One missed survey. One wrong address. One six-figure judgment heading back to court
A botched REO sale just cost U.S. Bank and SN Servicing a six-figure judgment after they sold a buyer the wrong house.
The mix-up started with a foreclosure in Shelby County, Alabama. Elizabeth Ellison had taken out a loan back in 2007, secured by a mortgage on a Shelby County property. The loan eventually landed with U.S. Bank Trust National Association, as trustee of the Igloo Series IV Trust, with SN Servicing Corporation handling it. Ellison fell behind, and in April 2022, U.S. Bank picked up the property at a foreclosure sale. The foreclosure deed identified the address as 77 Wildwood Chapel Road in Columbiana.
Here is where things got messy. SN Servicing hired a real-estate broker, Paul Garris, to sell the property. Garris drove out to check who was living there, but he could not find any house or mailbox marked 77 along the road. That is not unusual for rural properties, he later testified, so he pulled the tax records, which pointed him to what looked like a bricked-over double-wide trailer. He knocked on the door and found Ellison still inside. She told him the address was actually 67 Wildwood Chapel Road, though it might have been 77 at some point in the past. She also said she did not realize the property had been foreclosed but figured it might have been since she was several months behind on payments.
So nobody really knew which property the bank had actually foreclosed on. And here is the thing, nobody bothered to find out. No survey was ordered. Ellison was paid $3,500 to vacate. Garris listed the property as 77 Wildwood Chapel Road, an address he later acknowledged does not exist.
A few months later, in August 2022, Marco Bonilla agreed to buy the place for $95,000. The contract started with the address as 67 Wildwood, then got amended to 77 Wildwood before closing. The contract recommended a survey. Bonilla skipped it. He closed, took the keys to the double-wide trailer, and figured he owned it.
He did not.
Bonilla only found out something was off when he tried to sell the trailer to another buyer for $114,000. A title company ran the numbers and told him the legal description on his deed did not match the property he had been handed. The house he had actually bought was 101 Wildwood Chapel Road, a couple of doors down, and it appraised for only a little more than half the value of the trailer he had been living in.
Bonilla sued. He claimed conversion, breach of contract, negligence, wantonness, and asked the court to rescind the deed entirely. The trial court agreed on everything, undid the sale, ordered Bonilla to quitclaim his property back to U.S. Bank, and handed him $114,000 in compensatory damages, $14,913.70 in interest, and $75,000 in punitive damages.
The bank and the servicer appealed. They argued the sale was sold as is and that Bonilla should have ordered the survey he was offered. On May 15, 2026, the Alabama Supreme Court was not persuaded on the core of the case. It affirmed the rescission and the compensatory damages. The as-is argument had been abandoned on appeal, and the court noted that a buyer's failure to get a survey is not a defense to a conversion claim, since conversion is an intentional tort and contributory negligence does not apply.
The court did throw out the $75,000 punitive award, though. Whether the defendants acted wantonly or just made a sloppy mistake, the justices said, is a call for a jury, not a judge on summary judgment. That piece is heading back to the trial court.
For mortgage servicers handling REO, the takeaway lands hard. Identify the parcel before you list it. A $3,500 cash-for-keys deal and a wrong-address listing turned into a rescinded sale, a refunded purchase price, lost-profit damages, and a wantonness claim still on the table.
