Thanks for visiting! Welcome to a new way to research case law. You are viewing a free summary from Descrybe.ai. For citation checking, legal issue analysis, and other advanced tools, explore our Legal Research Toolkit — not free, but close.
Byrd v. MorEquity, Inc.
Citations: 94 So. 3d 378; 2012 Ala. Civ. App. LEXIS 65; 2012 WL 887483Docket: 2100734
Court: Court of Civil Appeals of Alabama; March 16, 2012; Alabama; State Appellate Court
Stephen A. Byrd and Cynthia B. Byrd appeal a summary judgment from the Mobile Circuit Court in an ejectment action initiated by MorEquity, Inc., which sought possession of a property the Byrds occupied as their residence. MorEquity claimed it acquired title to the property through a foreclosure sale and that the Byrds unlawfully detained it after their possessory interest was terminated. The Byrds, initially responding pro se, later amended their answer through retained counsel, denying MorEquity's right to possession and asserting that the foreclosure was invalid due to MorEquity's lack of ownership interest in the mortgage. MorEquity filed a motion for summary judgment supported by evidence, which the Byrds opposed. They also moved to strike some of MorEquity’s evidence, but the trial court denied this motion and granted summary judgment in favor of MorEquity. A writ of possession was issued, and the Byrds subsequently sought to alter or vacate the judgment, which was denied. After a stay on enforcement, the Byrds appealed. The key appellate issue is whether MorEquity had standing to bring the ejectment action, as determined by Alabama law under § 6-6-280(b). This statute requires that a complaint in an ejectment case must be filed in the name of the real owner or the person entitled to possession, and the plaintiff bears the burden of proving standing through evidence beyond mere allegations. The summary judgment highlights the necessity for MorEquity to provide specific facts demonstrating its standing, as established in relevant case law. To succeed in a motion for summary judgment, the plaintiff must establish a prima facie case demonstrating that there is no genuine issue of material fact and that they are entitled to judgment as a matter of law, as established in Armstrong v. McGee. The court reviews evidence in favor of the nonmovant and considers reasonable jury inferences. The burden of proof does not shift to the opposing party until the moving party has made this initial showing, per McClendon v. Mountain Top Indoor Flea Market. In the current case, MorEquity claims it has standing to pursue an ejectment action against the Byrds based on a foreclosure deed it obtained. The Byrds contest the validity of the foreclosure deed, asserting it was obtained through unauthorized proceedings. Citing Sturdivant, the court noted that a foreclosure deed could be declared void if the foreclosure was not conducted lawfully according to statutory provisions. The Byrds had previously executed a promissory note to Wilmington Finance, Inc., secured by a mortgage on the property, which stipulated that Wilmington could demand full payment upon default and invoke the power of sale. While Wilmington Finance is defined as the lender, the mortgage designates Mortgage Electronic Registration Systems, Inc. (MERS) as the nominee with the right to foreclose. MorEquity claims that MERS assigned the mortgage and its power of sale to it, allowing MorEquity to execute the foreclosure under § 35-10-12 of the Alabama Code. MorEquity's evidence regarding the assignment date is inconsistent, creating a critical conflict impacting the standing to foreclose. An affidavit from Kenneth Seheller of MorEquity includes an "ASSIGNMENT OF MORTGAGE" document, which states that Mortgage Electronic Registration Systems, Inc. (MERS) assigned the mortgage to MorEquity on April 20, 2009. In contrast, a second affidavit from Jeff Schutte indicates that MorEquity acquired the mortgage through a sale effective December 30, 2009. This discrepancy is significant because, per court precedent, a party must possess the authority to foreclose as of the initiation date of foreclosure proceedings. The debt was accelerated on December 11, 2009, with foreclosure notices published on December 15, 2009, suggesting that if the December 30 assignment date is accurate, MorEquity lacked the authority to initiate foreclosure, leaving Wilmington Finance, Inc. or MERS as the only entities able to do so at that time. Evidence indicates that Wilmington Finance, Inc. was involved in the foreclosure process, further implying the assignment had not occurred by mid-December. Consequently, MorEquity did not establish a prima facie case for standing, as its conflicting evidence raises a genuine issue of material fact regarding its authority to foreclose. The Byrds also argue for the reversal of the summary judgment on additional grounds, including MorEquity's alleged failure to provide proper notice of default and the required foreclosure sale notice. Allegations have been made regarding irregularities in the foreclosure sale notice as per § 35-10-8, Ala.Code 1975, and claims that MorEquity agreed to delay foreclosure while the Byrds engaged in a loss-mitigation program. However, oral agreements to forbear foreclosure are deemed invalid under the Statute of Frauds, as established in Coleman v. BAC Servicing. Additionally, there are claims of MorEquity's non-compliance with the National Housing Act's loss-mitigation regulations and a breach of fiduciary duty by underbidding at the sale, as referenced in Berry v. Deutsche Bank Nat’l Trust Co. These factors could serve as affirmative defenses in an ejectment action, potentially rendering the foreclosure deed voidable. The trial court's judgment in favor of MorEquity is reversed due to a fundamental dispute regarding MorEquity's authority to initiate foreclosure, which could invalidate the deed. The Byrds assert that any assignment of the mortgage did not entail the underlying note, a point supported by Coleman v. BAC Servicing, which states that the power of sale belongs to the note holder. Notably, the Byrds did not raise this issue during the summary judgment hearing but introduced it in a post-judgment motion. As a result, this argument was not considered by the trial court, following Green Tree Acceptance, Inc. v. Blalock's precedent. The Byrds also challenge the admissibility of certain assignments and evidence submitted post-hearing, but these concerns are deemed unnecessary to address given the resolution of the standing issue. The foreclosure notice indicated Wilmington Finance, Inc. as the entity pursuing the Byrds for mortgage debt, while also copying MorEquity. The notice specifies a default on the mortgage executed to MERS acting on behalf of Wilmington Finance, with MorEquity not mentioned as a party in the transaction.