KENNETH ANDERSON and BOBBIE ANDERSON, Plaintiffs and Appellants,
RECONTRUST COMPANY, N.A. BAC HOME LOANS SERVICING, LP f/k/a COUNTRYWIDE HOME LOANS SERVICING, LP, FEDERAL NATIONAL MORTGAGE ASSOCIATION and JOHN DOE CORPORATIONS/LLCS/PARTNERSHIPS/ BUSINESS TRUSTS/ANY OTHER TYPE ORGANIZATION OR BUSINESS ENTITY NOS. I-V, Defendants and Appellees.
Submitted on Briefs: July 26, 2017
FROM: District Court of the Eleventh Judicial District, In
and For the County of Flathead, Cause No. DV 11-1299D
Honorable David M. Ortley, Presiding Judge
Appellants: Paul A. Sandry, Johnson, Berg, & Saxby, PLLP;
Appellees: Mark D. Etchart, Browning, Kaleczyc, Berry &
Hoven, P.C.; Helena, Montana.
Kenneth and Bobbie Anderson (Andersons) appeal the judgment
of the Montana Eleventh Judicial District Court, Flathead
County, dismissing their asserted negligence, negligent
misrepresentation, fraud, and Montana Consumer Protection
(MCPA) claims against Bank of America, N.A. (Bank of America)
and ReconTrust Company N.A. (ReconTrust) pursuant to M. R.
Civ. P. 12(b)(6). We restate and address the following issues
Did the District Court erroneously dismiss Andersons'
negligence, negligent misrepresentation, fraud, and MCPA
claims pursuant to M. R. Civ. P. 12(b)(6)?
Did the District Court err by not sua sponte converting
ReconTrust's Rule 12(b)(6) motion to dismiss into a
motion for summary judgment pursuant to M R. Civ. P. 12(d)
upon the filing of an affidavit in support of Andersons'
brief in opposition?
AND FACTUAL BACKGROUND
On March 23, 2007, Andersons took out a loan from Mountain
West Bank for the purchase of a home in Kalispell, Montana,
secured by a residential trust indenture. As of July 2010,
Mortgage Electronic Registration Systems, Inc. (MERS) owned
the beneficial interest in the loan and mortgage. ReconTrust
was the trustee under the trust indenture. In September 2011,
after experiencing financial difficulty and defaulting on
their mortgage, Andersons contacted Bank of America to
inquire about a loan modification. At that time, a
trustee's foreclosure sale of Andersons' property was
previously scheduled for October 3, 2011. Later in September
2011, following a series of telephone calls and exchanges of
information, Bank of America informed Andersons that they
preliminarily qualified for a loan modification under the
Home Affordable Modification Program (HAMP).
HAMP is a federal program introduced in 2009 in response to
the subprime mortgage crisis. The program assists qualified
homeowners to avoid mortgage foreclosure by modifying monthly
loan payments to affordable levels. To qualify for a HAMP
loan modification, homeowners must satisfy various threshold
eligibility requirements and then make lower mortgage
payments on a trial basis for three consecutive months. Upon
successful completion of the trial period, the modification
Andersons assert on appeal that, despite repeated assurances
from Bank of America in September 2011 that they qualified
for a HAMP loan modification and that the conditional
approval would preempt the scheduled foreclosure sale, the
bank ultimately denied the requested loan modification. In
the absence of a loan modification, the trustee's
foreclosure sale proceeded as previously scheduled, at which
the trustee sold the property to the Federal National
Mortgage Association (FNMA a/k/a Fannie Mae). Andersons then
sued Bank of America, ReconTrust, and FNMA based on alleged
violations of the Montana Small Tract Financing Act, breach
of contract, HAMP-related violations, negligence, fraud,
negligent misrepresentation, and unfair or deceptive
practices in violation of the Montana Consumer Protection
On April 16, 2012, Bank of America and ReconTrust filed a
motion to dismiss pursuant to M. R. Civ. P. 12(b)(6) on the
asserted ground that Andersons' First Amended Complaint
stated insufficient facts to entitle them to relief on their
asserted claims. Andersons filed a brief in opposition to the
motion with a supplemental affidavit setting forth additional
facts in support of their claims. Andersons did not move for
conversion of the motion to dismiss into a motion for summary
judgment pursuant to M. R. Civ. P. 12(d). The District Court
ultimately dismissed all of Andersons' claims pursuant to
M. R. Civ. P. 12(b)(6) without consideration of the facts set
forth in ...