02/21/2017
Case Number: DA 16-0321
DA 16-0321
IN THE SUPREME COURT OF THE STATE OF MONTANA
2017 MT 31
BANK OF AMERICA, N.A.,
Plaintiff and Appellee,
v.
SUSAN JANE ALEXANDER,
Defendant and Appellant.
APPEAL FROM: District Court of the Twenty-First Judicial District,
In and For the County of Ravalli, Cause No. DV 2015-171
Honorable James A. Haynes, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Brian J. Miller, Morrison, Sherwood, Wilson & Deola, PLLP, Helena,
Montana
For Appellee:
Mark D. Etchart, Browning, Kaleczyc, Berry & Hoven, P.C., Helena,
Montana
Submitted on Briefs: December 14, 2016
Decided: February 21, 2017
Filed:
__________________________________________
Clerk
Justice Laurie McKinnon delivered the Opinion of the Court.
¶1 Susan Jane Alexander (Alexander) appeals from an order granting summary
judgment in favor of Bank of America, N.A. (BANA). We affirm.
ISSUES PRESENTED
¶2 Alexander raises numerous issues on appeal. We restate the issues as follows:
1. Whether BANA was entitled to summary judgment and a writ of assistance
based on unlawful detainer;
2. Whether Alexander sufficiently set forth a claim of fraud;
3. Whether Alexander’s claims of breach of written or oral contract are barred by
the statute of limitations;
4. Whether Alexander’s claims of breach of oral agreement are barred by the
statute of frauds; and
5. Whether Alexander properly alleged and offered supporting evidence for her
claim of unjust enrichment.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 On December 22, 2005, Alexander and her husband wanted to refinance their
home located in Victor, Montana, at 1379 Bourne Ridge Road (Property) to obtain a
$336,000 loan (Loan) for an addition and remodeling of the Property. Alexander
quitclaimed her interest, right, and title in the Property to her husband, who was the
borrower on the loan. The Loan was secured by the Property. Alexander maintained that
BANA assured her she would not be losing any interest in the Property. In connection
with the Loan, Alexander’s husband executed a promissory note (Note) and a deed of
trust (Deed of Trust), which was recorded in the Ravalli County Clerk and Recorder’s
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Office on December 28, 2005. On December 22, 2005, Alexander’s husband quitclaimed
his interest in the Property to himself and Alexander as joint tenants.
¶4 On December 27, 2006, Alexander’s husband died. Following his death,
Alexander alleges that BANA told her to continue to make payments and that she would
be able to assume and modify the loan in her own name. Alexander claims she made
numerous payments on the Loan. The Loan went into default, however, on September 1,
2009. The default was not cured and BANA began foreclosure proceedings. On April
21, 2014, a Notice of Trustee’s Sale was recorded in the Ravalli County Clerk and
Recorder’s Office. Alexander was served by BANA with the Notice of Trustee’s Sale on
April 22, 2014.
¶5 On August 28, 2014, a trustee’s sale was called at the Ravalli County Courthouse
located at 205 Bedford, Hamilton, Montana, and the Property was sold to BANA. A
Trustee’s Deed was recorded on September 3, 2014, confirming the sale to BANA. On
March 4, 2015, a Notice to Quit was served on Alexander, listing her as “female
occupant” of the Property. Nonetheless, Alexander continued to reside on the Property
and refused BANA’s demand to vacate the Property. On May 13, 2015, BANA filed a
complaint for unlawful detainer in the District Court.
¶6 Alexander, representing herself, filed an answer and asserted, in a separate
pleading, three counterclaims: breach of contract, breach of oral agreement, and a claim
of frivolous litigation. Although Alexander referred to BANA’s actions as fraudulent
throughout her pleadings and counterclaims, Alexander never alleged a distinct and
separate claim of fraud. Alexander’s primary contention regarding fraud was that the
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foreclosure sale never took place. After the court granted Alexander’s motion for a more
definite statement, which Alexander filed contemporaneously with her answer, BANA
filed an Amended Complaint for unlawful detainer and moved for summary judgment.
Alexander also moved for summary judgment on October 16, 2015. During a hearing
held December 2, 2015, the District Court addressed two issues which it decided required
supplemental briefing. One issue concerned a June 2013 letter from the United States
Department of Justice, Civil Rights Division, Housing and Civil Enforcement, addressed
to Alexander’s husband as the borrower on the Loan. The letter stated, in part:
[Y]our spouse may have been encouraged or required to sign a document,
often called a quitclaim deed or an interspousal transfer deed, that gave up
all of his or her rights or interests in the property in the process of your
getting this loan. If that happened, he or she may be eligible for assistance
reclaiming those property rights on a cash payment.
Alexander never submitted a claim pursuant to the June 2013 letter identifying a
settlement and Consent Order between the Department of Justice and the lender.
Pursuant to the terms of the Consent Order, the eligibility of a non-borrower spouse for
potential settlement proceeds had to be reviewed and required submittal of a claim by
July 31, 2013.
¶7 The second issue addressed in the parties’ supplemental briefing concerned the
submission by Alexander of the Declaration of Rosemarie Ellen Kleber (Kleber).
Kleber’s affidavit alleged that “no [sheriff’s] sale was held at the main entrance of the
[Ravalli] courthouse on August 28, 2014.”
¶8 On January 26, 2016, after considering all of Alexander’s arguments,
supplemental briefing, and affidavits from the parties, the District Court denied summary
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judgment to Alexander and granted summary judgment in favor of BANA. The District
Court concluded that the foreclosure sale was valid and that Alexander was unlawfully
holding possession of the Property. The District Court also concluded that Alexander’s
counterclaims were either barred by the statute of limitations or statute of frauds, and that
there was a complete lack of supporting evidence for any of her claims.
STANDARD OF REVIEW
¶9 “We review a district court’s grant of summary judgment de novo, applying the
same criteria as the district court.” McCulley v. American Land Title Co., 2013 MT 89,
¶ 11, 369 Mont. 433, 300 P.3d 679. Summary judgment is appropriate where no genuine
issues of material fact exist and where the moving party is entitled to judgment as a
matter of law. Clark v. Eagle Sys., 279 Mont. 279, 283, 927 P.2d 995, 997 (1996).
Further, we do not consider issues that were not raised at the district court level.
Wicklund v. Sundheim, 2016 MT 62, ¶ 26, 383 Mont. 1, 376 P.3d 403. For actions based
on breach of contract founded upon an instrument in writing, the statute of limitations is
eight years. Section 27-2-202(1), MCA. For actions based on breach of contract not
founded upon an instrument, the statute of limitations is five years. Section 27-2-202(2),
MCA.
DISCUSSION
¶10 We first address a preliminary issue raised by Alexander, who is now represented
by counsel. Alexander argues on appeal, citing Pilgeram v. GreenPoint Mortgage
Funding, Inc., 2013 MT 354, 373 Mont. 1, 313 P.3d 839, that BANA never established
the validity of the assignment from the originator of the Loan to BANA. BANA
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responds that this issue was not raised in the District Court and suggests that the District
Court’s failure to address the issue in its order granting summary judgment to BANA is
confirmation that it was not raised. BANA asserts that Alexander’s arguments in the
District Court were lengthy and confusing. Nonetheless, BANA maintains that primarily
Alexander’s challenge was not to the validity of any transfer or assignment, but rather
with whether the foreclosure sale took place at all. BANA also maintains that
Alexander’s opening brief does not comply with M. R. App. P. 12 in that it fails to cite to
the record and refers to Alexander’s briefs as record evidence. In Alexander’s reply
brief, Alexander recites from portions of her trial briefs and motions, primarily her
motion for more definite statement, and attempts to piecemeal together a challenge to the
validity of the assignment. The District Court concluded that it need not further address
the substance of Alexander’s motion for a more definite statement because Alexander,
rather than waiting to file a responsive pleading as M. R. Civ. P. 12(e) requires, filed her
answer and counterclaims contemporaneously with her motion for a more definite
statement. The District Court, therefore, found it was not necessary to address any
potential claims which may have been contained in Alexander’s motion for more definite
statement, as Alexander had already filed a responsive pleading.
¶11 After considering the pleadings filed by Alexander in the District Court, as well as
the District Court’s reliance on M. R. Civ. P. 12(e) and its significant effort to consider
all potential arguments made by Alexander, we conclude that the validity of the transfer
was not adequately raised before the District Court. We reach such a determination even
after giving Alexander the flexibility and latitude we normally try to accord
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self-represented litigants. We will not consider Alexander’s challenge to the validity of
the assignment from the originator of the Loan to BANA.1
¶12 1. Whether BANA was entitled to summary judgment and a writ of assistance
based on unlawful detainer.
¶13 Section 71-1-319, MCA, provides that the purchaser of property at a trustee’s sale
“shall be entitled to possession of the property on the 10th day following the sale,” and
that “any persons remaining in possession . . . shall be deemed to be tenants at will.”
Further, § 71-1-318, MCA, provides that the recordation of the trustee’s deed constitutes
prima facie evidence of the truth of the matters asserted therein and operates to convey all
right, title, and interest to a successor in interest. Aside from Alexander’s argument
regarding the validity of the Loan’s assignment, Alexander does not challenge BANA’s
right to foreclose, but argues instead that the 2014 foreclosure sale never took place.
Alexander concedes that she remained in possession of the Property after the foreclosure
sale and BANA became the rightful owner. Thus, the issue is whether there was a
genuine dispute of fact regarding whether the foreclosure sale took place as provided in
the Notice of Trustee’s Sale. If the foreclosure sale occurred and is valid, then Alexander
had committed an unlawful detainer pursuant to §§ 71-1-318 and -319, MCA, by her
refusal to vacate the Property.
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Alexander confuses standing to raise an issue with the failure to raise an issue during the
pendency of the trial court proceedings. The District Court found that Alexander had standing to
challenge the foreclosure sale. However, Alexander failed to adequately raise the issue of the
Loan’s assignment in her responsive pleading or succinctly, for that matter, anywhere. Thus, she
had standing to challenge the foreclosure sale, and did. She did not, however, raise the issue of a
defect in the Loan’s assignment.
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¶14 In support of her argument, Alexander submitted the affidavit of Kleber, which
states that Kleber attempted to attend the sale, but saw no sale take place. More
specifically, Kleber averred that she “waited on the entrance stairs as stated on the Notice
of Trustee’s sale . . .,” that she “waited [until] approximately 11:30 AM MST . . .,” and
that she “witnessed . . . no sale being held, and [no] trustee on site.” The District Court
took judicial notice of the fact that the Ravalli County Courthouse located at 205 Bedford
in Hamilton has no steps at its entrance. Ultimately, the District Court found Kleber’s
affidavit was not credible. In addition, BANA filed affidavits of Jeff Stenman (Stenman),
the vice president of Northwest Trustee Services, Inc. and the non-judicial trustee of the
Property, and Sean R. Cloninger (Cloninger), the process server and the lead
representative on the Non-Judicial Trustee’s Foreclosure Team at Equity Management,
Inc. Considering the affidavits together, the District Court found they gave a detailed and
accurate account of the Property’s sale on August 28, 2014, at the Ravalli County
Courthouse. The District Court concluded that Kleber’s affidavit was fatally flawed and
that Alexander had failed to present any credible evidence in support of her argument.
The District Court granted summary judgment to BANA on its complaint of unlawful
detainer. In considering the record de novo, we conclude the District Court did not err in
finding there was no genuine dispute of fact regarding the location and time of the
trustee’s sale and that it did, in fact, occur. The District Court did not err in concluding
that the foreclosure sale was valid and that BANA was entitled as a matter of law to
judgment on its complaint of unlawful detainer.
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¶15 2. Whether Alexander sufficiently averred a claim of fraud.
¶16 On appeal, Alexander argues that BANA assured her at the refinancing closing in
2005 that she would not be divested of her interest in the Property and that she did not
know at the 2005 closing that she was giving up an interest in the Property. Alexander
also argues that BANA represented at times it would allow her to assume the Loan, and
then at other times she could not. According to Alexander, this pattern continued right up
until the time of foreclosure.
¶17 Alexander never asserted a separate count alleging fraud. The District Court
found that throughout her counterclaims Alexander “generically” referenced fraud, but
that such “allusions to fraud are insufficient.” The District Court determined the basis of
any fraud claim was entirely unclear, and that random references were insufficient.
¶18 We agree. Although the conditions of a person’s mind may be alleged generally
when averring fraud, “[i]n all averments of fraud or mistake, the circumstances
constituting fraud or mistake must be stated with particularity.” M. R. Civ. P. 9(b); See
also Western Sec. Bank v. Edie Baill, LLP, 2010 MT 291, ¶ 50, 359 Mont. 34, 249 P.3d
35 (“We reject Glacier’s argument that all the elements of fraud sprinkled throughout
general averments in its complaint rise to a degree sufficient to have provided Edie with
notice of its intent to raise a fraudulent misrepresentation claim.”). We have held that to
survive a motion for summary judgment, a party alleging fraud must establish a prima
facie case by providing evidence of the following elements:
(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker’s
knowledge of its falsity or ignorance of its truth; (5) the speaker’s intent
that it should be acted upon by the person and in the manner reasonably
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contemplated; (6) the hearer’s ignorance of its falsity; (7) the hearer’s
reliance upon its truth; (8) the right of the hearer to rely upon it; (9) the
hearer’s consequent and proximate injury or damage.
Stanley v. Holms, 1999 MT 41, ¶ 33, 293 Mont. 343, 975 P.2d 1242.
¶19 Here, Alexander’s general allegations of fraud, appearing within other claims and
never having been specifically alleged, were insufficient to satisfy the particularity
required to plead fraud. Alexander does not identify specific statements that are fraud,
the speakers of the alleged statements, the falsity of the alleged statements, the speaker’s
intent, her ignorance of the truth, her reliance on the statements, or her damages flowing
from the alleged false statements. The District Court correctly concluded that Alexander
failed to state a claim for fraud based on this record.
¶20 3. Whether Alexander’s claims of breach of written or oral contract are barred by
the statute of limitations.
¶21 It is unclear, both during the trial court proceedings and on appeal, whether
Alexander is alleging breach of an oral contract or a written contract, or both. Assuming
that Alexander is alleging breach of a written contract premised upon the 2005
refinancing documents, Alexander appears to claim that the written documents
improperly divested her of her interest in the Property. While it is unclear exactly how
such an allegation supports a claim of breach of a contract, the statute of limitations for
actions based on breach of contract founded upon an instrument in writing is eight years.
Section 27-2-202(1), MCA. For actions based on breach of contract not founded upon an
instrument, the statute of limitations is five years. Section 27-2-202(2), MCA. Thus, to
the extent Alexander bases her breach of contract claim, whether written or oral, on some
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agreement arising out of the 2005 closing of the Loan, her claim is barred by the
applicable statute of limitations.
¶22 Alexander describes, however, a purported breach based on her being promised
that she would not lose an interest in the Property as part of the 2005 closing and that she
did not discover the breach until 2013 when the Department of Justice letter notified
borrowers that the practices conducted during the 2005 time period by lenders may be
discriminatory. Causes of action for breach of contract accrue upon the breach. Textana,
Inc. v. Klabzuba Oil & Gas, 2009 MT 401, ¶ 35, 353 Mont. 442, 222 P.3d 580. Here,
Alexander quitclaimed her interest in the Property at the 2005 closing and any alleged
breach of contract based on divestiture of her interest would have occurred then. To the
extent Alexander alleges formation of an oral agreement based on representations made
by BANA following the 2005 closing, the latest the statute of limitations would have
begun to run was in 2009, when foreclosure proceedings against Alexander were initiated
by BANA. Pursuant to either scenario, a breach of contract claim is barred by the
applicable statute of limitations. Moreover, even if the discovery rule applied to a breach
of contract claim, which it does not, Alexander knew she was losing her interest in the
Property when she executed the quitclaim deed to facilitate closure of the Loan. The
District Court did not err under the facts of this case when it concluded the 2013 letter
from the Department of Justice was irrelevant to the accrual of an action for breach of
contract. Alexander’s alleged breach of contract, whether founded on a written
instrument or not, is barred by the applicable statute of limitations.
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¶23 4. Whether Alexander’s claims of breach of oral agreement are barred by the
statute of frauds.
¶24 Alexander maintains that BANA represented to her up until the time of foreclosure
that if she continued to make payments she could assume and modify the loan in her
name. Alexander appears to argue the existence of an oral agreement which was
breached upon the foreclosure sale in August of 2014, and therefore is not barred by the
five year period of limitations applicable to a breach not founded upon an instrument in
writing. Section 27-2-202(2), MCA.
¶25 To the extent, however, that Alexander may be arguing that there was an oral
agreement to modify the Loan, such a claim is barred by the statute of frauds.
Section 71-1-203, MCA. An oral agreement to modify a loan falls within the statute of
frauds and requires that the modification be in writing. Morrow v. Bank of America,
N.A., 2014 MT 117, ¶ 28, 375 Mont. 38, 324 P.3d 1167. Any effort to modify the Loan
by Alexander must be in writing. Thus, although perhaps not barred by the statute of
limitations, such a claim for breach of an oral agreement to modify or assume the Loan is
barred by the statute of frauds.
¶26 5. Whether Alexander properly alleged and offered supporting evidence for her
claim of unjust enrichment.
¶27 To survive a motion for summary judgment on a claim of unjust enrichment, a
plaintiff must be able to demonstrate the existence of each element necessary to support
her claim. A claim of unjust enrichment is premised upon the following:
The doctrine of unjust enrichment is an equitable means of preventing one
party from benefiting from his or her wrongful acts. Among other things, a
claim of unjust enrichment requires a plaintiff to show the element of
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misconduct or fault on the part of the defendant or that the defendant
somehow took advantage of the plaintiff.
Estate of Pruyn v. Axmen Propane, Inc., 2009 MT 448, ¶ 64, 354 Mont. 208, 223 P.3d
845 (citation omitted). Further, unjust enrichment is an obligation created when there is
an absence of a contract between the parties. Pruyn, ¶ 63; See also Ryffel Family P’ship
v. Alpine Country Constr., Inc., 2016 MT 350, ¶ 33, 386 Mont. 165, 386 P.3d 971.
Although Alexander alleged a separate counterclaim of unjust enrichment, she did not
provide the District Court with any evidence in support of her allegation. While we
recognize the challenges that a self-represented litigant faces, we cannot fault the District
Court for granting summary judgment against a claim completely devoid of any
supporting evidence.
CONCLUSION
¶28 The judgment of the District Court is affirmed.
/S/ LAURIE McKINNON
We Concur:
/S/ MIKE McGRATH
/S/ MICHAEL E WHEAT
/S/ BETH BAKER
/S/ JIM RICE
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