Miguel A. Laborde and Himelda Johanna Cruz-Candelo v. Citizens Bank, N.A.

Rel: December 19, 2025

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other
errors, in order that corrections may be made before the opinion is printed in Southern Reporter.

SUPREME COURT OF ALABAMA
OCTOBER TERM, 2025-2026

_________________________

SC-2025-0014
_________________________

Miguel A. Laborde and Himelda Johanna Cruz-Candelo

v.

Citizens Bank, N.A.

Appeal from Madison Circuit Court
(CV-23-900301)

COOK, Justice.1

1This case was originally assigned to another Justice on this Court.

It was reassigned to Justice Cook on August 22, 2025.
SC-2025-0014

In 2015, Miguel A. Laborde took out a loan to finance the purchase

of a home for him and his wife, Himelda Johanna Cruz-Candelo. In turn,

they granted a mortgage on the property to secure the loan. The subject

loan was guaranteed and insured by the United States through the

Housing Loan Program of the Department of Veterans Affairs ("the VA"),

which is designed to help veterans secure home ownership while

minimizing the risk of foreclosure. Because Laborde was a veteran, he

qualified for this loan program.

In 2022, after encountering difficulty making their monthly

payments, they defaulted on the loan. As a result, Citizens Bank, N.A.

("the Bank"), began foreclosure proceedings. Laborde and Cruz-Candelo

sought to stave off those proceedings by offering to bring the loan current

before the sale, which they believed was their right under the mortgage

contract.

Despite their efforts to do so, Laborde and Cruz-Candelo say the

Bank refused to let them get current on the loan and sold the property to

third-party purchasers. Moreover, Laborde and Cruz-Candelo argue that

the amount received by the Bank at foreclosure was more than was owed

on their loan and yet the Bank has failed to pay this surplus to them.

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The third-party purchasers filed an ejectment action against them

in the Madison Circuit Court. Laborde and Cruz-Candelo defended

against that action and brought claims of their own against both the

Bank and the third-party purchasers. The trial court, however, entered

a judgment that, among other things, dismissed all of Laborde and Cruz-

Candelo's claims against them.

Laborde and Cruz-Candelo now appeal that judgment to this Court.

Laborde and Cruz-Candelo's claim against the third-party purchasers

has now been settled. They repurchased their house from the third-party

purchasers by paying even more than the foreclosure price. While the

ejectment is therefore no longer the subject of this appeal, the

reinstatement of their claims against the Bank remains at issue.

They ask this Court to reinstate four of the five claims they brought

against the Bank. The trial court erred in dismissing three of them. For

the reasons stated below, we affirm in part, reverse in part, and remand.

Facts and Procedural History

I. The Subject Loan

Laborde and Cruz-Candelo purchased a residential property

located on Heritage Mill Drive in Madison on November 19, 2015.

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Laborde obtained a loan in the amount of $416,150 from North Alabama

Mortgage, Inc., to finance the purchase of the house.

As stated previously, the subject loan was guaranteed and insured

by the United States through the Housing Loan Program of the VA. The

loan was issued subject to the terms, conditions, and restrictions set by

the Secretary of Veterans Affairs, including those set forth in 38 U.S.C. §

3703 and the corresponding federal regulations.

Those statutes and regulations require lenders and their agents to

conduct meaningful preforeclosure-default servicing in an effort to avoid

foreclosure. Consistent with those requirements, the mortgage and the

promissory note expressly obligate the lender to engage in such servicing.

In addition, the mortgage contract contains a provision that refers to the

governing VA regulations, providing that any inconsistent loan terms are

automatically "conform[ed]" to the applicable VA regulations.2

2Specifically, the mortgage contract includes the following
provision:

"Department of Veterans Affairs regulations at 38 C.F.R.
36.4337 provide as follows:

" 'Regulations issued under 38 U.S.C. Chapter 37
and in effect on the date of any loan which is
submitted and accepted or approved for a
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The day Laborde obtained the subject loan, Laborde and Cruz-

Candelo executed a promissory note in favor of North Alabama Mortgage

for the loan amount. To secure the note, Laborde and Cruz-Candelo

granted a mortgage on the property, naming North Alabama Mortgage

as the lender and Mortgage Electronic Registration Systems, Inc.

("MERS"), as the mortgagee and nominee for the lender. Again, on the

same date, North Alabama Mortgage executed an allonge endorsing the

note to Franklin American Mortgage. Laborde alleges that, at some point

thereafter, the Bank took over the servicing of their loan: collecting

payments from them, sending them to the lender, and handling

administrative aspects of the loan.

II. Laborde's Struggle to Make Payments on the Subject Loan and
the Underlying Foreclosure Sale

In 2021, Laborde's employment situation changed dramatically. He

had been involved in work connected with government contracting, but

when the United States abruptly withdrew from Afghanistan in 2021,

guaranty or for insurance thereunder, shall govern
the rights, duties, and liabilities of the parties to
such loan and any provisions of the loan
instruments inconsistent with such regulations
are hereby amended and supplemented to conform
thereto .' "
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many of those contracts fell through. This created financial instability,

and by 2022 Laborde was having difficulty making his monthly mortgage

payments.

In response to Laborde's failure to pay, the Bank accelerated the

note and set a foreclosure sale for February 21, 2023. Laborde claims

that, more than five days before the foreclosure sale, he contacted the

Bank to reinstate the mortgage. According to Laborde, he spoke with a

Bank employee, who informed him that to bring the loan current he

would be required to pay $31,252.32 in arrearages, $2,022.78 in

miscellaneous fees, and $5,175.53 in late fees, totaling approximately

$38,450. He asserts that he was prepared to wire this amount

immediately and tender full payment. However, the Bank allegedly

refused to accept the funds directly. Instead, the Bank employee

instructed Laborde to contact the foreclosure law firm handling the

matter -- Rubin Lublin, LLC.

Laborde maintains that he promptly called Rubin Lublin, left a

detailed voicemail explaining that he wished to pay the full

reinstatement amount immediately, and requested wiring instructions.

He also submitted a written inquiry through the firm's website asking

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for someone to contact him so that the payment could be completed.

Laborde contends that he never received a return call or response from

the law firm and that no wiring instructions were ever provided. He

asserts that the Bank, despite knowing of his willingness to cure the

default in full, refused to accept payment and pressed forward with

foreclosure.

The foreclosure sale was conducted on February 21, 2023. At the

sale, the property was purchased by third parties for $480,000, an

amount that Laborde and Cruz-Candelo allege was substantially less

than its fair market value, which, he claims, an appraisal showed was

closer to $625,000. Laborde and Cruz-Candelo state they were both out

of the country at the time of the foreclosure sale and that they did not

receive adequate notice to vacate the premises or to preserve and exercise

their statutory right of redemption. On March 6, 2023, a foreclosure deed

was executed to the purchasers.

III. The Underlying Ejectment Action and Laborde and Cruz-
Candelo's Claims

Following the foreclosure sale, the third-party purchasers filed an

action seeking to eject Laborde and Cruz-Candelo from the house.

Laborde and Cruz-Candelo responded by raising affirmative defenses to
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the allegations in the complaint and bringing a counterclaim against the

third-party purchasers. They also brought in the Bank as a third-party

defendant to the action and alleged four claims against it as well.

First, Laborde and Cruz-Candelo alleged that the Bank breached

the duty of good faith and fair dealing. They claimed that the Bank

breached those duties by refusing their timely effort to reinstate and by

proceeding with foreclosure despite Laborde's readiness to cure the

default. They further alleged that conducting a foreclosure sale under

those circumstances, and at a price substantially below market value,

was unconscionable and inconsistent with good faith and fair dealing.

Next, Laborde and Cruz-Candelo alleged a breach-of-contract claim

against the Bank. According to them, the Bank did not comply with the

notice provision of the mortgage contract, which was a condition

precedent to foreclosure. They further alleged that the Bank did not

comply with the regulations applicable to VA-guaranteed loans and that

those failures deprived the Bank of any contractual or legal authority to

conduct the foreclosure sale. They finally alleged that the Bank likewise

failed to honor Laborde's right under the mortgage contract to reinstate

the mortgage before acceleration and sale.

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Laborde and Cruz-Candelo further asserted a claim of wrongful

foreclosure. They alleged that the Bank's foreclosure proceedings were

negligent, wanton, or intentional and that the power of sale was exercised

for a purpose other than securing the debt owed. They also argued that

the Bank was not the party to whom the debt was owed at the time of

sale.

Laborde and Cruz-Candelo also sought to redeem the property from

the third-party purchasers. They argued that they did not receive proper

notice and that their right to redeem should be upheld.

Finally, Laborde and Cruz-Candelo requested declaratory relief,

asking the trial court to declare that the Bank lacked the right to

foreclose and that the foreclosure was therefore invalid.

IV. The Bank and the Third-Party Purchasers' Motions to Dismiss
and the Trial Court's Judgment

On March 21, 2024, the trial court dismissed all claims against both

the Bank and the third-party purchasers. One week later, Laborde and

Cruz-Candelo amended their claims pursuant to Rule 78, Ala. R. Civ. P.,

which permits amendment as of right within 10 days of an order granting

a motion to dismiss.

In their amended pleading, Laborde and Cruz-Candelo pleaded
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some more specific factual allegations in a few places and added a claim

of unjust enrichment against the Bank. The five original claims remained

the same.

On October 3, 2024, the trial court entered a summary judgment

for the third-party purchasers on their ejectment claim and dismissed all

of Laborde and Cruz-Candelo's claims against both parties, pursuant to

Rule 12(b)(6), Ala. R. Civ. P. Laborde and Cruz-Candelo thereafter filed

two separate motions to alter, amend, or vacate the judgment dismissing

their claims against the third-party purchasers and the Bank,

respectively. The trial court denied both motions.

Laborde and Cruz-Candelo appealed to this Court. While the appeal

was pending, they reached a pro tanto settlement with the third-party

purchasers to repurchase their house for $625,000. They then jointly

moved to dismiss the appeal as to those purchasers, and this Court

granted that motion. Thus, only the dismissal of Laborde and Cruz-

Candelo's claims against the Bank remains at issue in this appeal.

Standard of Review

"On appeal, a dismissal is not entitled to a presumption
of correctness. The appropriate standard of review under Rule
12(b)(6)[, Ala. R. Civ. P.,] is whether, when the allegations of
the complaint are viewed most strongly in the pleader's favor,
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it appears that the pleader could prove any set of
circumstances that would entitle her to relief. In making this
determination, this Court does not consider whether the
plaintiff will ultimately prevail, but only whether she may
possibly prevail. We note that a Rule 12(b)(6) dismissal is
proper only when it appears beyond doubt that the plaintiff
can prove no set of facts in support of the claim that would
entitle the plaintiff to relief."

Nance v. Matthews, 622 So. 2d 297, 299 (Ala. 1993) (internal citations

omitted).

Discussion

Laborde and Cruz-Candelo insist that the trial court erred in

dismissing four of the five claims that they brought against the Bank.3

With one exception, we agree.

I. Breach of Duty of Good Faith and Fair Dealing

Laborde and Cruz-Candelo assert that the Bank breached an

implied covenant of good faith and fair dealing, and they brought this

claim as an independent cause of action. In their view, the Bank's conduct

violated its duty not to interfere with their ability to receive the benefits

3Laborde and Cruz-Candelo do not argue that they should have
their declaratory-judgment claim reinstated, so we do not consider that
claim. See Ex parte Professional Bus. Owners Ass'n Workers' Comp.
Fund, 867 So. 2d 1099, 1101 (Ala. 2003) ("The failure to raise an issue on
appeal is the equivalent of waiving the issue.").
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of the mortgage.

Alabama law does not recognize an independent claim for a breach

of this type. Although Alabama law recognizes an " ' " implied covenant of

good faith and fair dealing," ' " meaning that " ' " neither party shall do

anything which will have the effect of destroying or injuring the rights of

the other party to receive the fruits of the contract," ' " Lloyd Noland

Found., Inc. v. City of Fairfield Healthcare Auth., 837 So. 2d 253, 267

(Ala. 2002) (quoting Sellers v. Head, 261 Ala. 212, 217, 73 So. 2d 747, 751

(1954)), our Court has made clear that this duty is not itself actionable.

Specifically, we have explained that "a duty of good faith in connection

with a contract is directive, not remedial, and that therefore an action

will not lie for breach of such a duty." Tanner v. Church's Fried Chicken,

Inc., 582 So. 2d 449, 452 (Ala. 1991) (citing Government St. Lumber Co.

v. AmSouth Bank, 553 So. 2d 68 (Ala. 1989)).

Laborde and Cruz-Candelo effectively concede this point in their

opening brief. They acknowledge that "the obligation [of good faith and

fair dealing] is actionable when the breach of that duty can be tied to the

performance of a specific term of the contract." Laborde and Cruz-

Candelo's brief at 27. The case they cite for that proposition, Lake

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Martin/Alabama Power Licensee Ass'n v. Alabama Power Co., 601 So. 2d

942, 945 (Ala. 1992), underscores that "[t]his Court has explicitly held

that there is no good faith contractual cause of action." Accordingly,

Laborde and Cruz-Candelo cannot recover for a breach of that duty

standing alone. Because Alabama law forecloses such an independent

cause of action, the trial court correctly dismissed this claim.

II. Breach of Contract

Laborde and Cruz-Candelo assert, among other things, that the

Bank frustrated their right to reinstate the mortgage.4 According to

them, they could have reinstated the mortgage five days before the

foreclosure sale under Paragraph 18 of the mortgage contract, which they

attempted to do, but the Bank deliberately kept them from paying the

funds to bring the loan current.

To prevail on a breach-of-contract claim, a plaintiff must prove " '(1)

4Laborde and Cruz-Candelo also allege that the Bank ignored the

incorporated federal regulations that would have allowed them to cure
any time before the foreclosure sale and that the Bank failed to give
proper notice of the foreclosure sale. Because we hold that the allegations
that the Bank breached Paragraph 18 of the mortgage are sufficient to
state the claim, we need not reach the question whether Laborde and
Cruz-Candelo can sufficiently state a claim for money damages under the
other theories they allege.
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a valid contract binding the parties; (2) the plaintiffs' performance under

the contract; (3) the defendant's nonperformance; and (4) resulting

damages.' " Shaffer v. Regions Fin. Corp., 29 So. 3d 872, 880 (Ala. 2009)

(quoting Reynolds Metals Co. v. Hill, 825 So. 2d 100, 105 (Ala. 2002)). For

the second element, a plaintiff can show either that he " 'has performed,

or that he is ready, willing, and able to perform under the contract.' "

Beauchamp v. Coastal Boat Storage, LLC, 4 So. 3d 443, 450 (Ala. 2008)

(quoting Winkleblack v. Murphy, 811 So. 2d 521, 529 (Ala. 2001)).

Paragraph 18 of the mortgage provides for terms under which the

borrower can reinstate the mortgage after acceleration. It states, in

relevant part: "If Borrower meets certain conditions, Borrower shall have

the right to have enforcement of this Security Instrument discontinued

at any time prior to the earliest of: (a) five days before sale of the Property

pursuant to any power of sale contained in this Security Instrument …."

Laborde and Cruz-Candelo specifically alleged that "[m]ore than 5

days prior to the foreclosure sale," Laborde "contacted [the Bank] to

reinstate by paying [the Bank] all sums due to cure the default …."

Further, Laborde and Cruz-Candelo alleged that a Bank employee told

Laborde how much money would be required to reinstate the mortgage

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but that he was unable to perform.

But nonperformance is no defense, because they alleged that the

Bank "refused to allow [Laborde] to wire the funds to [it]" and that the

law firm to which he was referred "failed and refused to communicate

with him at all regarding the reinstatement." In other words, Laborde

was "ready, willing, and able to perform" but was prevented from doing

so. Moreover, "[a] party to a contract who has caused a failure of

performance by the other party cannot take advantage of that failure."

Big Thicket Broad. Co. of Alabama v. Santos, 594 So. 2d 1241, 1244 (Ala.

Civ. App. 1991) (citing Dixson v. C. & G. Excavating, Inc., 364 So. 2d 1160

(Ala. 1978)).

For its part, the Bank does not dispute any of Laborde and Cruz-

Candelo's allegations. Indeed, its response brief on appeal ignores them

altogether. Instead, the Bank doubles down on the "first breach" doctrine,

arguing that, because Laborde and Cruz-Candelo failed to make their

required mortgage payments, they cannot maintain a breach-of-contract

action against the Bank. In the Bank's view, their prior default forecloses

any possible set of facts that could support such a claim.

The Bank primarily relies on two cases. In the first case, the United

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States District Court for the Northern District of Alabama entered a

summary judgment in favor of the mortgagee when it found that the

mortgagor had "failed to make payments for three years" and had "not

performed under the contract." Embry v. Carrington Mortg. Servs., LLC,

No. 1:22-CV-7-CLM, June 13, 2023 (N.D. Ala. 2023) (not reported in

Federal Supplement), aff'd in pertinent part and vacated in part on other

grounds, No. 24-13352, Nov. 6, 2025 (11th Cir. 2025) (not reported in

Federal Reporter). Notwithstanding that this Court is not bound to follow

the federal district court's interpretation of Alabama law, this case is not

dispositive. There, Embry brought an action against Carrington for

"failing to comply with … application of payment and notice

requirements." Id. Carrington was not accused of breaching a cure

provision like the one at issue in this case.

Next, in Tidmore v. Citizens Bank & Trust, 250 So. 3d 577, 590

(Ala. Civ. App. 2017), the Court of Civil Appeals found that "Tidmore did

not perform under [the mortgage] contract [because] he tendered many

late or incomplete payments, and he then defaulted on the loan outright."

Again, Tidmore did not assert breach of a cure provision, but breach of

notice requirements. Id. at 582. The Bank's reliance on both of these cases

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is misplaced. They do not sweep so broadly as to prohibit any breach-of-

contract action when a mortgagor fails to make payments on a loan and

certainly not in the case where the breach claimed involves a

contractually considered cure provision.

Rather, under Alabama law, when interpreting contracts, " ' " we

must examine the [text] as a whole and, if possible, give effect to each

section." ' " Davis v. City of Montevallo, 380 So. 3d 382, 389 (Ala. 2023)

(quoting City of Pinson v. Utilities Bd. of Oneonta, 986 So. 2d 367, 371

(Ala. 2007), quoting in turn Ex parte Exxon Mobil Corp., 926 So. 2d 303,

309 (Ala. 2005)); see also Antonin Scalia & Bryan A. Garner, Reading

Law: The Interpretation of Legal Texts § 24, at 167 (2012) ("Context is a

primary determinant of meaning. A legal instrument typically contains

many interrelated parts that make up the whole. The entirety of the

document thus provides the context for each of its parts.").

The Bank contends that Laborde and Cruz-Candelo cannot invoke

the protections of a contract they themselves first breached. But the

parties plainly contemplated that very possibility -- a missed mortgage

payment -- and addressed it expressly in the text of the contract in

Paragraph 18. The inclusion of a cure provision was not gratuitous; it

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was a deliberate allocation of risk, ensuring that the mortgagor retained

a contractual right to remedy default before facing foreclosure.

Paragraph 18 exists to operate precisely when the mortgagor fails

to make timely payments. To hold that a mortgagor forfeits the right to

cure by virtue of the very default that triggers it would render the clause

meaningless. The Bank's interpretation would mean that such provisions

could never be enforced in the exact circumstance they were designed to

govern. That outcome would discourage fair dealing in mortgage

transactions altogether.

It is no consolation, as the Bank argues, that its breach can be

raised as a defense in an ejectment action. Some lender obligations may

be foreclosed by a borrower's default, but the cure provision is not one of

them. It is an independently enforceable promise that takes effect after

default, and its breach remains actionable. To hold otherwise would

nullify the very protection the provision was designed to provide.

As we have stated, each provision of a contract must be given effect,

if possible. A mortgagee who disregards an express right to cure breaches

an independent, bargained-for obligation. The Bank's position, taken to

its logical conclusion, would substantially weaken the borrower's

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contractual protections and risk reducing the lender's own obligations to

mere formalities. 5

Accordingly, because Laborde and Cruz-Candelo have adequately

pleaded a viable breach-of-contract claim -- and because their failure to

make timely payments does not, as a matter of law, preclude them from

pursuing that claim -- we hold that the trial court erred in dismissing it.

III. Wrongful Foreclosure

Laborde and Cruz-Candelo alleged in their amended pleading that

"the foreclosure proceeding by the Bank was negligent, wanton or

intentional" and that the "power of sale was exercised for a purpose other

than to secure the debt." The Bank purportedly "relied on the assignment

from MERS, as nominee for North Alabama Mortgage, Inc. to assert it

was the Lender and had the right to foreclose on the mortgage." That

5While this Court has not spoken to how the "first breach" doctrine

would specifically apply in relation to a cure provision such as the one at
issue here, we find the Eleventh Circuit Court of Appeals' interpretation
of Georgia's "first breach" doctrine persuasive. That court has noted:
"[The mortgagee] … argues that any breach of contract action … would
be barred under the first breach doctrine …. [T]aken to its logical
conclusion, such a rule would prohibit any mortgagor from ever enforcing
any contract terms governing acceleration and foreclosure, as these
terms by definition come into play following a breach." Bates v.
JPMorgan Chase Bank, NA, 768 F.3d 1126, 1130 n.3 (11th Cir. 2014).
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assignment, incorporated into the amended pleading by reference, was

an assignment of the mortgage. 6

Laborde and Cruz-Candelo maintain that they had the contractual

right to cure the default before the foreclosure sale. They recount that,

when Laborde called the Bank, he was told to pay more than $38,000 in

fees in addition to the remaining loan balance. Although they believed

the fees to be overinflated, Laborde and Cruz-Candelo asserted that they

were "prepared to wire all the funds demanded directly to [the Bank]."

According to their allegations, the Bank frustrated their performance by

refusing to accept the tender.

A wrongful-foreclosure claim arises when " 'a mortgagee uses the

power of sale given under a mortgage for a purpose other than to secure

the debt owed by the mortgagor.' " Jackson v. Wells Fargo Bank, N.A., 90

6In certain circumstances, this Court is permitted to treat
documents attached to the pleadings as part of the pleadings without
converting a motion to dismiss into a motion for a summary judgment.
See Rule 10(c), Ala. R. Civ. P. ("A copy of any written instrument which
is an exhibit to a pleading is a part thereof for all purposes."). For
instance, those circumstances include when there are " ' authenticated
documents ... attached to the motion to dismiss' " that are " ' " ' " referred
to in the complaint and [are] central to the plaintiff[s'] claim[s]." ' " ' "
Sumter Cnty. Bd. of Educ. v. University of W. Alabama, 349 So. 3d 1264,
1266 (Ala. 2021) (quoting Newson v. Protective Indus. Ins. Co. of
Alabama, 890 So. 2d 81, 86 (Ala. 2003)) (other citations omitted).
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So. 3d 168, 171 (Ala. 2012) (quoting Reeves Cedarhurst Dev. Corp. v.

First Am. Fed. Sav. & Loan Ass'n, 607 So. 2d 180, 182 (Ala. 1992))

(emphasis added). Improper purposes include using the power of sale to

sell for " ' " any ill motive, to effect means and purposes of his own, or to

serve the purposes of other individuals," ' " Paint Rock Props. v.

Shewmake, 393 So. 2d 982, 983-84 (Ala. 1981) (citations omitted). Those

kinds of motivations constitute " ' " fraud in the exercise of the power." ' "

Id. (citations omitted).

On appeal, Laborde and Cruz-Candelo cite Harris v. Deutsche Bank

National Trust Co., 141 So. 3d 482, 491 (Ala. 2013), in which this Court

reinforced that a trustee must have "received an assignment of the note"

for it to "execute the power of sale in its own name." See also Coleman v.

BAC Servicing, 104 So. 3d 195, 205 (Ala. Civ. App. 2012) (" ' " The note is

the cow and the mortgage the tail. The cow can survive without a tail,

but the tail cannot survive without the cow." ' " ) (quoting Restatement

(Third) of Property: Mortgages § 5.4, Reporter's Note -- Introduction, cmt.

a at 386 (Am. L. Inst. 1997)). The Court found "that on the state of the

current record there is a genuine issue of material fact as to whether the

trustee received [that] assignment." Harris, 141 So. 3d at 491.

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However, as the Bank points out, under those facts, the Harris

Court affirmed a summary judgment for the mortgagee on the

mortgagor's wrongful-foreclosure claim. Id. The Court reiterated that a

wrongful-foreclosure action lies only when the mortgagee exercises the

power of sale for a purpose other than collecting the debt and recognized

that the Harrises did not "allege that the power of sale was exercised for

any purpose 'other than to secure the debt owed by them.' " Id.

But Harris was decided at the summary-judgment stage, where the

mortgagor must produce evidence of such an improper purpose. At the

pleading stage, the bar is lower: allegations that the mortgagee lacked

authority to foreclose, coupled with general assertions that the sale was

conducted for an improper purpose, are sufficient to state a claim.

Although Harris indicates that an improper "purpose" (that is, a state of

mind) is a requirement for a wrongful-foreclosure claim, the motion-to-

dismiss stage is different from the summary-judgment stage. Under Rule

9(b), Ala. R. Civ. P., a "condition of [the] mind" such as purpose "may be

averred generally" at the pleading stage.

Thus, while Harris supports the entry of a summary judgment for

a mortgagee when the record contains no evidence of improper purpose

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and the mortgagor did not allege an improper purpose, it does not

preclude a mortgagor from proceeding past the pleading stage when they

specifically allege, as Laborde and Cruz-Candelo did, that the "power of

sale was exercised for a purpose other than to secure the debt." The trial

court was incorrect to dismiss this claim.

IV. Unjust Enrichment

Laborde and Cruz-Candelo's final claim of unjust enrichment, in

addition to incorporating the rest of the statements in their amended

pleading, stated that "Defendant has been unjustly enriched as a result

of its actions." They alleged that the property sold for $480,000 -- more

than their original purchase price of $416,150.

Alabama law recognizes unjust enrichment as " ' an old equitable

remedy permitting the court in equity and good conscience to disallow

one to be unjustly enriched at the expense of another.' " Avis Rent A Car

Sys., Inc. v. Heilman, 876 So. 2d 1111, 1123 (Ala. 2003) (citation and

emphasis omitted). " 'To prevail on a claim of unjust enrichment under

Alabama law, a plaintiff must show that: (1) the defendant knowingly

accepted and retained a benefit, (2) provided by another, (3) who has a

reasonable expectation of compensation.' " Matador Holdings, Inc. v.

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HoPo Realty Invs., L.L.C., 77 So. 3d 139, 145 (Ala. 2011) (plurality

opinion) (quoting Portofino Seaport Vill., LLC v. Welch, 4 So. 3d 1095,

1098 (Ala. 2008)).

Taken together, Laborde and Cruz-Candelo's allegations permit a

reasonable inference that the Bank may have received and retained more

than it was entitled to under the mortgage. At this stage, however, the

Court's task is not to weigh evidence but to assess the sufficiency of the

pleadings. Under Alabama's liberal notice-pleading standard, dismissal

is proper only when there exists no set of facts under which the plaintiff

could prevail. Nance, 622 So. 2d at 299.7 Accepting Laborde and Cruz-

Candelo's allegations as true and drawing all reasonable inferences in

their favor, the Court cannot conclude as a matter of law that recovery

7The Bank argues that Laborde and Cruz-Candelo cannot bring an

unjust-enrichment claim because parties cannot bring such a quasi-
contract claim when there is an express contract between the parties.
The Bank correctly states the law. See Kennedy v. Polar-BEK & Baker
Wildwood P'ship, 682 So. 2d 443, 447 (Ala. 1996) ("[U]nder Alabama law,
claims of both an express and an implied contract on the same subject
matter are generally incompatible."). Laborde and Cruz-Candelo respond
by explaining that they have pleaded in the alternative and have also
alleged that the Bank does not own the note (that is, that there is no
contract between these parties). Because, in this case, "the existence of
an express contract … [is] disputed," they can pursue, at the pleading
stage, both claims for a surplus. Id.
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for unjust enrichment is foreclosed. Thus, the trial court erred in

dismissing this claim.

Conclusion

The trial court correctly dismissed Laborde and Cruz-Candelo's

claim of breach of the duty of good faith and fair dealing. However,

because they sufficiently alleged facts supporting their other three

claims, the trial court erred in dismissing those claims. We therefore

affirm the dismissal of the first claim, reverse the dismissal of the other

three claims, and remand the case for further proceedings consistent with

this opinion.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

Stewart, C.J., and Shaw, McCool, and Parker, JJ., concur.

Bryan, J., concurs in the result.

Wise, J., concurs in part and dissents in part, with opinion, which

Sellers and Mendheim, JJ., join.

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WISE, Justice (concurring in part and dissenting in part).

I concur to affirm the trial court's dismissal of Miguel A. Laborde

and Himelda Johanna Cruz-Candelo's claim of breach of the duty of good

faith and fair dealing. However, I dissent as to the majority's decision to

reverse the trial court's dismissal of Laborde and Cruz-Candelo's claims

of breach of contract, wrongful foreclosure, and unjust enrichment.

Sellers and Mendheim, JJ., concur.

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