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Lenders defeat claim over foreclosed house

Where the former owner of a house that was sold at foreclosure alleged that the property had an assessed value of $482,800, but was sold for only $87,114, but the record showed there was an unpaid federal tax lien and the homeowner presented no evidence showing the sales price was inadequate, the defendants were granted summary judgment.


Plaintiff alleged that defendants Wilmington Savings Fund Society FSB, Stanwich Mortgage Loan Trust Series 2015-1, Godwin-Jones & Price PC, Thomas E. Elements and Accredited Home Lenders Inc. breached the terms of the note and deed of trust, as well as Virginia law by (1) failing to provide notice of default and notice of foreclosure to plaintiff; (2) improperly appointing Thomas Clements as substitute trustee and (3) instructing Clements to foreclose upon the property without making a reasonable effort to obtain the highest possible sale price.

This matter was initially before the court on defendants’ motion to dismiss. At argument, the court determined that the motion should be converted to a motion for summary judgment to afford additional time for the plaintiff to conduct discovery on the issue of notice. Defendants have now requested entry of summary judgment.


The court agrees with defendants that the certified mail envelopes, in connection with the attached notices of sale and the affidavit by the law firm working on behalf of substitute trustee Clements, demonstrate that notice of sale was given to plaintiff on Aug. 12, 2016; that the U.S. Postal Service attempted delivery twice and that on Sept. 11, 2016, the U.S. Postal Service returned the notices of sale as “unclaimed.”

Accordingly, there is no genuine dispute of material fact that the notices of sale were given to both plaintiff and her ex-husband Troy Carner by certified mail by Aug. 12, 2016—36 days before the foreclosure sale. That certified mailing complied with the terms of the deed of trust as well as then-applicable Virginia law. At most then, plaintiff has contended that she did not actually receive the notice of foreclosure, but the law does not require proof that the homeowner actually received the notice, only that notice be given and the terms of mailing are laid out by statute and deemed sufficient compliance with the notice requirement.

Substitute trustee

Plaintiff’s second argument is that Clements’ appointment as substitute trustee was “invalid.” This argument lacks merit.

The undisputed documentary record establishes that Wilmington was assigned the right to enforce the deed of trust through a recorded chain of assignments attached to the complaint. And Wilmington, through its loan servicer and attorney-in fact Carrington, could lawfully appoint a substitute trustee, which it did.

Plaintiff has not challenged any of these points in opposition to defendants’ motion to dismiss, now converted to a motion for summary judgment. Nor has plaintiff submitted any documents or evidence to the contrary. They compel the conclusion that plaintiffs’ claim lacks merit on the basis that there was an invalid assignment or based on any alleged lack of authority on the part of the substitute trustee or failure to properly record the assignments.

Sales price

Plaintiff argued that defendants committed a breach of contract by directing Clements to foreclose upon the property without making a reasonable effort to obtain the highest possible sale price. Plaintiff alleged that while the property had an assessed value of $482,800, it was sold for only $87,114.

While a “significant discrepancy between the sales price and the value of property,” can render such a claim plausible, here any such disparity would not account for the existence of the sizable, unpaid $70,701.98 federal tax lien — which was docketed in 2011 and concerned taxes due as early as 2005, resulting in likely substantial penalties and interest.

Moreover, given that plaintiff has opted not to present any evidence in support of her argument that the foreclosure sale price was inadequate, the court concludes on the present record that plaintiff has not demonstrated the existence of a genuine issue of material fact regarding the adequacy of the sale price, such as would preclude entry of summary judgment in defendants’ favor on this final claim.

Defendants’ motion for summary judgment granted.

Carner v. Clements, Case No. 6:22-cv-00030, March 31, 2023. WDVA at Lynchburg (Moon). VLW 023-3-175. 17 pp.

VLW 023-3-175

Virginia Lawyers Weekly