Tommy Thompson v. First American National Bank
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IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2008-CA-00244-COA
TOMMY THOMPSON
APPELLANT
v.
FIRST AMERICAN NATIONAL BANK
DATE OF JUDGMENT:
TRIAL JUDGE:
COURT FROM WHICH APPEALED:
ATTORNEY FOR APPELLANT:
ATTORNEYS FOR APPELLEE:
NATURE OF THE CASE:
TRIAL COURT DISPOSITION:
DISPOSITION:
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
APPELLEE
01/23/2008
HON. JAMES LAMAR ROBERTS JR.
ALCORN COUNTY CIRCUIT COURT
B. SEAN AKINS
MATT P. PATTERSON
STANLEY R. PARKER
WENDELL H. TRAPP JR.
CIVIL - CONTRACT
SUMMARY JUDGMENT GRANTED FOR
THE DEFENDANT
AFFIRMED – 04/21/2009
BEFORE LEE, P.J., IRVING AND BARNES, JJ.
IRVING, J., FOR THE COURT:
¶1.
Tommy Thompson brought suit in the Alcorn County Circuit Court against First
American National Bank (First American) for wrongful foreclosure and other claims. First
American filed a motion for summary judgment based upon the statute of frauds and lack of
consideration. The circuit court granted the motion. Aggrieved, Thompson appeals and
asserts that the circuit court erred in holding that the doctrine of promissory estoppel did not
apply in this matter.
¶2.
Finding no reversible error, we affirm.
FACTS
¶3.
On October 29, 1997, Thompson purchased 112 acres of land in Hardin County,
Tennessee. The purchase was financed by First American. In September 2001, Thompson
became delinquent on his loan with First American. He received a letter around November
21, 2001, advising him that foreclosure proceedings had begun on the property and that he
had to pay the full payoff amount in order to prevent the property from being sold at an
auction. Thompson avoided the foreclosure by refinancing the loan with First American.
However, the following year, Thompson became delinquent again. From August 2002
through February 2003, he only made two of the scheduled monthly payments on his loan.
On February 21, 2003, First American sent Thompson a letter informing him that the loan
had been transferred to the collections department and that foreclosure might be the only
resolution for his delinquency. Thompson made payments on the loan in March, April, and
May 2003; however, the past due payments were still due and owing.
¶4.
On June 3, 2003, First American’s attorney sent Thompson a letter advising him of
the following:
If payment is not received within thirty (30) days, bringing this account
current, including interest and all publication, legal, and other necessary fees,
this property will be sold through foreclosure. Enclosed you will find a copy
of the Substituted Trustee’s Notice of Sale 1 giving you information concerning
the date, time and place of foreclosure.
Upon receipt of the letter, Thompson telephoned the bank’s attorney who informed
1
The Substituted Trustee’s Notice of Sale stated that the foreclosure sale would
occur on July 8, 2003.
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Thompson that he needed to speak directly with First American.
¶5.
Thompson alleges that on June 5, 2003, he and a friend traveled to the Tishomingo,
Mississippi branch of First American to “pay whatever amount was necessary to stop the
foreclosure which was scheduled for July 8, 2003.” Thompson further alleges that when he
got to the bank, he informed a bank teller that he had enough money to bring the loan current
but that he wanted to make two payments at that time and the next payment on July 10, 2003.
He also alleges that he asked the teller if the two payments would be enough to stop the
foreclosure and that she answered in the affirmative, causing him to refrain from bringing the
account current. The teller denied that she was ever aware of Thompson’s loan being in
foreclosure. She also denied that she informed Thompson that two payments would be
sufficient to stop the foreclosure sale.
¶6.
The foreclosure sale occurred on July 8, 2003, as scheduled. Thompson went to the
bank on July 10, 2003, allegedly to make a payment and was informed that the foreclosure
had already occurred. Thereafter, Thompson filed a complaint against First American,
alleging wrongful foreclosure and other claims. As noted earlier in this opinion, First
American’s motion for summary judgment was granted.
¶7.
Additional facts, as necessary, will be related during our analysis and discussion of
the issues.
ANALYSIS AND DISCUSSION OF THE ISSUES
¶8.
“[An appellate court] applies a de novo standard of review to the trial court’s grant
of summary judgment.” Windham v. Latco of Miss., Inc., 972 So. 2d 608, 610 (¶4) (Miss.
2008) (quoting Moss v. Batesville Casket Co., 935 So. 2d 393, 398 (¶15) (Miss. 2006)). “The
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evidence must be viewed in the light most favorable to the non-moving party. If, in this
view, the moving party is entitled to a judgment as a matter of law, then summary judgment
should be granted . . . . Otherwise, the motion should be denied.” Palmer v. Anderson
Infirmary Benevolent Ass’n, 656 So. 2d 790, 794 (Miss. 1995) (citing Brown v. Credit Ctr.,
Inc., 444 So. 2d 358, 362 (Miss. 1983)).
¶9.
Summary judgment should be granted “if the pleadings, depositions, answers to
interrogatories and admissions on file, together with the affidavits, if any, show that there is
no genuine issue as to any material fact and that the moving party is entitled to a judgment
as a matter of law.” M.R.C.P. 56(c). A fact is material if it “tends to resolve any of the
issues properly raised by the parties.” Simpson v. Boyd, 880 So. 2d 1047, 1050 (¶9) (Miss.
2004) (quoting Palmer, 656 So. 2d at 794)).
¶10.
The circuit court granted First American’s motion for summary judgment on two
grounds: (1) that the modification of the loan agreement was barred by the statute of frauds,
and (2) that the modification of the loan agreement lacked sufficient consideration.
1. Statute of Frauds and Consideration
¶11.
Our statute of frauds statute, Mississippi Code Annotated section 15-3-1 (Rev. 2003),
lists the types of contracts that must be in writing. Contracts for the sale of lands, tenements,
or hereditaments are included. Miss. Code Ann. § 15-3-1(c). A modification of a contract
within the statute of frauds must also be in writing. Canizaro v. Mobile Commc’ns Corp. of
Am., 655 So. 2d 25, 29 (Miss. 1995).
¶12.
While a written contract may be modified by a subsequent agreement, “the law of this
state is that such an agreement must be supported by new or additional consideration.” Iuka
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Guar. Bank v. Beard, 658 So. 2d 1367, 1372 (Miss. 1995) (citing Edrington v. Stephens, 148
Miss. 583, 592, 114 So. 387, 389 (1927)). “Consideration is sufficient if there is any benefit
to the promisor or any loss, detriment, or inconvenience to the promisee.” Id. (citing Jim
Murphy & Assocs., Inc. v. LeBleu, 511 So. 2d 886, 891 (Miss. 1987)).
¶13.
In Iuka, Beard received notice that her loan with Iuka Guaranty Bank (Iuka Guaranty)
was about to go into foreclosure because the installments were over ninety days past due.
Id. at 1370.
Although Beard was only required to bring the loan current, she and Iuka
Guaranty agreed that the bank would cancel the deed of trust securing the loan if she paid the
balance owed on the loan. Id. Beard paid the balance owed, but Iuka Guaranty refused to
cancel the deed of trust. Id. Beard filed suit against Iuka Guaranty, alleging an intentional
breach of contract as a result of Iuka Guaranty’s failure to cancel the deed of trust. Id. at
1369. The jury returned a verdict in her favor, and Iuka Guaranty appealed. Id.
¶14.
In ruling in Beard’s favor, our supreme court held that since Beard was not legally
obligated, at the time of payment, to pay the full amount of the debt remaining on the loan,
Beard “suffered a legal detriment in association with her agreement to fully satisfy her loan
in return for Iuka Guaranty’s promise to cancel the deed of trust.” Id. at 1372. The court
further held that Beard’s “act of prematurely satisfying her debt to Iuka [Guaranty] was a
legal detriment sufficient to enforce the subsequent agreement” between her and Iuka
Guaranty. Id.
¶15.
Similar to Beard, Thompson was legally required to bring the loan current to avoid
foreclosure. In order to bring the loan current, Thompson needed to make four payments on
the loan with First American. Even if we were to find that the bank teller told Thompson
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that his making two payments on the loan would stop the foreclosure proceedings and that
Thompson made the payments in response to the teller’s representation, we would still find
that there would be a lack of consideration to modify the original contract because those two
payments were already due and owing under the original agreement. Unlike the agreement
in Iuka, Thompson’s making two of the four payments was neither an additional benefit to
First American nor an additional detriment to Thompson.
¶16.
We agree with the circuit court that the alleged agreement between Thompson and the
bank teller was barred by the statute of frauds and that there was no additional consideration
for the alleged forbearance by First American. This issue is without merit.
2. Promissory Estoppel
¶17.
Thompson argues that even if the agreement, which he alleges arose from the bank
teller’s representation to him, is subject to the statute of frauds and lacks consideration, it is
still enforceable because First American is estopped under the doctrine of promissory
estoppel from asserting either of those defenses. Our supreme court has addressed the
circumstances when it is appropriate to invoke the affirmative defense of promissory estoppel
as follows:
An estoppel may arise from the making of a promise, even though without
consideration, if it was intended that the promise should be relied upon and in
fact it was relied upon, and if a refusal to enforce it would be virtually to
sanction the perpetuation of fraud or would result in other injustice.
C.E. Frazier Constr. Co. v. Campbell Roofing and Metal Works, Inc., 373 So. 2d 1036, 1038
(Miss. 1979) (emphasis added) (citing 28 Am. Jur. 2d, Estoppel and Waiver, § 48 (1966)).
¶18.
The general rule concerning estoppel and its application to the statute of frauds is well
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settled:
It is universally conceded that the doctrine of equitable estoppel may be
invoked to preclude a party to a contract from asserting the unenforceability
of a contract by reason of the fact that it is not in writing as required by the
statute of frauds. As is often said, the statute of frauds may be rendered
inoperative by an estoppel in pais. Where one has acted to his detriment solely
in reliance on an oral agreement, an estoppel may be raised to defeat the
defense of the statute of frauds. This is based upon the principle established
in equity, and applying in every transaction where the statute is invoked, that
the statute of frauds, having been enacted for the purpose of preventing fraud,
shall not be made the instrument of shielding, protecting, or aiding the party
who relies upon it in the perpetration of a fraud or in the consummation of a
fraudulent scheme.
Sanders v. Dantzler, 375 So. 2d 774, 776 (Miss. 1979) (citation omitted).
¶19.
Since neither the lack of consideration nor the statute of frauds can bar the
enforcement of an agreement where promissory estoppel is appropriate, the real issue
becomes whether promissory estoppel applies in this case. We find that it does not. As
mentioned above, the elements of promissory estoppel are: (1) the making of a promise, even
though without consideration, (2) the intention that the promise be relied upon and in fact is
relied upon, and (3) a refusal to enforce it would virtually sanction the perpetuation of fraud
or would result in other injustice. C.E. Frazier Constr. Co., 373 So. 2d at 1038.
¶20.
Here, the bank teller allegedly promised Thompson that the foreclosure proceedings
on his property would cease if he made two payments on his loan instead of bringing the loan
current. Thompson made the two payments. Therefore, at first blush, it may appear arguably
that Thompson proved the first and second elements of promissory estoppel, as he testified
that the bank teller promised that the bank would forgo foreclosure proceedings if he made
the two payments. However, a closer look at this fact scenario reveals its infirmity: the
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absence of any fact allegations that the bank teller was authorized to speak for, or make
decisions on behalf of, First American. It is common knowledge that a bank teller is not a
bank officer and that the job of a bank teller does not encompass making decisions in
mortgage foreclosure matters. Further, the bank teller did not foreclose on Thompson’s
property and had no authority to do so. Maybe we would have a different situation if it were
the president of First American that had made the promise or if there were any evidence that
the bank teller was authorized to speak for First American, but we do not. Therefore, there
is no genuine issue of material fact regarding whether First American ever promised
Thompson anything regarding its willingness to forgo foreclosure proceedings in exchange
for his making only two of the four installments that were already past due.
¶21.
Even assuming arguendo that the bank teller’s alleged representation to Thompson
is binding on First American, Thompson’s promissory estoppel argument still fails, because
our failure to enforce the agreement would not sanction the perpetuation of fraud nor would
it result in other injustice. As stated, Thompson not only owed the two payments that he
made, but he also owed two other payments that he did not make. We cannot discern how
it would sanction an injustice or perpetrate a fraud for a bank to collect what is rightfully
owed to it. Accordingly, we agree with the chancellor that Thompson failed to prove that,
on the facts of this case, promissory estoppel is an impediment to the granting of summary
judgment. Therefore, we find that this contention of error is without merit and affirm the
judgment of the circuit court granting summary judgment for First American.
¶22. THE JUDGMENT OF THE CIRCUIT COURT OF ALCORN COUNTY IS
AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE
APPELLANT.
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KING, C.J., LEE AND MYERS, P.JJ., ISHEE, ROBERTS, CARLTON AND
MAXWELL, JJ., CONCUR. GRIFFIS, J., CONCURS IN RESULT ONLY
W ITH O UT SEPA RA TE W R ITTEN OPIN IO N.
BA RN ES, J., N OT
PARTICIPATING.
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