Winfred P. Hudgins, DDS v. JP Morgan Chase Bank, N.A.

• Court: Court of Appeals of Virginia
• Decided: March 25, 2025
• Docket: 1667234
• Status: Unpublished

Opinion

COURT OF APPEALS OF VIRGINIA UNPUBLISHED

Present: Judges O’Brien, Ortiz and Lorish Argued at Fredericksburg, Virginia

WINFRED P. HUDGINS, DDS MEMORANDUM OPINION* BY v. Record No. 1667-23-4 JUDGE MARY GRACE O’BRIEN MARCH 25, 2025 JP MORGAN CHASE BANK, N.A.

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY Michael F. Devine, Judge

Barrett L. Kime (Manoil Kime, PLC, on briefs), for appellant.

Robert R. Michael (David L. Ward; BWW Law Group, LLC, on brief), for appellee.

Winfred P. Hudgins appeals the decision of the circuit court granting a motion for

summary judgment filed by JP Morgan Chase Bank, N.A. (“Chase”). Because we find that the

court had jurisdiction to adjudicate the claim and properly granted summary judgment on that

issue, we affirm.

BACKGROUND

Hudgins is the former owner and current resident of real property located in Reston,

Virginia. In September 2005, he executed a deed of trust securing a loan in the amount of $742,000

(the “First Mortgage”) from MGC Mortgage, Inc. (“MGC”) using the property as collateral. In June

2006, Hudgins executed a credit line deed of trust securing a loan in the amount of $200,000 from

Chase, also using the property as collateral. Hudgins defaulted on both mortgages during the

COVID-19 pandemic. MGC initiated foreclosure proceedings under the First Mortgage and

* This opinion is not designated for publication. See Code § 17.1-413(A). scheduled a foreclosure sale for September 2, 2022.1 Chase scheduled a foreclosure sale of its own

for August 31, 2022.2 Hudgins submitted loss mitigation packages to both MGC and Chase in an

effort to halt the foreclosures. Chase canceled its foreclosure sale when Hudgins entered its loss

mitigation process, but for reasons not disclosed in the record, MGC proceeded with its foreclosure

sale as scheduled. To protect its subordinate interest in the property as security for the Second

Mortgage, Chase attended MGC’s foreclosure sale, was the high bidder, and purchased the

property.

After the foreclosure sale, Chase filed a summons for unlawful detainer in general district

court. Hudgins moved to dismiss for lack of subject matter jurisdiction, alleging the existence of a

bona fide dispute over title to the property under Parrish v. Federal National Mortgage Association,

292 Va. 44 (2016). In his motion, Hudgins challenged the validity of Chase’s title with allegations

of common-law fraud, “dual tracking” 3 in violation of 12 C.F.R. § 1024.41(g); and inequitable

conduct. Hudgins claimed he was entitled to a declaratory judgment that Chase’s title was invalid

and a “constructive trust” to prevent Chase from “retain[ing] the benefit of its ill-gotten title.” In a

supplementary motion to dismiss, Hudgins added that he had a counterclaim against Chase to quiet

title.

1 The foreclosure sale was arranged by substitute trustee Commonwealth Trustees. For simplicity, we refer to MGC Mortgage, Inc., and all of its agents and assigns collectively as “MGC.”

Chase’s substitute trustee, Equity Trustees, LLC, arranged this foreclosure sale. For 2

simplicity, we refer to appellee JP Morgan Chase Bank, N.A. and all of its agents and assigns as “Chase.”

“Dual tracking occurs when [a] servicer moves forward with foreclosure while 3

simultaneously working with the borrower to avoid foreclosure.” McAdams v. Robinson, 26 F.4th 149, 154 (4th Cir. 2022) (alteration in original) (quoting Wilkins v. Wells Fargo Bank, N.A., 320 F.R.D. 125, 129 n.1 (E.D. Va. 2017)); see also Sharma v. Rushmore Loan Mgmt. Servs., LLC, 611 F. Supp. 3d 63, 82 (D. Md. 2020). -2- In his motion to dismiss, Hudgins alleged that Chase intentionally deceived him by

“represent[ing] that there would be no foreclosure while the loan[-modification] application with

[Chase] was pending.” Additionally, according to Hudgins, Chase violated 12 C.F.R. § 1024.41(g)

by purchasing the property at the First Mortgage foreclosure sale while his loan-modification

application was pending. He further accused Chase of engaging in an “unconscionable scheme” to

acquire title at MGC’s foreclosure sale and later attempting to “conceal” the purchase.

In an affidavit attached to his motion to dismiss, Hudgins alleged that after defaulting on the

mortgages, he contacted both MGC and Chase to discuss his delinquency. He subsequently

submitted loan-modification applications to both banks. Upon receiving foreclosure notices from

the banks, the affidavit states, Hudgins “contacted each of them by telephone,” and both informed

him that “[he] was in a loan[-]modification process with each of them and [his] home was not

subject to foreclosure.” According to the affidavit, he later learned that Chase canceled its

foreclosure sale “due to the pending modification process,” but had purchased the property at the

foreclosure sale. The affidavit offers no information about why MGC continued with the

foreclosure sale after Hudgins applied for a loan modification. But the affidavit asserts that MGC’s

foreclosure and Chase’s purchase of the property “violate[d] assurances that [he] received from loan

servicing representatives” for both mortgages “that there would be no foreclosure while

loan[-]modification applications were pending.” Hudgins also claimed that he had sufficient funds

on hand to reinstate both loans, but he did not do so because he relied on the assurances of MGC

and Chase that they would not proceed with foreclosure.

The general district court granted Hudgins’s motion to dismiss. In Chase’s de novo appeal

to circuit court, both parties declared their intent to renew and rely on their pleadings filed in general

district court. See Parrish, 292 Va. at 47, 54 (“[A]lthough de novo, an appeal in the circuit court is

a continuation of the original case.”); see also Stacy v. Mullins, 185 Va. 837 (1946). Chase then

-3- moved for summary judgment. In his opposition, Hudgins asserted that because a bona fide

question of title to the property existed in the general district court, and by extension the circuit

court on appeal, both courts lacked jurisdiction to hear the case; again, he based his jurisdictional

challenge on allegations of common-law fraud, dual tracking, and inequitable conduct by Chase.

At the summary judgment hearing, the arguments focused on equitable considerations.

Hudgins emphasized that both Chase and MGC had represented to him that “he would not be

subject to foreclosure while his loss mitigation applications were pending.” While conceding that

neither Chase nor MGC could bind the other by its separate representations, Hudgins argued the

court could nevertheless consider MGC’s conduct in determining whether he had sufficiently

alleged an equitable basis for challenging Chase’s title. He argued that instead of merely promising

not to foreclose itself, Chase “represented” to him “what were the facts under the federal

regulations,” that he was not subject to foreclosure, and that no foreclosure would occur. However,

when the court asked about the implication of this argument—that is, whether MGC’s alleged

violations could be “held against Chase”—Hudgins pivoted to an argument about Chase’s own

conduct: he asserted it was inequitable for Chase to “choos[e] to be part of a foreclosure” and could

have “reinstat[ed] the [F]irst [M]ortgage loan and charg[ed] the cost to” Hudgins. Hudgins

maintained that although Chase had no duty to reinstate the First Mortgage loan, its decision not to

pursue this option was an equitable consideration in Hudgins’s favor. Having “chose[n] the

foreclosure route,” he argued, Chase “now bears the risk of an equitable claim from the borrower.”

The court found that Hudgins had not raised a bona fide question of title and concluded that

it had jurisdiction to hear the case. “The facts, as [the court] underst[ood] them,” were that “Chase

said[] [it] would not foreclose on [its] loan [and] Chase did not foreclose on [its] loan.” If “Hudgins

misunderstood that or thought somehow that that absolved him from any risk of foreclosure, he was

unreasonably mistaken in that regard,” the court found. Nor was there any “evidence and no

-4- allegation . . . that Chase was in collusion or somehow was aware of any bad action by MGC.” The

court ruled that “there’s nothing to suggest[,] even looking at it from a demurrer standpoint[,] that

Chase was anything but a good faith purchaser for value.” The court granted Chase’s motion for

summary judgment.

ANALYSIS

On appeal, Hudgins asserts a single assignment of error: that “[t]he trial court erred in

granting summary judgment to [Chase], in that the trial court lacked subject matter jurisdiction to

proceed in the case under Parrish[.]”

In Parrish, the Supreme Court of Virginia held that in unlawful detainer actions filed in

general district court, where a homeowner raises allegations that create a bona fide question of title,

the general district court is divested of subject matter jurisdiction and must dismiss the case without

prejudice. 292 Va. at 51-52, 54. A circuit court hearing the appeal must likewise dismiss the

matter, the Court concluded, because “when exercising its de novo appellate jurisdiction, the circuit

court has no more subject matter jurisdiction than the general district court had in that court’s

original proceeding.” Id. at 49.

Not just “any naked allegation” of invalidity, however, “will put the deed in doubt, thereby

divesting the [court] of jurisdiction. The question of title raised by the homeowner’s allegations

must be legitimate.” Id. at 52. To divest the general district court of jurisdiction—and by extension

the circuit court on appeal—“the allegations must be sufficient to survive a demurrer had the

homeowner filed a complaint in circuit court seeking such relief.” Id.

The homeowners in Parrish sufficiently raised a bona fide question of title. In that case,

Brian and Teresa Parrish had mortgaged certain real property by deed of trust. Id. at 48. The deed

of trust was subsequently conveyed to the Federal National Mortgage Association (“Fannie Mae”),

which sent the Parrishes a notice to vacate and filed a summons for unlawful detainer in general

-5- district court. Id. The Parrishes countered that they had timely submitted a completed loss

mitigation application under 12 C.F.R. § 1024.41(g), which “prohibits a foreclosure sale after a

homeowner submits a complete loss mitigation application under certain circumstances.” Id. at 48,

54. They further alleged that “none of the exceptions provided in the regulation (which would have

permitted Fannie Mae and its agent to proceed to foreclosure notwithstanding the application)

applied.” Id. at 54.

The Court found it reasonable to infer that “Fannie Mae[] was aware of the alleged violation

of the deed of trust because it was [both] the lender that allegedly committed the violation” and the

“foreclosure purchaser.” Id. (emphasis added). These allegations, if proven, “could satisfy a court

of equity to set aside the foreclosure.” Id. Thus, the Parrishes raised a bona fide question of title in

the unlawful detainer proceeding, thereby divesting the general district court—and the circuit court

by extension— of subject matter jurisdiction. Id.

Hudgins’s allegations here did not meet that standard. As in Parrish, Hudgins rests his

challenge to the circuit court’s jurisdiction, as derived from that of the district court that originally

heard the case, on an allegation of “dual tracking”—that is, a lender proceeding with foreclosure

while loan-modification proceedings are ongoing—prohibited by 12 C.F.R. § 1024.41(g). But

Hudgins’s allegations are distinguishable from those in Parrish. In that case, Fannie Mae alone was

alleged to have engaged in dual tracking: Fannie Mae foreclosed on the Parrishes’ property while

the parties were in the loss mitigation process, and Fannie Mae was both the foreclosing lender and

the purchaser at the foreclosure sale. Id. Here, Chase was not dual tracking as, by Hudgins’s own

concession, Chase canceled its own foreclosure sale after he initiated the loss mitigation process.

Nevertheless, Hudgins asserts that he raised a bona fide question of title with allegations of

fraud. Defendants who raise a claim of fraud to invalidate a plaintiff’s deed in an unlawful detainer

action in the general district court must do so with sufficient specificity such that their allegations

-6- would “survive a demurrer had the homeowner filed a complaint in circuit court.” Id. at 52. Thus,

allegations of fraud are held to a higher pleading standard than other types of claims. See Ward’s

Equip. v. New Holland N. Am., 254 Va. 379, 385 (1997) (“Generalized, nonspecific allegations . . .

are insufficient to state a valid claim of fraud.”); Tuscarora, Inc. v. B.V.A. Credit Corp., 218 Va.

849, 858 (1978) (requiring that allegations of fraud not be “too vague, indefinite, [or] conclusory”).

If fraud is not sufficiently pled, no bona fide dispute over title exists, and the general district court

may properly try the issue of possession in the unlawful detainer action. Parrish, 292 Va. at 53.

According to Hudgins, Chase’s acknowledgement that the property was not subject to

foreclosure while in the loss mitigation process was a misrepresentation sufficient to sustain his

fraud claim. But Hudgins is bound by his own pleadings. On Chase’s appeal to circuit court,

Hudgins expressly renewed and relied on his pleadings from the general district court. One of those

pleadings—his motion to dismiss—attached his affidavit concerning the foreclosure. The facts in

the affidavit are thus part of his pleadings. See Cal. Condo. Ass’n v. Peterson, 301 Va. 14, 22

(2022) (“Under Rule 1:4(i), a pleader’s ‘mention in a pleading of an accompanying exhibit, of itself

and without more, makes such exhibit a part of the pleading.’”). As he stated in the affidavit,

Hudgins “contacted [MGC and Chase] by telephone regarding the foreclosure notices that [he] had

received. Representatives of [MGC] and [Chase] stated that [he] was in a loan[-]modification

process with each of them and [his] home was not subject to foreclosure.” Later in the affidavit

Hudgins recast these communications as having given him “assurances” that “there would be no

foreclosure while loan[-]modification applications were pending.”

In his motion to dismiss, Hudgins tried to magnify these statements into a fraud claim. He

alleged that Chase intended for him to rely on its promise “that there would be no foreclosure”

while at the same time intending that a foreclosure—presumably, by MGC—would “actually go

forward.” Even assuming the Chase representative did intend to communicate not only that Chase

-7- would refrain from foreclosures but also that MGC would too, Hudgins pled no facts tending to

show that in making such statement, Chase actually believed—or even suspected—that in reality

MGC would proceed with foreclosure. That Chase participated in the subsequent foreclosure sale

in no way shows that Chase believed all along that such a sale would happen. Moreover, as the

general district court noted, nothing in the record demonstrated any collaboration or collusion

between Chase and MGC. Hudgins’s position—that MGC’s actions made Chase’s representations

fraudulent— would, in effect, make Chase Hudgins’s insurer against any breach of those

regulations by MGC, over whom it had no control.4

Therefore, Hudgins’s allegations of fraud failed to raise a bona fide question of title. They

“lack the specificity required to make out a case of fraud,” including “[t]he identities of the agents,

officers, and employees of [Chase] who are alleged to have perpetrated the fraud.” Tuscarora, Inc.,

218 Va. at 858. “The allegations are too vague, indefinite, and conclusory to state a cause of

action.” Id.

Hudgins next argues he raised a bona fide question of title based on his equitable claim for a

constructive trust. “A constructive trust arises not only when there has been actual fraud, but

4 The facts of this case stand in clear contrast to those in our recent decision in Neal v. Secretary of the Department of Veterans Affairs, 79 Va. App. 1 (2023), where we ruled in favor of the homeowner resisting eviction following a foreclosure. In Neal, the homeowner became delinquent on a mortgage from Wells Fargo Bank, secured by a deed of trust in the residence guaranteed by the Veterans Administration (VA). Id. at 4. The deed of trust was subject to a “rider” requiring “compliance wi[th] all VA regulations in effect at the time of the execution of the deed of trust.” Id. Neal obtained a loan modification, but later defaulted on it. Id. The substitute trustee initiated a foreclosure sale, from which the VA emerged as the highest bidder. Id. Neal resisted the subsequent unlawful detainer action on the ground that when she received her loan modification, a VA representative told her that she “no longer had a ‘VA loan’ that required compliance with the VA regulations.” Id. Neal asserted that, had she known that she did in fact still have a VA loan, she “would have availed herself of certain protections contained in the VA regulations and guaranteed to her in her deed of trust.” Id. Unlike the present case, the homeowner in Neal alleged a clear and palpable misrepresentation, by the VA who was a party to the suit and purchaser at the foreclosure sale and uttered by an employee agent of the VA over whom the agency had direct control. See id. -8- whenever one holding title to property ‘is subject to an equitable duty to convey it to another on the

ground that he would be unjustly enriched if he were permitted to retain it.’” Leonard v. Counts,

221 Va. 582, 590 (1980) (quoting A. Scott, The Law of Trusts § 462 (3d ed. 1967)). Constructive

trusts “occur not only where property has been acquired by fraud or improper means, but also where

it has been fairly and properly acquired, but it is contrary to the principles of equity that it should be

retained, at least for the acquirer’s own benefit.” Id. at 589 (quoting 1 Frederick D.G. Ribble, Minor

on Real Property § 462 (2d ed. 1928)).

To raise a bona fide question of title, Hudgins was required to present allegations for a

constructive trust that would be sufficient to survive a demurrer. See Parrish, 292 Va. at 52. He

failed to do so. In his affidavit, Hudgins stated that he relied on Chase’s representation that “there

would be no foreclosure while the loan application with [Chase] was pending.” On appeal, he asks

this Court to infer an “unconscionable scheme” whereby Chase “substituted the [MGC] foreclosure

for its own foreclosure” and “gain[ed] title by foreclosure contrary to its representations.” Hudgins

suggests that, even if these inferences fail to show actual fraud, they nevertheless reflect unjust

conduct by Chase and should preclude Chase from retaining the benefit of title to the property. But

these inferences have no basis in fact and fail to support any viable cause of action for either fraud

or the imposition of a constructive trust. As discussed above, Hudgins pled no facts tending to show

that Chase knew or even suspected that MGC would proceed with foreclosure; nothing in the record

showed collaboration or collusion between the banks.

Hudgins contends that it was inequitable for Chase to acquire the property knowing that

MGC’s foreclosure sale violated federal regulations against dual tracking. However, violation of

the dual-tracking regulation does not create a title defect. See 12 U.S.C. § 2605(f) (providing a

money-damages remedy for dual-tracking violations); see also Code § 55.1-407. Accordingly,

-9- Hudgins’s equitable claims failed to raise a bona fide question of title that would deprive the lower

courts of jurisdiction over the unlawful detainer action.5

CONCLUSION

Because Hudgins failed to raise a bona fide question of title under Parrish, we affirm the

circuit court’s exercise of jurisdiction over the unlawful detainer appeal from general district

court.

Affirmed.

Because Hudgins assigned error only to the circuit court’s decision to grant summary 5

judgment on the ground that it did not have jurisdiction to hear the case, we need not reach any other arguments that Hudgins raises. - 10 -