Dale E. Wheatley; Stacy Franklin, Plaintiffs - Appellants
JPMorgan Chase Bank, N.A.; U.S. Bank, N.A.; Select Portfolio Servicing, Inc., Defendants - Appellees
Submitted: March 7, 2017
from United States District Court for the Western District of
Missouri - St. Joseph
RILEY,  Chief Judge, GRUENDER, Circuit
Judge, and GRITZNER,  District Judge.
Wheatley and his ex-wife Stacy Franklin sued several
financial entities for foreclosing on the mortgage loan
Wheatley took out on Franklin's house. The district
court held the foreclosure was justified and
granted the defendants summary judgment. Wheatley appeals
with respect to his claims under the Missouri Merchandising
Practices Act (MMPA), Mo. Rev. Stat. § 407.020. Franklin
appeals on her claims for tortious interference with
contract. With appellate jurisdiction under 28 U.S.C. §
1291, we affirm the judgment.
2006, Franklin wanted to cash out her equity and refinance
her house in Cosby, Missouri, but her credit was not good
enough to qualify for a loan. Wheatley verbally agreed to
help Franklin accomplish more or less the same result by
taking out a mortgage himself and buying the house from her,
on the understanding that Franklin would be responsible for
paying off the loan and Wheatley would deed her the property
when she did. In 2009, Franklin missed several payments and
the loan went into default.
first agreeing to a repayment plan with the loan servicer,
EMC Mortgage Corporation, Wheatley applied for a loan
modification. EMC ultimately offered Wheatley a modification
in May 2010. The modification agreement was conditioned upon
Wheatley affirming the truth of several statements,
including: "I am experiencing a financial hardship, and
as a result, am either in default under the Loan Documents or
a default is imminent." In an attached affidavit,
Wheatley claimed he did not have enough cash on hand to
afford his mortgage payments on top of his basic living
expenses. Wheatley also noted he did not live in the house
and paid rent and utilities elsewhere. And he repeatedly had
told EMC representatives that Franklin made the mortgage
payments, not him.
signed the modification agreement and returned it to EMC. EMC
also signed the agreement, but did not actually put the
modification into effect. EMC had miscalculated
Wheatley's unpaid balance-double-counting some interest
that had been capitalized-so the repayment terms in the
agreement did not match the (lower) amount Wheatley actually
owed, which caused EMC's automated computer system to
reject the modification. Thus, the changes to the loan were
never processed, EMC's records showed the loan still
being in default, and EMC continued sending Wheatley notices
of default and foreclosure. Wheatley spoke with EMC
representatives many times, but the issue was never resolved.
in 2009, EMC's loan-servicing portfolio was acquired by
JPMorgan Chase Bank, N.A. (Chase), which fully assumed
servicing Wheatley's loan in May 2011. Chase
representatives tried to work with Wheatley to resolve the
apparent default, but by then he had become frustrated with
his unsuccessful dealings with EMC and stopped responding.
About two years later, Chase brought in Select Portfolio
Servicing, Inc. (SPS), a sub-servicer, to handle
Wheatley's loan. SPS briefly tried to work the issue out
with Wheatley, but he was still not cooperating. Then, in
August 2013, SPS held a foreclosure sale, where U.S. Bank,
N.A., the successor trustee for the trust that owned
Wheatley's loan (along with others), bought the house
with a full-credit bid.
and Franklin sued Chase in Missouri state court. After Chase
removed the case, see 28 U.S.C. § 1441(a)
(removal); id. § 1332(a)(1) (diversity
jurisdiction), Wheatley and Franklin amended their pleadings
to add claims against U.S. Bank and SPS. The operative
complaint raised four counts, all by both plaintiffs against
all three defendants: wrongful foreclosure, breach of
contract, tortious interference, and deceptive or unfair
practices in violation of the MMPA. The district court
granted summary judgment for the defendants on all four
counts, but Wheatley and Franklin only appeal the last two,
each separately taking one count.
review the grant of summary judgment de novo. See,
e.g., Dupps v. Travelers Ins. Co., 80 F.3d
312, 313 (8th Cir. 1996). The interpretation and application
of state law is also a legal issue we decide de novo. See
id. Summary judgment is appropriate if "there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law." Fed.R.Civ.P.
56(a). The district court held the defendants had the right
to foreclose on the house, so Wheatley's MMPA claims
failed as a matter of law because he could not prove his loss
was caused by any misconduct of the defendants, as opposed to
his own "noncompliance with the loan documents."
The legality of the foreclosure was likewise fatal to
Franklin's tortious-interference claims, according to the
district court, because it meant Franklin could not establish
the "absence of justification" that is a necessary
element of such a claim, see, e.g.,
Cmty. Title Co. v. Roosevelt Fed. Sav. & Loan
Ass'n, 796 S.W.2d 369, 372 (Mo. 1990). We agree as
to both the foreclosure being justified and the consequences
of that fact for the plaintiffs' claims.
modification agreement explicitly provided it would only
"amend and supplement" the existing loan documents
"[i]f [Wheatley's] representations . . .
continue[d] to be true in all material respects."
(Emphasis added). By clear implication, if Wheatley's
material representations were not true, the agreement did not
"amend and supplement" anything, the existing
version of the loan stayed ...