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Johnson v. GMAC Mortgage Corp.2/22/2005
n to tender does not arise until the lender has fulfilled its obligations. Id.
As they do in their discussion of the declaratory judgment count, respondents contend that GMAC had no duty to release the deed of trust until Mr. Johnson agreed to tender. That may be true, but it also misses the point. The courts that have so ruled have not held that a borrower fails to state a claim for relief if he does not allege tender. They have simply held that a lender need not release its security interest until a court has an opportunity to determine whether the borrower actually has asserted statutory grounds for rescinding the loan agreement. See Riopta, 101 F.Supp.2d at 1331; Large , 292 F.2d at 54-55.
Thus, if Mr. Johnson asserted proper statutory grounds for rescission here, then GMAC's security interest would be void and the trial court would be obligated to quiet title in favor of Mr. Johnson. See Stottle v. Brittian , 459 S.W.2d 310, 313 (Mo. 1970). We therefore conclude that Mr. Johnson has alleged facts putting GMAC's security interest in issue based upon his claim that he rescinded the loan agreement after GMAC violated TILA. Cf. State ex rel. Mo. Highway & Transp. Comm'n v. London , 824 S.W.2d 55, 59 (Mo. App. E.D. 1991) ("If title has been properly put in issue, a judgment of dismissal without determination of title is error. This is true even if plaintiff fails to establish his claim of title. However, an adjudication of title must be based upon some evidence sufficient to put title in issue.") (internal citations omitted).
E. Mr. Johnson Stated a Claim for Conversion
Mr. Johnson's first amended petition included a count for conversion alleging that GMAC "used threats and coercion to obtain two payments" from him, that at the time GMAC did so it "was aware that did not owe money to GMAC" and that he paid the money to GMAC for a specific purpose but that GMAC "converted the money to its own use." When it dismissed this count, the trial court said that " claim for conversion of money is generally improper" and that " n exception exists ' ;in narrow circumstances' where 'the plaintiff delivered funds to the defendant for a specific purpose and the defendant diverted them for another and different purpose of the defendant." (quoting Knight v. M.H. Siegfried Real Estate , Inc ., 647 S.W.2d 811, 817 (Mo. App. W.D. 1982)).
Mr. Johnson's second amended petition included a revised count for conversion, alleging that he had "paid money to GMAC at the specific request of GMAC and upon representations made by GMAC that he was making payments on his account," that at the time GMAC made its requests and representations, GMAC "was aware that did not owe money to GMAC under the terms of the loan that had timely and lawfully cancelled pursuant to his rights under [TILA] and that did not have an account with GMAC," that he paid money to GMAC "for his escrow payments and the money was to be used for the payment of real property taxes and home owner's insurance premiums" and that "GMAC did not establish an escrow account, failed to credit the money to any escrow account and instead converted the money to its own use." The court dismissed this count as well, finding that Mr. Johnson "has yet failed to plead tender of the proceeds to defendant GMAC in an effort to rescind the transaction" and that " he failure to effect tender causes plaintiff's Second Amended Petition in that regard to be fatally defective."
Mr. Johnson contends that the trial court erred in dismissing these counts because "the facts state a claim for conversion in that under TILA, the defendant was not entitled to any payment, and the plaintiff paid money to the defendant to fu
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