Turner v. Wells Fargo Bank, N.A.

• Decision Date: 30 September 2016
• Docket Number: 2150320
• Citation: 254 So.3d 194
• Parties: Trenton TURNER, Jr., and Donna Turner v. WELLS FARGO BANK, N.A., as Trustee for Carrington Mortgage Loan and Trust 2006-NC2 Asset-backed Pass-through Certificates
• Court: Alabama Court of Civil Appeals

254 So.3d 194

Trenton TURNER, Jr., and Donna Turner
v.
WELLS FARGO BANK, N.A., as Trustee for Carrington Mortgage Loan and Trust 2006-NC2 Asset-backed Pass-through Certificates

2150320

Court of Civil Appeals of Alabama.

September 30, 2016
Rehearing Denied December 2, 2016
Certiorari Denied September 1, 2017

Alabama Supreme Court 1160212

Kenneth James Lay of Hood & Lay LLC, Birmingham, for appellants.

S. Keith Eady of RCO Legal, P.S., Atlanta, Georgia, for appellee.

DONALDSON, Judge.

Trenton Turner, Jr., and Donna Turner appeal from a summary judgment entered by the Jefferson Circuit Court ("the trial court") in favor of Wells Fargo Bank, N.A., as Trustee for Carrington Mortgage Loan and Trust 2006-NC2 Asset-backed Pass-through Certificates ("Wells Fargo"), ejecting them from real property located in Jefferson County ("the property"). We affirm the judgment.

Facts and Procedural History

In 2006, the Turners financed the purchase of the property by executing a promissory note ("the note") in favor of New Century Mortgage Corporation ("New Century"). Contemporaneously with the execution of the note, the Turners executed a mortgage in favor of New Century on the property as security for repayment of the note. The mortgage was recorded in the Jefferson Probate Court ("the probate court").

The mortgage contained the following provisions that are pertinent to this appeal:

"1. ... [I]f any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashiers check ...; or (d) Electronic Funds Transfer.

"....

"22. Acceleration Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument. ... The notice shall specify (a) the default; (b) the action required to cure the default; (c) a date not less than 30 days 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

254 So.3d 197

by this Security Instrument and sale of the Property. The notice shall further inform the 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."

According to affidavit testimony, on July 1, 2007, New Century transferred and assigned the note and the mortgage to Wells Fargo. Carrington Mortgage Services, LLC ("Carrington"), served as the loan servicer for Wells Fargo. Section 20 of the mortgage defines the term "loan servicer" as the "entity that collects periodic payments due under the note and this security instrument and performs other mortgage loan servicing obligations under the note, this security instrument, and applicable law." The assignment of the note and the mortgage was ultimately executed on February 1, 2012, and recorded in the probate court on February 15, 2012.

Between August 1, 2011, and October 5, 2011, the Turners tendered three checks to Carrington toward payment obligations under the note that were not honored due to insufficient funds. Although the Turners ultimately satisfied the note payments for those months, Carrington assessed a $30 insufficient-check charge for each dishonored check the Turners tendered ($90 total) and two charges of $100 each for late payments. On October 22, 2011, the Turners mailed a check, post-dated to October 27, 2011, to Carrington in the amount of $2,227.68, which was sufficient to pay one principal and interest payment plus one late charge of $100. Because the October 27, 2011, check did not include payment of the $90 charges for the insufficient checks that the Turners had previously tendered or the additional $100 late fee, Carrington returned that check to the Turners. On November 28, 2011, the Turners mailed to Carrington a check sufficient to pay one principal and interest payment plus a single $100 late charge, but the Turners did not include in that check the two monthly payments for October 2011 and November 2011, the two $100 late charges, and the $90 charges for insufficient checks. Carrington purportedly returned the November 28, 2011, check to the Turners, again because it was not sufficient to bring the note current. The Turners also sent monthly payments to Carrington on December 28, 2011, January 28, 2012, April 27, 2012, May 30, 2012, June 27, 2012, July 27, 2012, and August 30, 2012, each in the amount of $2,227.68. Carrington returned each of those checks to the Turners.

On November 30, 2011, Carrington sent a letter to the Turners notifying them of its intent to foreclose on the property, stating that the loan was in default because the monthly payment due on October 1, 2011, had not been received and informing the Turners that the default could be cured by the Turners' tendering certified funds in the amount of $4,545.36. The letter further stated that

"[f]ailure to cure the delinquency within 30 days of the date of this letter may result in acceleration of the sums secured by the Deed of Trust or Mortgage and in the sale of the property.

"You have the right to reinstate your loan after legal action has begun. You also have the right to assert in foreclosure, the non-existence of a default or any other defense to acceleration and foreclosure."

254 So.3d 198

No evidence was presented showing that the Turners responded to the letter.

On January 31, 2012, Trustee Management Company ("TMC"), on behalf of Wells Fargo, sent the Turners a notice of foreclosure sale stating that Wells Fargo had elected to accelerate the debt and notifying the Turners that the foreclosure sale was scheduled for February 27, 2012. The notice of the foreclosure sale was published in the Alabama Messenger newspaper on February 4, 2012, February 11, 2012, and February 18, 2012.

The foreclosure sale was conducted on February 27, 2012, and Wells Fargo was the highest bidder. On the same day, a foreclosure deed was executed conveying title to the property to Wells Fargo, and a corrected foreclosure deed correcting a typographical error was executed the same day. The foreclosure deed was recorded in the probate court on October 16, 2012. The Turners did not vacate the property after the foreclosure sale.

On November 14, 2012, Wells Fargo filed a complaint for ejectment against the Turners in the trial court. The Turners filed an answer on November 27, 2012, denying the ejectment claim and asserting certain defenses, including wrongful and unlawful foreclosure and that the notice of the foreclosure sale was defective.

On August 16, 2013, Wells Fargo filed a motion for a summary judgment, arguing that it had properly conducted the foreclosure sale, that it held lawful title to the property, and that it was entitled to possession of the property. Wells Fargo attached to its motion an affidavit of Tom Croft, senior vice president of Carrington. Croft attached as exhibits to his affidavit the note, the mortgage, the assignment of note and the mortgage, the Turners' payment history, the notice of foreclosure, evidence of publication of the notice of foreclosure sale, and the corrected foreclosure deed.

On September 4, 2013, the Turners filed a response to Wells Fargo's summary-judgment motion, arguing that Wells Fargo had caused them to default on the mortgage and that Wells Fargo had failed to provide them with proper notice as required by Section 22 of the mortgage. The Turners attached to their response Trenton Turner's affidavit; copies of the personal checks that the Turners had sent to Carrington dated October 27, 2011, November 28, 2011, December 28, 2011, January 28, 2012, April 27, 2012, May 30, 2012, June 27, 2012, July 27, 2012, and August 30, 2012, and that Carrington had returned to the Turners; and correspondence from Carrington returning some of those checks. The Turners asserted that they had submitted their mortgage payment, along with payment of a $100 late fee in October and November 2011. The Turners also asserted that Wells Fargo and Carrington had caused their nonperformance with the terms of the note because their attempted payments were not accepted. The Turners argued that had their payments been accepted, there would have been no default and no foreclosure. They also asserted that Wells Fargo had failed to provide them with proper notice under Section 22 of the mortgage of their "right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale." Trenton Turner testified in his affidavit that he and his wife had made the required monthly payments and that they were not delinquent on their required payments.

The trial court held a...