254 So. 3d 207
Ala.2017Background
- In 2006 the Turners executed a promissory note and mortgage (recorded in Jefferson County) to New Century; the loan/ mortgage were later assigned to Wells Fargo, with Carrington as servicer.
- Carrington sent a November 30, 2011, notice of intent to foreclose stating the amount to cure and that failure to cure within 30 days "may result in acceleration ... and in the sale of the property," and advising the Turners they had the right to reinstate and to "assert in foreclosure, the non-existence of a default or any other defense."
- A foreclosure sale was published and held on February 27, 2012; Wells Fargo was the purchaser and a foreclosure deed was later recorded. The Turners remained in possession.
- Wells Fargo filed ejectment; the trial court granted summary judgment to Wells Fargo; the Court of Civil Appeals affirmed, holding the November 30 notice substantially complied with the mortgage.
- The Alabama Supreme Court granted certiorari to decide whether the Court of Civil Appeals’ reliance on substantial compliance conflicted with this Court’s holding in Jackson v. Wells Fargo, which required strict compliance with mortgage notice terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether notice provision of mortgage requiring informing borrower of "right to bring a court action" must be strictly or substantially complied with | Turner: Mortgage requires exact notice; omission of explicit language rendered notice defective and foreclosure void | Wells Fargo: Substantial compliance suffices; the notice effectively informed Turners of reinstatement and defenses | Court: Jackson requires strict compliance for foreclosure notice; omission of the express right to bring a court action meant the mortgagee failed to comply and the sale failed |
| Whether Jackson is limited to total lack of pre-acceleration notice or applies when notice omits specific required language | Turner: Jackson governs any failure to comply with mortgage notice terms, not just total absence of notice | Wells Fargo: Jackson should be limited to cases with no pre-acceleration notice; here Turners received substantial notice of rights | Court: No distinction; Jackson applies and mandates strict compliance with mortgage notice language |
| Whether principles of substantial performance from general contract law (Mac Pon) control mortgage foreclosure notice requirements | Turner: Mortgage power of sale demands strict compliance, not general substantial-performance rule | Wells Fargo: Relied on Mac Pon and similar contract law to argue substantial compliance sufficed | Court: Mac Pon (construction contract substantial-performance case) is inapposite; strict compliance controls foreclosure power of sale |
| Effect of defective notice on foreclosure sale/title | Turner: Defective notice voids acceleration and the foreclosure sale fails to convey title | Wells Fargo: Sale valid because Turners had meaningful notice and opportunity to cure | Held: Defective notice (failure to inform of right to bring court action) renders the acceleration and sale void; remand for further proceedings |
Key Cases Cited
- Jackson v. Wells Fargo Bank, N.A., 90 So.3d 168 (Ala. 2012) (mortgage power of sale requires strict compliance with pre-acceleration notice terms)
- Dewberry v. Bank of Standing Rock, 227 Ala. 484 (Ala. 1933) (sale under power must be conducted in strict compliance with its terms)
- Bank of New Brockton v. Dunnavant, 204 Ala. 636 (Ala. 1920) (power of sale is part of contract and must be executed according to its terms)
- Mac Pon Co. v. Vinsant Painting & Decorating Co., 423 So.2d 216 (Ala. 1982) (substantial performance governs construction-contract obligations—not controlling for mortgage power-of-sale notice)
- Pinti v. Emigrant Mortgage Co., 472 Mass. 226 (Mass. 2015) (under a nearly identical mortgage provision, notice that failed to inform borrowers they must initiate court action did not strictly comply and rendered foreclosure void)