MCGINNIS v. AMERICAN HOME MORTGAGE SERVICING, INC
Filing
7
ORDER granting in part and denying in part 6 Motion for Default Judgment. Plaintiff is DIRECTED TO SUBMIT her application for attorneys fees and costs within fourteen (14) days of the date of this Order. Ordered by Judge C. Ashley Royal on 2/9/12 (lap)
IN THE UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF GEORGIA
MACON DIVISION
JANE MCGINNIS
:
:
Plaintiff,
:
v.
:
:
No. 5:11‐CV‐284 (CAR)
AMERICAN HOME MORTGAGE
:
SERVICING, INC.
:
:
:
Defendant.
:
___________________________________ :
ORDER ON MOTION FOR DEFAULT JUDGMENT
This cause comes before the Court on Plaintiff Jane McGinnis’ Motion for
Default Judgment [Doc. 6] against Defendant American Home Mortgage Servicing,
Inc. (“AHMSI”). AHMSI was served with a copy of the Complaint on June 26, 2011.
As of the date of this Order, AHMSI has failed to answer or otherwise respond.
Plaintiff filed a Motion for Entry of Default [Doc. 5], which was entered by the Clerk
on August 30. On September 27 Plaintiff filed this instant Motion requesting default
judgment as to AHMSI’s liability and a jury trial to determine the character, extent,
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measure, and amount of damages.1 For the reasons set forth below, Plaintiff’s Motion
for Default Judgment [Doc. 6] is GRANTED in part and DENIED in part.
FACTUAL BACKGROUND
On October 31, 2011, Plaintiff purchased a home at 172 Hilton Street in
Monticello, Georgia, (the “Property”) by obtaining a $72,750.00 loan (the “Mortgage”)
financed by Taylor, Bean & Whitaker (“TB&W”). At all relevant times, the Mortgage
was a federally related mortgage loan and was subject to the Real Estate Settlement
Procedures Act, 12 U.S.C. § 1601 et seq., (“RESPA”). That same day, Plaintiff also
purchased several other properties, financed by TB&W.2 Although Plaintiff does not
allege in her Complaint that she is a landlord or that the Property was leased during
the relevant time, Plaintiff does allude that the Property was to be leased to tenants.
From her first payment in 2006 until TB&W transferred its rights to servicing
the Mortgage in October 2009, Plaintiff made all of her monthly mortgage payments.
According to the record, AHMSI received service of process of the Complaint and Motion for Entry of
Default. However, there is no showing that the Clerk’s Entry of Default [text entry, Aug. 30, 2011] or
the Motion for Default Judgment [Doc. 6] was served on AHMSI. Rule 55 of the Federal Rules of Civil
Procedure does not require notice to be given to a defendant between the time of service of process and
entry of default judgment, but this Circuit has a strong policy of deciding cases on their merits. See In
re Worldwide Sys., Inc., 328 F.3d 1291, 1295 (11th Cir. 2003). Thus, this lack of notice will be taken into
consideration if AHMSI files a motion to set aside the default judgment in this case. See id.
2 The instant action involves only the Property and the Mortgage. The other properties and mortgages
are relevant to this action to the extent that is noted below.
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2
On October 17, 2009, AHMSI became the transferee servicer. In addition to informing
Plaintiff of this transfer, AHMSI also enclosed information regarding Plaintiff’s rights
under RESPA in a letter dated October 27.3 As a result, Plaintiff subsequently began to
make timely Mortgage payments to AHMSI until and including her final payment in
June 2011.
Shortly after the service transfer, AHMSI notified Plaintiff that she had failed to
make certain payments to TB&W in the final months prior to the transfer, and now, as
a result, was in default. On December 7, 2009, Plaintiff’s son, Adam McGinnis, at all
times on behalf of Plaintiff and with Plaintiff’s authority, sent AHMSI proof of
payment for the alleged defaulted payments and requested that it resolve the dispute.
Despite this letter, AHMSI continued to inform Plaintiff that she was in default. This
prompted Plaintiff’s son to resend proof of payment, requesting an immediate
resolution. Notwithstanding, AHMSI continued to contact Plaintiff, notifying her that
all of her loans, including the Mortgage, were in default, and threatening foreclosure
of the Mortgage. Additionally, AHMSI reported Plaintiff’s default to the collection
agencies employed by AHMSI and the credit reporting bureaus. Throughout this
entire ordeal, the only conceivable response to Plaintiff’s December 2009 inquiry was a
At some point, AHMSI also began servicing Plaintiff’s other mortgages that were initially financed by
TB&W.
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letter from AHMSI that merely informed Plaintiff of the amount that she was allegedly
in arrears, including late fees. This letter was dated June 30, 2010, over six months
after Plaintiff’s initial correspondence.
Up until March 2011, AHMSI accepted Plaintiff’s Mortgage payments without
issue. However, on March 2, AHMSI informed Plaintiff that it was foreclosing on the
Property and reimbursed her for her February 2011 payment that it had previously
cashed. Plaintiff continued to make her March, April, May, and June payments to
AHMSI; however, AHMSI subsequently returned these payments, refusing to accept
them.
Later that March, Plaintiff began to receive notices of foreclosure from
McCurdy & Candler, the law firm representing AHMSI in the foreclosure proceedings.
Plaintiff’s son contacted the attorneys to explain the payment dispute and, in April,
provided the firm with proof of payment. The firm told Plaintiff that it had forwarded
this information to AHMSI for review, but that it would be unable to stop the
foreclosure proceeding unless AHMSI so instructed.
During April and May of 2011, AHMSI ran a notice of foreclosure in The
Monticello News newspaper stating that Plaintiff was in default on the Mortgage and
the Property was to be sold at a foreclosure sale. On June 7, 2011, AHMSI foreclosed
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on the Property at the Jasper County Courthouse, selling it to the lender for $25,000.
As a result of the above events, Plaintiff alleges that she has suffered severe and
extreme mental and emotional distress, and that she has suffered physically and
financially as a result of AHMSI’s actions. Specifically, Plaintiff alleges that she is
being treated by a psychologist to ease the stress and anxiety caused by AHMSI’s
actions and that she is “fearful” that AHMSI will foreclose on her other loans in the
same manner, despite her timely payments. [Doc. 1, p. 16]. Plaintiff additionally
alleges that she has suffered a pecuniary loss, including the loss of rental income, as
well as damage to her credit reputation.
DISCUSSION
A. Default Judgment Standard
Prior to obtaining a default judgment, the party seeking judgment must first
seek an entry of default. Fed. R. Civ. P. 55(a). Plaintiff has satisfied this requirement.
After entry of default, Plaintiff is required to seek default judgment from the Court.
Fed. R. Civ. P. 55(b).
The mere entry of default does not mandate the entry of a default judgment.
Instead, the Court must find a sufficient basis in the pleadings for the judgment to be
entered. Nishimatsu Constr. Co. Ltd. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th
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Cir. 1975).4 The defendant is not held to admit facts that are not well‐pleaded or to
admit conclusions of law. Id. The clerk’s entry of default causes all well‐pleaded
allegations of facts to be deemed admitted. See Buchanan v. Bowman, 820 F.2d 359,
361 (11th Cir. 1987). The Court must accept these facts as true and determine whether
they state a claim upon which relief may be granted. See Chudasama v. Mazda Motor
Corp., 123 F.3d 1353, 1370, n.41 (11th Cir. 1987) (citing Nishimatsu, 515 F.2d at 1206).
The Court must consider whether the unchallenged facts constitute a legitimate cause
of action, since the party in default does not admit a mere conclusion of law. In
considering any default judgment, the Court must examine (1) jurisdiction, (2)
liability, and (3) damages. See Pitts v. Seneca Sports, Inc., 321 F. Supp. 2d 1353 (S.D.
Ga. 2004). This Court has jurisdiction pursuant to 28 U.S.C. § 1332 (diversity
jurisdiction). The remaining considerations, liability and damages, are discussed
below.
B. Liability
Plaintiff brings the following ten counts against AHMSI: 1) wrongful
foreclosure; 2) violations of §§ 2605(e) and (k) of RESPA; 3) defamation; 4) intentional
infliction of emotional distress; 5) conversion; 6) intentional and negligent failure to
In Bonner v. City of Pritchard, 661 F.2d 1206, 1209 (11th Cir. 1981), the Eleventh Circuit adopted all
cases decided by the former Fifth Circuit before October 1, 1981.
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exercise due care in servicing Plaintiff’s loan; 7) tortious interference with property
rights; 8) negligence per se; 9) attorney’s fees and expenses; and 10) punitive damages.
AHMSI’s liability of each will be assessed below.
1. Wrongful Foreclosure
Plaintiff first contends that AHMSI wrongfully foreclosed on her property
because she was not in default on her loan. Under Georgia law, “where a grantee does
not comply with the statutory duty under O.C.G.A. § 23‐2‐114 to exercise fairly the
power of sale in a deed to secure debt, the debtor may sue for damages for the tort of
wrongful foreclosure.” Calhoun First Nat. Bank v. Dickens, 264 Ga. 285, 285, 443
S.E.2d 837, 838 (1994); see O.C.G.A. § 23‐3‐114. Under Georgia law, a party asserting
wrongful foreclosure must establish (1) a legal duty owed to it by the foreclosing
party, (2) breach of that duty, (3) causal connection between the breach of that duty
and the injury sustained, and (4) damages. Heritage Creek Dev. Corp. v. Colonial
Bank, 268 Ga. App. 369, 371, 601 S.E.2d 842, 844 (2004).
In this case, the Court finds that Plaintiff has sufficiently established a well‐
pleaded claim for wrongful foreclosure. Plaintiff’s Complaint demonstrates that
AHMSI serviced Plaintiff’s mortgage and therefore had the legal duty to exercise fairly
and in good faith the power of sale in a deed to secure Plaintiff’s debt. Plaintiff has
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also sufficiently alleged that she was not in default, and thus, AHMSI breached its
duty by foreclosing on her property. Finally, Plaintiff sufficiently established a causal
connection between the breach of AHMSI’s duty and the injury she sustained as a
result. Accordingly, because Plaintiff has sufficiently alleged a claim of wrongful
foreclosure, default judgment as to this claim is GRANTED.
2. RESPA Violations
Plaintiff’s second count alleges that AHMSI violated Sections 2605(e) and
2605(k) of RESPA. First, Plaintiff alleges that, by failing to respond to her qualified
written request for information relating to the servicing of her loan, AHMSI violated
Section 2605(e). Under § 2605(e), when a loan servicer receives a qualified written
request, it must “provide a written response acknowledging receipt of the
correspondence” within twenty days and provide the borrower with the applicable
written explanation within sixty days. Id.
In this case, Plaintiff has sufficiently alleged that her letters and facsimiles to
AHMSI constituted qualified written requests. In her correspondence, Plaintiff
requested a print‐out of her account history with the alleged past due payments,
immediate assistance regarding the misunderstanding, and provided AHMSI with
proof of payment. AHMSI responded, if at all, over six months after Plaintiff’s initial
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request, certainly not within the twenty and sixty‐day time periods mandated by the
statute. The Court accordingly finds that Plaintiff has sufficiently alleged that AHMSI
violated § 2605(e) of RESPA. Default judgment as to this claim is therefore
GRANTED.
Plaintiff also asserts that AHMSI violated § 2605(k). Specifically, she alleges
that AHMSI “did not take timely action to respond to plaintiff’s pleas to correct her
account, refused to properly investigate its errors, failed to correct false reporting to
the credit bureaus and failed to follow standard servicer’s duties and standards of
care.” [Doc. 1, p. 17]. However, sections 2605(k)‐(m) of RESPA, enacted by the Dodd‐
Frank Wall Street Reform and Consumer Protection Act of 2010, Pub. L. No. 111‐203,
124 Stat. 1376 (2010) (the “Act”), are inapplicable to events occurring prior to its
effective date of transfer, eighteen months after the Act’s enactment date of July 21,
2010. See Williams v. Wells Fargo Bank N.A., No. 11‐21233‐CIV, 2011 WL 4368980, *5‐
7 (S.D. Fla. Sept. 19, 2011) (explaining that §§ 2605(k)‐(m) do not come into effect until
18 months after Act’s enactment date, and holding that a claim arising prior to the
effective date of the Act must be dismissed); see also Gibson v. Chase Home Fin., Lic.,
No. 8:11‐CV‐1302‐23TBM, 2011 WL 6319401 *6 (M.D. Fla. Dec. 16, 2011) (holding the
same). Here, RESPA § 2605(k) was not in effect prior to the events alleged by Plaintiff.
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Accordingly, default judgment is therefore DENIED as to this claim.
3. Defamation
Plaintiff next alleges that AHMSI is liable for “publishing false information
about her in the newspaper.” [Doc. 1, p. 18.] Under Georgia law, newspaper libel is
defined as “[a]ny false and malicious defamation of another in any newspaper,
magazine, or periodical, tending to injure the reputation of the person and expose him
to public hatred, contempt, or ridicule.” O.C.G.A. § 51‐5‐2. Accordingly, Plaintiff
must prove five elements: 1) publication 2) of a defamatory statement about the
plaintiff 3) which is false 4) that the Defendant is at fault for publishing, and 5)
Plaintiff suffered actual injury. See Bryant v. Cox Enter., Inc., 311 Ga. App. 230 234,
715 S.E.2d 458, 463 (2011).
In this case, Plaintiff’s newspaper libel claim is sufficiently alleged. Plaintiff
alleges that AHMSI ran a notice of foreclosure in the Monticello Newspaper from
April to May 2011. The advertisement identifies Plaintiff and the Property by name,
and states that the sale is because of “default in the payment of the indebtedness,
secured by a Security Deed.” [See Doc. 1, Ex. 16]. Finally, Plaintiff alleges that she
was not in default and therefore such an advertisement is false. Accordingly, the
Court finds that Plaintiff has sufficiently alleged a claim for newspaper libel against
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AHMSI; default judgment is GRANTED as to this claim.
Plaintiff also claims that AHMSI “report[ed] false information about her to the
credit bureaus.” [Doc. 1, p. 17]. The Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §
1681h(e), protects companies who furnish information to consumer reporting agencies
from state law defamation claims “unless the information it provided was both false
and also given with the malicious or willful intent to damage the consumer.” Lofton‐
Taylor v. Verizon Wireless, 262 Fed. App’x. 999, 1002 (11th Cir. 2008); Moore v.
Equifax Info. Servs., LLC, 333 F. Supp. 2d 1360, 1367 (N.D. Ga. 2004). The malice or
willfulness necessary to overcome the FCRA’s qualified immunity includes acting
with the knowledge that the information was false or acting with reckless disregard of
whether it was false. Parker v. Parker, 142 F. Supp. 2d 1216, 1227 (M.D. Ala. 2000).
Reckless disregard requires evidence of actual doubt about the truth of the
information. Id.
According to the sufficiently alleged facts in Plaintiff’s Complaint, AHMSI
made false statements to credit reporting agencies that she had defaulted on her
Mortgage payments. Further, AHMSI made this report after Plaintiff, on more than
one occasion, disputed the accuracy of AHMSI’s accounting to AHMSI. Based on
these allegations, Plaintiff has alleged that AHMSI knew that Plaintiff was not in
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default and nevertheless reported Plaintiff to the credit reporting agencies. Thus,
Plaintiff has alleged sufficient malice in support of her defamation claim. Finding that
Plaintiff’s defamation claim is not preempted by § 1681h(e), the Court concludes that
Plaintiff has also sufficiently alleged a defamation claim for false reporting to credit
bureaus. Thus, default judgment is GRANTED as to this claim.
4. Intentional Infliction of Emotional Distress
Plaintiff next alleges that AHMSI intentionally inflicted emotional distress.
Under Georgia law, a plaintiff must show the following elements in order to establish
a claim of intentional infliction of emotional distress: “(1) the conduct must be
intentional or reckless; (2) the conduct must be extreme and outrageous; (3) there must
be a causal connection between the wrongful conduct and the emotional distress; and
(4) the emotional distress must be severe.” United Parcel Svc. v. Moore, 238 Ga. App.
376, 377, 519 S.E.2d 15, 17 (1999). The Georgia Court of Appeals has recognized on
numerous occasions that “an intentional wrongful foreclosure can be the basis for an
action for intentional infliction of emotional distress.” See e.g., Ingram v. JIK Realty
Co., 199 Ga. App. 335, 337, 404 S.E.2d 802, 805 (1991) (citation omitted).
Here, Plaintiff’s Complaint alleges sufficient facts to support a claim for
intentional infliction of emotional distress against AHMSI: AHMSI ignored Plaintiffs
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“pleas” to correct her account; AHMSI repeatedly called and sent threatening letters;
and AHMSI foreclosed on the Property after Plaintiff had repeatedly told AHMSI that
she was not in default. [Doc. 1, p. 15]. Plaintiff additionally alleges that such conduct
has led to severe mental and emotional anxiety and stress, including her fear that
AHMSI will foreclose on her other loans. As a result, a psychologist is treating
Plaintiff for this and anxiety. The court accordingly concludes that Plaintiff has
sufficiently alleged a claim of intentional infliction of emotional distress against
AHMSI. Default judgment is GRANTED as to this claim.
5. Conversion
Plaintiff alleges that AHMSI took and converted her Mortgage payments by not
applying them to her account. Conversion is “[a]ny distinct act of dominion
wrongfully asserted over another’s property in denial of his right, or inconsistent with
it.” Md. Cas. Ins. Co. v. Welchel, 257 Ga. 259, 261, 356 S.E.2d 877, 880 (1987). In order
to establish a claim of conversion, plaintiff must show “1) title to the property or right
of possession, 2) actual possession in the other party, 3) demand for return of the
property, and 4) refusal by the other party to return the property.” Metzger v.
Americredit Fin. Servs., 273 Ga. App. 453, 454, 615 S.E.2d 120, 122 (2005). When
someone comes into lawful possession of personal property, however, in the absence
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of a demand for its return and a refusal to return the personal property, there is no
conversion. McDaniel v. White, 140 Ga. App. 118, 120, 230 S.E.2d 500, 502 (1976). In
Johnson v. Citimortgage, Inc., 351 F. Supp. 2d 1368 (N.D. Ga. 2004), a sister court
found that a bank’s refusal to properly apply funds to a plaintiff’s account, as plaintiff
had “repeated[ly] requested,” was evidence of conversion, even though the bank was
in lawful possession of the property. 351 F. Supp. 2d at 1372.
In this case, Plaintiff has alleged that she made all of her Mortgage payments in
a timely manner, and that AHMSI did not post Plaintiff’s February, March, April,
May, and June payments to her account. Plaintiff, however, does not allege that she
requested that AHMSI apply the funds to her account. Because this element is
necessary to establish a claim of conversion, the Court concludes that Plaintiff’s
conversion claim is DENIED.
6. Failure to Exercise Due Care in Servicing Plaintiff’s Loan
Plaintiff next asserts that AHMSI intentionally or negligently failed to exercise
due care in servicing her loan. Under Georgia law, the failure to perform a contract
does not constitute a tort, and a plaintiff has “a tort claim only where, in addition to
breaching the contract, the defendant also breaches an independent duty imposed by
law.” ServiceMaster Co., L.P. v. Martin, 252 Ga. App. 751, 754, 556 S.E.2d 517, 521
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(2001).
Here, Plaintiff has failed to allege any negligent actions or inactions by AHMSI
that fall outside of its administration of the Mortgage. The only duties that Plaintiff
alleges AHMSI violated were its duties to “service her loan in a non‐negligent manner
and to exercise ordinary care in the servicing of her loan.” [Doc. 1, p. 19]. These
duties, however, do not sustain separate tort duties outside of AHMSI’s
administration of the Mortgage. Accordingly, the Court finds that Plaintiff has failed
to sufficiently allege a claim for the intentional and negligent failure to exercise due
care in servicing Plaintiff’s Mortgage. Default judgment is therefore DENIED as to
this claim.
7. Tortious Interference with Property Rights
Plaintiff next alleges that AHMSI unlawfully interfered with “Plaintiff’s
enjoyment of her property or … with her rights in her property” under O.C.G.A. § 51‐
9‐1. [Doc. 1, p. 21]. Specifically, Plaintiff alleges that AHMSI interfered with her
enjoyment and rights of her property by (1) foreclosing on her property, and (2) by
interfering with Plaintiff’s landlord/tenant contract. Id.
Under Georgia law, any unlawful interference with a property right is a
trespass. Dowdell v. Cherry, 209 Ga. 849, 849, 76 S.E.2d 499, 500 (1953). Section 51‐9‐1
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of the O.C.G.A. states, “[t]he right of enjoyment of private property being an absolute
right of every citizen, every act of another which unlawfully interferes with such
enjoyment is a tort for which an action shall lie.” O.C.G.A. § 51‐9‐1. This claim “does
not have to be grounded in negligence, so long as the act causing the trespass was
intended.” Tacon v. Equity One, Inc., 280 Ga. App. 183, 188, 633 S.E.2d 599, 603 (2006).
Additionally, a defendant must have “interfered with [a plaintiff’s] possessory
interests in the realty. Tower Fin. Servs., Inc. v. Mapp, 198 Ga. App. 563, 564 402
S.E.2d 286, 288 (1991) (holding that because an error in a security deed had no legal
effect on plaintiff’s actual title to the property, cause of action under § 51‐91‐1 fails).
Plaintiff’s first claim of tortious interference based on AHMSI’s wrongful
foreclosure is sufficiently alleged. AHMSI’s deliberate action to foreclose on Plaintiff’s
property is in accord with Georgia’s interpretation of trespass. Further, Plaintiff has
sufficiently alleged that the foreclosure had a legal effect on her actual title to the
property. Thus, default judgment is GRANTED as to this claim.
Plaintiff’s second claim of tortious interference, however, is not sufficiently
alleged. In her Complaint, Plaintiff states that AHMSI’s action “interfered with
Plaintiff’s contract with the tenant and the subject of the property, depriving Plaintiff
of rental income.” [Doc. 1, p. 21]. While Plaintiff makes references to rental income
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throughout her Complaint, this is the first and only time Plaintiff makes any reference
to an actual contract at the time of foreclosure. Such a conclusory allegation is
insufficient. Accordingly, Plaintiff’s claim for tortious interference of her property
based on a contract with a tenant is not sufficiently alleged; default judgment is
DENIED as to this claim.
8. Negligence Per Se
Plaintiff’s complaint alleges four different claims of negligence per se: RESPA,
defamation, tortious interference, and a common law duty not to intentionally harm
Plaintiff. For the reasons below, default judgment as to this claim is DENIED.
RESPA
Plaintiff alleges that AHMSI had a “duty under 12 U.S.C. § 2605 not to
intentionally or negligently injure Plaintiff.” [Doc. 1, p. 20]. Such an allegation,
however, fails to allege a claim for which relief can be granted. See Smith v. IndyMac
Fed. Bank, F.S.B., No. 1:10‐cv‐1348, 2010 WL 5490728, *7 (N.D. Ga. 2010) (holding that
Plaintiff fails to state a claim under RESPA because plaintiff fails to identify any
specific section of RESPA that was violated). Here, Plaintiff’s allegation for a cause of
action, by itself, is too vague to provide the Court with any indication of what specific
sections of RESPA were violated. Thus, the Court finds that Plaintiff’s negligence per
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se claim under RESPA is not sufficiently alleged, and default judgment is DENIED.
Defamation & Tortious Interference
Plaintiff also claims that AHMSI “had a duty under Georgia’s defamation laws
not to falsely report plaintiff to the credit bureaus,” and “a duty under Georgia law
not to tortiously interfere with Plaintiff’s property rights.” [Doc. 1, p. 20]. “Before an
act can be considered as negligence it must be in violation of some duty ow[ed], under
the circumstances.” Central Anesthesia Assocs. P.C., et al. v. Worthy, et al., 173 Ga.
App. 150, 153, 325 S.E.2d 819, 823 (1984). Further, “[w]here the cited statute does not
govern the relationship between the parties, no cause of action exists, and recovery for
damages based on violation of that particular statute is unwarranted.” Amick v. BM
& KM, Inc., 275 F. Supp. 2d 1378, 1382 (N.D. Ga. 2003) (quotation omitted).
Here, Georgia law does not create either of the duties Plaintiff seeks to impose
upon AHMSI. Accordingly, Plaintiff has failed to allege a negligence per se claim with
regards to defamation and tortious interference, and therefore default judgment is
DENIED.
Common Law Duty
Plaintiff claims that “AHMSI had a duty under common law not to
intentionally harm” her. [Doc. 1, p. 20]. Disregarding Plaintiff’s bare allegation,
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negligence per se specifically contemplates the violation of a statute. See Louisville &
Nashville R. Co. v. Hames, 135 Ga. 67, 68 S.E. 805 (1910) (holding that Georgia law
allows the adoption of a statute as a standard of conduct so that its violation becomes
negligence per se). Here, Plaintiff cannot base a negligence per se claim on a common
law duty to “not intentionally harm” Plaintiff. Accordingly, Plaintiff has failed to
sufficiently allege a claim for negligence per se using the common law as a basis for
her assertion. Default judgment is therefore DENIED.
9. Attorney’s Fees
Plaintiff alleges that she is entitled to attorney’s fees and expenses under
O.C.G.A. § 13‐6‐11, because AHMSI “acted in bad faith, has been stubbornly litigious,
and has caused plaintiff unnecessary trouble and expense.” [Doc. 1, p. 21]. Under
Georgia law, when a plaintiff requests attorney’s fees on any one of these three
grounds as asserted by Plaintiff, the award must be specifically pleaded and prayed
for in the complaint. Dept. of Transp. v. Ga. Television Co., 2000, 244 Ga. App. 750,
751, 536 S.E.2d 773, 775 (2000). In light of the Court’s above findings regarding
AHMSI’s admissions by default and Plaintiff’s specific plea for relief, Plaintiff’s claim
for default judgment as to attorney’s fees is GRANTED.
10. Punitive Damages
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Under Georgia law, punitive damages may be awarded in tort actions in which
it is proven by “clear and convincing evidence that the defendant’s actions showed
willful misconduct, malice, fraud, wantonness, oppression, or that entire want of care
which would raise the presumption of a conscious indifference to consequences.”
O.C.G.A. § 51‐12‐5.1(b).
Here, Plaintiff has sufficiently alleged the following tort claims: wrongful
foreclosure, defamation, intentional infliction of emotional distress, and tortious
interference with property rights. The Court further finds that these tort claims are
grounded in “clear and convincing evidence” that AHMSI showed willful misconduct,
malice, and/or the entire want of care which gives rise to the “presumption of a
conscious indifference to consequences.” See id. Because Plaintiff’s claim for punitive
damages is sufficiently alleged as to those claims, default judgment is GRANTED.
C. Damages
Although the entry of default judgment on certain claims is appropriate here,
the Court still has an obligation “to assure that there is a legitimate basis for any
damage award it enters.” Anheuser Busch, Inc. v. Philpot, 317 F.3d 1264, 1266 (11th
Cir. 2003). Under Rule 55(b), the district court “may conduct hearings…when, to enter
or effectuate [a default] judgment, it needs to: … determine the amount of damages.
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Fed. R. Civ. P. 55(b)(2). The decision of whether to hold a hearing on damages rests in
the district court’s discretion, as indicated by the permissive nature of Rule 55(b).
DIRECTV, Inc. v. Huynh, 318 F. Supp. 2d 1122, 1129 (M.D. Ala. 2004).
In her Complaint, Plaintiff requested a jury trial, seeking actual, compensatory,
and punitive damages. In the instant Motion, Plaintiff requests that this Court reserve
entry of judgment on damages pending a jury trial. Most of Plaintiff’s surviving
claims—wrongful foreclosure, section 2605(e) of RESPA, defamation, intentional
infliction of emotional distress, tortious interference with property rights, and punitive
damages—are claims in which the amount of damages is a non‐liquidated sum and
which cannot be easily calculated. Moreover, the Court finds that, considering the
nature of the underlying tort actions, a jury is the more appropriate body to determine
Plaintiff’s damages than the Court. Accordingly, a jury will assess the amount of
damages that Plaintiff is entitled.
Plaintiff is also entitled to attorney’s fees and costs incurred. Plaintiff must
submit her application for attorney’s fees and costs within fourteen (14) days of the
date of this Order. See Local Rule 54.1.
CONCLUSION
In light of the uncontested allegations and exhibits submitted in Plaintiff’s
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Complaint, the Court concludes that Plaintiff’s Motion for Default Judgment [Doc. 6]
is GRANTED in part as to liability only and DENIED in part. Plaintiff’s Motion for
Default Judgment [Doc. 6] is GRANTED as to liability only for the following claims:
wrongful foreclosure, violation of RESPA § 2605(e), defamation, intentional infliction
of emotional distress, tortious interference with property rights due to wrongful
foreclosure, and punitive damages. A jury will determine the amount of damages in
all of the above claims except Plaintiff’s claim for attorney’s fees. The Court reserves
judgment as to damages for Plaintiff’s attorney’s fees until it receives further
evidentiary support. Plaintiff is DIRECTED TO SUBMIT her application for
attorney’s fees and costs within fourteen (14) days of the date of this Order. Plaintiff’s
Motion for Default Judgment [Doc. 6] is DENIED as to the following claims: violation
of RESPA §2605(k), conversion, intentional and negligent failure to exercise due care
in servicing Plaintiff’s loan, tortious interference with Plaintiff’s contractual relations
with a tenant, and negligence per se.
SO ORDERED, this 9th day of February, 2012.
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S/ C. Ashley Royal
C. ASHLEY ROYAL
UNITED STATES DISTRICT JUDGE
LMH/ssh
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