MCCOLLIGAN v. STATE HOME MORTGAGE et al
ORDER granting 3 Motion to Dismiss for Failure to State a Claim; denying as moot 8 Motion to Dismiss Complaint; denying as moot 11 Motion to Recover Original Documents; denying as moot 14 Motion for Jury Trial and Issuance of Subpoena; denying as moot 20 Motion to Confirm Jury Trial; denying as moot 22 Motion to Strike. Ordered by US DISTRICT JUDGE C ASHLEY ROYAL on 8/15/2017 (lap)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
RODNEY M. McCOLLIGAN,
STATE HOME MORTGAGE and
GEORGIA HOUSING AND
ORDER ON DEFENDANTS’ MOTION TO DISMISS
Plaintiff Rodney M. McColligan, a self‐proclaimed sovereign citizen,1 filed this
pro se action against Defendants State Home Mortgage and Georgia Housing and
Finance Authority (“GHFA”). Plaintiff bring a federal claim for rescission under the
Truth In Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., and state‐law claims for
wrongful foreclosure, fraud, intentional infliction of emotional distress, slander of title,
and declaratory relief. Before the Court are Defendants’ Motion to Dismiss under Rule
12(b)(6). For the reasons set forth below, the Court HEREBY GRANTS Defendants’
Motion [Doc. 3] and DISMISSES Plaintiff’s Complaint [Doc. 1‐1] for failure to state a
Sovereign citizens believe they are not subject to the laws of any government. See “Amendment One to
Complaint” [Doc. 6, p. 2] (proclaiming Plaintiff is a “Private American National and Secured Party
Creditor, not a Fourteenth Amendment U.S. Citizen”). See also “Rodney Bio & Revelations of Truth” [Doc.
20‐1, pp. 1‐2] (asserting the British Parliament passed a law in 1666 declaring all people “strawmen”).
claim upon which relief can be granted. The Court also DENIES as MOOT Plaintiff’s
Motion to Recover Original Documents [Doc. 11], Plaintiff’s Motion for Jury Trial and
Issuance of Subpoena [Doc. 14], Plaintiff’s Motion to Confirm Jury Trial [Doc. 20],
Defendants’ Motion to Dismiss Plaintiff’s “Amendment One to Complaint” [Doc. 8],
and Defendants’ Motion to Strike Plaintiff’s “Second Amended Complaint” [Doc. 22].
This suit arises out of the foreclosure of Plaintiff’s home. Although Plaintiff’s
Complaint contains numerous pages of rambling irrelevancies, the Court accepts all
factual allegations in the Complaint as true and construes them in the light most
favorable to Plaintiff.2
On August 20, 2007, Plaintiff signed a Promissory Note and Security Deed to
obtain a $95,663.00 mortgage from Market Street Corporation (“Market Street”).3 The
Security Deed granted Market Street the power to foreclose on Plaintiff’s home in
Warner Robins, Georgia, upon Plaintiff’s default.4 On September 5, 2007, Market Street
assigned the Security Deed to Defendant GHFA.5
See, e.g., [Doc. 1‐1, pp. 3‐4].
Id. at p. 5.
See Security Deed [Doc. 3‐2]. Although this document is “outside the four corners of the complaint,” it is
“central to the plaintiff’s claims and is undisputed in terms of authenticity”; thus the Court may consider
it in ruling on the Motion to Dismiss. Maxcess, Inc. v. Lucent Techs., Inc., 433 F.3d 1337, 1340 n.3 (11th Cir.
5 See GHFA Authority Transfer and Assignment [Doc 3‐3, p. 1]. Like the Security Deed, this document is
“central to the plaintiff’s claims and is undisputed in terms of authenticity.” Maxcess, 433 F.3d at 1340 n.3.
In January of 2017, Plaintiff hired a “Certified Forensic Loan Auditor,” who
informed him that his mortgage was securitized and transferred to a trust.6 The auditor
also told Plaintiff his mortgage was not assigned to certain intermediary parties before
its transfer to the trust, in violation of the Pooling and Servicing Agreement (“PSA”)
governing the securitization process.7 Plaintiff subsequently defaulted on his mortgage
payments, and Defendants sent Plaintiff a Notice of Default.8
On March 27, 2017, Plaintiff filed this action in the Houston County Superior
Court. On April 4, 2017, Defendants foreclosed on Plaintiff’s home.9 On April 26, 2017,
Defendants removed the case to this Court, invoking the Court’s original jurisdiction
over Plaintiff’s TILA claim pursuant to 28 U.S.C. § 1331 and supplemental jurisdiction
over Plaintiff’s state law claims pursuant to 28 U.S.C. § 1367. On May 1, 2017,
Defendants filed their Motion to Dismiss.
On May 17, 2017, Plaintiff filed an “Amendment One to Complaint” [Doc. 6].
Plaintiff’s Amendment consists of incoherent pronouncements and adds no new
allegations to the original Complaint.10 On July 11, 2017, Plaintiff filed a “Second
Amended Complaint” [Doc. 21] without Defendants’ consent or the Court’s leave, in
violation of Federal Rule of Civil Procedure 15(a). Regardless, Plaintiff’s “Second
Securitization is a process in which multiple mortgages are bundled and sold to third‐party investors.
[Doc. 1‐1, p. 6].
8 Id. at p. 14 (admitting Plaintiff defaulted but “not in the manner stated in the Notice of Default”).
9 [Doc. 6, p. 1].
10 See [Doc. 6, p. 2] (proclaiming Plaintiff’s “intent to hold accountable liars, thieves, and violators” of his
Amended Complaint” is identical to his original Complaint. Although Defendants
moved for dismissal before Plaintiff filed his Amended Complaints, Plaintiff’s
amendments do not change the substance of his allegations. Thus, the Court can
consider Defendants’ Motion to Dismiss Plaintiff’s original Complaint.11
Rule 8 of the Federal Rules of Civil Procedure requires that a pleading contain “a
short and plain statement of the claim showing that the pleader is entitled to relief.”12
Although a complaint “does not need detailed factual allegations,” it must provide
“more than labels and conclusions, and a formulaic recitation of the elements of a cause
of action will not do.”13 In the same vein, a complaint may not rest on “naked assertions
devoid of further factual enhancement.”14 “Factual allegations must be enough to raise
a right to relief above the speculative level.”15
On a motion to dismiss, the Court must accept as true all well‐pleaded facts in a
plaintiff’s complaint.16 To avoid dismissal pursuant to Rule 12(b)(6) of the Federal
Rules, “a complaint must contain sufficient factual matter, accepted as true, to state a
See Clemmons v. Columbus Consol. Gov’t, No. 4:15‐CV‐54 (CDL), 2015 WL 5722800, at *1 (M.D. Ga. Sept.
29, 2015) (finding judicial economy warrants “taking into consideration the additional facts that [the
plaintiff] seeks to allege in her amended complaint”).
12 Fed. R. Civ. P. 8(a)(2).
13 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
14 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation omitted).
15 Twombly, 550 U.S. at 555.
16 McElmurray v. Consol. Gov’t of Augusta‐Richmond Cnty., 501 F.3d 1244, 1251 (11th Cir. 2007).
claim to relief that is plausible on its face.”17 A claim is plausible where the plaintiff
alleges factual content that “allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”18 The plausibility standard requires that
a plaintiff allege sufficient facts “to raise a reasonable expectation that discovery will
reveal evidence” that supports a plaintiff’s claims.19
Defendants contend all of Plaintiff’s claims—rescission under TILA, wrongful
foreclosure, fraud, intentional infliction of emotional distress, slander of title, and
declaratory relief—should be dismissed for failure to state a claim. The Court agrees.
Rescission under TILA
First, Plaintiff requests the Court rescind the mortgage transaction under TILA
because Defendants failed to disclose the fact that the mortgage “would ultimately
benefit Defendants.”20 Plaintiff’s rescission claim, however, is barred by TILA’s three‐
year statute of limitations. When a lender fails to comply with TILA’s disclosure
requirements, the borrower’s “right of rescission shall expire three years after the date
of consummation of the transaction or upon the sale of the property, whichever occurs
first.”21 Here, Plaintiff alleges the mortgage transaction was consummated on August
Iqbal, 556 U.S. at 678 (internal quotation omitted).
19 Twombly, 550 U.S. at 556.
20 [Doc. 1‐1, p. 17].
21 15 U.S.C. § 1635(f).
20, 2007—over nine years before Plaintiff filed this action.22 Accordingly, Plaintiff is not
entitled to rescission under TILA.23
Having dismissed Plaintiff’s only federal claim, the Court must now determine
whether to exercise supplemental jurisdiction over the remaining state law claims. A
district court may decline to exercise supplemental jurisdiction over such claims if it has
dismissed all claims over which it has original jurisdiction.24 In deciding whether to
exercise supplemental jurisdiction, the district court should consider factors such as
judicial economy, convenience, fairness to the litigants, and comity.25 Having fully
considered the matter, the Court will exercise supplemental jurisdiction over Plaintiff’s
state law claims.
Plaintiff bases his wrongful foreclosure claim on two theories: (1) Defendants do
not hold the Promissory Note, and (2) Defendants did not comply with the terms of the
PSA. To state a claim for wrongful foreclosure under Georgia law, a plaintiff must
establish (1) a legal duty owed to the plaintiff by the foreclosing party; (2) a breach of
that duty; (3) a causal connection between the breach of that duty and the injury
sustained by the plaintiff; and (4) damages.26
[Doc. 1‐1, p. 5].
See Smith v. Highland Bank, 108 F.3d 1325, 1326 (11th Cir. 1997) (per curiam).
24 28 U.S.C. § 1367(c)(3).
25 See Palmer v. Hosp. Auth. of Randolph Cnty., 22 F.3d 1559, 1569 (11th Cir. 1994).
26 Gregorakos v. Wells Fargo Nat’l Ass’n, 285 Ga. App. 744, 747‐48 (2007).
Here, Plaintiff fails to state a claim under either of his wrongful foreclosure
theories. First, Georgia law authorizes the holder of a security deed to foreclose on
property even if it does not hold the promissory note.27 Because Defendant GHFA held
the Security Deed, it was authorized to foreclose on Plaintiff’s home when he
defaulted.28 Second, Plaintiff has no standing to challenge an alleged violation of the
PSA, to which he is not a party.29 Accordingly, his wrongful foreclosure claim must be
Next, Plaintiff contends Defendants fraudulently induced him to obtain the
mortgage by concealing the fact that the mortgage would be securitized.30 To state a
claim for fraud under Georgia law, a plaintiff must establish (1) a false representation
by the defendant; (2) scienter; (3) an intention to induce the plaintiff to act or refrain
from acting; (4) justifiable reliance by the plaintiff; and (5) damage to the plaintiff.31
Additionally, “[a]n obligation to disclose must exist before a party may be held liable
for fraud based upon the concealment of material facts.”32
You v. JP Morgan Chase Bank, 293 Ga. 67, 74 (2013).
See GHFA Transfer and Assignment [Doc 3‐3, p. 1]; Security Deed [Doc. 3‐2, p. 3].
29 Alexander v. Bank of America, N.A., No. 2:13‐CV‐00067‐RWS, 2014 WL 106349, at *6 (N.D. Ga. Jan. 10,
2014). See also Montgomery v. Bank of America, 321 Ga. App. 343, 346 (2013).
30 Although Plaintiff purports to raise separate claims for fraudulent concealment and fraudulent
inducement, the latter claim merely restates the arguments in Plaintiff’s meritless wrongful foreclosure
claim. See [Doc. 1‐1, pp. 12‐13] (contending “Defendants are fraudulently foreclosing on the Property”).
31 Anderson v. Atlanta Comm. for Olympic Games, Inc., 261 Ga. App. 895, 900 (2003).
32 Infrasource, Inc. v. Hahn Yalena Corp., 272 Ga. App. 703, 705 (2005). See also O.C.G.A. § 23‐5‐53.
Here, Plaintiff cannot establish any of these elements because Defendants did not
originate the mortgage—Market Street did.33 Indeed, Plaintiff fails to allege he had any
contact whatsoever with Defendants before obtaining the mortgage from Market
Street.34 Thus, Plaintiff’s fraud claim must be dismissed.
Intentional Infliction of Emotional Distress
Plaintiff’s emotional distress claim must also be dismissed. To state a claim for
intentional infliction of emotional distress under Georgia law, a plaintiff must
demonstrate that (1) the defendantʹs conduct was intentional or reckless; (2) the conduct
was extreme or outrageous; (3) the conduct caused Plaintiff emotional distress; and (4)
Plaintiffʹs emotional distress was severe. 35 “In order to rise to the requisite level of
outrageousness, ‘[t]he defendantʹs conduct must be so extreme in degree, as to go
beyond all possible bounds of decency, and to be regarded as atrocious, and utterly
intolerable in a civilized society.’”36
Here, Plaintiff simply states Defendants caused him emotional distress by
foreclosing on his home. Where a debt is secured by a security deed, however, a
creditor commits no tortious act by foreclosing on the debtor’s property when the
[Doc. 1‐1, p. 5].
See Ali v. Fleet Fin., Inc. of Ga., 232 Ga. App. 13 (1998) (plaintiffs’ admissions that they never “had any
contact whatsoever” with defendants prior to transaction were “fatal to their claims for fraud and
fraudulent concealment”). See also McCabe v. Daimler, 160 F. Supp. 3d 1337, 1351 (N.D. Ga. 2015) (holding
defendant with “no apparent relationship with [p]laintiffs” had no duty to disclose).
35 McClung Surveying, Inc. v. Worl, 247 Ga. App. 322, 326 (2000) (citing Ashman v. Marshallʹs of MA, Inc., 244
Ga. App. 228, 229 (2000)).
36 Id. (internal quotation marks omitted).
debtor defaults.37 Accordingly, absent any additional allegations of wrongful conduct
by Defendants, Plaintiff fails to state an emotional distress claim.
Slander of Title
Likewise, Plaintiff’s slander of title claim must be dismissed. To state a claim for
slander of title under Georgia law, a plaintiff must establish that (1) the defendant
published slanderous or libelous statements; (2) the statements were false and
malicious; (3) the plaintiff sustained special damages thereby; and (4) the plaintiff
possessed an estate in the property slandered or libeled.38
Plaintiff contends Defendants falsely and maliciously impugned his title to his
home by publishing a Notice of Default before the foreclosure. Such publication,
however, is not a false and malicious statement. Pursuant to the Security Deed,
Defendant GHFA was authorized to foreclose on Plaintiff’s home and lawfully
published the Notice of Default when Plaintiff defaulted.39 Additionally, Plaintiff’s
generalized allegations that he “has incurred expenses in order to clear title” are wholly
insufficient to demonstrate special damages, which must be pled with particularity. 40
See Aetna Fin. Co. v. Culpepper, 171 Ga. App. 315, 318‐19 (1984) (quoting Rome Bank & Trust Co. v. Kerce,
140 Ga. App. 596, 600 (1976)).
38 Exec. Excellence, LLC v. Martin Bros. Inv., LLC, 309 Ga. App. 279, 282 (2011).
39 [Doc. 1‐1, p. 5]. See also Security Deed [Doc. 3‐2, p. 3].
40 Veatch v. Aurora Loan Serv., LLC, 331 Ga. App. 597, 600 (2015) (quoting Sanders v. Brown, 257 Ga. App.
566, 568 (2002)).
Finally, Plaintiff requests a declaration that Defendants had no authority to
foreclose on his home based on the alleged deficiencies in the securitization of the
mortgage. To obtain a declaratory judgment under Georgia law, a plaintiff “must
establish that a declaratory judgment is necessary to relieve himself of the risk of taking
some future action that, without direction, would jeopardize his interests.”41
Declaratory relief, however, is improper where the defendant has “a right in the
security deed and attached property, and the standing to institute a non‐judicial
foreclosure sale.”42 Here, Defendant GHFA held the Security Deed and thus was
authorized to foreclose on Plaintiff’s home when he defaulted.43 Accordingly, Plaintiff
is not entitled to the declaratory relief he seeks.
For the reasons set forth above, the Court HEREBY GRANTS Defendants’
Motion to Dismiss [Doc. 3] and DISMISSES Plaintiff’s Complaint [Doc. 1‐1] for failure
to state a claim upon which relief can be granted. The Court also DENIES as MOOT
Plaintiff’s Motion to Recover Original Documents [Doc. 11], Plaintiff’s Motion for Jury
Trial and Issuance of Subpoena [Doc. 14], Plaintiff’s Motion to Confirm Jury Trial [Doc.
20], Defendants’ Motion to Dismiss Plaintiff’s “Amendment One to Complaint” [Doc.
Milani v. One West Bank FSB, 491 F. App’x 977, 979 (11th Cir. 2012) (per curiam) (quoting Porter v.
Houghton, 273 Ga. 407, 408 (2001)).
42 See Sparra v. Deutsche Bank Nat’l Trust Co., 336 Ga. App. 418, 422 (2016).
43 See GHFA Transfer and Assignment [Doc 3‐3, p. 1]; Security Deed [Doc. 3‐2, p. 3].
8], and Defendants’ Motion to Strike Plaintiff’s “Second Amended Complaint” [Doc.
SO ORDERED, this 15th day of August, 2017.
S/ C. Ashley Royal
C. ASHLEY ROYAL, SENIOR JUDGE
UNITED STATES DISTRICT COURT
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