Jenifer Bailey v. Wells Fargo Bank, N.A.

Court of Appeals of Mississippi·Decided June 18, 2019·No. 2017-CA-00156-COA·Published

Opinion

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI NO. 2017-CA-00156-COA

JENIFER BAILEY APPELLANT v.

WELLS FARGO BANK, N.A., JEREMIAH E. APPELLEES SCHROEDER II, MARIE SCHROEDER, REMAX CHOICE PROPERTIES AND REMAX, LLC

DATE OF JUDGMENT: 01/06/2017 TRIAL JUDGE: HON. LAWRENCE PAUL BOURGEOIS JR. COURT FROM WHICH APPEALED: HARRISON COUNTY CIRCUIT COURT, FIRST JUDICIAL DISTRICT

ATTORNEY FOR APPELLANT: MICHAEL W. CROSBY ATTORNEYS FOR APPELLEES: FREDERICK N. SALVO III ADRIA H. JETTON

SAMUEL D. GREGORY

DONALD RAFFERTY

NATURE OF THE CASE: CIVIL - PERSONAL INJURY DISPOSITION: AFFIRMED - 06/18/2019 MOTION FOR REHEARING FILED: MANDATE ISSUED:

EN BANC.

J. WILSON, P.J., FOR THE COURT:

¶1. Jenifer Bailey bought a house from Jeremiah (“Jay”) and Marie Schroeder. Bailey later sued the Schroeders, alleging that they failed to disclose that there had once been a meth lab in the house. The Schroeders filed a motion for summary judgment, supported by affidavits and deposition testimony, arguing that there was no genuine issue of material fact and that they were entitled to judgment as a matter of law because there was no evidence that there had been a meth lab in the house—let alone evidence that they knew or should have

known about it. In response, Bailey failed to produce any affidavits or other competent evidence to show that there was a genuine issue of material fact. Therefore, the circuit court granted the Schroeders’ motion for summary judgment. We affirm.

FACTS AND PROCEDURAL HISTORY

¶2. On November 23, 2010, Bailey filed a complaint in Harrison County Circuit Court against the Schroeders, Re/Max Choice Properties, and Re/Max LLC. In relevant part, the complaint alleged as follows: Jay was a broker/agent and principal of Re/Max Choice Properties, which was an agent of Re/Max LLC. The Schroeders owned a rental house in Gulfport. In 2008, they listed the house for sale with the Re/Max defendants. As required by Mississippi law, the Schroeders completed and signed a “Property Condition Disclosure Statement,” which required them to answer the following question:

Are you aware of any problems which may exist with the property by virtue of prior usages such as, but not limited to, Methamphetamine Labs, Hazardous/Toxic waste disposal, the presence of asbestos components, Lead-Based Paint, Urea-Formaldehyde Insulation, Mold, Radon Gas, Underground Tanks or any past industrial uses of the premises?

The Schroeders checked “No” in response to this question. In January 2009, Bailey bought the house from the Schroeders. Bailey alleges that she later discovered that a former occupant of the house had been arrested in 2007 for operating a meth lab in the house. She further alleges that the Schroeders knew or should have known about the meth lab. Bailey’s complaint asserted claims against the Schroeders1 for fraud, negligent misrepresentation, violation of statutory real estate disclosure requirements, and breach of contract. The

1 We will refer to all defendants collectively as “the Schroeders.”

complaint also named Wells Fargo Bank N.A. as an additional “plaintiff.” The complaint asserted that Wells Fargo was “a necessary and indispensable party to this litigation” because it held a deed of trust on the subject property.

¶3. The Schroeders answered the complaint, denying Bailey’s allegations that there had been a meth lab in the house or that they knew or should have known about a meth lab. Wells Fargo filed a “Response” to the complaint in which it asserted that it was “not a Plaintiff and should be treated as a Rule 19 Defendant.”2 Wells Fargo stated that it should be considered a Rule 19 defendant because it held a deed of trust on the property and that its interest in the case, if any, was limited to its rights associated with the deed of trust. Wells Fargo stated it had “not joined in [Bailey’s] claims” but “reserve[d] the right to seek leave . . . to join in [Bailey’s] claims or assert counter and/or cross claims at a later date.”

¶4. The parties engaged in discovery during 2011 and 2012. In October 2013, the clerk filed a motion to dismiss for failure to prosecute, but Bailey opposed the motion and noticed depositions, and the court administratively terminated the clerk’s motion. In July 2015, after another year of inactivity, the clerk filed another motion to dismiss for failure to prosecute, but Bailey filed a response to the motion, and the motion was denied.

¶5. On November 4, 2016, Wells Fargo filed a “Motion to Dismiss.” Wells Fargo argued that it should be dismissed from the case because no claims were asserted against it and because it no longer held a deed of trust on the property (and, thus, was no longer a necessary party). Bailey did not file a response to Wells Fargo’s motion.

2 See M.R.C.P. 19(a) (A necessary party “may be made a defendant or, in a proper case, an involuntary plaintiff.”).

¶6. On November 28, 2016, the Schroeders filed a motion for summary judgment. They argued that they were entitled to judgment as a matter of law because there was no evidence that there had been a meth lab in the house or that they knew or should have known about a meth lab. The motion was supported by the Schroeders’ affidavits and deposition testimony from three of their former tenants—Barbara Broadus and two of her children, Daniel and Tena Broadus. The Broaduses testified that they lived in the house during the time when Bailey alleged that a meth lab had been in operation there. They all denied that there had been a meth lab in the house. They testified that Barbara’s son Tim was only an occasional guest at the house but did not live there permanently. They knew that Tim used drugs, but they never saw him with drugs in the house. Barbara testified that she would not have allowed Tim to bring drugs into the house. On July 30, 2017, Barbara found a green plastic bottle in the backyard that she thought was unusual and might be related to drugs. After consulting a friend, she decided to call the police, and the police arrested Tim at the house for possession of precursors. The police found additional precursors in Tim’s car. Police searched the house but only found some ordinary household batteries in the bedroom where Tim was sleeping. Barbara, Daniel, and Tena all testified that they never smelled any odors in the house or saw anything else to suggest that Tim was making meth in the house. They lived in the house for a year after Tim’s arrest and never experienced any health issues. Barbara testified that she told Marie Schroeder that she had to have Tim arrested. However, she did not tell the Schroeders that Tim had been making meth at the house (because she did not believe that he had been). In affidavits, Jay and Marie Schroder both swore that no one

ever told them that there was a meth lab in the house.

¶7. On December 8, 2016, Bailey filed a response to the Schroeders’ motion. However, all but the first page of the response is missing because of an apparent filing error by Bailey. Bailey submitted three pages of exhibits with her response. One page is what purports to be an August 6, 2007 memorandum to Jay and Marie Schroeder from Detective Aaron Fore of the Gulfport Police Department. The memorandum states:

Mr. and Mrs. Schroeder,

This letter is to inform you of a Methamphetamine Lab that was discovered in and about the residence located at [the subject address]. On July 30, 2007, the Gulfport Police Narcotics Unit seized numerous devices and precursors used in the manufacture of Methamphetamine from the [subject] address . . . . It is my duty to inform you of the hazards associated with the manufacture of Methamphetamine. As a precautionary measure, it would be advis[able] for a professional cleaning and sterilization to be conducted of the residence to avoid any sicknesses related to possible toxins remaining on the premises. If you have any questions or concerns . . . , you can contact me . . . .

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Jenifer Bailey v. Wells Fargo Bank, N.A., (Mich. Ct. App. 2019).

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