419 P.3d 105
Mont.2018Background
- In 2006 Puryer obtained a $285,750 loan on her Kalispell residence, secured by a Deed of Trust naming Mortgage Electronic Registration Systems as beneficiary nominee; maturity date April 1, 2036.
- Puryer stopped payments in 2007 after alleged instruction to do so while pursuing a HAMP modification; she defaulted and has lived on the property since.
- Lenders sent at least nine Notices of Sale between 2008 and 2016; each notice was later cancelled and no foreclosure sale occurred. Notices alleged acceleration and stated large unpaid balances.
- Puryer sued in 2016 (amended complaint 2017) asserting six claims: declaratory relief (statute of limitations/acceleration), breach of contract and implied covenant (contractual and tortious based on a "special relationship"), FDCPA, MCPA, intentional/negligent infliction of emotional distress, and lack of authority to foreclose.
- District Court dismissed most claims on 12(b)(6) grounds; Puryer appealed. The Supreme Court affirmed dismissal of some claims and reversed others as described below.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Notices of Sale accelerated the loan and triggered the 8‑year statute of limitations under §71‑1‑210, MCA | Notices of Sale accelerated entire debt (first notice July 10, 2008) so 8‑year period began then | Deed of Trust requires lender notice and an implementing election to accelerate; notices did not effectuate maturity | Court: No acceleration; statute of limitations not triggered, maturity remains 2036; declaratory claim dismissed |
| Breach of contract and contractual implied covenant of good faith and fair dealing | Lenders breached Deed of Trust notice requirements; alleged damages and deprivation of contract benefits | Lenders: plaintiff failed to plead actual damages and no tortious special relationship exists | Court: Breach of contract survives (nominal damages adequate); contractual implied covenant claim survives; tortious implied‑covenant (special relationship) adequately pled to survive 12(b)(6) pending factual development |
| FDCPA (15 U.S.C. §§1692e, 1692f/1692f(6)) | Repeated Notices of Sale and false statements violated FDCPA, including §1692f prohibiting certain nonjudicial dispossession threats | Lenders are not "debt collectors" for enforcement of security interests; most FDCPA claims fail or are time‑barred | Court: Claims under §1692e dismissed; claim under §1692f (specifically §1692f(6) type conduct re: threatened nonjudicial dispossession) survives as to the July 5, 2016 notice (within one‑year limitations); earlier violations properly dismissed |
| Montana Consumer Protection Act (MCPA) | Violations of trust indenture and FDCPA allegations constitute unfair/deceptive acts causing ascertainable loss (fees, costs, lost opportunities) | No actionable MCPA conduct; no ascertainable loss alleged | Court: MCPA claim adequately pled (Jacobson precedent); alleged costs/fees and consequences suffice for ascertainable loss to survive 12(b)(6) |
| Intentional/negligent infliction of emotional distress | Continuing notices caused severe emotional distress affecting plaintiff’s health | Insufficient factual allegations of "serious or severe" distress; conclusory assertions only | Court: Dismissal affirmed — allegations do not meet Montana's high threshold for severe emotional distress |
Key Cases Cited
- Bank of America, N.A. v. Alexander, 2017 MT 31, 386 Mont. 305, 389 P.3d 1020 (discussed; court determined inapplicable to non‑acceleration here)
- Jacobson v. Bayview Loan Servicing, LLC, 2016 MT 101, 383 Mont. 257, 371 P.3d 397 (MCPA can be violated by trust‑indenture/nonjudicial foreclosure misconduct; costs and lost opportunities can constitute ascertainable loss)
- Dowers v. Nationstar Mortg., LLC, 852 F.3d 964 (9th Cir.) (enforcement of a security interest generally not FDCPA debt collection, but §1692f(6) can cover wrongful nonjudicial foreclosure threats)
- Ho v. ReconTrust Co., N.A., 858 F.3d 568 (9th Cir.) (nonjudicial foreclosure activity is not debt collection under most FDCPA provisions)
- Story v. Bozeman, 242 Mont. 436, 791 P.2d 767 (1990) (elements for tortious breach of implied covenant — "special relationship" factors govern when tort remedies apply)
- Midfirst Bank v. Ranieri, 257 Mont. 312, 848 P.2d 1046 (1993) (payment of arrears may reinstate trust indenture; supports concept that notice does not necessarily accelerate entire debt)