Edwin M. Ramos, et al. v. Wells Fargo Bank, NA, et al.
Record No. 141080
Supreme Court of Virginia
April 16, 2015
Circuit Court No. CL2013-10944
In the Supreme Court of Virginia held at the Supreme Court Building in the City of Richmond, on Thursday, the 16th day of April, 2015.
Upon an appeal from a judgment rendered by the Circuit Court of Fairfax County.
Appellants filed this action challenging the foreclosure sale of their residence. They claimed that Wells Fargo wrongfully initiated the foreclosure under the deed of trust securing the promissory note for their loan to purchase the property. After their original and first amended complaints were dismissed on demurrers, with leave to amend, appellants filed the second amended complaint asserting a single claim for breach of contract.
Appellants allege in the second amended complaint as follows: The loan to purchase their residence was insured by the Federal Housing Administration. Certain federal Department of Housing and Urban Development (“HUD“) regulations were incorporated into the accompanying purchase money deed of trust, including
Wells Fargo filed a demurrer to the second amended complaint, asserting that appellants did not state a cause of action for breach of contract because, among other things, they
In reviewing a circuit court‘s decision sustaining a demurrer, we address the same issue that the circuit court addressed: whether the facts alleged in a complaint are legally sufficient to state a cause of action upon which the requested relief may be granted. Assurance Data, Inc. v. Malyevac, 286 Va. 137, 143, 747 S.E.2d 804, 807 (2013); Dunn, McCormack & MacPherson v. Connolly, 281 Va. 553, 557, 708 S.E.2d 867, 869 (2011)). Like the circuit court, we accept as true all facts properly pleaded and all reasonable inferences that may be drawn from those facts. Assurance Data, 286 Va. at 143, 747 S.E.2d at 807; Concerned Taxpayers v. County of Brunswick, 249 Va. 320, 323, 455 S.E.2d 712, 713 (1995). A demurrer, however, does not admit the correctness of the pleader‘s legal conclusions. Murayama 1997 Trust v. NISC Holdings, LLC, 284 Va. 234, 245, 727 S.E.2d 80, 86 (2012); Arogas, Inc. v. Frederick Cnty. Bd. of Zoning Appeals, 280 Va. 221, 224, 698 S.E.2d 908, 910 (2010). Because this presents an issue of law, we review the circuit court‘s decision de novo. Assurance Data, 286 Va. at 143, 747 S.E.2d 808; Dunn, McCormack & MacPherson, 281 Va. at 557, 708 S.E.2d at 869.
“The elements of a breach of contract action are (1) a legally enforceable obligation of a defendant to a plaintiff; (2) the defendant‘s violation or breach of that obligation; and (3) injury or damage to the plaintiff caused by the breach of obligation.” Filak v. George, 267 Va. 612, 619, 594 S.E.2d 610, 614 (2004).
Here, appellants rely upon Squire v. Virginia Housing Development Authority, 287 Va. 507, 758 S.E.2d 55 (2014), and Mathews v. PHH Mortgage Corp., 283 Va. 723, 724 S.E.2d 196 (2012), in asserting their breach of contract action. In those cases, we held that the subject HUD regulation,
We assume without deciding that appellants have made sufficient allegations of causation for their breach of contract action. Nonetheless, we conclude that appellants have failed to set forth allegations supporting their requests for relief in the form of both money damages and rescission of the foreclosure sale.
As indicated above, an essential element in a breach of contract action is that the defendant‘s breach of a contractual obligation caused injury or damage to the plaintiff. Sunrise Continuing Care, LLC v. Wright, 277 Va. 148, 154, 671 S.E.2d 132, 135 (2009); Filak, 267 Va. at 619, 594 S.E.2d at 614. Accordingly, the plaintiff must allege facts setting forth the injury or damage incurred as a result of defendant‘s breach. See Squire, 287 Va. at 518, 758 S.E.2d at 61 (holding plaintiff sufficiently alleged damages resulting from foreclosure sale conducted in breach of deed of trust based on lender‘s failure to conduct face-to-face meeting required by HUD regulation).
In the second amended complaint, appellants fail to set forth a single factual allegation of any injury or damage they incurred as a result of Wells Fargo‘s alleged breach. And their second amended complaint contains no ad damnum clause stating the amount of any damages claimed, in violation of
As to rescission, appellants allege that after defaulting on their loan Wells Fargo and ALG initiated the foreclosure sale in
Upon foreclosure under a Virginia deed of trust, “‘[t]he contract of sale [is] consummated when the auctioneer crie[s] the property out to the person making the highest and last bid. The only power remaining in the trustees, so far as the purchaser [is] concerned, [is] to collect the purchase money and execute a proper deed conveying such property and title as had been conveyed to [the purchaser].‘” Feldman v. Rucker, 201 Va. 11, 21, 109 S.E.2d 379, 386 (1959) (quoting Powell v. Adams, 179 Va. 170, 174-75, 18 S.E.2d 261, 263 (1942)). Therefore, because the sale of the property to Potomac was so consummated, appellants are not entitled to rescission of the foreclosure sale.*
In sum, appellants’ second amended complaint “does not satisfy the pleading requirement of alleging facts upon which relief can be granted” and is thus “insufficient to withstand a demurrer.” Dean, 263 Va. at 490, 561 S.E.2d at 690.
For these reasons, we affirm the judgment of the circuit court sustaining Wells Fargo‘s demurrer to the second amended complaint and dismissing it with prejudice. The appellants shall pay to the appellees two hundred fifty dollars damages.
This order shall be certified to the said circuit court and shall be published in the Virginia Reports.
A Copy,
Teste:
Patricia L. Harrington, Clerk