                        This opinion will be unpublished and
                        may not be cited except as provided by
                        Minn. Stat. § 480A.08, subd. 3 (2012).

                             STATE OF MINNESOTA
                             IN COURT OF APPEALS
                                   A14-0861

                            Loyce C. Gonza-Odima, et al.,
                                     Appellants,

                                          vs.

                                    Zumbro LLC,
                                     Respondent,

                             Homeward Residential, Inc.,
                              a Delaware corporation,
                                   Respondent.

                              Filed December 15, 2014
                                     Affirmed
                                Stoneburner, Judge

                            Ramsey County District Court
                              File No. 62-CV-13-7650

Kenneth G. Schivone, Roseville, Minnesota (for appellants)

Jack E. Pierce, Matthew S. Greenstein, Bernick Lifson, P.A., Minneapolis, Minnesota
(for respondent Zumbro LLC)

Jared D. Kemper, Dykema Gossett, PLLC, Minneapolis, Minnesota (for respondent
Homeward Residential, Inc.)

      Considered and decided by Schellhas, Presiding Judge; Johnson, Judge; and

Stoneburner, Judge.




 Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
                        UNPUBLISHED OPINION

STONEBURNER, Judge

       Appellants, mortgagors whose property was sold in foreclosure, challenge the rule

12 dismissal of their amended complaint against respondents, the servicer of their

mortgage and the entity that acquired the property at the end of the redemption period.

Appellants argue that the district court erred by (1) failing to treat respondents’ rule 12

motions as motions for summary judgment; (2) holding that some of their claims are

barred by Minn. Stat. § 513.33 (2012); and (3) holding that they failed to state valid

claims against the mortgage servicer for negligent misrepresentation, fraudulent

misrepresentation, and breach of the duty of good faith and fair dealing. We affirm.

                                         FACTS

       Appellants Loyce Gonza-Odima and Gabriel Odima (Odimas) mortgaged real

property.   The mortgage was serviced by respondent Homeward Residential, Inc.

(Homeward). Odimas, who subsequently leased the property to persons not party to this

action, defaulted on the mortgage, prompting a foreclosure by advertisement in 2012. At

that time, Odimas were approximately $14,000 behind on their mortgage payments.

       While the foreclosure was in process, Odimas started working with Homeward to

modify the mortgage under the Home Affordable Mortgage Program (HAMP). An

October 4, 2012 notice of foreclosure, served on the tenants who occupied the property,

stated $278,264.66 as the amount due on the mortgage and that a foreclosure sale would

occur on November 16, 2012. That sale was postponed and, on November 19, 2012,




                                            2
Homeward sent notice that the sale would occur later that month. That sale, however,

was subsequently postponed to January 22, 2013.

       By letter dated November 30, 2012, Homeward told Odimas that it needed more

information from them to determine their eligibility for HAMP relief. On January 21,

2013, Gabriel Odima spoke with someone at Homeward who confirmed that Odimas had

provided all of the information required for the HAMP eligibility determination and

further stated that the foreclosure sale set for January 22, 2013 would not occur.

       Despite Homeward’s representation to Odimas, the foreclosure sale occurred on

January 22, 2013, and the holder of the mortgage bought the property. Odimas did not

redeem the property, a successor in interest to a junior creditor did, and the redeeming

entity conveyed the property to respondent Zumbro, LLC. Zumbro later conveyed the

property to another entity, not a party to this action.

       In October 2013, Odimas sued Zumbro and Homeward, challenging the

foreclosure.   Odimas’ amended complaint (complaint), which erroneously identifies

Homeward as the mortgagee rather than the servicer of the mortgage, admits that Odimas

were approximately $14,000 in arrears at the time the first foreclosure sale was noticed.

The complaint alleges, in part, that the terms of the mortgage were violated because there

was no notice given by certified mail of the default and the acceleration of the amounts

otherwise not yet due under the mortgage, as required by the mortgage. Odimas asserted

that this prevented them from curing the default prior to foreclosure. The complaint,

construed broadly, asserts that absent notice, acceleration of the entire amount due on the

mortgage was improper, and therefore that the notice of foreclosure, which claimed that


                                               3
the entire accelerated amount of the mortgage was due, erroneously overstated the

amount actually due.      The complaint also asserts that Homeward negligently and

fraudulently told Odimas that the foreclosure sale would not occur on January 22, 2013.

Odimas’ complaint asserts six somewhat repetitive counts. Counts one and two allege

that the assertion of a false amount due constitutes violations of statutory requirements

for foreclosure by advertisement. Count three alleges that false representations made by

Homeward breached its duties of good faith and fair dealing, hindering Odimas’

performance of mortgage obligations and causing them not to act to protect themselves.

Count four alleges that Homeward acted negligently and fraudulently by informing them

that the foreclosure sale would not occur. Count five alleges that Homeward’s false

statements of the amount due and that the sale would not occur breached Homeward’s

duty of good faith and fair dealing. Count six alleges that Homeward’s false statement

that the sale would not occur was intentionally and fraudulently made, causing Odimas

not to protect themselves.

       Zumbro and Homeward moved to dismiss the complaint for failure to state a claim

on which relief could be granted.       To support their motions, Homeward’s counsel

submitted an affidavit stating, in relevant part: “Attached hereto as Exhibit 1 is a true and

correct copy of Notices of Default sent on May 24, 2012.” Exhibit 1 consists of two

copies of a letter dated May 24, 2012, giving notice of default and intent to accelerate the

mortgage, documents showing that those letters were sent by certified mail, and return

receipts apparently signed by each Odima, acknowledging their receipt of the notices.




                                             4
       Just before the hearing on the motions to dismiss, Odimas attempted to file an

affidavit of Gabriel Odima adding additional information to supplement the allegations in

the complaint that Homeward told him there would be no foreclosure sale. This affidavit

also states that Odimas “did not see” the notices attached as Exhibit 1 to the affidavit of

Homeward’s counsel.         Homeward objected to the timeliness of Gabriel Odima’s

affidavit, and the district court declined to consider it.

       The district court granted the motions to dismiss under Minn. R. Civ. P. 12.02(e),

ruling that Odimas’ complaint failed to state a claim on which relief could be granted.

Judgment was entered dismissing the complaint, and Odimas appeal.

                                       DECISION

       Under Minn. R. Civ. P. 12.02(e), “a claim is sufficient to survive a motion to

dismiss for failure to state a claim if it is possible on any evidence which might be

produced, consistent with the pleader’s theory, to grant the relief demanded.” Walsh v.

U. S. Bank, N.A., 851 N.W.2d 598, 600 (Minn. 2014) (syllabus); see Bahr v. Capella

Univ., 788 N.W.2d 76, 80 (Minn. 2010) (stating that a pleading will be dismissed “only if

it appears to a certainty that no facts, which could be introduced consistent with the

pleading, exist which would support granting the relief demanded”) (quotation omitted).

Our review of an order dismissing a case under rule 12.02 is de novo, and we “accept the

facts alleged in the complaint as true and construe all reasonable inferences in favor of

the nonmoving party.” Walsh, 851 N.W.2d at 606.




                                               5
1.     The district court did not err by failing to treat the motions to dismiss as
       motions for summary judgment.

       Odimas argue that the district court’s acceptance of the documents in Exhibit 1 of

Homeward’s counsel’s affidavit required conversion of the rule 12 motions into motions

for summary judgment.      We disagree.     Rule 12.02 requires that “[i]f, on a motion

asserting the defense that the pleading fails to state a claim upon which relief can be

granted, matters outside the pleading are presented to and not excluded by the court, the

motion shall be treated as one for summary judgment and disposed of as provided in Rule

56, and all parties shall be given reasonable opportunity to present all material made

pertinent to such a motion by Rule 56.” But a district court “may consider documents

referenced in a complaint without converting the motion to dismiss to one for summary

judgment.” N. States Power Co. v. Minn. Metro. Council, 684 N.W.2d 485, 490-91

(Minn. 2004) (clarifying that only documents referenced in or a part of the pleading that

is the subject of the motion to dismiss may be considered without converting a rule 12

motion to dismiss into a motion for summary judgment).

       Odimas’ complaint asserts that notice by certified mail under the acceleration

clause of the mortgage was not given. The letters constituting notice, as well as proof of

their mailing by certified mail are, therefore, plainly referenced in the complaint, and the

district court’s consideration of those documents does not convert the rule 12 motions

into motions for summary judgment.         And the documents conclusively refute the

assertion that notice was not sent by certified mail, thereby negating all of Odimas’

claims that are based on the assertion that acceleration of the mortgage was a breach of



                                             6
any contractual duty, and resulted in a misstatement of the amount due on the foreclosure

notice.

          Alternatively, even if it could be argued that the documents contained in Exhibit 1

were outside of the pleadings, Odimas failed to raise any factual issue and failed to

provide any argument that additional discovery could have shown the existence of a fact

issue, concerning mailing of the notice by certified mail as required by the mortgage.

The affidavit that Odimas attempted to introduce stated only that they “did not see” the

notice attached as Exhibit 1 and does not purport to refute the evidence that the notice

was mailed to them by certified mail. Any error by the district court in failing to treat the

issue of mailing of this notice as one for summary judgment did not prejudice Odimas

and does not require reversal of dismissal of all claims related to an alleged misstatement

of the amount due based on failure to comply with the notice requirement contained in

the mortgage.

2.        Odimas’ claims based on the timing of notice of postponement of the
          November 16 foreclosure sale fail to state claims on which relief could be
          granted.

          Odimas argue that they made a viable challenge to the foreclosure sale based on

the fact that notice of postponement of the sale scheduled for November 16 was not given

until November 19. We find no merit in this claim.

          Postponement of foreclosure sales is governed by Minn. Stat. § 580.07,

subd. 1(a)(1), (2) (2012). Those provisions state, in relevant part, that (1) the party

seeking postponement must publish “a notice of the postponement and the rescheduled

date of the sale, if known, as soon as practicable, in the newspaper in which the notice [of


                                               7
the original sale] was published”; and (2) the notice of postponement be mailed, within

three business days of the postponed sale, to the occupant. This mailed notice must

include the rescheduled date, if known “and the date on or before which the mortgagor

must vacate the property . . .” Minn. Stat. § 580.07, subd. 1(a)(1), (2).         Odimas’

complaint fails to mention Minn. Stat. § 580.07 and makes no allegation that notice was

not given in accord with the statute.

       Odimas rely on Bennet v. Brundage, 8 Minn. 432, 8 Gil. 385 (1863), to support

their argument that it is “improper” to publish notice of postponement after the date of

the originally scheduled sale. Bennet involved a dispute about whether a foreclosure sale

was defective because postponement of sale was noticed before the sale rather than on the

day of the scheduled sale. See Bennet, 8 Minn. at 434, 8 Gil. at 385 (stating that the case

involves only whether the sale can legally be postponed prior to the day named in the

original notice and that nothing in the applicable statute required the party to wait until

the scheduled day to give notice).      The opinion notes the general advantage of a

mortgagor of early notice of postponement, but the case does not hold that notice must be

given before the date of sale. See Bennet, 8 Minn. at 434-35, 8 Gil. at 385. Because

neither the statute nor caselaw requires that notice of postponement be given before the

originally scheduled date of sale, Odimas’ claim to the contrary fails to assert a claim on

which relief can be granted.

3.     Odimas’ claims based on Homeward’s representation that the January 22
       foreclosure sale would not occur are barred by the statute of frauds.

       Counts three, four, and six of Odimas’ complaint are all based on Homeward’s

representation to Gabriel Odima that the foreclosure sale would not occur on January 22,

                                            8
2013. The district court concluded that because an oral promise to postpone a foreclosure

sale constitutes an unwritten credit agreement on which any action by a debtor is barred

by statute, Odimas failed to make a claim on which relief could be granted. See Minn.

Stat. § 513.33, subd. 1(1) (defining a “credit agreement,” in relevant part, as “an

agreement to lend or forebear repayment of money . . . , to otherwise extend credit, or to

make any other financial accommodation”); id., subd. 2 (stating that “[a] debtor may not

maintain an action on a credit agreement unless the agreement is in writing, expresses

consideration, sets forth the relevant terms and conditions, and is signed by the creditor

and the debtor”); id., subd. 3(3) (providing that the writing requirement applies to an

agreement by a creditor to forbear from exercising remedies under prior credit

agreements).

       Odimas, citing no authority, assert that the statute does not apply to claims for

fraud and misrepresentation. We disagree. See Brisbin v. Aurora Loan Servs., LLC, 679

F.3d 748, 752 (8th Cir. 2012) (holding that a promise to postpone a foreclosure sale is a

financial accommodation for purposes of Minn. Stat. § 513.33, subd. 1). Because the

statute plainly bars any action by a debtor on such an unwritten agreement, there is no

merit to Odimas’ assertion that actions for fraud and misrepresentation are not barred by

the statute. Because all claims based on Homeward’s assertion that the sale would not

occur are barred by the statute, we decline to address Odimas’ arguments addressing the

district court’s alternative bases for dismissing these claims.

       Affirmed.




                                              9
