242 So. 3d 961
Miss. Ct. App.2018Background
- Norair and Burnette Avakian purchased a Columbus, MS home; they executed separate deeds of trust in March 2006 to secure Norair’s promissory note after a refinancing. Norair later defaulted and died in 2010.
- The promissory note was eventually held by Citibank as trustee; Wilmington Trust succeeded Citibank as trustee in December 2012; J.P. Morgan serviced the loan.
- Burnette sued in 2012 to enjoin foreclosure; the district court initially found the deeds unenforceable, but the Fifth Circuit reversed, holding the two deeds together created an enforceable instrument (773 F.3d 647).
- On remand the district court entered final judgment for the trustee (Wilmington substituted in); Wilmington then filed a state chancery action (2015) asserting judicial foreclosure, breach of contract, unjust enrichment, and declaratory relief.
- The chancery court granted Wilmington partial summary judgment on foreclosure, breach, and declaratory claims, finding res judicata applied based on the prior federal judgment; it granted Burnette summary judgment on unjust enrichment because a contract governed the parties’ relationship.
- This appeal and cross-appeal challenge (1) application of res judicata to bar Burnette’s defenses about note/deed possession, and (2) dismissal of Wilmington’s unjust-enrichment claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars Burnette from disputing Wilmington’s status as holder and other defenses to foreclosure | Burnette: genuine issue exists whether Wilmington is true holder of note/deeds; thus foreclosure/breach/declaratory claims not ripe for summary judgment | Wilmington: prior federal litigation decided the trustee’s right to foreclose; final federal judgment and substitution of Wilmington create res judicata bar | Court: Affirmed — four identities of res judicata met (subject matter, cause, parties/privity, capacity); prior federal final judgment precludes re-litigation of those defenses |
| Whether Wilmington may recover under unjust enrichment for Burnette’s commercial use of the property after default | Wilmington: Burnette was unjustly enriched by operating a B&B and profiting without paying on the note | Burnette: relationship governed by promissory note and deed of trust; unjust enrichment unavailable where contract exists | Court: Affirmed — unjust enrichment unavailable because an express contract (deed/note) governs remedies; chancery order nonetheless required monthly rent pending appeal |
Key Cases Cited
- Avakian v. Citibank N.A., 773 F.3d 647 (5th Cir.) (held two deeds collectively created enforceable security interest)
- Estate of Avakian v. Wilmington Tr. Nat’l Ass’n, 231 So.3d 208 (Miss. Ct. App.) (affirming probate court rulings, including tolling and timeliness of creditor claim)
- Hill v. Carroll Cty., 17 So.3d 1081 (Miss. 2009) (res judicata four-identity framework)
- Gibson v. Williams, Williams & Montgomery P.A., 186 So.3d 836 (Miss. 2016) (res judicata bars all grounds or defenses available in prior action)
- Estate of White v. White, 152 So.3d 314 (Miss. 2014) (de novo review and summary judgment standard)