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Birmingham Bar Association Bulletin - Winter 2013

Real Estate Law Foreclosure and Ejectment: Continued from page 12 ure to state a claim.15 If a plaintiff cannot prove the elements of his cause of action, he has a “cause of action” problem, not a standing problem. In BAC Home Loan, the plaintiff claimed title under a foreclosure deed. According to the Court, the circuit court had subject-matter jurisdiction to decide the validity of that foreclosure deed. If the court were to conclude that the deed was invalid, then the plaintiff would not prevail in its action to obtain possession. However, that did not mean the plaintiff had no right to come to court in the fi rst place. BAC Home Loan means borrowers will no longer have two bites at the apple when attempting to invalidate a foreclosure sale. In addition, BAC Home Loan demonstrates the Alabama Supreme Court’s willingness to revisit cases decided on standing grounds and to reclassify what was once considered an issue of standing as simply a failure to state a claim. For example, a case decided just one week after BAC Home Loan further demonstrates this willingness. In Ex parte MERSCORP, Inc.,16 a probate judge sued MERSCORP, Inc. for failing to pay recording fees associated with mortgage assignments. MERSCORP moved to dismiss, arguing that the probate judge had not alleged an injury (and thus lacked standing) because the law imposes no duty to record mortgage assignments and provides no private right of action for failure to record. When the circuit court denied the motion to dismiss, MERSCORP sought a writ of mandamus. Th e Supreme Court denied the writ, emphasizing that MERSCORP’s argument was actually a Rule 12(b)(6) failure-to-statea claim argument rather than a standing argument. Th us, even if MERSCORP had a winning argument, that argument was not that the circuit court lacked subject matter jurisdiction. E. CONCLUSION Th e non-judicial foreclosure process in Alabama is intended to be a straightforward process for secured lenders to exercise their interest in collateral in the event of a default. Borrowers often slow down and complicate this process by challenging the foreclosure sale in court. Th e Alabama Supreme Court’s recent decisions in GMAC Mortgage, Harris, and BAC Home Loan will make it more diffi cult for borrowers to make these challenges in the future. G ENDNOTES 1 Associates at Balch & Bingham LLP. The opinions expressed in this arti cle are solely those of the authors and do not refl ect those of Balch & Bingham or any clients. Special thanks to Chase T. Espy and John Naramore for their thoughts and comments on this arti cle. 2 In an eff ort to lessen the harshness of foreclosure, Alabama has enacted statutes that provide a mortgagor with, among others, a statutory right to redeem the property for one year. A����. C������ §§ 6-5-248 et seq. 3 See Ex parte MERSCORP, Inc., No. 1111370, --- So. 3d ---, 2013 WL 5299251, at *1–2 (Ala. Sept. 20, 2013) (describing how promissory notes are bought and sold on a secondary market). 4 See A����. C������. §§ 35-10-12, -13, & -14 (1975); see also Ex parte GMAC Mortgage, LLC, No. 1110547, --- So.3d ---, 2013 WL 4873071, at *3 (Ala. Sept. 13, 2013) 5 A����. C������ § 6-6-280(b). 6 Sturdivant v. BAC Home Loans Servicing, LP, No. 2100245, --- So.3d ---, 2011 WL 6275697 (Ala. Civ. App. Dec. 16, 2011) 7 GMAC Mortgage, LLC, --- So. 3d ---, 2013 WL 4873071, at *6. 8 Kelly v. Carmichael, 117 So. 67, 70 (1928); Ala. Code. §§ 35-10-1 & -12; Ritt er v. Moseley, 148 So. 143, 147 (Ala. 1933); Lewis v. Wells, 50 Ala. 198, 206 (Ala. 1874) 9 GMAC Mortgage, --- So. 3d ---, 2013 WL 4873071, at *6. 10 Harris v. Deutsche Bank Nat’l Trust Co., No. 1110054, --- So. 3d ---, 2013 WL 4870808 (Ala. Sept. 13, 2013). 11 Ex parte BAC Home Loans Servicing, LP, No. 1110373, --- So. 3d ---, 2013 WL 4873061, at *12 (Ala. Sept. 13, 2013). 12 Cadle Co. v. Shabani, 950 So. 2d 277 (Ala. 2006). 13 Sturdivant, --- So. 3d ---, 2011 WL 6275697, at *15 (emphasis in original). 14 BAC Home Loans was actually consolidated with another appeal, Robinson v. Cox, No. 1110458 (2011). However, for purposes of this analysis, the facts are the same. 15 BAC Home Loans, --- So. 3d ---, 2013 WL 4873061, at *12. Justi ce Murdock noted that the concept of standing comes from public law cases—i.e., cases challenging the legality of government acti on and alleging harms shared by the citi zenry generally. This concept has “no necessary role to play in respect to private-law acti ons, which . . . come with established elements that defi ne an adversarial relati onship and ‘controversy’ suffi cient to justi fy judicial interventi on.” Id. 16 MERSCORP, --- So. 3d ---, 2013 WL 5299251. 14 Birmingham Bar Association


Birmingham Bar Association Bulletin - Winter 2013
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