Richard v. Wells Fargo Bank, N.A.
418 S.W.3d 468
Mo. Ct. App.2013Background
- Elizabeth and Paul Richard held the Property as tenants by the entirety; Paul refinanced in 2005 with Wells Fargo and executed a promissory note signed by Paul only.
- The 2005 deed of trust secured the note and, on seventeen pages, Elizabeth initials most pages and signs on the seventeenth page as 'Borrower'; the eighteenth page labels Elizabeth as 'Non-Borrower'.
- The deed defines 'Borrower' as Paul and Elizabeth; section 13 provides that a co-signer who did not execute the note still conveys the co-signer’s interest.
- A cover page showed two grantor iterations: one listing only Paul, another with both Paul and Elizabeth; handwritten addition identified Elizabeth as grantor on the latter.
- After Paul's death (2008), Wells Fargo performed default notices; foreclosure proceeded non-judicial and HSBC Bank purchased the Property at sale via credit bid in 2009.
- Elizabeth sued Wells Fargo and HSBC on multiple counts; the trial court granted partial summary judgment on Counts I, II, and VI, and dismissed remaining counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Deed ambiguity due to Borrower designation | Elizabeth argues the deed is ambiguous because Elizabeth is named both as 'Borrower' and 'Non-Borrower'. | Wells Fargo/HSBC contend the deed, read with the note, is clear and unambiguous in identifying Elizabeth as 'Borrower'. | Not ambiguous; deed unambiguously identifies Elizabeth as Borrower. |
| Material alteration of the deed of trust | Handwritten addition of Elizabeth as grantor altered rights; renders the deed invalid as to Elizabeth. | Handwritten addition does not change terms or obligations; not a material alteration. | Not a material alteration; validity preserved. |
| Wrongful foreclosure (cash bid requirement and notice) | Foreclosure sale violated terms by non-cash bid and by implying delay would be granted. | Credit bid permitted by law; no evidence of improper delay; sale compliance with law. | Foreclosure sale valid; cash bid not required and no improper delay shown. |
Key Cases Cited
- Ethridge v. Tier-One Bank, 226 S.W.3d 127 (Mo. banc 2007) (tenants by the entirety must both be named as grantors)
- Frame v. Boatmen’s Bank of Concord Village, 782 S.W.2d 117 (Mo.App. E.D.1989) (contracts construed together; parties' intentions as to security instruments)
- Reese v. First Missouri Bank & Trust Co. of Creve Coeur, 664 S.W.2d 530 (Mo.App. E.D.1983) (harmonize contradictory documents when possible; ambiguity defined when not)
- Rouse v. Wells Fargo Bank, N.A., 2009 WL 3335027 (Bankr.W.D.Mo. Oct. 14, 2009) (co-signer conveys co-signer’s interest when promissory note not executed by co-signer)
- Hallquist v. United Home Loans, Inc., 715 F.3d 1040 (8th Cir.2013) (credit bids permitted where value exchanged; cash not strictly necessary)
- Webb v. Salisbury, 39 S.W.2d 1045 (Mo. 1931) (foreclosure sale validity and payment terms)
- Martin v. Lorren, 890 S.W.2d 352 (Mo.App. S.D.1994) (case law on foreclosure and notices)
- Young Dental Mfg. Co. v. Engineered Products, Inc., 838 S.W.2d 154 (Mo. App. E.D.1992) (extrinsic evidence only after no ambiguity shown)
- Webb v. Salisbury, 39 S.W.2d 1045 (Mo. 1931) (cash requirement in foreclosure terminology)
- IT T Commercial Fin. Corp. v. Mid~Am. Marine Supply Corp., 854 S.W.2d 371 (Mo. banc 1993) (summary judgment standards and burden shifting)