Date: 08-01-2006

Case Style: Thaxton v. Beneficial Mortgage Co. of Oklahoma

Case Number: 103080

Judge: Doug Gabbard II

Court: Oklahoma Court of Civil Appeals on appeal from the District Court of Tulsa County, Oklahoma

Plaintiff's Attorney:

Tim Janak, Tulsa, Oklahoma, for Plaintiffs/Appellants

Defendant's Attorney:

Dan M. Peters, FULLER, TUBB, POMEROY & STOKES, P.C., Oklahoma City, Oklahoma, for Defendants/Appellees

Description:

Plaintiffs, John F. Thaxton II and Annette Thaxton, appeal an order of summary judgment granted in favor of Defendants, Beneficial Mortgage Co. (BMC) and Beneficial Oklahoma, Inc. (BOI). For the following reasons, we affirm in part, reverse in part, and remand for further proceedings.

In July 1994, Dennis and Janet Bullock granted BMC a first mortgage on their real property to secure the payment of their loan with BOI. In May 1998, they granted BMC a second mortgage on their real property to secure the payment of another loan with BOI. In May 1999, they sold the real property to Plaintiffs. As part of this sales transaction, Guaranty Abstract Co. obtained loan payoff information from BOI, paid off the balance of the mortgages, and requested releases, notifying BOI that, under Oklahoma law, it was required to release the mortgages within 50 days or suffer substantial penalties. BOI replied by letter, stating that it would release the mortgages.

In September 2000, Plaintiffs refinanced and discovered that the Bullock mortgages had not been released. Buffalo Abstract Co., on behalf of Plaintiffs, sent a fax to BOI, again requesting the release of mortgages and noting that it had "been well over 90 days" since payment. BOI sent a written reply admitting that both mortgages had been paid in full and that they would be released. 1

In November 2003, Plaintiffs again attempted to refinance. On November 7, 2003, they received a title opinion indicating that Defendants had still not released the mortgages of record. As a result, Plaintiffs allege that they were unable to refinance, defaulted on their note, and had a foreclosure action filed against them on December 4, 2003, by their mortgage holder, Green Tree Servicing. Shortly thereafter, Plaintiffs filed bankruptcy, and, on March 10, 2004, mailed a deed in lieu of foreclosure to Green Tree Servicing in an effort to settle the foreclosure action. However, Green Tree refused to accept the deeds because the mortgages had not been released. BOI eventually filed releases of both mortgages in the Office of the County Clerk of Tulsa County, Oklahoma, on April 23, 2004.

On July 29, 2004, Plaintiffs filed the present action against Defendants, setting forth two causes of action: First, violation of 46 O.S.2001 § 15, which requires mortgage holders to release their mortgage within 50 days of full payment, and, if not, then 10 days after written notice by the mortgagee, the mortgagee may file a civil action for damages equaling one percent of the principal debt not to exceed $100 per day for each day the release is not recorded; Second, the tort of intentional infliction of emotional distress. Plaintiffs sought damages in excess of $10,000 for violation of the statute, loss of equity in the property, damage to their credit, and severe emotional distress.

On October 6, 2005, after generally denying liability, Defendants filed a motion for summary judgment arguing three propositions: First, that Plaintiffs' cause of action under § 15 accrued on October 6, 2000, and was barred by the one-year statute of limitations set forth in 12 O.S. Supp. 2005 § 95(4); Second, that Plaintiffs' suit failed to state a cause of action under § 15 because the notice given to Defendants was from a third party, not Plaintiff, and the second mortgage was never paid in full; Third, § 15 sets forth an exclusive remedy and, therefore, Plaintiffs' second cause of action for intentional infliction of emotional distress was barred.

Plaintiffs responded that the commencement of the limitations period was estopped by Defendants' conduct; that the notice given to Defendants was by Plaintiffs' agents; that the second mortgage was paid in full; and that damages for emotional distress and punitive conduct could be awarded.

On December 21, 2005, after reviewing the pleadings and listening to the argument of counsel, the trial court, without explaining its decision, granted summary judgment in favor of Defendants. Plaintiffs appeal.

Outcome: For the reasons set forth above, we reverse the summary judgment on Plaintiffs' first cause of action because a substantial controversy exists as to whether Defendants are equitably estopped from asserting the statute of limitations as an affirmative defense. However, we affirm the summary judgment on Plaintiffs' second cause of action since 46 O.S.2001 § 15 sets forth an exclusive remedy.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED FOR FURTHER PROCEEDINGS.

Plaintiff's Experts: Unavailable

Defendant's Experts: Unavailable

Comments: Reported by Janey Horton