Walker v. North American Savings Bank
142 So. 3d 590
Ala. Civ. App.2013Background
- In 2005, Walkers obtained a loan from North American Savings Bank for $224,000 secured by a mortgage in favor of MERS as nominee for the Bank.
- Walkers alleged assurances of a later rate modification, which never occurred, while TIL stated a variable rate.
- Walkers defaulted in November 2005; the mortgage was assigned to the Bank on July 20, 2008, with no notice allegedly received by Walkers.
- Foreclosure notices were sent and published in September 2008; Bank purchased the property at foreclosure on September 30, 2008 for $205,000.
- Bank filed ejectment action October 20, 2008; Walkers answered in November 2008 asserting defenses including defective notice and wrongful foreclosure.
- Bank moved for summary judgment in October 2009; Walkers filed opposition and amended pleadings including multiple counterclaims on December 1, 2009; trial court granted summary judgment in May 2011 and disallowed counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bank had right to foreclose with proper notices | Walkers: notices failed; no proper notice or assignment notice. | Bank: notices complied; assignment and default notices were sent; mortgage allowed sale after acceleration. | No genuine notice defects; foreclosure valid. |
| Rule 56 sufficiency of Kellam and Wright affidavits | Affidavits lacked personal knowledge and timeliness for Rule 56(e). | Affidavits meet Rule 56(e) and timely; objections not preserved. | Affidavits properly supported summary judgment; objections waived. |
| Loss-mitigation defense to ejectment following nonjudicial foreclosure | Failure to offer loss-mitigation under HUD/NHA rules invalidates foreclosure. | Loss-mitigation failure not a defense to ejectment after nonjudicial foreclosure. | Not a valid defense; ejectment affirmed. |
| Whether foreclosure sale price shocks conscience to justify setting aside | Bank underbid property; sale price ($205,000) below market value ($224,000). | Price not shockingly low; 91.5% of alleged FMV; no fraud established. | _sale price not so low as to shock conscience; summary judgment upheld. |
| Discretion to disallow Walkers' counterclaims under Rule 13 | Counterclaims timely; some are compulsory; prejudice to Bank if allowed. | Court should allow counterclaims; timing within scheduling order; prejudice shown. | Trial court did not abuse discretion in disallowing counterclaims; affirmed. |
Key Cases Cited
- Coleman v. BAC Servicing, 104 So.3d 195 (Ala.Civ.App.2012) (notice compliance shown through Bank's attached letters)
- Mt. Carmel Estates, Inc. v. Regions Bank, 853 So.2d 160 (Ala.2002) (unconscionable bid price may raise fraud presumption)
- Perry v. BIC Construction, 100 So.3d 1090 (Ala.Civ.App.2012) (adequacy of bid prices discussed; shocks conscience standard)
- Blackmon v. Nexity Financial Corp., 953 So.2d 1180 (Ala.2006) (Rule 15 amendments; undue delay and prejudice considerations)
- Clark v. Wells Fargo Bank, N.A., 24 So.3d 424 (Ala.2009) (Rule 13 counterclaims; compulsory vs permissive considerations)
- Presley v. B.I.C. Constr., 64 So.3d 610 (Ala.Civ.App.2009) (evidence valuation and admissibility of tax assessor data)