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Graham-Rogers v. Wells Fargo Bank, N.A.

Supreme Court of Montana

September 24, 2019

CHELCEE GRAHAM-ROGERS, Plaintiff and Appellant,
v.
WELLS FARGO BANK, N.A., Defendant and Appellee.

          Submitted on Briefs September 18, 2019

          APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV 16-571B Honorable Rienne H. McElyea, Presiding Judge

          For Appellant: Brian J. Miller, Robert Farris-Olsen, Morrison Sherwood Wilson & Deola, PLLP, Helena, Montana

          For Appellee: Kenneth K. Lay, Brett Clark, Crowley Fleck PLLP, Helena, Montana

          OPINION

          Jim Rice Justice

         ¶1 Chelcee Graham-Rogers (Graham-Rogers), appeals from the entry of summary judgment on her claims in favor of Wells Fargo Bank, N.A. (Wells Fargo), by the Eighteenth Judicial District Court, Gallatin County. We affirm, and restate the issues as follows:

1. Did the District Court err by dismissing Graham-Rogers' breach of contract claim?
2. Did the District Court err by dismissing Graham-Rogers' tort claims?

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶2 In 2005, Graham-Rogers jointly owned an 11.331-acre tract (Lot 3) in Gallatin County, along with her mother, grandmother, and two siblings. Graham-Rogers and the other owners designated a 1-acre portion of Lot 3 as collateral for mortgage purposes (Tract M) and had a mortgage tract survey recorded to reflect this designation. On February 14, 2006, Graham-Rogers obtained a loan from Valley Bank of Belgrade for $125, 042. Graham-Rogers and her family members who jointly owned Lot 3 executed a deed of trust with Valley Bank of Belgrade as beneficiary, with Tract M serving as collateral for the loan. After the loan's origination, Wells Fargo assumed service of the loan.

         ¶3 On November 19, 2008, Graham-Rogers and her then-husband refinanced the February 14, 2006 loan with Wells Fargo, borrowing $182, 849 dollars (the Loan). Graham-Rogers executed a Deed of Trust to secure the Loan, which named Wells Fargo as beneficiary. Tract M served as the collateral for the Loan and is referred to as the "Property" in the Deed of Trust.

         ¶4 For reasons that are not evident from the record, when Tract M was created for mortgage purposes, the Department of Revenue assigned the tract its own tax identification number, REF 54165, separate from the tax identification number for Lot 3, REF 32145. Between 2006 and 2008, property taxes were separately assessed for Tract M. Sometime in 2009, the Department of Revenue deactivated the tax identification number for Tract M. The District Court found, upon the uncontested affidavit submitted by an employee of the Department of Revenue, that the Department does not ordinarily assign new tax identification numbers for mortgage survey parcels. Since 2008, the Department has assessed real property taxes on Lot 3 and Tract M together, as an individual tax parcel, referred to as tax identification number REF 32145.[1]

         ¶5 Under the Deed of Trust, Graham-Rogers was responsible for paying, "in each monthly payment, together with principal and interest as set forth in the Note and any late charges, a sum for (a) taxes and special assessments levied or to be levied against the Property . . . ." In the event Graham-Rogers failed to make required payments, Wells Fargo was authorized to do "whatever is necessary to protect the value of the Property and Lender's rights in the Property, including payment of taxes . . . ." The Deed of Trust further specified that any amount paid by Wells Fargo to protect the value of the Property "shall become an additional debt of the Borrower and be secured by this Security Instrument."

         ¶6 Graham-Rogers and her family members who jointly owned Lot 3 failed to pay the 2009 and 2010 property taxes assessed to Lot 3, which included Tract M. In October 2010, Graham-Rogers received a real estate tax bill from Gallatin County which stated, "WARNING! This property is the subject of a TAX LIEN SALE per MCA 15-17-212. Please pay TOTAL DELINQUENT TAXES DUE immediately." Graham-Rogers sought to refinance the Loan with Wells Fargo in late 2010 and early 2011. In February 2011, upon learning of the tax delinquency and pending tax lien sale of the property, Wells Fargo advanced $3, 387.76 to pay the delinquent taxes because there were insufficient funds in Graham-Rogers' escrow account to pay the full amount of taxes due. The advance created a negative balance in Graham-Rogers' escrow account. Wells Fargo notified Graham-Rogers of its full tax payment, the resulting escrow shortage, and a change in her monthly mortgage payment to make up the shortage in her escrow account.

         ¶7 Graham-Rogers objected to Wells Fargo's full tax payment for Lot 3 and the increase of her mortgage payment to cover the tax payment. Graham-Rogers continued to pay the original loan payment amount, which reflected the taxes and costs associated only with Tract M. Graham-Rogers and Wells Fargo attempted to resolve this payment issue in 2011, with Wells Fargo offering repayment options, but an agreement was not reached. Wells Fargo maintained the Deed of Trust permitted it to pay the taxes in full and increase Graham-Rogers' monthly mortgage payment accordingly, and that Graham-Rogers' partial payments did not satisfy the terms of the note and Deed of Trust. Payments have not been made on the loan as due since July 2013.

         ¶8 On August 7, 2011, Wells Fargo sent Graham-Rogers a letter stating the Loan was in default and that Wells Fargo would pursue foreclosure if the Loan was not made current. In October 2013, Graham-Rogers quitclaimed her interest in Lot 3 to her family, and Wells Fargo initiated foreclosure proceedings in December 2013. Graham-Rogers pursued several other avenues in search of relief, including filing a ...


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