Rufus and Delores Stancil v. First Mount Vernon Industrial Loan Association
131 A.3d 867
| D.C. | 2014Background
- Stancils borrowed $500,000 from FMV in April 2009 to buy a DC property, with an 18% note and 24% default rate.
- FMV foreclosed after default; in June 2011 the parties entered into an oral forbearance requiring a $170,000 payment by Stancils and FMV to forbear foreclosure and modify the note.
- The $170,000 included $100,000 for attorney’s fees, $20,000 to FMV, and $50,000 for forbearance; FMV promised to write the forbearance modification but did not.
- FMV later foreclosed in January 2012; the Stancils sued for fraudulent misrepresentation, breach of an oral forbearance, and related claims.
- Trial court dismissed some claims; this court affirmed in part (attorney’s-fees fraud) and reversed/remanded on other counts for further proceedings.
- Key issues concern whether parol-evidence and statute-of-frauds defenses bar the forbearance-related claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Parol evidence vs. oral forbearance | Stancils contend the $50,000 was for an oral forbearance, not just note payment. | FMV relied on parol-evidence to bar extrinsic terms since the note is final. | Parol-evidence does not bar subsequent oral modification; remand proper for forbearance claims. |
| Statute of Frauds estoppel | FMV’s promise to write the forbearance prevents enforcement as a defense via estoppel. | Estoppel fails without detrimental reliance; fraud insufficient. | Remanded to address estoppel and reliance in light of alleged detrimental reliance on the promise. |
| Detrimental reliance sufficiency | Payment of $170,000 reliance on oral forbearance supports fraud and estoppel. | Payment was due under default and not detrimental; cannot support fraud. | Remanded; trial court should resolve whether reliance was detrimental and whether it supports estoppel/fraud. |
| Fraudulent misrepresentation re forbearance | FMV intended foreclosure from the start and lied about forbearance/its writing. | No concrete misrepresentation proven; stylistic pleading issues. | Survives to some extent; need further development on reliance and falsity; not dismissed outright. |
| Breach of oral forbearance vs. Statute of Frauds | Oral forbearance modified the note; enforcement should not be barred by statute of frauds. | Oral forbearance not enforceable absent writing; statute bars claim. | Trial court erred in dismissing; remand to consider both theories with proper guidance. |
Key Cases Cited
- Jordan Keys & Jessamy, LLP v. St. Paul Fire & Marine Ins. Co., 870 A.2d 58 (D.C.2005) (de novo review of dismissal for failure to state a claim; accept allegations as true)
- Railan v. Katyal, 766 A.2d 998 (D.C.2001) (fraud elements and reliance; estoppel and statute of frauds considerations)
- Clark v. Clark, 535 A.2d 872 (D.C.1987) (oral modification of a written contract despite no writing requirement)
- Segal Wholesale, Inc. v. United Drug Serv., 933 A.2d 780 (D.C.2007) (parol-evidence and contract interpretation principles in DC)
- Landow v. Georgetown-Inland W. Corp., 454 A.2d 310 (D.C.1982) (detrimental reliance considerations in estoppel contexts)