92 Va. Cir. 472
Hopewell Cir. Ct.2013Background
- Julie K. Carr borrowed from Bank of America in 2007; loan secured by deed of trust with PRLAP, Inc. as trustee. Note and deed required 30‑day pre‑acceleration/cure notice.
- Bank of America replaced PRLAP as trustee with Samuel I. White, P.C.; White advertised and conducted a foreclosure sale on December 22, 2011; Fannie Mae acquired title after the sale.
- Carr alleges the 30‑day cure/notice documents were backdated and thus invalid, so the foreclosure was defective.
- On December 21, 2011, Bank of America representatives allegedly told Carr the December 22 sale was cancelled while her loan modification application was under review; Carr relied and took no other steps.
- Carr seeks: breach of the Note and Deed of Trust (including quiet title), actual and constructive fraud, and breach of the implied covenant of good faith and fair dealing. Defendants demurred to the amended complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether pre‑acceleration notice requirements in the Note and Deed of Trust were breached | Notices were backdated / no valid 30‑day notice was given, so foreclosure was defective | Notices complied with contract; foreclosure valid | Demurrer overruled as to breach of Note and Deed of Trust (claim may proceed); demurrer sustained as to quiet title (leave to amend) |
| Quiet title against Fannie Mae | Carr claims superior title because foreclosure was defective | Carr has not pleaded she satisfied obligations under the loan documents | Demurrer sustained with leave to amend (quiet title claim dismissed for now) |
| Actual and constructive fraud based on representations foreclosure was cancelled | Bank told Carr sale was cancelled, she reasonably relied, and suffered damages when sale proceeded | Economic‑loss rule bars tort recovery / statements were not actionable | Demurrer overruled as to Bank of America for fraud (compensatory damages allowed); economic‑loss rule rejected because fraud is a common‑law duty |
| Fraud claim against Samuel I. White, P.C. | White acted as Bank’s agent in the purported foreclosure | Allegations insufficiently particularized to show White’s fraud | Demurrer sustained as to White with leave to amend (fraud allegations lack requisite particularity) |
| Breach of implied covenant of good faith and fair dealing as a standalone tort | Carr asserts Bank acted in bad faith in handling modification/foreclosure | Virginia does not recognize a standalone tort for breach of the implied covenant when contract governs | Demurrer sustained without leave to amend (no independent cause of action) |
Key Cases Cited
- Tronfeld v. Nationwide Mut. Ins. Co., 272 Va. 709 (purpose of a demurrer and pleading standards)
- Fox v. Custis, 236 Va. 69 (demurrer does not admit legal conclusions)
- Filak v. George, 267 Va. 612 (elements of breach of contract)
- Maine v. Adams, 277 Va. 230 (quiet title requires superior title and pleading of legal obligations)
- Cohn v. Knowledge Connections, Inc., 266 Va. 362 (elements of fraud under Virginia law)
- Nationwide Ins. Co. v. Patterson, 229 Va. 627 (elements of constructive fraud)
- Foreign Mission Bd. v. Wade, 242 Va. 234 (a single act can support both contract and tort claims)
- Charles E. Brauer Co. v. Nations Bank of Va., N.A., 251 Va. 28 (no independent tort for implied covenant of good faith and fair dealing)