author: DONALDSON, Judge.

text:
    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 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."

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 hearing on the summary-judgment motion on September 6, 2013. The parties have not provided this court with a transcript of that hearing. According to a September 13, 2013, filing by Wells Fargo, the trial court directed the parties at the summary-judgment hearing to provide additional briefing on whether "substantial compliance with the terms of the notice of default and acceleration requirements of a mortgage is all that is required before a creditor may accelerate and foreclose." According to the same filing of Wells Fargo, the trial court also directed the Turners to submit additional evidence concerning their contention that they had delivered the check dated November 28, 2011, to Carrington.

On September 13, 2013, the Turners filed a supplement to their response to Wells Fargo's summary-judgment motion. In the supplement, the Turners argued that there existed a genuine issue of material fact regarding whether Wells Fargo was a holder of the note and, thus, whether Wells Fargo had the authority to foreclose on the property. The Turners did not present any additional arguments or evidence concerning delivery to Carrington of the check dated November 28, 2011. Wells Fargo filed a reply to the Turners' supplemental response on September 13, 2013. Wells Fargo did not move to strike the additional arguments raised by the Turners in their supplemental response.

The trial court entered an order on September 18, 2013, allowing the parties time to submit further briefing in light of the Alabama Supreme Court's decisions issued on September 13, 2013, in Ex parte GMAC Mortgage, LLC, 176 So. 3d 845 (Ala. 2013) and Ex parte BAC Home Loans Servicing, LP, 159 So. 3d 31 (Ala. 2013).

On January 20, 2015, Wells Fargo filed a "renewed" motion for a summary judgment. As a part of its renewed motion, Wells Fargo refiled its original motion for a summary judgment and its brief in support thereof, as well as copies of its replies to the Turners' responses to the motion. The certificate of service shows that Wells Fargo served counsel for the Turners with a copy of the renewed filings on January 20, 2015. On March 18, 2015, the trial court entered a summary judgment in favor of Wells Fargo, thereby granting Wells Fargo possession of the property.

The Turners filed a motion to alter, amend, or vacate the judgment on March 24, 2015. On the same day, Wells Fargo filed a response to the motion. The trial court held a hearing on the motion on May 27, 2015. The trial court entered an order denying the motion on June 22, 2015, summarizing the arguments asserted in the postjudgment motion and stating, in pertinent part:

"First, [the Turners] argue Wells Fargo failed to provide evidence it required certified funds from [the Turners] prior to notice of acceleration of all sums due. Second, [the Turners] claim [Wells Fargo] made additional arguments in its renewed motion for summary judgment, which was ruled upon without the benefit of a hearing.
"As to the first issue, [Section 1] of the subject mortgage states in part, 'However, if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid....[,]' Wells Fargo may require further payments be made via certified funds. The record shows on November 30, 2011, [Wells Fargo] mailed a copy of a 'Notice of Intent to Foreclose' to the Turners clearly stating payment was due in the form of certified funds, and allowing 30 days for [the Turners] to cure the default on their loan. Further, the Turners were aware their mortgage payments made in the form of personal checks for October and November of 2011 were not accepted, further putting them on notice their attempted form of payment was improper for those unpaid months. The Court therefore finds this notice was sufficient and in accordance with the mortgage.
"Secondly, in their [postjudgment] motion, [the Turners] argue Wells Fargo's renewed motion for summary judgment filed January 20, 2015, asserts new facts not raised and argued in its original motion for summary judgment filed August 16, 2013. However, the Turners fail to specify what new facts have been asserted by [Wells Fargo]. The Court has reviewed these motions and determines Wells Fargo's renewed motion for summary judgment is nearly identical to its original motion for summary judgment, except for the new attorney information on the last page of the filing. As no new material facts are asserted by Wells Fargo, the motion fails as to this argument."

The Turners filed a notice of appeal to our supreme court on July 24, 2015. On January 11, 2016, the supreme court entered an order transferring the appeal to this court pursuant to § 12-2-7(6), Ala. Code 1975.

Standard of Review

"This Court's review of a summary judgment is de novo. Williams v. State Farm Mut. Auto. Ins. Co., 886 So. 2d 72, 74 (Ala. 2003). We apply the same standard of review as the trial court applied. Specifically, we must determine whether the movant has made a prima facie showing that no genuine issue of material fact exists and that the movant is entitled to a judgment as a matter of law. Rule 56(c), Ala. R. Civ. P.; Blue Cross & Blue Shield of Alabama v. Hodurski, 899 So. 2d 949, 952-53 (Ala. 2004). In making such a determination, we must review the evidence in the light most favorable to the nonmovant. Wilson v. Brown, 496 So. 2d 756, 758 (Ala. 1986). Once the movant makes a prima facie showing that there is no genuine issue of material fact, the burden then shifts to the nonmovant to produce 'substantial evidence' as to the existence of a genuine issue of material fact. Bass v. SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98 (Ala. 1989) ; Ala. Code 1975, § 12-21-12. '[S]ubstantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.' West v. Founders Life Assur. Co. of Fla., 547 So. 2d 870, 871 (Ala. 1989)."

Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038-39 (Ala. 2004).

Discussion

The sole action before the trial court was the action commenced by the filing of Wells Fargo's complaint, which stated a cause of action against the Turners for ejectment pursuant to § 6-6-280, Ala. Code 1975. That statute provides, in pertinent part, as follows:

"An action for the recovery of land or the possession thereof in the nature of an action in ejectment may be maintained without a statement of any lease or demise to the plaintiff or ouster by a casual or nominal ejector, and the complaint is sufficient if it alleges that the plaintiff was possessed of the premises or has the legal title thereto, properly designating or describing them, and that the defendant entered thereupon and unlawfully withholds and detains the same."

§ 6-6-280(b). Therefore, on a motion for a summary judgment, Wells Fargo was required to present substantial evidence establishing that it had legal title to the property and that the Turners unlawfully remained on the property.

On appeal, the Turners contend that Wells Fargo was not entitled to foreclose on the property because (1) Carrington, the loan servicer for Wells Fargo, improperly refused to accept the October 27, 2011, and November 28, 2011, checks the Turners had tendered, thus causing the Turners to be in default of the mortgage; (2) Wells Fargo failed to provide proper notice to the Turners of the default pursuant to Section 22 of the mortgage; and (3) Wells Fargo failed to present substantial evidence showing that it was a holder of the note. Furthermore, we must determine whether the trial court should have provided the Turners with an opportunity to be heard or to respond to Wells Fargo's renewed motion for a summary judgment before it entered the summary judgment in favor of Wells Fargo.

I. The Turners' Brief

The Turners raise several arguments on appeal that do not appear to have been presented to the trial court. In their appellate brief, the Turners make the following arguments and factual assertions, among others: that they testified in their affidavits that they were never provided notice of the assignment of the mortgage; that they were never provided proper notice pursuant to an adjustable rate rider to the mortgage regarding changes in their interest rates and payments, which changes, they say, contributed to their default; that Wells Fargo failed to send them a notice of default, a notice of intent to accelerate, and a notice of foreclosure sale; that the Turners never received the January 31, 2012, letter sent by TMC to notify the Turners of the acceleration and of the notice of foreclosure sale; that the mortgage is a "Fannie Mae" form mortgage; that the November 30, 2011, letter from Carrington contained the incorrect amount that the Turners could pay to cure their default; and that Croft's affidavit failed to show that he had personal knowledge of the Turners' mortgage and the events occurring in this case. The record does not reflect that any of these assertions or arguments were raised before the trial court.

Instead, some or all of these arguments and factual assertions have been raised, almost verbatim, in appellate briefs filed by counsel for the Turners in other appeals unrelated to the present case. See, e.g., Walker v. North American Sav. Bank, 142 So. 3d 590 (Ala. Civ. App. 2013), Surles v. Bayview Loan Servicing, LLC (No. 2111234, Nov. 8, 2013), 171 So. 3d 694 (Ala. Civ. App. 2013) (table), and Bennett v. Deutsche Bank Nat'l Trust Co., (No. 2100843, April 6, 2016), 143 So. 3d 870 (Ala. Civ. App. 2012) (table). Although those other cases are similar to the present case in that they involved foreclosures on mortgages and claims for ejectment, they are not identical to the present case and they involved different facts. Nonetheless, it is apparent that the Turners' attorney, despite being afforded two seven-day extensions from this court to file the Turners' appellate brief, utilized arguments and facts raised in appellate briefs in those and other cases, changed dates and the names of the parties, and inserted those arguments and facts in the Turners' brief in the present appeal as a basis for reversing the trial court's summary judgment even though those facts and arguments are not supported by the record.

"Arguments that are not appropriately tailored to each individual client and the facts of each case not only do the client a grave disservice, but they also undermine the principle of judicial economy." United States v. Coleman, 610 Fed.Appx. 347, 356 n.3 (5th Cir. 2015) (not selected for publication in the Federal Reporter ). Furthermore, "[t]his Court cannot consider arguments raised for the first time on appeal; rather, our review is restricted to the evidence and arguments considered by the trial court." Andrews v. Merritt Oil Co., 612 So. 2d 409, 410 (Ala. 1992). " 'It is a fundamental rule of appellate procedure that, regardless of [the] merits of [the] appellant's contentions, appellate courts will not review questions not decided by the trial court.' " Etherton v. City of Homewood, 700 So. 2d 1374, 1377-78 (Ala. 1997) (quoting Bevill v. Owen, 364 So. 2d 1201, 1203 (Ala. 1979) ). As a result, these arguments cannot be considered on appeal. Additionally, as to the Turners' attempt to challenge aspects of Croft's affidavit, the Turners did not file a motion to strike the affidavit in the trial court. Because the Turners "did not move to strike the affidavit at issue, this court will not hold the trial court in error for considering that affidavit in determining whether to enter a summary judgment." Inline Elec. Supply Co. v. Eskildsen, 198 So. 3d 524, 528 (Ala. Civ. App. 2015). Accordingly, we address below only those arguments that, according to the record, the Turners raised before the trial court.

II. Breach of the Mortgage

The Turners contend that they produced substantial evidence in opposition to Wells Fargo's summary-judgment motion showing that they were not in breach of the mortgage and that, instead, Wells Fargo's actions caused them to default, which, in turn, led to the foreclosure. The Turners point to the evidence they submitted in opposition to the summary-judgment motion showing that they tendered their monthly mortgage payments, along with payment of a $100 late fee, to Carrington in October 2011 and November 2011, and that they attempted to make mortgage payments in subsequent months. The Turners assert that this evidence shows that they were not in breach of the mortgage and that, instead, Carrington's failure to accept the payments resulted in an improper and wrongful foreclosure.

The Turners, however, do not dispute the evidence presented by Wells Fargo that they tendered three checks to Carrington containing insufficient funds between August 1, 2011, and October 5, 2011. The Turners do not contest that they failed to include in their October 27, 2011, check to Carrington the $90 charge for tendering three checks with insufficient funds. The Turners do not dispute that Carrington returned the October 27, 2011, check to the Turners because they failed to include payment of the $90 insufficient-check charges. Furthermore, the Turners do not contest that they tendered only a single month's payment in the November 28, 2011, check and that that check failed to include funds to satisfy the October payment, the late fees, and funds to cover the $90 insufficient-checks charges. The Turners do not claim that the late fees or insufficient-check charges were not permitted under the terms of the note.

Section 1 of the mortgage authorized Wells Fargo, through Carrington as the loan servicer, to require "that any or all subsequent payments due under the note and [the mortgage] be made ... [by] certified check ...." after a check was returned unpaid. On November 30, 2011, Carrington sent the Turners a notice of intent to accelerate the amount due under the note and stated that the Turners could cure the default by tendering certified funds in the amount of $4,545.36 (representing two monthly payments of $2,127.68, plus three $30 insufficient-check charges, and two $100 late charges). The Turners do not dispute that they failed to tender certified funds to Carrington to cure the default in the amount stated in the November 30, 2011, notice. Thus, the evidence establishes that the Turners failed to pay the entire amount due in the October 27, 2011, check, that the Turners were in default on the mortgage, that the Turners failed to cure the default with paying the debt by certified funds, and that Wells Fargo did not breach the mortgage by enforcing the provisions of Section 1. Accordingly, the trial court did not err in entering the summary judgment for Wells Fargo on the basis that Wells Fargo breached the mortgage.

III. Proper Notice of the Foreclosure

The Turners contend that Wells Fargo failed to give the Turners proper notice of foreclosure that is required pursuant to Section 22 of the mortgage, which states, in part, that such notice shall "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." The Turners contend that the November 30, 2011, notice of intent to accelerate sent by Carrington failed to include this explicit language. They contend that, because they did not receive proper notice required by the mortgage, Wells Fargo was precluded from foreclosing on the property and that the foreclosure sale is void.

The November 30, 2011, notice stated, in pertinent part, that "[y]ou 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."

"Substantial performance of a contract does not contemplate exact performance of every detail but performance of all important parts." Mac Pon Co. v. Vinsant Painting & Decorating Co., 423 So. 2d 216, 218 (Ala. 1982). The November 30, 2011, notice substantially complied with the notice requirement of Section 22, and, therefore, Wells Fargo, through Carrington, substantially complied with the requirements of that section of the mortgage by sending the notice that included the aforementioned language. Therefore, there was no genuine issue of material fact before the trial court to support the Turners' claim that the notice was defective.

IV. Real Party in Interest

The Turners also contend that Wells Fargo did not produce substantial evidence in support of its motion for a summary judgment showing that it was a holder of the note and the mortgage at the time of the first two publications of the notice of the foreclosure sale in the Alabama Messenger; thus, the Turners contend, a genuine issue of material fact exists as to whether Wells Fargo had authority to foreclose on the property.

In Gray v. Federal National Mortgage Ass'n, 143 So. 3d 825 (Ala. Civ. App. 2014), this court addressed a nearly identical issue, stating:

"In Harris v. Deutsche Bank National Trust Co., 141 So. 3d 482, 491 (Ala. 2013), our supreme court reasoned:
" 'The Harrises also argue that the power of sale described in the mortgage was given by the Harrises as part of the security for the repayment of the debt evidenced by the note and can be "executed" only by the trustee if it was the party entitled to the money thus secured. They cite § 35-10-12, Ala. Code 1975, which states that the power to sell lands given in a mortgage "is part of the security and may be executed by any person, or the personal representative of any person who, by assignment or otherwise, becomes entitled to the money thus secured." In Carpenter v. First National Bank, 236 Ala. 213, 181 So. 239 (1938), this Court applied the predecessor to § 35-10-12, stating:
" ' "A power of sale in a mortgage of real estate is a part of the security, and passes to any one who by assignment or otherwise becomes entitled to the money secured. Code 1923, § 9010.
" ' "But an agent of such holder to whom the mortgage is delivered merely for the purpose of foreclosure, having no ownership of the debt, is not authorized to foreclose in his own name, and execute a deed in his name to the purchaser. Ownership of the debt does not pass to such agent merely because the note is indorsed in blank. Such foreclosure is ineffective, and a court of equity may take jurisdiction for the purpose of foreclosure.'
" ' 236 Ala. at 215, 181 So. at 240 (emphasis added). The foreclosure deed in this case was executed by the trustee in its own name, not on behalf of the lender, SouthStar, or any other party to which SouthStar may have assigned the note. The deed was effective to transfer title and to foreclose the rights of the mortgagor, therefore, only if the trustee, in its own name, was entitled to receive the money secured by the note at the time it executed and delivered that deed.
" 'The parties agree in their briefs, however, and we accept for purposes of this case, that the mortgage given MERS "solely as a nominee for Lender and Lender's successors and assigns" did not entitle MERS to the money secured by the mortgage. Accordingly, the subsequent assignment of that mortgage by MERS to the trustee did not accomplish an assignment of that right to the trustee. The trustee in fact concedes that summary judgment was inappropriate in this case and that on the state of the current record there is a genuine issue of material fact as to whether the trustee received an assignment of the note so as to have entitled it to execute the power of sale in its own name. (It asserts that, if this case is returned to the trial court, it will introduce "conclusive evidence" of its receipt as early as 2005 of the debt evidenced by the original note signed by the Harrises.) The summary judgment entered by the trial court therefore is due to be vacated and the case remanded for a determination as to whether the trustee received an assignment of the right to receive the money secured by the note, and thus the power to execute the corresponding power of sale in its own name, before executing and delivering the foreclosure deed.'
"(Footnote omitted.) See also Ex parte BAC Home Loans Servicing, LP, 159 So. 3d 31, 35-36 (Ala. 2013) (holding that the right of the foreclosing entity to conduct a foreclosure sale must be proven in order to show that the buyer at a foreclosure sale has superior legal title and a cause of action to eject the debtor). Further, in Coleman v. BAC Servicing, 104 So. 3d 195 (Ala. Civ. App. 2012), this court explained:
" 'Alabama law specifically contemplates that there can be a separation. See § 35-10-12 and Harton [v. Little, 176 Ala. 267, 57 So. 851 (1911) ]. The Restatement (Third) of Property: Mortgages takes the position that a note and mortgage can be separated but that "[t]he mortgage becomes useless in the hands of one who does not also hold the obligation because only the holder of the obligation can foreclose." Restatement (Third) of Property: Mortgages § 5.4, Reporter's Note-Introduction, cmt. a at 386. The Restatement explains: " 'The note is the cow and the mortgage the tail. The cow can survive without a tail, but the tail cannot survive without the cow.' " Id. at 387 (quoting Best Fertilizers of Arizona, Inc. v. Burns, 117 Ariz. 178, 179, 571 P.2d 675, 676 (Ct. App.), reversed on other grounds, 116 Ariz. 492, 570 P.2d 179 (1977) ).'
" 104 So. 3d at 205."

143 So. 3d at 830-31.

"An assignee of a debt secured by a mortgage may execute the right to foreclose. § 35-10-1 and § 35-10-12, Ala. Code 1975. ' "The clear test of the right of an assignee of the mortgage to exercise the power of sale under [ § 35-10-1, Ala. Code 1975,] is that such assignee is entitled to receive the money secured by the mortgage." ' Ex parte GMAC Mor[t]g., LLC, 176 So. 3d 845, 848 (Ala. 2013) (quoting Kelly v. Carmichael, 217 Ala. 534, 537, 117 So. 67, 70 (1928) ). ...
"....
" 'In Alabama, a note secured by a mortgage is a negotiable instrument. Thomas v. Wells Fargo Bank, N.A., 116 So. 3d 226, 233 (Ala. Civ. App. 2012). A holder of a note secured by a mortgage is entitled to enforce the terms of the note. Perry v. Federal Nat'l Mortg. Ass'n, 100 So. 3d [1090,] 1094 [ (Ala. Civ. App. 2012) ].'
" Sturdivant v. BAC Home Loan Servicing, LP, 159 So. 3d 47, 55 (Ala. Civ. App. 2013) (footnote omitted); see § 7-3-301, Ala. Code 1975 (providing that a holder is a 'person entitled to enforce' the negotiable instrument). The negotiable instrument must have been either issued or negotiated to a person or an entity in order for the transferee to become a holder. § 7-3-302, Ala. Code 1975; Stone v. Goldberg & Lewis, 6 Ala. App. 249, 259, 60 So. 744, 748 (1912) (opinion on rehearing) ('[T]he instrument must be "negotiated" to the holder in order for the holder to be a "holder in due course." '). A negotiation requires a transfer of possession and an indorsement by the holder if the instrument is payable to an identified person or transfer by possession only if the instrument is payable to bearer. § 7-3-201(b), Ala. Code 1975."

Smalls v. Wells Fargo Bank, N.A., 180 So. 3d 910, 915-16 (Ala. Civ. App. 2015).

The evidence shows that the note was indorsed in blank by a representative of New Century. Croft testified that the note and the mortgage were transferred to Wells Fargo on July 1, 2007. On February 1, 2012, before the publication of notice of foreclosure and approximately one month before the foreclosure sale, New Century executed an assignment of the mortgage and the note to Wells Fargo. The assignment was recorded in the probate court on February 15, 2012. The evidence, therefore, establishes that Wells Fargo was a holder of the note secured by the mortgage. Accordingly, Wells Fargo was entitled to enforce the terms of the note and mortgage and to foreclose on the property. We therefore conclude that Wells Fargo presented substantial evidence showing that it was a real party in interest and that Wells Fargo possessed the power to sell the property in foreclosure.

V. Wells Fargo's Renewed Motion for a Summary Judgment

The Turners contend that the trial court entered a summary judgment in favor of Wells Fargo without allowing them an opportunity to respond to Wells Fargo's renewed summary-judgment motion and without setting the renewed motion for a hearing. Rule 56(c)(2), Ala. R. Civ. P., provides:

"The motion for summary judgment, with all supporting materials, including any briefs, shall be served at least ten (10) days before the time fixed for the hearing, except that a court may conduct a hearing on less than ten (10) days' notice with the consent of the parties concerned. Subject to subparagraph (f) of this rule, any statement or affidavit in opposition shall be served at least two (2) days prior to the hearing."

The Turners contend that the renewed motion filed by Wells Fargo on January 20, 2015, contained evidentiary submissions that had not been submitted with the original motion. The Turners contend that, under Rule 56, the trial court should have provided them with an opportunity to refute the additional evidence.

A review of the renewed motion filed by Wells Fargo, however, shows that Wells Fargo merely refiled the same summary-judgment motion and brief in support thereof that it had filed on August 16, 2013. Furthermore, the renewed motion was filed on January 20, 2015, and the judgment was not entered until March 18, 2015. We note also that Wells Fargo refiled its replies to the Turners' 2013 responses to its original summary-judgment motion without making any substantive changes in the argument or presenting any additional evidentiary materials.

Before Wells Fargo filed its renewed motion, the Turners already had filed responses to the summary-judgment motion and the trial court had held a hearing on September 6, 2013, at which counsel for both parties appeared. Because the renewed motion did not contain any new arguments or additional evidentiary submissions that were not part of the initial summary-judgment motion, the trial court did not err by failing to hold an additional hearing following the filing of the renewed motion.

Accordingly, we will not reverse the trial court on the basis that it did not provide the Turners with an opportunity to respond to Wells Fargo's renewed summary-judgment motion.

Conclusion

For the foregoing reasons, the summary judgment entered by the trial court in favor of Wells Fargo is affirmed.

AFFIRMED.

Thompson, P.J., and Thomas and Moore, JJ., concur.

Pittman, J., recuses himself.

      The record shows that only Trenton Turner submitted an affidavit in opposition to Wells Fargo's summary-judgment motion.

      In some instances in the Turners' appellate brief, not even the names of the parties and the specific dates were changed from briefs filed in the other appeals.

      Also notable is that the table of authorities in the Turners' appellate brief is identical to the table of authorities in the appellate brief filed in Walker, supra, including the references to the page numbers. Additionally, some of the cases in the table of authorities in the brief in the present case are not actually cited in the brief, and some of the cases cited in the argument section of the brief are not listed in the table of authorities. Furthermore, in some parts of the Turners' appellate brief, the Turners provide incorrect page numbers for citations to the record. For instance, in the argument section of the brief, the Turners reference page numbers that were used in the brief in Walker and that do not correlate to the proper location of the document cited in the record in the present case.


source: Caselaw Access Project

author: PARKER, Justice.

license: Public Domain

text:
    EX PARTE Trenton TURNER, Jr., and Donna Turner
    (In re: 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)
    1160212
    Supreme Court of Alabama.
    September 1, 2017
    Kenneth James Lay of Hood & Lay LLC, Birmingham, for petitioners.
    S. Keith Eady of RCO Legal, P.S., Atlanta, Georgia, for respondent.
    Michael Forton, and Joseph Abrams, Legal Services Alabama, Huntsville; and Bradford W. Botes, Reese & Shinn, P.C., Birmingham, Counsel for the National Consumer Law Center, for amici curiae Legal Services Alabama and the National Consumer Law Center, in support of the petitioners.
   PARKER, Justice.

Trenton Turner, Jr., and Donna Turner petitioned this Court for a writ of certiorari to review the Court of Civil Appeals' decision affirming a judgment entered by the Jefferson Circuit 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 the Turners from real property located in Jefferson County ("the property"). See Turner v. Wells Fargo Bank, N.A., 254 So.3d 194 (Ala. Civ. App. 2016). We granted certiorari review to consider whether the Court of Civil Appeals' decision conflicts with this Court's decision in Jackson v. Wells Fargo Bank, N.A., 90 So.3d 168 (Ala. 2012). See Rule 39(a)(1)(D), Ala. R. App. P. For the following reasons, we conclude that the Court of Civil Appeals' decision in this case does conflict with Jackson, and we reverse its judgment.

Facts and Procedural History

The Court of Civil Appeals set forth the relevant facts and procedural history in Turner, supra, as follows:

"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 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.... 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."

Turner, 254 So.3d at 197.

There was subsequently a dispute concerning the Turners' obligation under the mortgage, and Wells Fargo sought to foreclose on the property. The Court of Civil Appeals set forth the remaining pertinent facts:

"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 ... 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.'
"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."

Turner, 254 So.3d at 197-98. Ultimately, the trial court entered a summary judgment in favor of Wells Fargo, and the Turners appealed.

Standard of Review

"Questions regarding the legal effect of unambiguous contractual provisions are questions of law, which are reviewed de novo. Bon Harbor, LLC v. United Bank, 53 So.3d 82, 91 (Ala. 2010)." Jackson v. Wells Fargo Bank, N.A., 90 So.3d at 171.

Discussion

The Turners argue that the Court of Civil Appeals' decision is in conflict with Jackson. The particular portion of the Court of Civil Appeals' decision that the Turners argue conflicts with Jackson states:

"The Turners contend that Wells Fargo failed to give the Turners proper notice of foreclosure that is required pursuant to Section 22 of the mortgage, which states, in part, that such notice shall '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.' The Turners contend that the November 30, 2011, notice of intent to accelerate sent by Carrington failed to include this explicit language. They contend that, because they did not receive proper notice required by the mortgage, Wells Fargo was precluded from foreclosing on the property and that the foreclosure sale is void.
"The November 30, 2011, notice stated, in pertinent part, that '[y]ou 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.'
" 'Substantial performance of a contract does not contemplate exact performance of every detail but performance of all important parts.' Mac Pon Co. v. Vinsant Painting & Decorating Co., 423 So.2d 216, 218 (Ala. 1982). The November 30, 2011, notice substantially complied with the notice requirement of Section 22, and, therefore, Wells Fargo, through Carrington, substantially complied with the requirements of that section of the mortgage by sending the notice that included the aforementioned language. Therefore, there was no genuine issue of material fact before the trial court to support the Turners' claim that the notice was defective."

Turner, 254 So.3d at 203.

The Turners argue that the notice they received did not explicitly inform them of their right to bring a court action challenging the foreclosure. There is no question that the mortgage required Wells Fargo to notify the Turners of their right to bring a legal action; the mortgage states that Wells Fargo "shall further inform the Borrower of ... 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." The Court of Civil Appeals determined that Wells Fargo's notice to the Turners, which undisputedly did not inform the Turners of this right, nevertheless substantially complied with the notice requirement set forth in the mortgage. The Turners argue that Jackson requires strict compliance, not merely substantial compliance. We agree.

In Jackson, the mortgagors "refinanced an existing loan on their home .... In so doing, they gave a mortgage on the property, which was subsequently assigned to the bank." 90 So.3d at 169. The mortgage in Jackson included the same notice requirement as in the mortgage at issue in this case. The Jackson Court set forth the notice requirement, with the language relevant to the issue on appeal in that case emphasized, as follows:

" '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 by this Security Instrument and sale of the Property. The notice shall further inform 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....'
"(Emphasis added.)"

90 So.3d at 169 (final emphasis added).

The mortgagors eventually defaulted on the mortgage by failing to make the required payments. The mortgagors were sent the following notice, which was entitled "Notice of acceleration of promissory note and mortgage":

"'YOU ARE HEREBY NOTIFIED that, pursuant to the terms of the Promissory Note and Mortgage dated the 11th day of February, 2005, to Mortgage Electronic Registration Systems, Inc. acting solely as nominee for The Mortgage Outlet, Inc., said mortgage having subsequently been transferred and assigned to [the trustee] and by virtue of default in the terms of said Note and Mortgage, [the trustee] hereby accelerates to maturity the entire remaining unpaid balance of the debt, including attorney's fees, accrued interest, and other lawful charges, and the amount due and payable as of this date is $37,040.27. This payoff amount may change on a daily basis. If you wish to pay off your mortgage, please call our office to obtain the updated figure.
"'We are at this time commencing foreclosure under the terms of the Mortgage, and enclosed is a copy of the foreclosure notice to be published in the Mobile Press-Register. Please note that the foreclosure sale is scheduled for August 15, 2008. If you wish to avoid losing the subject property, you must contact us immediately; otherwise, the foreclosure sale will take place as set forth in the publication notice, and we will take legal action to obtain possession of the subject property....'
"(Capitalization in original; emphasis added.) The foreclosure sale occurred on August 15, 2008, as advertised...."

90 So.3d at 170.

The mortgagors subsequently sued the bank, alleging that the bank breached the mortgage by failing to give the mortgagors the notice they were due under the terms of the mortgage. The mortgagors argued that the bank was required to give them notice of the bank's intent to accelerate the debt due under the mortgage, but that the notice the mortgagors received instead notified them that the debt had already been accelerated. 90 So.3d at 172. This Court agreed with the mortgagors. In so holding, this Court relied upon the following authorities:

" Dewberry v. Bank of Standing Rock, 227 Ala. 484, 492, 150 So. 463, 469 (1933) ('[A] sale under the power [of sale] in a mortgage or trust deed must be conducted in strict compliance with the terms of the power.'); Bank of New Brockton v. Dunnavant, 204 Ala. 636, 638, 87 So. 105, 107 (1920) (' "In a court of law a power of sale is merely part of a legal contract to be executed according to its terms." ' (quoting Harmon v. Dothan Nat'l Bank, 186 Ala. 360, 369, 64 So. 621, 624 (1914) )); Fairfax Cnty. Redev. & Hous. Auth. v. Riekse, 281 Va. 441, 446, 707 S.E.2d 826, 829 (2011) ('[T]he powers of the person foreclosing under a mortgage ... are limited and defined by the instrument under which he acts, and he has only such authority as is thus expressly conferred upon him, together with incidental and implied powers that are necessarily included therein.... Accordingly, the ... mortgagee must see that in all material matters he keeps within his powers, and must execute the trust in strict compliance therewith.')."

90 So.3d at 173. This Court concluded that the bank's failure to give the mortgagors the notice they were due under the terms of the mortgage resulted "in failure of the acceleration, and, consequently, failure of the foreclosure sale." Id.

In Jackson, as evidenced by its reliance on Dewberry v. Bank of Standing Rock, 227 Ala. 484, 150 So. 463 (1933), Bank of New Brockton v. Dunnavant, 204 Ala. 636, 87 So. 105 (1920), and Fairfax County Redevelopment & Housing Authority v. Riekse, 281 Va. 441, 707 S.E.2d 826 (2011), this Court held that a party seeking to institute foreclosure proceedings must do so in strict compliance with the terms of the mortgage. In the present case, Wells Fargo did provide the Turners with notice of its intent to accelerate the debt. However, although required to do so under the terms of the mortgage, Wells Fargo failed to notify the Turners of their right to bring a court action challenging the foreclosure.

Wells Fargo argues that Jackson has no application in the present case because, it says, Jackson is distinguishable. Wells Fargo argues that Jackson should be limited to situations where no notice is given. For instance, in Jackson, the mortgagors were given no notice of the bank's intent to accelerate before the bank purported to accelerate the debt owed by the mortgagors. Wells Fargo argues that the present case is different because the Turners were given notice of the intent to accelerate, just not notice of all of their rights. We fail to see a distinction. Although the Turners were given notice of certain of their rights under the terms of the mortgage, they were given no notice of their right to bring a court action directly attacking the foreclosure. Jackson applies in this case and requires strict compliance.

The Court of Civil Appeals held that Wells Fargo "substantially complied with the notice requirement." Turner, 254 So.3d at 203. The only authority relied upon by the Court of Civil Appeals in so concluding was this Court's decision in Mac Pon Co. v. Vinsant Painting & Decorating Co., 423 So.2d 216 (Ala. 1982). Mac Pon is not a case concerning a mortgage contract but a contract for the construction of a building. The question in Mac Pon was whether the contractor had substantially performed its duty under the contract to "apply one coat of clear silicone sealer and one coat of latex paint." 423 So.2d at 218. Mac Pon does not concern the issue presented in this case, which is whether a mortgagee is required to comply strictly with the terms of the mortgage in exercising its power to sell.

The Turners have demonstrated that the above-quoted portion of the Court of Civil Appeals' decision is in conflict with Jackson. Wells Fargo failed to provide the Turners with proper notice under the mortgage. Accordingly, because Wells Fargo failed to comply with the requirements of the mortgage, the mortgage sale conducted on February 27, 2012, failed. See Jackson, 90 So.3d at 173 (holding that a foreclosure sale failed to pass title to the purchaser because the mortgagee failed to strictly comply with the terms of the mortgage in giving notice to the defaulting mortgagor).

Conclusion

Based on the foregoing, we reverse the Court of Civil Appeals' judgment and remand the cause for further proceedings consistent with this opinion.

REVERSED AND REMANDED.

Stuart, C.J., and Bolin, Shaw, Main, Wise, and Bryan, JJ., concur.

Murdock, J., concurs in the result.

Sellers, J., dissents.

I respectfully dissent. This Court granted Trenton Turner, Jr., and Donna Turner's petition for a writ of certiorari in order to consider their assertion that the Court of Civil Appeals' decision conflicts with Jackson v. Wells Fargo Bank, N.A., 90 So.3d 168 (Ala. 2012). In Jackson, after the mortgagors had defaulted on their obligation to make payments on their mortgage loan, a representative of the mortgagee sent the mortgagors a letter notifying them that the mortgage debt had been accelerated. The mortgage agreement, however, provided that, before the mortgage debt could be accelerated, the mortgagee was required to provide the mortgagors with notice that they were in default, that the default could result in acceleration of the debt, and that the mortgagors had at least 30 days to cure the default. Accordingly, the mortgagors sued the mortgagee and its representative, alleging breach of the mortgage agreement. The trial court entered a summary judgment in favor of the defendants.

On appeal, this Court pointed to an opinion of the Supreme Court of Texas for the following proposition:

" 'Notice of intent to accelerate is necessary in order to provide the debtor an opportunity to cure his default prior to harsh consequences of acceleration and foreclosure. Proper notice that the debt has been accelerated, in the absence of a contrary agreement or waiver, cuts off the debtor's right to cure his default and gives notice that the entire debt is due and payable. See Faulk v. Futch, 147 Tex. 253, 214 S.W.2d 614 (1948). Notice that the debt has been accelerated, however, is ineffective unless preceded by proper notice of intent to accelerate. Allen Sales & Servicenter, Inc. v. Ryan, 525 S.W.2d 863 (Tex. 1975).' "

90 So.3d at 172 (quoting Ogden v. Gibraltar Sav. Ass'n, 640 S.W.2d 232, 233-34 (Tex. 1982) (emphasis omitted)). The Court indicated that notice of the mortgagee's intent to accelerate the debt and of the mortgagors' opportunity to cure the default was a condition precedent to the mortgagee's ability to accelerate the debt:

"[The mortgage] required the bank to give the [mortgagors] a notice-before acceleration-that it was considering an acceleration, upon the failure of certain conditions, in 'not less than 30 days' following the date of the notice. In other words, the debt could not be accelerated until at least 30 days had passed and the [mortgagors] were still in default. Under the language of this mortgage, without proper notice of intent to accelerate, acceleration fails and, consequently, so does the foreclosure sale."

Jackson, 90 So.3d at 173. Thus, because the mortgagors in Jackson were given no notice that the mortgagee intended to accelerate the debt and that they had an opportunity to cure their default, the debt could not be accelerated, and the foreclosure was invalid. The majority in the present case acknowledges that the Turners were given notice of Wells Fargo Bank's intent to accelerate the debt and of their opportunity to cure their default. In my view, that circumstance distinguishes this case from Jackson.

It is my further view that the Court of Civil Appeals correctly rejected the Turners' argument that Wells Fargo's failure to provide the Turners with the verbatim language, set out in the mortgage, regarding their right to bring an action in court rendered the foreclosure invalid. I believe that the Court of Civil Appeals properly relied on law regarding substantial compliance with contractual provisions. See Townsend v. Federal Nat'l Mortg. Ass'n, 923 F.Supp.2d 828, 835-36 (W.D. Va. 2013) (considering an identical provision in a deed of trust and ruling that language in a notice informing mortgagors that they had " 'the right to argue that [they] did keep [their] promises and agreements under the [mortgage documents], and to present any other defenses that [they] may have,' " but omitting language regarding the right to " 'bring a court action,' " did not render a nonjudicial foreclosure invalid, stating that "specific language used to convey to borrowers what rights they have is not material to the essential purposes of a deed of trust").

In my opinion, the correspondence to the Turners put them on notice of their responsibility to cure their default and that, if they did not, the debt would be accelerated and the mortgage foreclosed upon. I would affirm the judgment of the Court of Civil Appeals.

      Another instructive case from a nonjudicial-foreclosure jurisdiction is Pinti v. Emigrant Mortgage Co., 472 Mass. 226, 33 N.E.3d 1213 (2015). In Pinti, the Supreme Judicial Court of Massachusetts held that a notice provision in a mortgage (nearly identical to the one at issue in this case) required strict compliance as a necessary component of the power of sale in the mortgage. The court explained that the improper notice, which informed the defaulting mortgagors only of their right " 'to assert in any lawsuit for foreclosure and sale the nonexistence of a default or any other defense [they] may have to acceleration and foreclosure and sale,' " did not strictly comply with the terms of the mortgage because the notice did not inform the mortgagors of their right and need to initiate legal action to challenge the validity of the foreclosure. 472 Mass. at 237, 33 N.E.3d at 1222-23. This lack of notice is significant in a nonjudicial-foreclosure state, such as Alabama, because, as explained by the Pinti court, defaulting mortgagors
      "could be misled into thinking that they had no need to initiate a preforeclosure action against the mortgagee but could wait to advance a challenge or defense to foreclosure as a response to a lawsuit initiated by the mortgagee-even though, as a practical matter, such a lawsuit would never be brought."
      472 Mass. at 237, 33 N.E.3d at 1222. The court held that the subsequent foreclosure sale was void because the notice failed to strictly comply with the terms of the mortgage. 472 Mass. at 240-43, 33 N.E.3d at 1224-26.
      Under a nearly identical mortgage, the Supreme Judicial Court of Massachusetts determined that a notice informing the defaulting mortgagors simply of their right to assert the nonexistence of a default in any lawsuit concerning the foreclosure was not sufficient to satisfy the terms of the mortgage but that the notice required that the defaulting mortgagors be informed of their right and need to initiate legal action to challenge the validity of the foreclosure. In the present case, the Turners were not even informed of their right to bring a court action to challenge the validity of the foreclosure.

      The Court of Civil Appeals explained the importance of a party receiving notice of his right to challenge a foreclosure by court action in Campbell v. Bank of America, N.A., 141 So.3d 492, 494 (Ala. Civ. App. 2012), as follows:
      "An ejectment action following a nonjudicial foreclosure, however, is not a 'foreclosure action,' and a defense in such an action asserting errors in the foreclosure process is a collateral attack on a foreclosure. See Dewberry v. Bank of Standing Rock, 227 Ala. 484, 493, 150 So. 463, 470 (1933) (characterizing the action in Jones v. Hagler, 95 Ala. 529, 10 So. 345 (1891), in which the plaintiff sought possession of certain property he had purchased from a trustee, who had sold the property pursuant to a power of sale in a deed of trust, and in which the defendant had asserted irregularities in the sale, as 'a statutory action in the nature of ejectment-an indirect or collateral attack upon the foreclosure of real and personal property sold by a trustee, under the power [of sale in a deed of trust]' (some emphasis in original; some emphasis added)). Accord Pinkert v. Lamb, 215 Ark. 879, 883, 224 S.W.2d 15, 17 (1949) (stating that an ejectment action is a 'collateral attack by appellees on the ... foreclosure decree and sale ..., and the burden [is] on them to prove such defects therein as would render the sale and decree void'); Dime Sav. Bank, FSB v. Greene, 2002 Pa. Super. 392, 813 A.2d 893, 895 (2002) (stating that '[a]n ejectment action is a proceeding collateral to that under which the land was sold' and that, 'where it is claimed that [an] underlying default judgment [in a judicial-foreclosure action] is merely voidable, that claim will not be entertained because such a judgment can not be reached collaterally').
      "In a direct attack on a foreclosure-that is, an action seeking declaratory and injunctive relief to halt the foreclosure sale before it occurs, see, e.g., Ferguson v. Commercial Bank, 578 So.2d 1234 (Ala. 1991) ; Bank of Red Bay v. King, 482 So.2d 274 (Ala. 1985) ; and Woods v. SunTrust Bank, 81 So.3d 357 (Ala. Civ. App. 2011), or an action to set aside the sale after it has occurred, see, e.g., Beal Bank, SSB v. Schilleci, 896 So.2d 395 (Ala. 2004) ; Kelly v. Carmichael, 217 Ala. 534, 536, 117 So. 67, 69 (1928) ; and Browning v. Palmer, 4 So.3d 524 (Ala. Civ. App. 2008) -any circumstance in the foreclosure process that would render the foreclosure sale void or voidable may be asserted. In a proceeding involving a collateral attack on a foreclosure, however, only those circumstances that would render the foreclosure sale void may be raised as an affirmative defense."

      We note that Wells Fargo cites several cases setting forth general contract law. Like Mac Pon, however, none of those cases concerns the issue presented in this case. Jackson is controlling.


text:
    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.
    October 13, 2017
    On Remand from the Alabama Supreme Court
   DONALDSON, Judge.

The Alabama Supreme Court has reversed this court's decision affirming the summary judgment of the Jefferson Circuit Court in Turner v. Wells Fargo Bank, N.A., 254 So.3d 194 (Ala. Civ. App. 2016), and has remanded the cause to this court. Ex parte Turner, 254 So.3d 207 (Ala. 2017). In compliance with the supreme court's opinion, we reverse the summary judgment and remand the cause to the trial court for proceedings consistent with the opinion of the Alabama Supreme Court.

REVERSED AND REMANDED.

Thompson, P.J., and Thomas and Moore, JJ., concur.

Pittman, J., recuses himself.


author: MOORE, Judge.

text:
    Robert DIERCKS and Carin Diercks v. Phillip D. ODOM, et al.
    2151011
    Court of Civil Appeals of Alabama.
    April 7, 2017 Certiorari Granted September 1, 2017
    Reversed by Alabama Supreme Court 1160620
    David F. Steele, Jr., of Steel Law, LLC, Monroeville, for appellants.
    William R. Strokes, Jr., of Strokes & Strokes, P.C., Brewton, for appellees.
   MOORE, Judge.

Robert Diercks and Carin Diercks appeal from a judgment entered by the Escambia Circuit Court ("the trial court") determining that they had breached the restrictive covenants applicable to residential lots located in the Second Alexander Heights Subdivision ("the subdivision") and enjoining the Dierckses "from further or additional construction of [a certain accessory building] located on Lot 58" and "[requiring] the [Dierckses] to remove the [building] from Lot 58." We reverse the trial court's judgment.

Procedural History

On February 18, 2015, certain owners of real property in the subdivision, specifically, Phillip D. Odom, Lynda Joy Odom, James Steven White, Gregory Wayne White, Kimberly Gibson White, Jason R. Castleberry, and Renee P. Ryan ("the plaintiffs"), filed a complaint against the Dierckses, alleging that the Dierckses had begun construction on an accessory building ("the structure") on lot 58 in the subdivision that was in violation of the restrictive covenants applicable to the subdivision. The plaintiffs requested the trial court to order the Dierckses to stop construction of the structure and to return lot 58 to its previous condition. On May 7, 2015, the Dierckses answered the complaint.

On February 4, 2016, the plaintiffs filed a motion for a summary judgment. On April 29, 2016, the Dierckses responded to the summary-judgment motion. The trial court entered a summary judgment in favor of the plaintiffs on May 6, 2016. On June 5, 2016, the Dierckses filed a postjudgment motion; that motion was denied on July 26, 2016. On September 6, 2016, the Dierckses filed their notice of appeal.

Facts

The trial court set out the undisputed facts in its judgment as follows:

"1. The parties to this action are owners of real property located within the [subdivision].
"2. [The restrictive covenants] were adopted with reference to the real property located within the subdivision and were recorded on April 3, 1986, in Deed Record 452, page 574, in the office of the Judge of Probate of Escambia County, Alabama.
"3. The [Dierckses] purchased Lot 47 in the subdivision by deed dated December 9, 1993....
"4. The [Dierckses] purchased Lot 58 in the subdivision by deed dated July 15, 2010....
"5. At the time the [Dierckses] purchased Lots 47 and 58 in the subdivision, the [Dierckses] had actual or constructive notice of the [restrictive] covenants.
6. The [Dierckses'] dwelling house in which they reside is located on Lot 47 in the subdivision.
7. Lot 58 had no improvements located thereon at the time the [Dierckses] purchased the lot.
"8. The [Dierckses] commenced construction of [the] structure on Lot 58 in October 2014[,] which the [Dierckses] describe as an accessory building.
"9. The structure which the [Dierckses] started constructing on Lot 58 is the only improvement the [Dierckses] intended to construct on Lot 58 and is the only improvement located on Lot 58 as of the present date.
"10. There is no family dwelling located on Lot 58.
"11. The front of Lot 58 faces onto Brooks Boulevard in the subdivision.
"12. The carport or garage of the structure on Lot 58 opens onto or faces toward the front of Lot 58.
"13. The structure on Lot 58 when completed would not contain a minimum of 1,700 square feet of living space exclusive of a carport or garage and/or open porches attached to the structure.
"14. The zoning ordinances of the City of Brewton, Alabama prohibit detached accessory buildings in excess of 15 feet in height and provide that a detached accessory building shall not be located on a lot by itself.
"15. The structure on Lot 58 exceeds 15 feet in height and is located on a lot by itself.
"16. The front building line of Lot 58 is 78.5 feet in width.
"....
"18. By deed dated May 29, 2014, and recorded at Official Record Book 577, pages 271-274, in the office of the Judge of Probate of Escambia County, Alabama, the [Dierckses] conveyed Lots 47 and 58 in the subdivision to themselves in a combined metes and bounds description, subject to the [restrictive] covenants."

The restrictive covenants provide, in pertinent part:

"That Hines Realty Company, Inc., a corporation, the owner of [the subdivision], as shown by plat of said subdivision recorded in Plat Book 5, Page 153, in the Office of the Judge of Probate of Escambia County, Alabama, do hereby adopt the following [restrictive c]ovenants with reference to the property located in said subdivision.
"1. Land Use and Building Type.
"A. Single family dwellings only and accessory structures customarily incidental to this use.
"....
"C. The carports and garages must not open on or face toward the front of the lot.
"2. Size and Location of Structure.
"A. Dwelling house to contain a minimum of 1,700 square feet of living space exclusive of carport, garage and/or open porches.
"B. House to be located on lot in accordance with zoning regulations of the City of Brewton, Alabama.
"3. Building lot to be a minimum of 100 feet in width at the front building line with the exception of # 17, # 13, and # 27."

The trial court concluded that the Dierckses' conveyance to themselves of lots 47 and 58 did not "avoid the application of the [restrictive] covenants to Lot 58." It further concluded that the structure on lot 58 violated "paragraphs 1.A., 1.C., 2.A., 2.B., and 3 of the [restrictive] covenants."

Standard of Review

" 'We review this case de novo, applying the oft-stated principles governing appellate review of a trial court's grant or denial of a summary judgment motion:
" ' "We apply the same standard of review the trial court used in determining whether the evidence presented to the trial court created a genuine issue of material fact. Once a party moving for a summary judgment establishes that no genuine issue of material fact exists, the burden shifts to the nonmovant to present substantial evidence creating a genuine issue of material fact. 'Substantial evidence' is 'evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.' In reviewing a summary judgment, we view the evidence in the light most favorable to the nonmovant and entertain such reasonable inferences as the jury would have been free to draw." '
" American Liberty Ins. Co. v. AmSouth Bank, 825 So.2d 786, 790 (Ala. 2002) (quoting Nationwide Prop. & Cas. Ins. Co. v. DPF Architects, P.C., 792 So.2d 369, 372 (Ala. 2000) (citations omitted))."

General Motors Corp. v. Kilgore, 853 So.2d 171, 173 (Ala. 2002).

Discussion

On appeal, the Dierckses first argue that the restrictive covenants do not prohibit them from combining two adjacent lots in the subdivision into one lot; they posit that, when the lots are considered as one combined lot, the combined lot is not in violation of the restrictive covenants.

" 'Restrictive covenants are to be construed according to the intent of the parties in the light of the terms of the restriction and surrounding circumstances known to the parties. [ Virgin v. Garrett, 233 Ala. 34, 169 So. 711 (1936) ; Chattahoochie & Gulf Railway Co. v. Pilcher, 163 Ala. 401, 51 So. 11 (1909).]
" 'Restrictions against the free use and enjoyment of property are not favored in law and such restrictions are to be strictly construed. [ Springdale Gayfer's Store Co. v. D.H. Holmes Co., 281 Ala. 267, 201 So.2d 855 (1967) ; Bear v. Bernstein, 251 Ala. 230, 36 So.2d 483 (1948) ; Virgin v. Garrett, supra. ]' "

Marengo Hills, Inc. v. Watson, 368 So.2d 856, 858 (Ala. 1979) (quoting Kennedy v. Henley, 293 Ala. 657, 663, 309 So.2d 435, 439 (1975) ).

Both parties have discussed at length Marengo Hills, the case on which the plaintiffs relied in support of their summary-judgment motion. In Marengo Hills, like in the present case, certain landowners attempted to combine two adjacent lots into one lot; the landowners constructed a residence on one of the lots and thereafter began constructing a 50-foot by 24-foot garage on the second lot. Id. The subdivision developer filed a complaint against the landowners, alleging that the construction of the garage violated restrictive covenants that were applicable to the second lot. Id. Unlike the present case, however, the restrictive covenants at issue in Marengo Hills included a provision stating:

" 'Nothing herein contained shall prevent a purchaser from purchasing two or more adjoining lots for the purpose of constructing a dwelling on the composite area thereof, in which event the entire area shall be treated as one residential building lot for the purpose of these restrictive covenants; provided, however, that after construction of a dwelling on any such composite residential building lot, the owner thereof may not sell any one of the lots as originally laid out, separately from the others, unless the dwelling located on the remaining lot or lots complies in all respects with the provisions of Item 3 hereof [regarding distances between structures and the lot lines].' "

Marengo Hills, 368 So.2d at 857 (emphasis omitted). Our supreme court reasoned that "[t]he purchase of two adjoining lots and the treatment of the entire area as one residential lot is ... expressly sanctioned in Covenant (4), therefore the intent of the parties should be given effect." 368 So.2d at 858.

Marengo Hills is distinguishable from the present case because, in this case, there is no provision in the restrictive covenants authorizing or prohibiting the combining of two lots into one single lot. However, our supreme court, in Hoffman v. Tacon, 293 Ala. 684, 309 So.2d 817 (1975), considered the issue whether a landowner's subdivision of his lot to create two lots violated the restrictive covenants applicable to the original lot. In addressing the issue, our supreme court found it noteworthy that "[t]here is no restriction [in the restrictive covenants] which prohibits specifically the subdivision of a lot." 293 Ala. at 685, 309 So.2d at 818. The supreme court concluded that the trial court in that case had correctly determined that the subdivision of the lot was not prohibited so long as the subdivided lots remained subject to the restrictive covenants. See also Tanglewood Homes Ass'n, Inc. v. Feldman, 436 S.W.3d 48, 67 (Tex. App. 2014) (holding that landowner could combine adjacent lots into one lot when restrictive covenants did not expressly forbid such action).

Relying on our supreme court's reasoning in Hoffman and the general consideration that restrictive covenants must be strictly construed, we conclude that the restrictive covenants at issue in the present case do not prevent the Dierckses from combining their two adjacent lots into one lot, with the combined lot remaining subject to the restrictive covenants. In its judgment, the trial court, primarily by treating lot 58 as a separate lot from lot 47 and by viewing the structure as the lone structure on lot 58, determined that the structure violated the restrictive covenants. However, as we have held, the Dierckses validly combined the lots, and the question for adjudication should have been whether the construction of the structure on the combined lot violated the restrictive covenants. Based on its erroneous belief that the lots remained legally separated for the purposes of the restrictive covenants, the trial court never reached that issue. Thus, we reverse the trial court's summary judgment to the extent it determined that the lots remained legally separate, and we remand the case for the trial court to reconsider its judgment in light of this opinion.

The Dierckses also argue that the trial court erred in determining that the construction of the structure violated covenant 2.B., which provides that the "house [is] to be located on lot in accordance with zoning regulations of the City of Brewton, Alabama." The trial court determined that the structure, which is intended to garage a mobile home owned by the Dierckses, violated covenant 2.B. because a local zoning ordinance prohibits detached accessory buildings from being above 15 feet in height. By its plain language, covenant 2.B. only requires the location of the house on a lot to be in accordance with Brewton's zoning regulations. Covenant 2.B. does not regulate the height of accessory buildings by requiring compliance with local zoning regulations or otherwise. Thus, the trial court erred in concluding that the height of the structure violated covenant 2.B.

Conclusion

Based on the foregoing, we reverse the summary judgment entered by the trial court, and we remand the case for the trial court to conduct further proceedings in accordance with this opinion.

REVERSED AND REMANDED.

Pittman and Donaldson, JJ., concur.

Thompson, P.J., dissents, with writing, which Thomas, J., joins.

This appeal is from a summary judgment the Escambia Circuit Court ("the trial court") entered in favor of certain residents ("the residents") in the Second Alexander Heights Subdivision ("the subdivision") in their civil action against Robert Diercks and Carin Diercks, who also reside in the subdivision. In their action, the residents sought to enforce the "protective covenants," also known as restrictive covenants, of the subdivision and to require the Dierckses to remove what is characterized as a "pole barn/shed" from a second lot the Dierckses had purchased behind the lot on which their residence is located.

We review a summary judgment pursuant to the following standard:

"This Court's review of a summary judgment is de novo. Williams v. State Farm Mut. Auto. Ins. Co., 886 So.2d 72, 74 (Ala. 2003). We apply the same standard of review as the trial court applied. Specifically, we must determine whether the movant has made a prima facie showing that no genuine issue of material fact exists and that the movant is entitled to a judgment as a matter of law. Rule 56(c), Ala. R. Civ. P.; Blue Cross & Blue Shield of Alabama v. Hodurski, 899 So.2d 949, 952-53 (Ala. 2004). In making such a determination, we must review the evidence in the light most favorable to the nonmovant. Wilson v. Brown, 496 So.2d 756, 758 (Ala. 1986). Once the movant makes a prima facie showing that there is no genuine issue of material fact, the burden then shifts to the nonmovant to produce 'substantial evidence' as to the existence of a genuine issue of material fact. Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797-98 (Ala. 1989) ; Ala. Code 1975, § 12-21-12."

Dow v. Alabama Democratic Party, 897 So.2d 1035, 1038-39 (Ala. 2004).

The evidentiary submissions in support of and in opposition to the residents' motion for a summary judgment indicate that the Dierckses reside in a house on lot 47, which faces Robin Drive in the subdivision. More than 16 years after moving into that house, they purchased lot 58, which was vacant. The front of lot 58 faces Brooks Boulevard. The back of lot 58 abuts the back boundary line of lot 47, and it also abuts the back boundary line of lot 48, which is next door to the Dierckses' house. In other words, lot 58 runs from Brooks Boulevard to the back of lots 47 and 48. There is a drainage ditch on the east side of lot 58, causing it to curve into a triangular or wedge shape, so that the front of the lot that abuts Brooks Boulevard is 78.5 feet in width. The map shows that the greater portion of lot 58 lies behind lot 48 rather than behind the Dierckses' lot 47. The Odoms, who are among the residents who brought this action, live on Brooks Boulevard, on lot 57, which is on the west side of lot 58.

The structure to be built on lot 58 is a detached accessory building, described in the Dierckses' application for a zoning variance as a "pole barn/shed" under which they intend to park their motor home. The application also states that the structure will exceed 15 feet in height, which exceeds the maximum height allowed for detached accessory buildings as set forth in the zoning requirements for the City of Brewton. Article IX, Section 9.142, City of Brewton Land Use and Development Ordinance ("the zoning ordinance"). According to the record, the Zoning Board of Adjustment did not grant the Dierckses the height variance they had requested. The Dierckses have appealed that decision. However, the Dierckses did not present any evidence to rebut the facts asserted by the residents.

Upon consideration of the evidence submitted, the trial court determined that there were no genuine issues of material fact and that, as a matter of law, the residents were entitled to the injunctive relief they sought, that is, to have the Dierckses enjoined from going forward with construction of the "pole barn/shed." Among other things, the undisputed evidence indicates that the structure exceeds the 15-foot height limit imposed by the zoning ordinance on detached accessory structures and that the front of the "pole barn/shed" opens onto the front of lot 58, which runs along Brooks Boulevard, in violation of "protective covenant" 1.C. of the subdivision. That covenant provides that "carports and garages must not open on or face toward the front of the lot."

"Restrictive covenants will be recognized and enforced when established by contract, but they are not favored and will be strictly construed. Carpenter v. Davis, 688 So.2d 256, 258 (Ala. 1997). Our Supreme Court has held that
" 'in construing restrictive covenants, all doubts must be resolved against the restriction and in favor of free and unrestricted use of property. However, effect will be given to the manifest intent of the parties when that intent is clear.... Furthermore, restrictive covenants are to be construed according to the intent of the parties in the light of the terms of the restriction and circumstances known to the parties.'

" Hines v. Heisler, 439 So.2d 4, 5-6 (Ala. 1983)." Hipsh v. Graham Creek Estates Owners Ass'n, 927 So.2d 846, 848-49 (Ala. Civ. App. 2005). See also Grove Hill Homeowners' Ass'n v. Rice, 43 So.3d 609, 614 (Ala. Civ. App. 2010).

The restrictive covenants governing the subdivision ensure that houses and detached structures within the subdivision are built in compliance with the zoning ordinance and that the subdivision has a cohesive appearance. The effect of the covenants is to prohibit open garages and carports from being seen from the street and to prevent detached accessory buildings from detracting from the appearance of the neighborhood. The structure the Dierckses intend to build clearly violates at least some of the restrictive covenants at issue.

Because the structure at issue in this case violates the restrictive covenants governing the subdivision, and because the Dierckses presented no evidence to indicate that their structure does not violate those covenants, I believe that the summary judgment was proper. Because I would affirm the judgment of the trial court, I respectfully dissent.

Thomas, J., concurs.

      In their complaint, the plaintiffs alleged only violations of the restrictive covenants. We do not express any opinion on whether the plaintiffs could have also sought independent enforcement of the zoning regulations of the City of Brewton regarding the height of the structure. The record discloses that the City of Brewton notified the Dierckses that the height of the structure violated a city ordinance. The Dierckses sought a variance to permit the construction, which was denied. The Dierckses have appealed that determination. We express no opinion on whether the variance should be permitted. We hold only that the height of the structure does not violate covenant 2.B.