her   TILA      claims,   Wolf

asserts that the foreclosure and sale of her house was also

invalid because of deficiencies in the transfer of the deed of

trust      and    the     appointment      of        a   substitute        trustee.       Wolf

additionally makes claims of fraud, defamation, and breach of

the   implied      covenant      of      good    faith     and     fair     dealing.       The

district court dismissed Wolf’s case in its entirety, and Wolf

timely appealed.          For the reasons that follow, we affirm.

                                                I.

      We review a district court’s grant of a motion to dismiss

de novo and view the facts in the light most favorable to the

non-moving party.           Gilbert v. Residential Funding, LLC, 678 F.3d

271, 273 (4th Cir. 2012).

      This       action    arises     from      Wolf’s         attempt     to   rescind    her

mortgage through TILA.              Wolf’s complaint alleges that she owned

a   home    in    Charlottesville,         Virginia,           and,   on    May   14,     2007,

                                                3
refinanced her existing home mortgage with MetroCities Mortgage,

LLC (MetroCities).           The loan was evidenced by a note that was

secured by a deed of trust, and by a lien on Wolf’s home.                                The

deed of trust named Mortgage Electronic Systems (MERS) as the

lender’s nominee, granting MERS legal title to the deed of trust

and giving MERS legal rights, including the right to foreclose.

The deed of trust named Michael J. Barrett as trustee.                             At the

loan closing, Wolf received a disclosure statement and a “Notice

of Right to Cancel” the loan as required by TILA.                        See 15 U.S.C.

§    1635(a).        Additionally,        Wolf    received       a     separate    notice

informing     her    of     her    ability   to   opt     out    of     an   arbitration

agreement with MetroCities.

       On March 12, 2010, Wolf defaulted on the terms of her loan.

On March 30, 2010, MERS assigned the deed of trust to BAC.                                On

this same day, BAC appointed PFC as substitute trustee in place

of    the    original       trustee-Barrett.             BAC    instructed        PFC     to

foreclose.         In response, PFC advertised a foreclosure sale for

May   5,    2010.      On    May    2,   2010,    just    three       days   before      the

foreclosure sale, Wolf attempted to rescind her mortgage loan

pursuant to TILA by mailing a notice of rescission to BAC.                              As a

result,      BAC     temporarily         cancelled       the     foreclosure           sale.

However,     the    foreclosure       sale   eventually         took    place     in    July

2010, and Fannie Mae purchased the home.

                                             4
     Thereafter,       Fannie    Mae     instituted        an       unlawful     detainer

action against Wolf in the General District Court of Albemarle

County.    After the Albemarle County court awarded possession of

the property to Fannie Mae, Wolf filed her initial complaint in

this action in the same court.                  PFC successfully removed this

action    to    the   United    States     District       Court      for   the    Western

District of Virginia.

     Wolf submits that she is entitled to have her home loan

rescinded pursuant to TILA.              In furtherance of this argument,

Wolf alleges that the original lender, MetroCities, materially

underdisclosed the finance charge that was applied as part of

obtaining her loan.         Specifically, Wolf claims that MetroCities

materially      underdisclosed       the       finance     charge      based     on   its

failure    to    disclose      the   following:          (1)    a    $10   charge     for

recordation costs, (2) an interest charge of $15, and (3) an

excess charge for casualty insurance that was at least $50 more

than reasonable.        Next, Wolf alleges that her right to rescind

the loan was not properly disclosed to her.                     In addition to her

TILA claims, Wolf asserts that the foreclosure sale of her house

is void because the assignment of the note from MERS to BAC was

invalid as was the appointment of PFC as substitute trustee.

Wolf also makes claims for fraud against BAC and PFC, defamation

against PFC, and breach of the implied covenant of good faith

and fair dealing against BAC.                  In support of her fraud claim,

                                           5
Wolf argues that appointment of PFC as substitute trustee was an

act of fraud, and that the advertisement of the foreclosure sale

itself was a fraudulent representation.                       She further argues that

the advertisement of the foreclosure sale defamed her and caused

her considerable public shame and embarrassment.                               Wolf’s claim

for   breach    of     the    implied    covenant            of    good   faith    and     fair

dealing also centers on her allegation that the appointment of

PFC and the subsequent foreclosure sale were deficient.

      The    district        court    found       that    Wolf’s       TILA    claims      were

untimely and that the rest of her allegations failed to state a

cognizable claim.        The district court then granted BAC, PFC, and

Fannie Mae’s motion to dismiss the case in its entirety.                                   This

appeal followed.             We have jurisdiction pursuant to 28 U.S.C.

§ 1291.

                                             II.

                                             A.

      Wolf     first     argues       that     the       district         court    erred     in

dismissing     her     TILA    claims     based         on    her     failure     to   timely

exercise     her     right    to     rescind      the    home       mortgage      loan.      In

enacting     TILA,     Congress       decided      “that          economic    stabilization

would be enhanced . . . by the informed use of credit.”                                      15

U.S.C. § 1601(a).             In furtherance of informed use of credit,

TILA requires that a creditor make certain disclosures of terms

                                              6
when a loan transaction is made.                   When a consumer enters into a

loan       secured     by    her    principal       residence,       TILA’s   “buyer’s

remorse” provision allows the consumer to rescind the agreement.

Id.    §    1635(a).        Ordinarily,      the    right   of   rescission     may    be

exercised      within       three    business       days    from     either    closing,

delivery of notice of the right to rescind, or delivery of all

“material      disclosures,”        whichever      occurs    last.      Id.     If    the

required notice or material disclosures are not provided or are

deficient, the deadline to rescind is extended to three years

after consummation, transfer, or sale of the property, whichever

event occurs first.           Id. § 1635(f).

       TILA    also     requires      that    lenders       disclose    to    borrowers

“finance charges,” which are the cost of borrowing and include

“the sum of all charges . . . imposed directly or indirectly by

the creditor as an incident to the extension of credit.”                              Id.

§§ 1605(a), 1632(a).              If a lender fails to accurately disclose

finance charges to the borrower and a foreclosure is underway,

any charge that varies more than $35 from the actual sum of the

finance charge is grounds for rescission.                    Id. § 1635(i)(2).        In

addition to the required disclosure of finance charges, TILA

also mandates that the lender accurately disclose the consumer’s

right to rescind the loan.             Id. § 1635(a).         The lender must give

notice that “clearly and conspicuously discloses” the borrower’s

right to rescind.           Id.

                                             7
     As noted previously, the loan between Wolf and Metrocities

was finalized on May 14, 2007, but Wolf did not file a notice of

rescission until May 2, 2010.                     Thus, in order for her rescission

to be timely, she must establish that the three-year extended

deadline applies.             Wolf contends that the three-year deadline

applies because: (1) MetroCities assessed three underdisclosed

finance charges, and (2) MetroCities did not adequately disclose

her rescission rights in that the inclusion of an arbitration

clause     rendered           the        notice        of     the       right     to     rescind

“insufficiently clear to comply with the elements of TILA.”

     The district court found it unnecessary to decide whether

the three-year deadline applied because it determined that even

if it did apply, Wolf did not validly exercise her right of

rescission       because      she        failed       to    file    a   lawsuit    within      the

three-year deadline.            The district court issued its decision on

November       23,    2011.         On    May     3,   2012,       this   Court    issued      its

opinion in Gilbert v. Residential Funding LLC, 678 F.3d 271 (4th

Cir. 2012).          This Court held that a borrower does not need to

file a lawsuit seeking rescission within the three-year time

frame    and    instead,       must       only     notify      her      lender    that   she   is

exercising her right of rescission within the three-year limit.

Id. at 277.          Therefore, the district court’s holding that Wolf’s

rescission claim had expired is now contrary to the law of this

circuit.       In light of Gilbert, Wolf’s claim had not necessarily

                                                  8
expired when Wolf filed suit, and the relevant question becomes

whether Wolf has adequately alleged facts such that the three-

year deadline applies.

                                         B.

     Despite the fact the district court failed to evaluate the

substance of Wolf’s TILA claims, we are “entitled to affirm the

district court on any ground that would support the judgment in

favor   of   the   party   prevailing         below.”         Crosby   v.   City   of

Gastonia,    635   F.3d    634,    643   n.10    (4th     Cir.    2011)     (quoting

Catawba Indian Tribe v. City of Rock Hill, 501 F.3d 368, 372 n.4

(4th Cir. 2011)) (internal quotation marks omitted).                     Here, even

with the benefit of Gilbert, Wolf’s TILA claims fail.

     As previously noted, when a foreclosure is underway, any

failure to accurately disclose a finance charge exceeding $35 is

grounds for rescission.           15 U.S.C. § 1635(i)(2).              Wolf asserts

that MetroCities failed to disclose three finance charges: (1)

an excess charge for casualty insurance that was at least $50

more than reasonable, (2) a $10 recordation fee, and (3) a $15

interest     charge   which   arose      because        the    bank    received    an

overpayment from Wolf and failed to return it for two months.

Because the recordation fee and the interest charge together

fail to meet the threshold amount, we begin with the alleged

excess casualty charge.

                                         9
        Wolf alleges that she was charged $591 for one year of

casualty    insurance          and   that     escrow      reserved        an    additional

$443.25    for    nine     months      of    additional      insurance.              Although

casualty insurance charges are part of the applicable finance

charge,     id.      §    1605(c),          escrow       payments        are    not,     id.

§ 1605(e)(3).        Further, if the borrower is given the option to

pick his or her own casualty insurer and this right is disclosed

at closing, then casualty insurance is not a part of the finance

charge.        Id.     § 1605(c).           The   applicability          of    the    escrow

exemption is conditioned upon the payments being bona fide and

reasonable.       Regulation Z, 12 C.F.R. § 1026.4(c)(7) (previously

codified at 12 C.F.R. § 226.4(c)(7)).

        Wolf does not contend that the $591 for casualty insurance

is unreasonable.         Instead, it appears that Wolf takes issue with

the   escrow     fees,    as    Wolf    avers     that     the    amount       charged    for

casualty insurance was unreasonable because it required payment

in advance for an excessive amount of time.                              Wolf summarily

claims that the amount charged “was unreasonable by at least

$50.”     Wolf, however, presents no facts as to why the amount of

escrow charged was unreasonable.                  Wolf’s bare assertion that the

fees charged were unreasonable “stops short of the line between

possibility      and     plausibility”       of    the    right     to    relief.        Bell

Atlantic Corp. v. Twombly, 550 U.S. 544, 546 (2007).                            Because of

                                             10
this,    her    claim     that     the    escrow        payments    were       unreasonable

fails.

       Second, as already noted, the $10 recordation fee and the

$15    interest     fee    do    not     meet     the    threshold       $35    requirement

combined.         12      C.F.R.       § 1026.23(h)(2)           (stating       that     once

foreclosure is initiated finance charges are deemed accurate if

they were “understated by no more than $35.”)                           Therefore, Wolf’s

claim based on the recordation and interest fees fails as a

matter of law.

                                            C.

       In support of her TILA claim, Wolf also alleges that the

lender failed to accurately disclose her right to rescind the

loan.     In addition to the disclosure of finance charges, TILA

also     mandates      that      the     lender     “clearly       and     conspicuously”

disclose the borrower’s right to rescind the loan.                               15 U.S.C.

§ 1635(a).       Wolf concedes that the Notice of the Right to Cancel

was in proper form.              As a condition of the loan, MetroCities

required Wolf to enter an arbitration agreement.                          After the loan

was    closed,    Wolf     was    informed        of    her     right    to    rescind   the

arbitration agreement as well as her right to rescind the loan

itself.        Wolf    alleges     that     the     information         provided    in   the

arbitration      agreement       was     “drastically         inconsistent”       with    the

information       provided       for     rescinding       the    loan     and    that    this

                                            11
inconsistency          undermined         the     otherwise            accurate      rescission

information provided to her.                   Specifically, Wolf claims that the

arbitration agreement required her to send different information

to a different address than what was required to rescind the

loan.     According to Wolf, this rendered the Notice of the Right

to Cancel “insufficiently clear to comply with the requirements

of TILA.”

        We     are   reluctant       to    accept       that      an    extrinsic      document

makes     a    separate     Notice        of      the       Right      to   Cancel     unclear,

especially when Wolf concedes that the notice complied with the

requirements of TILA.             The separate arbitration provision simply

gave    Wolf     a     choice   to    terminate             the     arbitration       provision

without       affecting     the      underlying             loan.        Wolf’s    choice   to

arbitrate was wholly separate from her choice to rescind the

loan in its entirety, and her right to rescind the loan was in

no way undermined by her right to opt out of arbitration.                                   The

fact that the arbitration cancellation provisions were different

from the rescission provisions does not affect the clarity of

the separate Notice of the Right to Cancel.                                 Accordingly, we

reject        Wolf’s     argument         that        the     arbitration         cancellation

provision undermined a Notice of the Right to Cancel that was

perfectly consistent with TILA’s disclosure requirements.

                                                 12
      In sum, Wolf has failed to state any viable claim under

TILA, and we therefore affirm the district court’s dismissal of

her TILA claims.

                                                 III.

      Wolf next challenges the validity of the assignment of the

note from MERS to BAC.                     First, Wolf asserts that the deed of

trust     did       not    provide        MERS    the    right       to     assign      the   note.

Second, Wolf alleges that neither MERS nor BAC possessed the

note when it was purportedly assigned because the note was lost

at   that      time.         The       district     court       found       that    Wolf      lacked

standing       to    challenge           the   propriety        of    the    assignment.            We

agree.

      In       addition           to     the     constitutional             requirements        for

standing,        there           exist     other        “prudential          limitations”           to

standing.           Warth v. Seldin, 422 U.S. 490, 498 (1975).                                 Among

these limitations, is the principle that a party “generally must

assert his own legal rights and interests, and cannot rest his

claim     to    relief       on    the     legal       rights    or       interests      of    third

parties.”       Id. at 499.

      BAC argues that as a non-party to the assignment, Wolf does

not have the right to challenge the assignment.                                BAC’s argument

is   in    accord         with    Virginia       law.     In     Virginia,         to   sue    on    a

contract one must be a party to or beneficiary of the contract.

                                                  13
See Mich. Mut. Ins. Co. v. Smoot, 129 F. Supp. 2d 912, 920 (E.D.

Va. 2000).         Notably, Wolf has not alleged that she is a party to

the assignment from MERS to BAC or that she is an intended

beneficiary of the assignment.                   Without an enforceable contract

right,      Wolf    lacks   standing        to    attack      the    validity    of    the

assignment.         Furthermore, the assignment does not affect Wolf’s

rights or duties at all.              Wolf still has the obligation under

the   note    to     make   payments.            In   fact,    the    only    thing    the

assignment affects is to whom Wolf makes the payments.                               Thus,

she   has    no     interest    in    the    assignment        from    MERS     to    BAC.

Accordingly, she has no standing to challenge it.

                                            IV.

      Wolf next argues that BAC’s appointment of PFC as trustee

was invalid, and because of this PFC was without authority to

foreclose on her property.             Wolf makes two arguments in support

of this contention.            First, she claims that BAC and MERS were

not in possession of the note at the time they purported to

appoint PFC as trustee.              Second, Wolf avers that the notarized

document effectuating PFC’s appointment as trustee was a “bogus”

document because the second page was not attached to the first

page when the document was signed.

      Wolf contends that the appointment of PFC as trustee was

ineffective because on March 12, 2010, eighteen days before the

                                            14
appointment, she received a letter from BAC’s counsel informing

her that the note “was unavailable at this time.”                      Wolf claims

that the appointment of PFC as trustee was a nullity because BAC

nor MERS possessed the note at the time of the appointment.

Even if the appointment might be a nullity in that circumstance,

Wolf does not present a sufficient claim that BAC or MERS did

not possess the note.         In fact, there is substantial evidence to

the contrary.      PFC attached a copy of the note as an exhibit to

the district court, and the note states that PFC is the holder

of the note or the authorized agent of the holder of the note.

The note was also produced at a hearing in the district court.

Further, an examination of the note reveals the endorsement of

the original lender, MetroCities to Countrywide Bank, then from

Countrywide Bank to Countrywide Home Loans—which became BAC—and

then   an     endorsement     in    blank     by   Countrywide      Home    Loans.

According     to   Virginia    law,      “[w]hen      endorsed    in    blank,    an

instrument becomes payable to bearer and may be negotiated by

transfer of possession alone until specially endorsed.”                          Va.

Code   Ann.    § 8.3A-205(b).           And    once    in    possession    of     an

instrument, the holder is entitled to enforce it.                      Id. § 8.3A-

301.   Thus, PFC as a holder in possession of the note had the

authority     to   foreclose       on   the   property      in   accordance      with

Virginia law.

                                         15
          Wolf’s    next       argument      is       that     the     notarized          document

purporting         to   appoint       PFC   as    trustee       is    invalid          because    the

signed second page of the document was not attached to the first

page at execution.                Wolf alleges that as a result of this defect

the document was ineffective because of invalid notarization.

In    support      of   this       proposition,         Wolf    relies    on       Stanley       Dale

Williams v. HSBC Finance Corp., No. CL 10-877 (Va. Cir. Ct.

March 30, 2011).               In Williams, the plaintiff alleged that the

two       pages    of   a    document       purporting         to    appoint       a    substitute

trustee appeared to have been executed at different places and

times, and because of this may not have been executed in front

of    a    notary.          The   court     found     that     this    was     a       valid   claim

because the document must be executed in front of a notary to be

effective.         Id. at 2.          Unfortunately, Williams is not helpful to

Wolf.        In Williams, if the claims were true, this would have

established that the document was not properly notarized.                                      Here,

even if the allegations are true, it is irrelevant whether the

pages      were    stapled        together       when    the    documents          were    signed.

Wolf cites no authority, and we have found none, that requires

papers       to    be       stapled    together         for     a    proper        notarization.

Therefore, Wolf’s argument fails.

                                                 16
                                    V.

     Wolf next asserts a claim for fraud.            Wolf alleges that

because of the invalid appointment of PFC as the trustee, the

foreclosure action was void, and BAC and PFC committed fraud by

advertising the foreclosure sale.        Further, Wolf claims that due

to her reliance on the validity of the appointment, she failed

to take action to prevent the foreclosure prior to the sale.              To

plead a claim for fraud, a plaintiff must show:               (1) a false

representation, (2) of material fact, (3) made intentionally and

knowingly, (4) with intent to mislead, (5) reliance by the party

misled, and (6) resulting damage to the party misled.                  State

Farm Mut. Auto. Ins. Co. v. Remley, 618 S.E.2d 316, 321 (Va.

2005).     Additionally,    the   Federal   Rules   of    Civil    Procedure

mandate    a   heightened   pleading     standard   for    fraud    claims.

Federal Rule of Civil Procedure 9(b) requires a party alleging

fraud     to   “state   with      particularity     the     circumstances

constituting fraud or mistake.”          Fed. R. Civ. P. 9(b).           The

circumstances required to be pled with particularity are “the

time, place, and contents of the false representations, as well

as the identity of the person making the misrepresentation and

what he obtained thereby.”         United States ex rel. Wilson v.

Kellogg Brown & Root, Inc., 525 F.3d 370, 379 (4th Cir. 2008)

(quoting Harrison v. Westinghouse Savannah River Co., 176 F.3d

776, 786 (4th Cir. 1999)).

                                    17
       Wolf fails to satisfy the pleading standards for fraud.

First, Wolf does not allege a false representation of material

fact that is contained in the appointment document.                         Further,

Wolf does not identify any representation that misled her.                        Even

if   we   were   to   accept   that      the   appointment     of   PFC     and       the

subsequent foreclosure sale were deficient, the document does

not contain any facts that mislead Wolf.                    The document simply

captures the intent of BAC and PFC to substitute PFC as trustee.

Moreover, Wolf did not rely on these statements, as she took

action to stop the foreclosure sale when she mailed notice of

rescission.

       Similarly, Wolf fails to plead sufficient facts to show

that    the   advertisement    of     the     foreclosure    sale   was     a    false

representation.         Nothing     in      the   foreclosure       claim       was     a

misrepresentation of material fact.                The advertisement merely

shows that PFC intended to foreclose on the property, an action

on which it followed through.                  Also, there is no reason to

conclude that BAC and PFC intended to defraud Wolf because they

sought to foreclose on her property after she defaulted on the

loan.     It should come as no surprise to a home-owner that the

lender may seek to foreclose on her home when she fails to make

payments.     In sum, Wolf fails to plead several required elements

to make a claim for fraud, and the district court was correct in

dismissing her claim.

                                         18
                                    VI.

     Next, Wolf contends that PFC defamed her when it published

the foreclosure notice.       She claims that the foreclosure notice

caused   “her   public    shame   and    embarrassment       and     considerable

emotional harm.”         To state a claim for defamation Wolf must

show:    (1) publication of (2) a false statement (3) that defamed

Wolf, and (4) was made with the requisite intent.                   See Chapin v.

Knight-Ridder,    Inc.,     993   F.2d       1087,    1092   (4th     Cir.   1993)

(applying Virginia law).          “To be ‘actionable,’ the statement

must be not only false, but also defamatory, that is, it must

‘tend[] so to harm the reputation of another as to lower him in

the estimation of the community or to deter third persons from

associating or dealing with him.’”                   Id. (quoting Restatement

(Second) of Torts § 559).

     In support of her argument Wolf cites language from the

notice of foreclosure.      The notice provides:

     In execution of a Deed of Trust . . . . from ELAYNE
     WOLF dated May 14, 2007 . . . the undersigned
     appointed Substitute Trustee will offer for sale at a
     public auction at the front of the Circuit Court
     building for the County of Albemarle located at 501 E.
     Jefferson Street, Charlottesville, Virginia, on July
     21, 2010 . . . .

Although Wolf contests the validity of the foreclosure sale, she

has not alleged that the published statements were false.                       In

fact, the advertisement that a foreclosure sale would occur is

unquestionably true.       See Lapkoff v. Wilks, 969 F.2d 78, 82 (4th

                                        19
Cir. 1992) (noting that a true statement cannot be defamatory).

Furthermore,       Wolf    was    undeniably      in    default,         rendering       the

publication of a foreclosure notice warranted.                           In the absence

of any false statement about Wolf, we cannot conclude that the

foreclosure      notice     defamed      her.        Because        of    this,      Wolf’s

defamation claim fails.

                                         VII.

       Finally, Wolf argues that the note and accompanying deed of

trust   contained     an     implied     covenant      of    good    faith      and     fair

dealing   that     imposed    obligations       on     the   holder       of   the     note.

Wolf claims that BAC breached the implied covenant of good faith

and fair dealing by acting outside of the scope of their rights

when    (1)   proceeding         with    the    foreclosure         even       after    the

allegedly “bogus” substitution of the trustee and (2) asserting

ownership on the basis of an invalid foreclosure.

       Wolf   is    correct       that    “[i]n      Virginia,       every        contract

contains an implied covenant of good faith and fair dealing.”

Enomoto v. Space Adventures, Ltd., 624 F. Supp. 2d 443, 450

(E.D. Va. 2009).          However, the covenant of good faith and fair

dealing does not mean that a party who has contracted for valid

contractual rights cannot exercise those rights, as long as that

party does not exercise those rights in bad faith.                        See id.

                                          20
     In this case, MERS had the authority to assign the note to

BAC, and BAC had the authority to appoint a substitute trustee,

namely PFC.     The note also provided the right to foreclose on

the property.     Simply stated, MERS and its assigns had valid

contractual rights to take all of the steps that they did in

fact take.    To prevail, Wolf needs to show sufficient evidence

that these rights were exercised in bad faith.     Although Wolf

may not agree with actions taken, she has presented no evidence

that BAC’s contractual discretion was exercised in bad faith,

dishonestly, or that she was treated unfairly.     Therefore, we

must conclude that BAC did not breach the implied covenant of

good faith and fair dealing.

                               VIII.

     Wolf fails to state any claim that survives a motion to

dismiss.   Because of this failure, we affirm the judgment of the

district court.

                                                         AFFIRMED

                                21