Midland Properties v. Wells Fargo
296 Neb. 407
| Neb. | 2017Background
- Jerry Morgan borrowed against real property, conveyed it to Midland Properties, LLC, and later defaulted on the loan; Wells Fargo was assignee of the note and deed of trust and initiated a nonjudicial foreclosure.
- HBI purchased the property at the trustee’s sale and later conveyed it to H & S Partnership, LLP.
- Morgan and Midland sued Wells Fargo, HBI, and H & S asserting wrongful foreclosure, quiet title, tortious interference with business relationships (tenant contacts), and seeking declaratory and equitable relief.
- Wells Fargo moved for summary judgment, producing records showing missed payments, notice of default, compliance with foreclosure notice/recording requirements, and denial of a loan modification due to title issues.
- Appellants relied primarily on Morgan’s deposition/affidavit recounting unidentified telephone conversations with Wells Fargo employees (allegedly instructing him not to pay and promising no foreclosure) and secondhand tenant reports; the district court excluded much of this as hearsay/lacking foundation and granted summary judgment to Wells Fargo.
- Appellants’ late motion to file a second amended complaint to add Wells Fargo’s independent contractor was denied; the district court found delay unexplained and the proposed claim futile. The Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether genuine issues of material fact precluded summary judgment on wrongful foreclosure/quiet title | Morgan’s testimony of Wells Fargo reps telling him not to pay and promising no foreclosure created a dispute about default/notice | Wells Fargo’s records show missed payments, proper notice, and modification denial; Morgan’s testimony lacked foundation (no speaker identity or dates) | Excluded Morgan’s testimony for lack of foundation; no genuine issue; summary judgment for Wells Fargo affirmed |
| Admissibility of Morgan’s deposition/affidavit statements about telephone conversations | Testimony admissible and nonhearsay to rebut foreclosure right | Testimony inadmissible hearsay and lacked requisite foundation to identify speakers | Court did not abuse discretion excluding the statements; they were inadmissible as presented |
| Whether tenant statements (reports of harassment/contact) create an issue on tortious interference | Tenant reports (as related by Morgan) show Wells Fargo contacted/harassed tenants, causing interference and damages | Wells Fargo produced tenant affidavit denying contact and records showing only occupancy checks by an independent contractor; Morgan lacked personal knowledge of tenant communications | Morgan’s hearsay recounting of tenants was inadmissible; no genuine issue on interference; summary judgment on tortious interference affirmed |
| Whether to allow leave to file a second amended complaint adding the independent contractor | Plaintiffs sought to add the contractor after the amendment deadline, claiming late discovery of its identity | Wells Fargo had identified the contractor earlier; plaintiffs offered no adequate excuse for delay and the claim would be futile | Denial of leave to amend was not an abuse of discretion; motion properly denied |
Key Cases Cited
- Bixenmann v. Dickinson Land Surveyors, 294 Neb. 407, 882 N.W.2d 910 (2016) (summary judgment standard and appellate review)
- State v. Casterline, 293 Neb. 41, 878 N.W.2d 38 (2016) (evidentiary foundation review)
- Golnick v. Callender, 290 Neb. 395, 860 N.W.2d 180 (2015) (pleading/amendment and related standards)
- SID No. 196 of Douglas Cty. v. City of Valley, 290 Neb. 1, 858 N.W.2d 553 (2015) (summary judgment burdens)
- Linch v. Carlson, 156 Neb. 308, 56 N.W.2d 101 (1952) (evidence rules regarding witness knowledge)
- Steinhausen v. HomeServices of Neb., 289 Neb. 927, 857 N.W.2d 816 (2015) (elements of tortious interference)
- Green v. Box Butte General Hosp., 284 Neb. 243, 818 N.W.2d 589 (2012) (trial court’s discretion to deny leave to amend)