Evans v. MC&J Invs.
| Docket Number | 2022-CA-01248-SCT |
| Decision Date | 25 January 2024 |
| Parties | SAMUEL EVANS AND SANDRA EVANS v. MC&J INVESTMENTS, LLC |
| Court | Mississippi Supreme Court |
BEFORE KITCHENS, P.J., COLEMAN AND GRIFFIS, JJ.
¶1. Samuel Evans and Sandra Evans appeal the trial court's refusal to set aside a foreclosure sale. We find no error and affirm.
¶2. On December 19, 2003, Samuel and his wife Sandra executed a deed of trust securing repayment of $40,800 for real property[1] located in Clay County. The deed of trust granted a security interest in the property to the original lender, United Financial Mortgage Corporation, and was later assigned to U.S. Bank.
¶3. Samuel and Sandra defaulted on their payments, and foreclosure proceedings were initiated. Samuel and Sandra were advised that the foreclosure sale was scheduled for January 4, 2017.
¶4. Samuel and Sandra contacted and entered into discussions with Bank of America to bring their payment obligations current in order to avoid foreclosure. On December 22, 2016, Bank of America sent Samuel and Sandra a document entitled "Reinstatement Calculation" in which Bank of America represented the reinstatement amount necessary to reinstate the debt secured by the deed of trust. The reinstatement calculation instructed Samuel and Sandra to send certified funds or money order to Bank of America in the amount of $9,511.13. The reinstatement calculation noted that the reinstatement amount was "good through" January 3, 2017.
¶5. According to Samuel, a Bank of America employee advised him that as long as Bank of America received the reinstatement amount before the foreclosure sale, the sale would not occur. Samuel sent the reinstatement payment by FedEx on January 3 for an early delivery on January 4, before the scheduled foreclosure sale. Samuel and Sandra assumed that they had brought their debt current and that the foreclosure sale would not go forward. They later learned, however, that despite representations by Bank of America, the foreclosure sale had occurred. Neither Samuel nor Sandra attended the foreclosure sale.
¶6. The property at issue was purchased at the foreclosure sale by MC&J Investments, LLC, for $15,834.83. Julious McClinton, a real estate investor who buys properties in foreclosure, is the managing member of MC&J Investments. After the foreclosure sale, a substituted trustee's deed was issued to MC&J. The deed was later recorded on January 23, 2017, in the land records of Clay County.
¶7. On February 23, 2018, Samuel and Sandra filed a complaint in Clay County Chancery Court against U.S. Bank, Bank of America, Underwood Law Firm, PLLC,[2] and MC&J Investments. In their complaint, Samuel and Sandra alleged: (1) Bank of America intentionally and/or negligently misrepresented that Samuel and Sandra could make their reinstatement payment prior to the start of the scheduled foreclosure in order to avoid foreclosure, (2) Defendants failed to follow Mississippi law and wrongfully proceeded with the foreclosure sale, (3) Defendants sold the property at foreclosure for legally inadequate consideration, making the foreclosure sale void, and (4) Defendants never had the legal authority to foreclose on the property. Samuel and Sandra sought "[t]o set aside the foreclosure sale as void and to vest title to the [r]eal [p]roperty as it was immediately before the wrongful sale[.]" They further sought compensatory, general, special, consequential, and punitive damages as well as reasonable costs and attorneys' fees.
¶8. On December 6, 2020, Samuel and Sandra voluntarily dismissed without prejudice their claims against U.S. Bank, Bank of America, and Underwood Law Firm, PLLC, for their inability to serve those Defendants, leaving MC&J Investments as the only remaining Defendant.
¶9. MC&J Investments filed its answer to Samuel and Sandra's complaint and also filed a counterclaim for defamation, intentional infliction of emotional distress, violation of the Litigation Accountability Act, and negligence. Samuel and Sandra filed their response to MC&J Investments' counterclaim.
¶10. Trial was held on June 23, 2022. At trial, Samuel testified regarding an alleged oral agreement with McClinton in which McClinton agreed to buy the property at the foreclosure sale and then sell it back to Samuel. Samuel acknowledged that the alleged agreement was not reduced to writing.
¶11. The trial court entered an "Opinion and Final Judgment on Plaintiffs' Complaint against MC&J Investments, LLC and MC&J's Counterclaim against Plaintiffs" on November 18, 2022, denying Samuel and Sandra's claims against MC&J Investments and MC&J Investments' counterclaim against Samuel and Sandra. Specifically, the trial court found as follows: (1) the bid price paid by MC&J Investments did not shock the conscience of the court, (2) no writing was produced to support Samuel's claim that McClinton promised to sell him back the property, and (3) MC&J Investments failed to establish any harm or damages.
¶12. Samuel and Sandra timely appealed the trial court's denial of their claims against MC&J Investments.[3] On appeal, they argue: (1) the trial court erred by finding the statute of frauds prevented the enforcement of a promise to sell back the property to Samuel and Sandra, and (2) the trial court erred by finding the price paid at the foreclosure sale was not so inadequate as to shock the conscience and by failing to set aside the foreclosure sale.
¶13. Thompson v. First Am. Nat'l Bank, 19 So.3d 784, 787 (Miss. Ct. App. 2009) (citing Miss. Code Ann. § 15-3-1(c)). Here, the alleged oral agreement between Samuel and McClinton was for the sale of property consisting of three acres of land and a house located on that land. Because the agreement involved land, it was required to be in writing. Miss. Code Ann. § 15-3-1(c) (Rev. 2019). It is undisputed that the agreement was not in writing. Accordingly, it is barred under the statute of frauds. Id.
¶14. Samuel and Sandra argue that even if the agreement with McClinton is subject to the statute of frauds, it is still enforceable under the doctrine of promissory estoppel.
[A]n estoppel may arise from the making of a promise, even though without consideration, if it was intended that the promise should be relied upon and in fact it was relied upon, and if a refusal to enforce it would be virtually to sanction the perpetuation of fraud or would result in other injustice.
C.E. Frazier Constr. Co. v. Campbell Roofing &Metal Works, Inc., 373 So.2d 1036, 1038 (Miss. 1979) (alteration in original) (citation omitted).
It is universally conceded that the doctrine of equitable estoppel may be invoked to preclude a party to a contract from asserting the unenforceability of a contract by reason of the fact that it is not in writing as required by the statute of frauds. As is often said, the statute of frauds may be rendered inoperative by an estoppel in pais. Where one has acted to his detriment solely in reliance on an oral agreement, an estoppel may be raised to defeat the defense of the statute of frauds. This is based upon the principle established in equity, and applying in every transaction where the statute is invoked, that the statute of frauds, having been enacted for the purpose of preventing fraud, shall not be made the instrument of shielding, protecting, or aiding the party who relies upon it in the perpetration of a fraud or in the consummation of a fraudulent scheme.
Sanders v. Dantzler, 375 So.2d 774, 776 (Miss. 1979) (internal quotation marks omitted) (quoting 73 Am. Jur. 2d Statute of Frauds § 565).
¶15. Because the statute of frauds does not bar the enforcement of an agreement when promissory estoppel is appropriate, the real issue is whether promissory estoppel applies in this case. We find it does not.
¶16. The elements of promissory estoppel are: (1) the making of a promise, even though without consideration, (2) the intention that the promise be relied upon and in fact is relied upon, and (3) a refusal to enforce the promise would sanction the perpetuation of fraud or would result in other injustice. C.E. Frazier Constr. Co., 373 So.2d at 1038.
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