Davis R. Conway and Sheri D. Conway v. CitiMortgage, Inc. and Federal National Mortgage Association, Inc.

Summary

The Missouri Supreme Court held that homeowners sufficiently pleaded a claim under the Missouri Merchandising Practices Act based on alleged wrongful foreclosure-related conduct. The Court interpreted "in connection with" broadly to include post-loan servicing and collection practices occurring during the ongoing performance of a loan, even when undertaken by an entity that was not the original lender. The judgment dismissing the claim was reversed and the case remanded.

Holdings

1. For purposes of the Missouri Merchandising Practices Act, a loan is an agreed-upon bundle of services being sold by the lender, and the sale continues until the last agreed service is performed or the loan is repaid. Fraudulent or deceptive conduct occurring while those services are being performed is "in connection with" the sale.
2. A defendant need not have been an original party to the loan transaction or have a direct contractual relationship with the borrower to be liable under the MMPA, so long as the alleged misconduct occurred in connection with services comprising the sale of the loan.

Questions Presented

1. Whether the Conways sufficiently pleaded that the defendants’ alleged wrongful foreclosure and related loan-servicing conduct occurred "in connection with" the sale of the mortgage loan under the Missouri Merchandising Practices Act.
2. Whether a defendant that was not the original lender or seller, including a loan servicer or assignee, may be liable under the Missouri Merchandising Practices Act for deceptive conduct connected with the ongoing performance and enforcement of a loan.

Disposition

reversed_and_remanded