Williams v. Wells Fargo Home Mortgage, Inc., 1:15-cv-00164

Fannie Mae owned a mortgage on Williams’s residence; Wells Fargo serviced the loan and was assigned the mortgage and possession of the note solely to conduct a foreclosure sale on Fannie Mae’s behalf.
Fannie Mae purchased the property at foreclosure for an amount that only satisfied the indebtedness; Wells Fargo delivered a foreclosure deed to Fannie Mae and possession of the note reverted to Fannie Mae after the sale.
Williams vacated the property but retained her statutory right of redemption; within the redemption period Fannie Mae resold the property to a third party for about $122,000 more than the indebtedness.
Williams sued under Alabama law seeking recovery of the excess proceeds from the resale.
Defendants removed the case and moved to dismiss, arguing Alabama law imposes no duty on a mortgagee to remit resale excess to the mortgagor during the redemption period; the court denied the motion to dismiss, relying on Springer and Davis to conclude a mortgagee must remit excess proceeds.
Defendants then moved to certify the controlling state-law question to the Alabama Supreme Court; the district court denied certification.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a mortgagee who resells foreclosed property during the statutory redemption period and receives more than the indebtedness must remit the excess to the mortgagor	Williams: Alabama law (Springer, Davis) requires a mortgagee/mortgage purchaser who resells for a profit during redemption to apply or remit excess to reduce/return to mortgagor	Defendants: No duty to remit; Wells Fargo served only as assignee/servicer, and Fannie Mae was not a mortgagee for this purpose after assignment; public-policy arguments against imposing such a duty	Court denied certification; held existing Alabama authorities (Springer, Davis) support remitting excess and certification unnecessary because the question is not determinative and state law is sufficiently clear

Springer v. Baldwin County Fed. Sav. Bank, 562 So. 2d 138 (Ala. 1989) (mortgagee-purchaser who resells during redemption must apply excess to reduce mortgagor's debt)
Davis v. Huntsville Production Credit Ass'n, 481 So. 2d 1103 (Ala. 1985) (mortgagee receiving more than indebtedness at foreclosure must deliver excess to mortgagor)
Smigiel v. Aetna Cas. & Sur. Co., 785 F.2d 922 (11th Cir. 1986) (federal courts have discretion to certify state-law questions)
State of Fla. ex rel. Shevin v. Exxon Corp., 526 F.2d 266 (5th Cir. 1976) (factors for deciding whether to certify state-law questions)
Escareno v. Noltina Crucible & Refractory Corp., 139 F.3d 1456 (11th Cir. 1998) (federal courts should exercise restraint in certifying state-law questions)
First Ala. Bank v. Aetna Ins. Co., 607 F.2d 676 (5th Cir. 1979) (certification improper when question addresses only one of multiple alternative dispositive theories)