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Dorman v. Trustmark National Bank

Court of Appeals of Mississippi

May 7, 2019

ODELL DORMAN, JR. AND RENODDA A. DORMAN A/K/A RENODDA DORMAN APPELLANTS
v.
TRUSTMARK NATIONAL BANK, SUCCESSOR TO HERITAGE BANKING GROUP APPELLEE

          DATE OF JUDGMENT: 10/10/2017

          LEAKE COUNTY CIRCUIT COURT HON. CHRISTOPHER A. COLLINS JUDGE

          ATTORNEYS FOR APPELLANTS: MARK K. TULLOS CRAIG N. ORR

          ATTORNEYS FOR APPELLEE: STEPHANIE M. RIPPEE WILLIAM F. RAY

          BEFORE BARNES, C.J., WESTBROOKS AND LAWRENCE, JJ.

          BARNES, C.J.

         ¶1. After Trustmark National Bank (Trustmark) foreclosed on Odell and Renodda Dorman's property and evicted them from their residence, the parties discovered that the deed of trust (DOT) securing their consumer loan agreement did not contain a legal description for the six acres on which the residence was located. The Dormans moved back into the home, and Trustmark filed suit in the Leake County Circuit Court for the remaining loan deficiency. The Dormans counterclaimed that Trustmark had wrongfully foreclosed on their home, and Trustmark moved to amend its complaint to assert an affirmative defense of mutual mistake, which the court granted. Trustmark subsequently filed a motion for summary judgment, alleging that the parties had intended for the Dormans' residence to be included in the DOT, and the bank requested a reformation of the deed for mutual mistake. Granting summary judgment, the circuit court ordered that the DOT be reformed to reflect the legal description for the residential property and awarded Trustmark a deficiency judgment.

         ¶2. The Dormans argue on appeal that the court did not have subject-matter jurisdiction to reform the DOT and erred in granting the motion for summary judgment, reforming the DOT, and awarding a judgment for the loan deficiency. Although we find the court had jurisdiction to consider the bank's claims, we conclude that there is a genuine issue of material fact as to whether the Dormans intended to pledge the residential property as security for the loan, and we reverse the court's judgment and remand for further proceedings. Accordingly, we find the court erred in reforming the DOT and in awarding a deficiency judgment against the Dormans.

         FACTS AND PROCEDURAL HISTORY

         ¶3. The Dormans owned several parcels of land in Leake County, Mississippi. In April 1999, they obtained a loan for $80, 462 from Carthage Bank.[1] The loan was secured by a DOT for certain parcels of land, which included the Dormans' residence located on approximately six acres at 723 Highway 487, Carthage, Mississippi. In March 2004, the Dormans consolidated the 1999 loan with other loans to lower their monthly payments. Although the bank's loan application listed the "residence" under "Collateral Offered or Purchased," the DOT securing the loan did not contain a legal description of the six acres on which the home was located.[2]

         ¶4. On April 14, 2005, the Dormans executed another consolidated loan agreement for $164, 720.66 with Heritage Banking Group, Trustmark's predecessor in interest. The agreement stated that the loan was:

Secured by Deed of Trust of even date herewith on real estate located in Section 31 Township 10 North Range 9 Leake County Mississippi being more particularly described in said Deed of Trust; One (1) 1997 Toyota 4 Runner[, ] Serial No. JT3GM84R8V001619J; 11 Shares Bank of Walnut Grove Stock evidenced by Certificate No. 472 in the name of Renodda Dorman or Odell Dorman.

(Emphasis added). The DOT for the 2005 loan did not contain a legal description of the six acres on which the Dormans' house was located.

         ¶5. When the Dormans became delinquent on their loan payments, Trustmark's attorney, Mark Mayfield, sent a foreclosure letter on October 25, 2013, stating in part:

If you are the former owner, child, or spouse of former owner: Your home sold at foreclosure and you no longer own the property. The premises must be vacated no later [than] Thursday, October 31, 2013.
Please immediately move out and remove the house of all contents. Lock doors and windows. Send this office the keys and garage door openers. Let us know the date that you'll be out, and we will change the locks.
If you fail to comply, the new owner has asked us to file an eviction lawsuit directing the Sheriff to forcibly remove you and your belongings. Expect a Deputy Sheriff to serve you with a summons to appear in court.

         The Dormans vacated the property and moved to a rental home. After a nonjudicial foreclosure sale, Renodda's brother-in-law contacted Trustmark in February 2014 to inquire about buying the property. Bank personnel informed him at that time that the DOT's legal description did not include the dwelling and the six acres upon which it was located; so the Dormans moved back into the house.

         ¶6. On May 22, 2014, Trustmark filed a complaint with the circuit court for the remaining loan deficiency of $70, 791.99, plus interest. There was no mention of the issue with the DOT. The Dormans filed an answer and counterclaim, alleging wrongful foreclosure because Trustmark knew or should have known there was no lien on their residence. Trustmark subsequently filed a motion to amend its complaint on May 24, 2015, asserting a defense of mutual mistake because the loan documentation indicated that "Trustmark believed it was obtaining the Dormans' house as collateral for the subject loan, and the Dormans believed they were assigning their home as collateral for the subject loan." The ...


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