Federal Home Loan Mortgage Corporation v. Margaret Wilson
702 F. App'x 827
11th Cir.2017Background
- Margaret Wilson defaulted on a mortgage originated by Wells Fargo Home Mortgage, Inc.; Wells Fargo later assigned the mortgage and note to Freddie Mac, endorsed the note in blank, and retained physical possession as document custodian and servicer.
- A nonjudicial foreclosure sale occurred; Freddie Mac submitted a foreclosure deed showing legal title through the sale, and Wilson remained in possession of the property.
- Wilson sued (and counterclaimed) alleging Wells Fargo lacked authority to foreclose in its own name, the sale occurred outside legally permitted hours, and equitable estoppel barred foreclosure; she asserted counterclaims for breach of contract, wrongful foreclosure, negligence, and slander of title, among others.
- Freddie Mac and Wells Fargo moved for summary judgment on ejectment and on Wilson’s counterclaims; the district court granted summary judgment for the defendants.
- On appeal, Wilson argued (1) improper authority to foreclose, (2) sale time invalidating the sale, (3) equitable estoppel based on postponements and loan-modification communications, and (4) that these defects preserved her counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wells Fargo had authority to conduct the foreclosure in its own name | Wells Fargo sold the mortgage to Freddie Mac and thus lacked authority to foreclose in its own name | Wells Fargo retained possession of a note endorsed in blank and served as document custodian/servicer, giving it enforceable holder rights under Alabama law | Wells Fargo had authority; possession of a blank-endorsed note sufficed to enforce the note and power of sale |
| Whether the foreclosure sale occurred during lawful hours (11 AM–4 PM) | Auctioneer certificate ambiguous (10:49 vs 11:49), so genuine dispute exists | Foreclosure deed recites compliance with lawful hours; deed is prima facie evidence and plaintiff offered no proof the recitals were false | No genuine dispute; foreclosure deed’s recital stood unrebutted, so sale was proper |
| Whether equitable estoppel barred enforcement due to postponements/loan-modification communications | Postponements and document requests lulled Wilson into relying on detention of sale and expectation of modification | Wilson knew she had been denied a third modification, had no guaranteed postponement, and was told the sale would go forward | No estoppel: no misleading promise or detrimental reliance shown |
| Whether summary judgment on Wilson’s counterclaims (breach, wrongful foreclosure, negligence, slander of title) was erroneous | Counterclaims rely on alleged lack of authority and improper sale timing to show wrongful foreclosure and related torts | Defendants show lawful foreclosure and authority; thus counterclaims fail as a matter of law | Summary judgment affirmed as counterclaims rest on rejected premises |
Key Cases Cited
- Brooks v. Cnty. Comm’n of Jefferson Cnty., 446 F.3d 1160 (11th Cir. 2006) (summary-judgment standard and view of evidence for nonmoving party)
- Allen v. Tyson Foods, Inc., 121 F.3d 642 (11th Cir. 1997) (mere scintilla of evidence insufficient to defeat summary judgment)
- Thomas v. Wells Fargo Bank, N.A., 116 So. 3d 226 (Ala. Civ. App. 2012) (possession of a note endorsed in blank is prima facie evidence of ownership)
- Garst v. Johnson, 37 So. 2d 183 (Ala. 1948) (foreclosure-deed recitals are prima facie evidence of compliance)
- Mazer v. Jackson Ins. Agency, 340 So. 2d 770 (Ala. 1976) (elements of equitable estoppel under Alabama law)
- Steele v. Fed. Nat’l Mortg. Ass’n, 69 So. 3d 89 (Ala. 2010) (sufficiency of ejectment pleading and title showing)
- Campbell v. Bank of Am., N.A., 141 So. 3d 492 (Ala. Civ. App. 2012) (collateral attack in ejectment requires wrongful foreclosure that renders sale void)
- Dunning v. New England Life Ins. Co., 890 So. 2d 92 (Ala. 2003) (nonparties cannot enforce contract rights of others)