Lane v. Bayview Loan Servicing, LLC
| Decision Date | 22 August 2019 |
| Docket Number | Record No. 180979 |
| Citation | 831 S.E.2d 709 |
| Court | Virginia Supreme Court |
| Parties | Gloria B. LANE v. BAYVIEW LOAN SERVICING, LLC, et al. |
Drew D. Sarrett (Ian E. Vance ; Sarrett Law Firm, on briefs), Richmond, for appellant.
Christy L. Murphy (Bischoff Martingayle, on brief), for appellee Bayview Loan Servicing, LLC.
Richard E. Craig, Fairfax (Amy L. Bradley ; Briglia Hundley, Vienna, on brief), for appellee Eric Charles Von Allman.
No brief filed by appellee Equity Trustees, LLC, as Substitute Trustee.
PRESENT: All the Justices
OPINION BY JUSTICE S. BERNARD GOODWYN
In this appeal, we consider whether the circuit court erred when it sustained a plea in bar which asserted res judicata.
On March 30, 2007, Gloria B. Lane (Lane) executed a deed of trust (Deed of Trust) on property (Property) located in Chase City, Virginia to secure a note of $52,397.51 (Note). Bayview Loan Servicing, LLC (Bayview) serviced the loan on behalf of the noteholder.1
Paragraphs 12 and 17 of the Deed of Trust provided that in the event of Lane’s default, the noteholder was to notify Lane of the breach and the action required to cure the breach, by certified mail prior to accelerating the Note and foreclosing on the Property. Paragraph 17 also stated that if the noteholder intended to sell the Property, it was to notify Lane of the sale "in the manner prescribed by applicable law."
On May 10, 2016, Bayview mailed Lane a letter entitled "Notice of Default and Intent to Accelerate" (May Notice). The May Notice stated that the Loan was delinquent by $1,060, and if this remained unpaid, Bayview would foreclose on the Property.
On August 9, 2016, Bayview mailed another letter to Lane entitled "Notice of Default and Intent to Accelerate" (August Notice). The August Notice stated the Loan was delinquent by $1,146, and Bayview would commence foreclosure proceedings if the balance was not paid by September 13, 2016. A note in the top right corner of the August Notice stated: "Sent via Certified Mail."
On December 12, 2016, BWW Law Group, LLC (BWW) mailed Lane a letter entitled "Notice of Foreclosure Sale" (Foreclosure Notice). The Foreclosure Notice stated that it was sent "on behalf of the party secured by the Deed of Trust" and that the Property would be sold at public auction on January 4, 2017 (Foreclosure Sale), by Equity Trustees, LLC (Equity), the substitute trustee.
The Foreclosure Notice was accompanied by a copy of an advertisement of the Foreclosure Sale, in which it was stated that BWW was providing legal representation for Equity. The Foreclosure Notice was also accompanied by a document, dated December 2, 2016, that was entitled "Appointment of Substitute Trustee." It stated that Bayview "appoints [Equity] as Substitute Trustee/Grantee."
On December 30, 2016, Lane filed a petition for injunction, pro se, in the Circuit Court of Mecklenburg County against "Substitute Trustee: BWW Law Group, LLC" (Injunction Action). Lane sought to enjoin the Foreclosure Sale, scheduled for January 4, 2017, alleging that: (1) the Foreclosure Sale was not advertised in the newspaper, (2) she "received a letter of sale on the 27th of December 2016," (3) she did not receive a "certified mail returned receipt," and (4) she did not receive any prior letters notifying her of default.
On January 3, 2017, the circuit court held a hearing on the Injunction Action, and orally denied the petition for injunction. The Foreclosure Sale occurred, as scheduled, on January 4, 2017.
On January 10, 2017, the circuit court entered its order denying the injunction (January 2017 Order). The January 2017 Order noted that the court held a hearing on the petition on January 3, 2017, at which Lane and BWW were present. Upon Lane’s testimony, "the written evidence submitted by the Parties, and the arguments of [Lane] and counsel for [BWW]," the court found the following:
The January 2017 Order concluded by stating "[t]his matter is ended." Lane did not appeal the January 2017 Order.
On February 3, 2017, Equity executed a Substitute Trustee’s Deed conveying the Property to Bayview, the highest bidder at the Foreclosure Sale (Trustee Deed). On March 15, 2017, Bayview conveyed the Property to Eric Charles Von Allman (Von Allman) by special warranty deed.
On September 15, 2017, Lane, represented by counsel, filed a complaint in the Circuit Court of Mecklenburg County against Bayview, Equity, and Von Allman. With leave of court, she filed an amended complaint on November 20, 2017.
Count I of the amended complaint alleges that Bayview breached Paragraphs 12 and 17 of the Deed of Trust by mailing the May Notice first class instead of by certified mail, and by stating that Lane had missed two payments when she had only missed one. Count II alleges that Equity was not lawfully appointed as substitute trustee, in violation of Code § 55-59. Count III alleges that Bayview breached Code §§ 55-59, -59.2, and -59.3 when it breached the Deed of Trust as alleged in Counts I and II. Count IV alleges that Bayview breached implied covenants of good faith and fair dealing as the agent for the noteholder when it conducted the Foreclosure Sale in breach of the terms of the Deed of Trust and Virginia statutes.
Lane seeks compensatory damages and rescission of the Trustee Deed. Lane also seeks rescission of the special warranty deed to Von Allman, claiming that Von Allman had constructive notice of defects in his title to the Property and was not a good faith purchaser for value.
On December 11, 2017, Bayview filed a plea in bar of res judicata, asserting claim and issue preclusion based upon the Injunction Action and the January 2017 Order. Lane filed a brief in opposition to the plea in bar.
On February 12, 2018, the circuit court held a hearing on Bayview’s plea in bar. The court found that "this matter was brought before this same court ... a little over a year ago, and at that time the court had a full and final hearing." The circuit court reasoned that its finding in the January 2017 Order that Bayview "sent the plaintiff a pre-acceleration notice in compliance with Paragraph 17 of the Deed of Trust" was "pretty much dispositive of this matter," and ruled that the amended complaint was barred by res judicata.
On April 26, 2018, the circuit court entered an order sustaining Bayview’s plea in bar "for the reasons stated on the record," and dismissed the amended complaint as to Bayview, with prejudice. On May 14, 2018, the court entered another order dismissing the amended complaint with prejudice as to Von Allman and Equity because the ruling in favor of Bayview on its special plea of res judicata precluded Lane from obtaining relief from either Equity or Von Allman.
Lane appeals. This Court granted two assignments of error:
ANALYSIS
Lane asserts that the circuit court erred in sustaining Bayview’s plea in bar because Bayview failed to prove the prerequisites for the application of res judicata.
"Res judicata involves both issue and claim preclusion." Funny Guy, LLC v. Lecego, LLC , 293 Va. 135, 142, 795 S.E.2d 887 (2017). While claim preclusion bars relitigation of a cause of action, issue preclusion bars relitigation of a factual issue. D’Ambrosio v. Wolf , 295 Va. 48, 56, 809 S.E.2d 625 (2018). Whether a claim or issue is precluded by a prior judgment is a question of law this Court reviews de novo. Caperton v. A.T. Massey Coal Co. , 285 Va. 537, 548, 740 S.E.2d 1 (2013). In granting Bayview’s plea in bar of res judicata, the circuit court did not specify whether it was basing its decision upon issue preclusion, claim preclusion, or both.
Patterson v. Saunders , 194 Va. 607, 612, 74 S.E.2d 204 (1953) (alteration and...
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