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Tennant v. Chase Home Fin., LLC

Alabama Court of Civil Appeals

July 24, 2015

William Wade Tennant and William Blake Tennant
Chase Home Finance, LLC

Page 1173

          Appeal from Baldwin Circuit Court. (CV-11-900569).

         THOMAS, Judge. Thompson, P.J., and Pittman, Moore, and Donaldson, JJ., concur.


Page 1174

          On Application for Rehearing

         THOMAS, Judge.

         The opinion of April 17, 2015, is withdrawn, and the following is substituted therefor.

         In April 2011, Chase Home Finance, LLC (" Chase" ), filed a complaint in the Baldwin Circuit Court seeking to reform a mortgage deed executed in February 2008 by William Wade Tennant (" Wade" ) to reflect that the mortgage was secured by a residential lot instead of a neighboring vacant lot. In its complaint, Chase also sought, as an alternative remedy, an equitable lien or mortgage against the residential lot, and it sought to set aside a conveyance of the residential lot from Wade to his son, William Blake Tennant (" Blake" ). Wade and Blake (hereinafter referred to collectively as " the Tennants" ) answered Chase's complaint in June 2011, and in December 2011 they asserted counterclaims against Chase; the Tennants' counterclaims

Page 1175

related to Chase's entry, in August 2010, into the house on the residential lot and its changing a lock on the house.[1] Chase answered the counterclaims and later amended its complaint to add a claim seeking damages for Wade's failure to comply with the request to correct the mortgage deed under a " Correction Agreement" he had signed in connection with the execution of the mortgage. Chase further requested an award of attorney fees.

         Chase moved for a bifurcated trial of the issues relating to Chase's complaint in January 2013, and the trial court granted that motion on February 8, 2013. The trial court tried the issues of the reformation of the mortgage deed and the setting aside of Wade's conveyance of the residential lot to Blake on January 13, 2014. After the conclusion of the trial, the trial court entered a judgment on January 17, 2014 (" the January 2014 judgment" ), in which it ordered that the mortgage deed be reformed to reflect the legal description of the residential lot and in which it set aside the conveyance of the residential lot from Wade to Blake; the January 2014 judgment further declared that Chase's other claims had been rendered moot or were denied.

         The trial court certified the January 2014 judgment as a final judgment pursuant to Rule 54(b), Ala. R. Civ. P. The Tennants filed a timely postjudgment motion, which the trial court denied. The Tennants appealed the January 2014 judgment to this court; because we lacked jurisdiction, see Ala. Code 1975, § 12-3-10 (setting out this court's appellate jurisdiction), we transferred the appeal to the Alabama Supreme Court, which then transferred the appeal back to this court, pursuant to Ala. Code 1975, § 12-2-7(6). This court affirmed, without an opinion, the January 2014 judgment reforming the deed on November 14, 2014. Tennant v. Chase Home Fin., LLC (No. 2130719, November 14, 2014), __ So.3d __(Ala Civ. App 2014) (table) . This court denied the Tennants' application for rehearing, and our supreme court denied certiorari review on February 13, 2015. Ex parte Tennant (No. 1140331, February 13, 2015), __ So.3d __(Ala. 2015) (table).

         While the appeal from the January 2014 judgment was pending, Chase moved for a summary judgment on the Tennants' counterclaims against it. Chase supported its motion for a summary judgment with documentation, including the mortgage agreement and excerpts from the depositions of Wade and Blake, taken in 2012 and 2013, respectively. The summary-judgment motion did not address the Tennants' counterclaims individually. Instead, the motion requested a summary judgment in Chase's favor on the Tennants' counterclaims based on the fact that the mortgage deed had been reformed by the January 2014 judgment and because, Chase contended, it was therefore authorized to enter the house on the residential lot and change the lock to secure the house under Section 9 of the mortgage agreement.

         Section 9 of the mortgage agreement, which is entitled " Protection of Lender's

Page 1176

Interest in the Property and Rights under the Security Interest," reads, in its entirety:

" If (a) Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b) there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, or enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations), or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over the Security Instrument, (b) appearing in court; and (c) paying reasonable attorney fees to protect its interest in the Property and/or rights under the Security Instrument, including its secured position in a bankruptcy proceeding. Securing the Property includes, but is not limited to, entering the property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender my take action under this Section 9, Lender does not have to do so and is not under any obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this section 9.
" Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.
" If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower acquires fee simple title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing."

         Chase argued that because the reformation of the deed related back to the date the deed was executed in February 2008, see Monroe v. Martin,726 So.2d 701, 703 (Ala.Civ.App. 1998) (explaining that, except in certain instances not here relevant, " reformation, if granted, will be effective as of the date of the instrument to be reformed" ), the Tennants' counterclaims were " moot and fail as a matter of law" and that Chase's actions in 2010 were authorized under the mortgage agreement. As factual support for its argument that it had the right to enter the house and change the lock, Chase relied on Wade's admission in his deposition that he was in default of the mortgage to establish that Wade had " fail[ed] to perform the covenants and agreements contained" in the mortgage agreement. Thus, Chase contended that its August 2010 entry into the house and its replacement of a door lock with a lockbox was authorized by Section 9 of the mortgage ...

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