Teeuwissen v. JP Morgan Chase Bank, N.A.
902 F. Supp. 2d 826
S.D. Miss.2011Background
- Chase foreclosed on the Teeuwissens’ Mississippi home after imposing an escrow for taxes; deed of trust allowed escrow revocation by lender; Teeuwissens disputed escrow and alleged improper debt collection, accounting, and notice practices.
- Chase notified Teeuwissens in March 2009 of potential escrow if taxes remained delinquent and ultimately established an escrow after they allegedly paid taxes late; Teeuwissens disputed the default and stopped payments.
- The Chancery Court issued a limited preliminary injunction on December 23, 2010, preventing actions related to foreclosure pending merits; foreclosure sale occurred December 21, 2010, and Chase purchased the property.
- Plaintiffs filed wrongful-foreclosure, contract, good-faith-and-fair-dealing, negligence, accounting, misrepresentation, RESPA, FDCPA, injunction/contempt, declaratory-judgment claims in state court; Chase removed to federal court and moved to dismiss or for summary judgment.
- Court analyzed Rule 12(b)(6) and Rule 56 standards, denying in part and granting in part; up front, court held Chase had authority to revoke the escrow and foreclose, but plaintiffs survived claims for wrongful foreclosure (notably as to notice and accounting) and a contract-based claim for failure to provide notice; other claims were dismissed.
- Teeuwissens’ discovery request was deemed premature for remaining claims; the court retained some injunctive-contempt and declaratory-judgment issues for resolution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Wrongful foreclosure due to notice or accounting | Teeuwissen claims Chase wrongfully foreclosed for lack of statutorily required notice and improper accounting | Chase asserts proper authority to foreclose and no material notice/accounting defects | Survives partial dismissal; wrongful-foreclosure claim survives on notice/accounting grounds |
| FDCPA applicability | FDCPA applies to Chase as a debt collector | Chase is a creditor/mortgage servicer, not a debt collector; not in default at time of assignment | Dismissed against Chase |
| RESPA claim viability | RESPA violations due to failure to respond and improper escrow | Loan not shown to be federally related mortgage loan; RESPA claim lacking standing | Dismissed |
| Accounting obligation | Chase failed to provide timely, full accounting | No cognizable accounting duty beyond foreclosure context; disputed | Survival of wrongful-foreclosure accounting aspect; otherwise dismissed as independent claim |
| Breach of contract (notice and escrow issues) | Chase breached contract by improper escrow and failure to provide notice | Escape escrow via deed provision; notices provided where required | Notice-based breach survives; escrow-imposition and related claims largely dismissed subsequently |
Key Cases Cited
- Horace Mann Life Ins. Co. v. Nunaley, 960 So.2d 455 (Miss. 2007) (contractual good-faith and fair-dealing standard; misrepresentation elements discussed)
- Perry v. Stewart Title Co., 756 F.2d 1197 (5th Cir. 1985) (debt-collector definition includes creditors in narrow circumstances)
- Bailey v. Bailey, 724 So.2d 335 (Miss. 1998) (good-faith and fair-dealing standard guidance; bad-faith conduct described)
- Cenac v. Murry, 609 So.2d 1257 (Miss. 1992) (covenant of good faith and fair dealing in contracts; bad-faith concept explained)
- Twombly, 550 U.S. 544 (U.S. 2007) (pleading standard requiring plausible claims; not mere speculation)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (summary judgment standard; material facts and genuine issues)