Jackson v. Nationstar Mortgage LLC
2016 Ark. App. 473
| Ark. Ct. App. | 2016Background
- Patricia Jackson's house burned in 2012; Allstate denied her homeowner's claim alleging arson/misrepresentation and a jury later found Jackson (or someone on her behalf) caused the fire.
- Jackson sued Allstate in federal court (verdict for Allstate affirmed by the Eighth Circuit). She then filed a declaratory-judgment action in Pulaski County against Nationstar (her mortgagee), Allstate, and others seeking, among other things, reimbursement of mortgage payments and payoff of the loan based on an alleged payment from Allstate to Nationstar for $203,164.41.
- Nationstar moved to dismiss, stating it had applied the Allstate funds to the loan, charged off the remainder, and released the mortgage; Nationstar argued Arkansas law (Fireman’s Fund) bars Jackson’s requested recovery when the insured caused the loss.
- Jackson amended her complaint to add claims (breach of the mortgage agreement and unjust enrichment) alleging Nationstar unreasonably delayed applying the proceeds while demanding an affidavit, causing her to make additional mortgage payments.
- The trial court held a hearing, granted Nationstar’s motion to dismiss, and entered dismissal with prejudice; Jackson appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether court erred by considering Nationstar’s pre-amendment motion after Jackson filed an amended complaint | Jackson: amended complaint added new claims and theories, so original motion shouldn’t control | Nationstar: amended complaint sought the same relief; defects in original motion still apply | Court: No error — amended pleading sought same relief; motion remained applicable (no exaltation of form over substance) |
| Whether Jackson was denied opportunity to respond to motion as to new claims | Jackson: needed additional time and written response to address newly pleaded claims | Nationstar: adopted its prior motion; hearing provided opportunity to respond | Court: No error — hearing occurred and Jackson had chance to argue; written response not required before ruling |
| Whether Arkansas law permits recovery of mortgage payments where insured caused loss (i.e., applicability of Fireman’s Fund) | Jackson: claims distinguishable because mortgage agreement separately required application of proceeds to mortgage (argued later on appeal) | Nationstar: Fireman’s Fund bars mortgagee application to benefit insured mortgagor who caused loss; thus no recovery | Court: Held Fireman’s Fund-controlled result and barred the relief as pleaded; Nationstar had no duty to apply proceeds to reduce Jackson’s obligation |
| Whether Jackson preserved the argument that the mortgage agreement independently required payoff (contract-based claim) | Jackson: mortgage contract required application of proceeds to loan; Nationstar wrongfully delayed and demanded affidavit | Nationstar: such theory was not raised below; dismissal proper on existing grounds | Court: Argument not preserved for appeal because Jackson did not present that specific theory to the trial court; appellate review declined |
Key Cases Cited
- Fireman’s Fund Ins. Co. v. Rogers, 18 Ark. App. 142 (Ark. Ct. App. 1986) (standard mortgage clause can bar insurer liability to mortgagor who caused loss)
- Smith v. Walt Bennett Ford, Inc., 314 Ark. 591 (Ark. 1993) (trial court may rule on a motion after a hearing even if no written response was filed)
- Jackson v. Allstate Ins. Co., 785 F.3d 1193 (8th Cir. 2015) (affirming jury finding that insured or someone on her behalf caused the fire)
- Ouachita Wilderness Inst., Inc. v. Mergen, 329 Ark. 405 (Ark. 1997) (appellate courts generally decline to consider theories not raised at trial)