Squire v. VHDA
758 S.E.2d 55
Va.2014Background
- King purchased Norfolk home in 2002, executed a promissory note to VHDA secured by a deed of trust.
- In 2010 King fell behind on payments and entered a June 2010 VHDA forbearance agreement to suspend arrears through August 2010.
- Forbearance ended; King attempted to reinstate but VHDA foreclosed after appointing Evans as substitute trustee in 2010.
- Foreclosure sale occurred October 28, 2011; Potter purchased the property for $115,200, below KING's home value and later litigation ensued.
- King sued VHDA, Evans, and Potter alleging HUD regulations require a face-to-face meeting prior to foreclosure and other breaches.
- Trial court sustained demurrers on several claims; demurrers were reversed in part and remanded as to breach of deed of trust and fiduciary duty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of deed of trust for lack of face-to-face meeting | King alleges failure to hold/arrange meeting breached deed. | VHDA/ Evans contend no causal link or proper pleading. | Trial court erred; counts survive demurrer on this theory. |
| Breach of forbearance agreement | King attempted to cure arrears under forbearance but was not allowed to. | Court found no full timely payment or compliant cure pleaded. | Demurrer upheld; forbearance breach not shown. |
| Rescission of foreclosure sale | Sale price shockingly inadequate and Potter not bona fide purchaser due to notice. | No fraud or lis pendens; sale to third party proper. | Trial court affirmed; rescission not warranted. |
| Quiet title | Plaintiff seeks title relief after foreclosure with unresolved obligations to VHDA. | Plaintiff failed to satisfy obligations to real party in interest. | Demurrer sustained; no quiet title relief. |
Key Cases Cited
- Mathews v. PHH Mortgage Corp., 283 Va. 723 (2012) (face-to-face HUD requirement as condition precedent; pre-foreclosure declaratory judgment)
- Bayview Loan Servicing, LLC v. Simmons, 275 Va. 114 (2008) (post-foreclosure damages; pre-acceleration notice issues)
- Westminster Investing Corp. v. Lamps Unlimited, Inc., 237 Va. 543 (1989) (causation/damages element in contract actions)
- Filak v. George, 267 Va. 612 (2004) (elements of a breach of contract action; causation essential)
- CaterCorp, Inc. v. Catering Concepts, Inc., 246 Va. 22 (1993) (pleading sufficiency; avoid mere conclusory allegations)
- Bayview Loan Servicing, LLC v. Simmons, 275 Va. 114 (2008) (post-foreclosure damages; pre-acceleration notice issues)
- Uniwest Construction, Inc. v. Amtech Elevator Servs., 280 Va. 428 (2010) (contract interpretation; HUD regulations incorporated in deeds of trust)