21st Mortgage Corporation v. Robinson, [Ms. SC-2023-0304, Dec. 20, 2024] __ So. 3d __ (Ala. Civ. App. 2024). The Court (Shaw, J.; Parker, C.J., and Bryan, Mendheim, and Mitchell, JJ., concur) reverses a judgment entered by the Baldwin Circuit Court on a jury verdict on claims of promissory fraud and outrage in favor of Raymond Robinson and against 21st Mortgage Corporation (“21st Mortgage”). The jury awarded Robinson $200,000 in compensatory damages and $1,000,000 in punitive damages on the promissory-fraud claim and $780,000 in compensatory damages and $1,000,000 in punitive damages on the tort-of-outrage claim, for a total award of $2,980,000.
In December 2016, Robinson contracted with Emerald Homes, LLC (“Emerald”) to purchase a mobile home to replace an existing house on his property. Robinson attempted to finance the purchase through a loan from 21st Mortgage. Robinson alleged he “tore down his house in preparation for the delivery of his new mobile home, an event that ultimately did not occur because, [despite a preapproval] Robinson also alleged, Emerald and/or 21st Mortgage refused to complete the loan transaction.” Ms. *2.
The Court first reiterates the elements of a claim for promissory fraud:
Promissory fraud requires, in addition to the elements of a traditional fraud claim, an intention by the defendant not to perform at the time the subject promise was made as well as an intent to deceive:
“‘“‘The elements of fraud are (1) a false representation (2) of a material existing fact (3) reasonably relied upon by the plaintiff (4) who suffered damage as a proximate consequence of the misrepresentation. To prevail on a promissory fraud claim ..., two additional elements must be satisfied: (5) proof that at the time of the misrepresentation, the defendant had the intention not to perform the act promised, and (6) proof that the defendant had an intent to deceive.’”’”
Heisz v. Galt Indus., Inc., 93 So. 3d 918, 925 (Ala. 2012) (citations omitted). See also Alabama River Grp., Inc. v. Conecuh Timber, Inc., 261 So. 3d 226, 245 (Ala. 2017) (“To succeed on a claim of promissory fraud, the … plaintiffs must prove two elements in addition to the elements of misrepresentation, namely: ‘proof that at the time of the misrepresentation, the defendant had the intention not to perform the act promised, and ... proof that the defendant had an intent to deceive.’” (quoting Ex parte Moulton, 116 So. 3d 1119, 1144 (Ala. 2013))).
Ms. **15-16.
After discussing the evidence, the Court holds that the trial court should have granted JML to 21st Mortgage on the promissory fraud claim. The Court first notes a lack of “direct evidence … to suggest that, at the time it issued the preapproval notice to Robinson, 21st Mortgage had no intention to eventually fund the loan as promised in the event Robinson met all required conditions.” Ms. *19. The Court recognizes that an intent not to perform can be found from circumstantial evidence, but concludes the circumstantial evidence relied on by Robinson is insufficient. The Court explains, Robinson relies on “testimony from [21st Mortgage credit manager Lisa] Ryan to suggest that all the ‘closing conditions’ were, in fact, satisfied, in doing so, he ignores other testimony from Ryan suggesting that even if the ‘closing conditions’ for Robinson’s loan were fully satisfied, all the ‘funding conditions’ were not, which testimony is confirmed by the fact that Robinson’s deed, evidence of a full down payment, and a mortgage release were not sent to 21st Mortgage.” Ms. * 22.
The Court “reiterates that the tort of outrage is an extremely limited cause of action and will lie in circumstances demonstrating only the most egregious conduct,” Ms. **26-27, and holds
While the outcome of a failed loan transaction can be unfortunate for a borrower, the lack of success in closing Robinson’s loan, especially with no intent to deceive on the part of 21st Mortgage, was not so extreme in degree as to go “‘“‘beyond all possible bounds of decency[] and to be regarded as atrocious and utterly intolerable in a civilized society.’”’” Wilson, 266 So. 2d at 677 (citations omitted). Further, “[t]he evidence did not show the level of conduct our cases have recognized to be actionable as outrageous.” Potts v. Hays, 771 So. 2d 462, 465 (Ala. 2000). Thus, as with Robinson’s promissory-fraud claim, even viewing the evidence in the light most favorable to him, nothing suggests the extreme or outrageous conduct necessary to survive 21st Mortgage’s motion for a JML as to the tort-of-outrage claim.
Ms. *29.