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Duenas-Rendon v. Wells Fargo Bank, N.A.

Supreme Court of Alaska

August 14, 2015

MARIA D. DUENAS-RENDON, Appellant,
v.
WELLS FARGO BANK, N.A., Successor to Wells Fargo Home Mortgage, Inc., Appellee

Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, John Suddock, Judge. Superior Court No. 3AN-12-06466 CI.

Swan T. Ching, Anchorage, for Appellant.

Michael J. Parise and Michael B. Baylous, Lane Powell LLC, Anchorage, for Appellee.

Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and Bolger, Justices.

OPINION

Page 1038

MAASSEN, Justice.

I. INTRODUCTION

A borrower sued her mortgage lender, claiming that its foreclosure on her home violated the terms of their contract. On appeal she argues that the lender waived its right to foreclose when it continued to accept monthly mortgage payments after recording a notice of default, leading her to believe that it no longer intended to foreclose. The lender responds that it closely followed the contractual procedures for default and acceleration and that its acceptance of payments did not waive its right to foreclose in light of the parties' agreement permitting it to do so once the loan was in default. The superior court granted summary judgment to the lender.

The borrower appeals. She argues that the superior court erred in granting summary judgment and also that it should have addressed an outstanding discovery motion before deciding the case in the lender's favor. Finding no error, we affirm.

II. FACTS AND PROCEEDINGS

A. Facts

In 2003 Maria Duenas-Rendon and her then-husband Enrique Barajas purchased an Anchorage home for $50,000 with the help of a mortgage loan from Wells Fargo Bank[1] in

Page 1039

the amount of $47,500. The terms of the loan were outlined in two documents: a promissory note and a deed of trust. It is undisputed that these two documents constitute the agreement between Duenas-Rendon and Wells Fargo.

1. The parties' agreement

The promissory note provides that the borrowers will be in default if they " do not pay the full amount of each monthly payment on the date it is due." The promissory note has an acceleration clause authorizing the bank, on written notice of default, to require the borrowers " to pay immediately the full amount of Principal which has not been paid and all the interest that [the borrowers] owe on that amount," as well as expenses such as attorney's fees. The promissory note also provides that the bank's failure to invoke the acceleration clause in the event of a default does not waive its right to invoke it later.

The provisions of the deed of trust are somewhat redundant but also more detailed. For example, the deed of trust gives the bank options on how to treat " any payment or partial payment" that is " insufficient to bring the Loan current" : the bank may return the payment or accept it, though acceptance is " without waiver of any rights hereunder or prejudice to [the bank's] rights to refuse such payment or partial payments in the future." If the bank accepts a partial payment, it may apply the payment to the loan or hold it " until Borrower makes payment to bring the Loan current." If the borrowers do not bring the loan current " within a reasonable period of time," the bank may either apply the held funds to the loan " or return them to the Borrower."

The deed of trust also addresses acceleration of the loan. It requires notice to the borrowers that the bank intends to exercise its right to accelerate, and it specifies the notice's contents. It provides that " [i]f 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 [deed of trust] without further demand." It also describes the borrowers' right to have enforcement of the deed of trust discontinued and to reinstate the loan on certain conditions: that the borrowers pay all amounts that were due before acceleration, cure any other defaults, pay the expenses of enforcement, and give other reasonable assurances to the bank if requested. And it ...


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