Anthony Jones v. Fulton Bank, N.A.
565 F. App'x 251
4th Cir.2014Background
- Anthony L. Jones and Cheryse D. Glenn-Jones sued Fulton Bank alleging breaches of the deed of trust securing their mortgage and sought damages and to quiet title.
- Defendant moved to dismiss under Fed. R. Civ. P. 12(b)(6); the district court granted the motion.
- Key factual allegations: Defendant sent a pre-acceleration notice the Joneses claim was deficient; Defendant appointed Samuel I. White, P.C. as substitute trustee and instructed foreclosure; Joneses alleged related contract and UCC-based good-faith claims; they also sought quiet title.
- The district court dismissed for failure to state a claim, concluding the Joneses failed to plead damages for the defective notice, lacked standing to challenge the trustee appointment, the UCC claim was legally deficient, and they had not satisfied obligations required to quiet title.
- The Joneses appealed; the Fourth Circuit reviewed the 12(b)(6) dismissal de novo and affirmed without oral argument.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a deficient 30-day pre-acceleration notice supports breach of contract damages | The notice was deficient, constituting breach | Even if notice deficient, plaintiff must plead damages caused by that breach | Affirmed dismissal — plaintiffs did not adequately plead damages for the notice breach |
| Whether Joneses may challenge appointment of substitute trustee | Appointment violated deed of trust and foreclosure was noncompliant | Joneses lack standing to challenge trustee appointment; they fail causation/redressability elements | Affirmed dismissal — plaintiffs lacked standing to dispute the appointment |
| Viability of a separate UCC implied covenant of good faith claim | Bank breached implied duty of good faith under UCC arising from deed of trust breaches | UCC does not apply to real estate transfers; even if it did, good-faith breach gives only contract (not independent tort) remedy | Affirmed dismissal — UCC claim fails as a matter of law |
| Whether plaintiffs can bring quiet title without paying the deed of trust | Quiet title is proper to clear allegedly superior adverse interest | Plaintiff must have satisfied obligations and show superior title/rights | Affirmed dismissal — plaintiffs did not allege they satisfied obligations required to quiet title |
Key Cases Cited
- Sec’y of State for Defence v. Trimble Navigation, Ltd., 484 F.3d 700 (4th Cir. 2007) (standard of review for Rule 12(b)(6) dismissal)
- Erickson v. Pardus, 551 U.S. 89 (U.S. 2007) (factual allegations in complaint assumed true at motion to dismiss)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility pleading standard)
- Mathews v. PHH Mortg. Corp., 724 S.E.2d 196 (Va. 2012) (deed of trust construed as contract)
- Filak v. George, 594 S.E.2d 610 (Va. 2004) (elements of breach of contract and requirement to plead damages)
- Bayview Loan Servicing, LLC v. Simmons, 654 S.E.2d 898 (Va. 2008) (deficient pre-acceleration notice can be breach)
- Edwards v. City of Goldsboro, 178 F.3d 231 (4th Cir. 1999) (issues not raised on appeal are abandoned)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (standing: injury, causation, redressability)
- Greenwood Assocs., Inc. v. Crestar Bank, 448 S.E.2d 399 (Va. 1994) (UCC does not apply to transfers of real property)
- Charles E. Brauer Co. v. NationsBank of Va. N.A., 466 S.E.2d 382 (Va. 1996) (breach of implied UCC duty gives rise only to contract remedy)
- Tapia v. U.S. Bank, N.A., 718 F. Supp.2d 689 (E.D. Va. 2010) (quiet title requires plaintiff to have satisfied obligations to show superior interest)