Richard v. Wells Fargo Bank, N.A.

Citation418 S.W.3d 468
Decision Date04 February 2014
Docket NumberNo. ED 98712.,ED 98712.
CourtCourt of Appeal of Missouri (US)
PartiesElizabeth RICHARD, Appellant, v. WELLS FARGO BANK, N.A. and HSBC Bank, USA, N.A., Respondents.

OPINION TEXT STARTS HERE

Gregory G. Fenlon, Clayton, MO, for appellant.

David Hamilton, John H. Kilper, Hazelwood & Weber LLC, St. Charles, MO, for respondents.

KURT S. ODENWALD, Judge.

Introduction

Elizabeth Richard (Elizabeth) 1 appeals from the trial court's grant of partial summary judgment in favor of Wells Fargo Bank, N.A. (Wells Fargo) and HSBC Bank USA, National Association (HSBC Bank) in a lawsuit involving a parcel of real property, a promissory note, and a deed of trust. Elizabeth filed a nine-count petition against Wells Fargo and HSBC Bank in which she sought declaratory judgment (Count I), requested the court to enjoin Wells Fargo and HSBC Bank from prosecuting their unlawful detainer action (Count VI), and pleaded multiple other claims, including wrongful foreclosure (Count II). Wells Fargo and HSBC Bank filed a motion for partial summary judgment, and the trial court granted their motion.

Because the record before us negates essential elements of Elizabeth's claims, we hold that the trial court's grant of summary judgment in favor of Wells Fargo and HSBC Bank on Counts I, II, and VI was proper. Accordingly, we affirm the trial court's judgment.

Factual and Procedural History

The facts, construed in the light most favorable to Elizabeth, are as follows. In 1995, Elizabeth's husband, Paul Richard (Paul), purchased a parcel of real property (“the Property”) located in Valley Park, Missouri. Paul and Elizabeth took title to the property as tenants by the entirety. On February 28, 2005, Paul refinanced the Property, borrowed $154,400.00 from Wells Fargo, and executed a promissory note. Elizabeth did not sign the promissory note, which contained an acceleration clause.

On February 28, 2005, the same day the promissory note was executed, the promissory note was secured by a deed of trust. Seventeen pages of the eighteen-page deed of trust bear Elizabeth's initials. On page seventeen, Elizabeth signed a signature line, and the preprinted word “Borrower” appears beside the signature line. Page eighteen, which does not contain Elizabeth's initials, bears a notary seal and identifies Elizabeth as “Non-borrower.”

The first section of the deed of trust is entitled “Definitions” and defines the word “Borrower” as PAUL D RICHARD AND ELIZABETH M RICHARD, HUSBAND AND WIFE. Section 13 of the deed of trust contains the following provision: [A]ny Borrower who co-signs this Security Instrument but does not execute the Note (a “co-signer”): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument....” “Security Instrument” is defined as “this document, which is dated FEBRUARY 28, 2005 together with all Riders to this document.” Two riders follow the deed of trust: a prepayment rider and an adjustable rate rider. Both riders were signed by Elizabeth and identify her as “Borrower.”

A cover page was affixed to the deed of trust and faxed to Wells Fargo on March 4, 2005. The cover page contains the following information: the title of the document, the date of the document, the grantor(s) and their address, the grantee and the grantee's address, and a legal description of the real property. There are two iterations of the cover page. One copy identifies PAUL D RICHARD as the grantor. A second copy identifies PAUL D RICHARD and Elizabeth M. Richard, husband and wife as the grantors. On the second copy, the words Paul D Richard appear in typeface, and the words “and Elizabeth M. Richard, husband and wife” appear in handwriting.

Paul died on August 27, 2008. After his death, Elizabeth made two payments to Wells Fargo on the promissory note. In December 2008, Wells Fargo sent a notice of default to the Property. The default was never abated. Wells Fargo then invoked the promissory note's acceleration clause, which states, [i]f the default is not cured ..., 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....” The acceleration clause further states, If Lender invokes the power of sale, Lender or Trustee shall mail copies of a notice of sale.... Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder for cash at the time and place and under the terms designated in the notice of sale....” After the required statutory notices of sale were mailed, a non-judicial foreclosure sale of the Property was held on October 5, 2009. HSBC Bank was the highest bidder at the non-judicial foreclosure sale and purchased the Property with a credit bid.

Thereafter, Elizabeth filed a nine-count lawsuit against Wells Fargo and HSBC Bank. Wells Fargo and HSBC Bank filed a motion for partial summary judgment on Count I (declaratory judgment), Count II (wrongful foreclosure), and Count VI (to enjoin the unlawful detainer action) and on any other claim based on allegations that the deed of trust is invalid. In their motion, Wells Fargo and HSBC Bank alleged they were entitled to summary judgment on Counts I, II, and VI and on any other claim based on the invalidity of the deed of trust because the deed of trust is valid and by executing the deed of trust, Elizabeth conveyed her interest in the Property. Wells Fargo and HSBC Bank further argued that they were entitled to summary judgment on Count II because the loan was in default and the foreclosure sale complied with the terms and conditions of the promissory note and the deed of trust.

The trial court granted the motion for partial summary judgment and entered judgment in favor of Wells Fargo and HSBC Bank on Counts I, II, and VI. Approximately one month later, the trial court, on its own motion, entered a judgment and order of dismissal for the remaining counts, providing that “all claims herein, are dismissed without prejudice for failure to prosecute....” Elizabeth appeals.2

Points on Appeal

Elizabeth raises two points on appeal. In her first point on appeal, she argues that the trial court erred in granting summary judgment in favor of Wells Fargo and HSBC Bank on Count I for declaratory judgment because the summary judgment record demonstrates that the deed of trust was unenforceable due to ambiguity and material alterations. Elizabeth contends the deed of trust was ambiguous because it identifies Elizabeth as both “Borrower” and “Non-borrower.” Elizabeth also claims that the deed of trust was materially altered because after Elizabeth signed the instrument, the words “and Elizabeth M. Richard, husband and wife” were handwritten on the cover page of the deed of trust. In her second point on appeal, Elizabeth contends that the trial court erred in granting summary judgment in favor of Wells Fargo and HSBC Bank on her wrongful foreclosure claim because the non-judicial foreclosure required the buyer to pay cash, but cash was not paid. Elizabeth also argues that the trial court erred in entering summary judgment in favor of Wells Fargo and HSBC Bank on the foreclosure claim because she was led to believe that the foreclosure proceedings would be postponed.

Standard of Review

We review the entry of summary judgment de novo. Rice v. Shelter Mut. Ins. Co., 301 S.W.3d 43, 46 (Mo. banc 2009). We review the record in the light most favorable to the party against whom judgment was entered. ITT Commercial Fin. Corp. v. Mid–Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). We will affirm where the pleadings, depositions, affidavits, answers to interrogatories, exhibits, and admissions establish that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Beyerbach v. Girardeau Contractors, Inc., 868 S.W.2d 163, 165 (Mo.App. E.D.1994). Defendants may establish their right to summary judgment by showing: facts negating any element of the plaintiff's cause of action; that the plaintiff has presented insufficient evidence to allow the finding of any element of the plaintiff's cause of action; or that there is no genuine dispute as to the existence of the facts necessary to support a properly pleaded affirmative defense. Ameristar Jet Charter, Inc. v. Dodson Intern. Parts, Inc., 155 S.W.3d 50, 58–59 (Mo. banc 2005). Where the trial court did not render factual findings, all factual issues are presumed resolved in accordance with the result of the trial court's judgment, and we will affirm if the trial court's judgment is proper under any reasonable theory supported by the evidence. Frick's Meat Products, Inc. v. Coil Constr. of Sedalia Inc., 308 S.W.3d 732, 736 (Mo.App. E.D.2010).

Discussion

I. The trial court properly granted summary judgment in favor of Wells Fargo and HSBC Bank on Count I because the terms of the deed of trust are not ambiguous and were not materially altered.

Elizabeth raises two separate arguments under her first point on appeal, both of which attack the validity of the deed of trust. We address each argument in turn.

A. The Deed of Trust is Not Ambiguous.

A loan transaction typically consists of a promissory note and a security interest, such as a deed of trust. Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 623 (Mo.App. E.D.2009). “A deed of trust pledges land to secure a debt” and entitles its holder to foreclose on property under certain circumstances. Mills v. 1st Nat. Bank of Mexico, 661 S.W.2d 808, 811 (Mo.App. E.D.1983); Bellistri, 284 S.W.3d at 623. When a husband and wife hold property as tenants by the entirety, both parties, the husband and the wife, must be named as grantors or borrowers in the deed of trust to convey their...

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