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Tidmore v. Citizens Bank & Trust

Alabama Court of Civil Appeals

May 12, 2017

Danny R. Tidmore
Citizens Bank & Trust

          Appeal from Marshall Circuit Court (CV-15-15)

          THOMPSON, Presiding Judge.

         On June 16, 2015, Citizens Bank and Trust ("Citizens") filed an unlawful-detainer action against Danny R. Tidmore in the Marshall District Court. On July 14, 2015, the action was transferred to the Marshall Circuit Court ("the trial court"), and Citizens amended its complaint, asserting an ejectment claim and seeking to recover on several promissory notes between Citizens and Tidmore. Citizens based its ejectment claim on its assertion that it was entitled to possession of certain property ("the property") by virtue of its recent foreclosure on a mortgage on the property executed by Tidmore and its purchase of the property at the foreclosure sale. Tidmore answered and counterclaimed, seeking both declaratory relief and seeking to recover monetary damages on claims asserting, among other things, negligence, wantonness, unjust enrichment, wrongful foreclosure, slander of title, breach of contract, fraud, "placed in false light, " defamation, slander, libel, unfair and deceptive trade practices, and breach of the covenant of good faith and fair dealing.

         On September 21, 2015, Citizens moved the trial court for an order awarding it possession of the property. On October 9, 2015, the trial court conducted a hearing on that request. Thereafter, on October 22, 2015, the trial court entered an order determining that Citizens was entitled to a writ of possession to the property. The trial court specified in that order that the parties' remaining claims would be heard at a later hearing. On November 4, 2015, Tidmore appealed to our supreme court, which transferred the appeal to this court pursuant to § 12-2-7, Ala. Code 1975. Citizens sought to dismiss that appeal, and the parties argued the issue whether the trial court had entered an order that constituted a preliminary injunction. On June 30, 2016, this court, assuming, based on the positions of the parties, that the order was one granting a preliminary injunction, dismissed the appeal because a final judgment had subsequently been entered in the action. See Evans v. Cumberland Lake Country Club, Inc., 682 So.2d 11, 13 (Ala. 1996) (an appeal of a preliminary injunction was moot when the trial court entered a later, permanent injunction); and Gulf House Ass'n, Inc. v. Town of Gulf Shores, 484 So.2d 1061, 1064 (Ala. 1985) ("Whether or not the trial court erred in denying the preliminary injunction is moot, because there has been a final decision on the merits which denied the permanent injunction.").

         While the appeal of the October 22, 2015, order was pending, Citizens moved for a summary judgment on all claims, and Tidmore opposed that motion. On May 2, 2016, the trial court purported to enter a summary judgment in favor of Citizens on all of the parties' claims and awarded Citizens monetary damages constituting principal and interest on the various outstanding loans Tidmore had obtained from Citizens. Tidmore filed a purported postjudgment motion, which the trial court denied. Tidmore timely appealed to our supreme court, which transferred the appeal to this court pursuant to § 12-2-7, Ala. Code 1975.

         Initially, we note that because Tidmore's appeal of the October 22, 2015, order was pending in this court until June 30, 2016, the trial court lacked jurisdiction to enter its May 2, 2016, summary judgment. See Landry v. Landry, 91 So.3d 88, 89 (Ala. Civ. App. 2012) (jurisdiction can be in only one court at a time); and Johnson v. Willis, 893 So.2d 1138, 1141 (Ala. 2004) ("'[W]hile an appeal is pending, the trial court "can do nothing in respect to any matter or question which is involved in the appeal, and which may be adjudged by the appellate court."'" (quoting Reynolds v. Colonial Bank, 874 So.2d 497, 503 (Ala. 2003), quoting in turn Foster v. Greer & Sons, Inc., 446 So.2d 605, 608 (Ala. 1984))). Accordingly, upon submission, this court entered an order reinvesting the trial court with jurisdiction to reenter its summary judgment. The trial court did so on April 20, 2017, and Tidmore's appeal then became effective. Rule 4(a)(4), Ala. R. App. P.; Hendricks v. KW Plastics, Inc., 5 So.3d 1289, 1290 (Ala. Civ. App. 2008).

         The record indicates that on July 5, 2012, Tidmore and his former wife obtained a loan from Citizens that was secured by a mortgage on property that included the house in which the Tidmores resided. (Tidmore and his wife divorced, and Tidmore was awarded the house and the property, subject to its indebtedness; Citizens filed its ejectment action against only Tidmore.) The amount of the loan was $70, 755.22, and it was evidenced by a "balloon note" payable over 85 months.

         In the spring of 2013, Tidmore began having financial difficulties and did not remain current on his mortgage payments. Tidmore and Rick Malone, the Citizens loan officer, had several discussions regarding the late or missed payments. Malone stated that, at one point, Tidmore anticipated using the proceeds of the settlement he received, or would receive, from a legal action to catch up the mortgage payments, but, Malone stated, Tidmore later informed him that he could not do so because he had not received as large a settlement from that legal action as he had anticipated. At the October 9, 2015, hearing on Citizens's request for possession of the property, Tidmore disputed that he was behind in his payments to Citizens in the fall of 2014, although documents submitted by Citizens showed payments credited toward Tidmore's account a month to several months after their due dates. Regardless, it is undisputed that in October 2014 Tidmore made a payment to Citizens that was credited, except for $7.65, to his past-due September 2014 mortgage payment and that Tidmore made no further payments toward the mortgage indebtedness after that date. The trial court noted in its May 20, 2016, judgment in this matter, which, as noted, was reentered on April 20, 2017, that Tidmore had failed to make any payment toward the mortgage indebtedness in more than one year.

         Tidmore filed for bankruptcy protection on November 24, 2014, but that action was dismissed on January 21, 2015, because of Tidmore's noncompliance with the bankruptcy plan. On February 10, 2015, Citizens notified Tidmore by letter that the mortgage loan was in default and that his failure to cure the default within ten days might result in the acceleration of the mortgage indebtedness. That letter asked Tidmore to contact Citizens for a determination of the amount necessary to pay the mortgage indebtedness in full. Attached to that letter was a "statement in compliance with the Fair Debt Collection Practices Act, " see 15 U.S.C. § 1692 et seq., that set forth the amount of the original mortgage and the amounts necessary to pay the past-due amounts.

         By letter dated March 3, 2015, Citizens notified Tidmore that it had elected to accelerate the mortgage indebtedness and of its intent to foreclose on the property pursuant to the mortgage contract by a foreclosure sale scheduled for March 31, 2015.

         Tidmore again filed for bankruptcy protection on March 31, 2015, and that action was dismissed, again for noncompliance with the bankruptcy plan, on April 15, 2015. On April 17, 2015, Citizens again notified Tidmore of its acceleration of the mortgage indebtedness and that a foreclosure sale was scheduled for May 26, 2015. The foreclosure sale was conducted on May 26, 2015, and Citizens purchased the property for $48, 839.25. The mortgage and the foreclosure deed described the foreclosed property as comprising "Lots 5, 6, 7, 8, 9, 10, 11 and 12 in the Elmer Miller Addition to the City of Albertville, Alabama." On May 26, 2015, Citizens notified Tidmore by letter of its foreclosure and its purchase of the property, and it demanded possession of the property.

         Also on May 26, 2016, Tidmore filed for bankruptcy protection for a third time. That third bankruptcy action was dismissed on June 10, 2015. Citizens argued to the trial court that Tidmore's third bankruptcy filing within a six-month-period did not operate to stay the foreclosure sale. See 11 U.S.C. § 362(c)(4)(A)(i).

         We note that in 2012 and 2013, Tidmore also obtained four loans from Citizens other than the mortgage loan. Three of those four loans were secured by various vehicles he owned; the other loan appears to be a signature loan. Tidmore defaulted on each of the other four loans. Citizens's amended complaint in this action sought an award of damages related to each of those loans. The trial court's judgment awards Citizens monetary damages based on its finding that Tidmore owed Citizens on five outstanding "notes" and that "the total outstanding principal and interest owed to [Citizens] from [Tidmore] as of April 21, 2016, is $48, 617.94." Tidmore has not challenged the amount of that damages award, nor has he argued that he cannot determine the amount to which Citizens might be entitled in reference to only the mortgage indebtedness. The other loans are not at issue in this appeal, and, therefore, we do not set forth detailed facts pertaining to those loans.

         However, we note that Citizens sought possession of the property during the pendency of the action below because, it alleged, Tidmore had damaged some collateral that secured two of the other four loans it had made to Tidmore. During the October 9, 2015, hearing on Citizens's motion seeking possession of the property, Citizens presented ore tenus and photographic evidence tending to indicate that Tidmore had damaged or destroyed two vehicles that secured at least two of those loans. Tidmore denied that he had intentionally damaged those vehicles, and he stated that he had taken the vehicles apart for repairs but no longer knew where many of the parts for those vehicles were located. Citizens argued that evidence supported its concern that Tidmore would damage the house on the property if he were allowed to remain in that house during the pendency of the action below and any appeal that might follow. In its October 22, 2015, order, the trial court awarded Citizens possession of the property, specifically finding, among other things, that Tidmore "has willfully destroyed property, being two trucks, covered in separate notes with" Citizens.

         Initially, we note that "'[n]ot all irregularities in the foreclosure process, but only those irregularities that would render the foreclosure sale void, may be raised as affirmative defenses to an ejectment action.'" Pittman v. Regions Bank, [Ms. 2150455, Dec. 2, 2016] __ So.3d __ (Ala. Civ. App. 2016) (quoting Campbell v. Bank of America, N.A., 141 So.3d 492, 499 (Ala. Civ. App. 2012)). Among those irregularities are the following issues raised by Tidmore. See, generally, Pittman v. Regions Bank, supra (discussing the irregularities that will void a foreclosure sale).

         Tidmore argues that Citizens did not provide him proper notice of "assignment as well as default and acceleration" under the terms of the mortgage contract. First, we note that there was no assignment of the mortgage contract, because it is undisputed that Citizens provided the mortgage loan, serviced that loan, and foreclosed based on that loan. Further, Tidmore made no argument concerning an assignment, or lack of notice of any assignment, before the trial court, and, therefore, to the extent he makes an argument concerning an assignment of the mortgage, he is impermissibly raising the issue for the first time on appeal. See Andrews v. Merritt Oil Co., 612 So.2d 409, 410 (Ala. 1992) ("This Court cannot consider arguments raised for the first time on appeal; rather, our review is restricted to the evidence and arguments considered by the trial court.").

         Tidmore next argues that Citizens did not provide him with proper notice of the acceleration of the loan and of its intent to foreclose. Tidmore cites Pittman v. Regions Bank, supra, for the proposition that a party who has breached a contract cannot take advantage of that failure. That case, however, involved a dispute concerning a home builder and a homeowner, and it addressed a breach-of-contract claim. Tidmore does not explain how that case applies in the context of whether he received proper notice under the mortgage contract between the parties. Rather, he contends that if one party breaches a contract, the other may be excused from performance under the contract. See Baldwin v. Penetta, 4 So.3d 555, 562 (Ala. Civ. App. 2008). It appears that Tidmore is maintaining that Citizens's purported failure to provide proper notice of the acceleration of the mortgage loan and the foreclosure operated to excuse him from making the payments on the mortgage indebtedness that resulted in the acceleration and foreclosure. However, if Baldwin v. Panetta, supra, could be said to apply in this case, it would be for the proposition that Tidmore's failure to make payments on the mortgage indebtedness would operate to excuse Citizens's performance under the mortgage contract.[1]

         Tidmore also cites Jackson v. Wells Fargo Bank, N.A., 90 So.3d 168 (Ala. 2012), in which the Jacksons had sued Wells Fargo on several claims, including breach of contract, related to Wells Fargo's foreclosure on a mortgage contract. In that case, our supreme court held that the trial court had erred in entering a summary judgment in favor of Wells Fargo on the Jacksons' breach-of-contract claim because the mortgage contract had required Wells Fargo to provide both notice that it was considering accelerating the loan "in 'not less than 30 days, '" and of its intent to foreclose, but Wells Fargo had failed to present evidence that it had provided notice to the Jacksons that it was considering accelerating the loan. 90 So.3d at 173. In so holding, the court stated, "Under the language of this mortgage, without proper notice of intent to accelerate, acceleration fails and, consequently, so does the foreclosure sale" 90 So.3d at 173. Tidmore argues summarily that, based on that quoted language, the foreclosure sale in this case is invalid based on Citizens's failure to provide notice of its intent to accelerate. That argument fails for two reasons.

         First, the issue in Jackson v. Wells Fargo was the propriety of a summary judgment on a breach-of-contract claim and not the validity of the underlying foreclosure sale, as is at issue here. Further, the mortgage contract at issue here provides that, "if permitted by law, I [(Tidmore)] waive any otherwise required notice of: presentment; demand; acceleration; and intent to accelerate, " but then contains a provision stating:

"Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under the section titled Transfer of the Property or a Beneficial Interest In Borrower, unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than the minimum number of days established by Applicable Law from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. To the extent permitted by law, the notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law. To the extent permitted by law, Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section, including but not limited to, reasonable attorneys' fees and costs of title evidence.
"If Lender invokes the power of sale, Lender shall give a copy of a notice to Borrower in the manner provided in the section titled Notices. Lender shall publish the notice of sale once a week for three consecutive weeks in a newspaper published in Marshall County, Alabama, and thereupon, shall sell the Property to the highest bidder at public auction at the front door of the County Courthouse of this County. Lender shall deliver to the purchaser Lender's deed conveying the Property. Lender or its designee may purchase the Property at any sale. Borrower covenants and agrees that the proceeds of the sale shall be applied in the following order: (a) to all expenses of the sale, including, but not limited to, reasonable attorneys' fees; (b) to all sums secured by this Security Instrument; and (c) any excess to the person or persons legally entitled to it."

         Tidmore contends in his brief on appeal that Citizens provided no notice that complied with the mortgage contract, but he fails to identify any language from that mortgage contract with which he contends Citizens failed to comply. It appears that Tidmore is arguing that Citizens did not provide him any notice of its intent to accelerate. However, the record indicates that Citizens sent a letter to Tidmore dated February 10, 2015, in which it notified Tidmore that it was considering accelerating the mortgage loan.[2] Tidmore contends in his appellate brief that Citizens conceded that the notice contained in the February 10, 2015, letter was not sufficient. He cites to his questioning of Malone during the October 9, 2015, hearing on Citizens's request for possession of the property. During that questioning, Tidmore asked only if the February 10, 2015, letter notified Tidmore that he could file a legal action to contest Citizens's consideration of its right to accelerate the loan. Malone, however, agreed only that he believed that the February 10, 2015, letter was sufficient.[3]

          The February 10, 2015, letter notified Tidmore that Citizens was considering accelerating the note if Tidmore did not bring the loan indebtedness current. Attached to that letter was a statement of the amounts due under the note and the amount of the arrearage.[4] Tidmore has not identified in his brief submitted to this court any specific omissions by Citizens that, he contends, should have been included in the February 10, 2015, notice. It is not the function of this court to create an argument or perform legal research on behalf of an appellant. Ex parte Borden, 60 So.3d 940, 943 (Ala. 2007). Even assuming that Citizens did fail to include some part of the required notice, this court has stated:

"Alabama law is clear that errors in the notice that do not prejudice the mortgagor will not invalidate an otherwise valid foreclosure sale. See, e.g., Drake v. Rhodes, 155 Ala. 498, 46 So. 769 (1908) (transposition of mortgagor's initials did not prejudice mortgagor); Richards v. Phillips, 925 So.2d 216 (Ala. Civ. App. 2005) (inaccurate statement in preamble of notice that property was located in Shelby County did not prejudice mortgagor because legal description of property in notice accurately stated that property was located in Chilton County); and Farmers' Sav. Bank v. Murphree, 200 Ala. 574, 76 So. 932 (1917) (failure to specify in notice that foreclosure sale would be for cash did not prejudice mortgagor because, although the sale was made for cash, an extension of credit to purchasers would tend to attract more bidders)."

Perry v. Federal Nat'l Mortg. Ass'n, 100 So.3d 1090, 1099 (Ala. Civ. App. 2012). We cannot say that Tidmore has demonstrated that the trial court erred in entering the summary judgment based on his ...

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