Jenkins v. BAC Home Loans Servicing LP
Filing
24
ORDER granting 13 Motion to Dismiss Complaint. Ordered by Judge Hugh Lawson on 9/29/2011. (nbp)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
VALDOSTA DIVISION
RANDY JENKINS,
:
:
Plaintiff,
:
:
v.
:
:
BAC HOME LOAN SERVICING, LP,
:
McCALLA RAYMER, LLC,
:
:
Defendants.
:
___________________________________
Civil Case No.
7:11-cv-73 (HL)
ORDER
Before this Court is the Defendants’ Motion to Dismiss (Doc. 13). In
conjunction with this Motion to Dismiss, the Court is taking under consideration
Plaintiff’s Response to the Motion to Dismiss (Doc. 21), Defendants’ Reply (Doc.
22), and a second Response from Plaintiff (Doc. 23).
I.
Background
On July 20, 2007, Plaintiff executed a Security Deed on his home (“Subject
Property”) in favor of non-party Countrywide Home Loans, Inc., as Lender, and
Mortgage Electronic Registration Systems, Inc. (“MERS”), as Nominee, to secure
a promissory note in the amount of $175,750.00. On March 2, 2010, MERS
assigned its interest in the Security Deed to Defendant BAC Home Loan
Servicing, LP (“BAC”). On August 18, 2010, Plaintiff received a letter from
Defendant McCalla Raymer (“McCalla”) notifying Plaintiff that he was in default
and that a foreclosure sale of the Subject Property would take place unless the
mortgage was paid in full. A second letter was sent to Plaintiff on September 27,
2010 to the same effect.
In his version of the facts, Plaintiff contends that the assignment from
Countrywide Home Loans to Defendant BAC was fraudulent. (Doc. 8, ¶¶ 16-25,
28-36.) To support this allegation, Plaintiff asserts that Defendants were
participating in “foreclosure fraud,” an offense that included filing false documents
with the Clerk of the Superior Court of Colquitt County. (Doc. 8, ¶ 26.)
Additionally, Plaintiff maintains that Defendants repeatedly harassed him to
collect “alleged but nonexistent debt.” (Doc. 8, ¶ 39.) Defendants deny all of
these factual allegations.
Based upon these allegations, Plaintiff asserts claims against Defendants
for violations of the Fair Debt Collection Practice Act (“FDCPA”), 15 U.S.C. §§
1692 et seq. (Counts I – VI), the Georgia Fair Business Practice Act (“FBPA”),
O.C.G.A. § 10-1-390 et seq. (Count VII), the Real Estate Settlement Procedures
Act of 1974 (“RESPA”), 12 U.S.C. § 2601 et seq. (Count VIII), as well as claims
for unjust enrichment, breach of implied covenant of good faith and fair dealing,
conversion, libel and defamation, breach of contract, fraud and deceit, mortgage
fraud and abuse (Counts IX – XVI). Plaintiff seeks compensatory damages, in
addition to other relief.
II.
Standard of Review
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On a motion to dismiss, the Court must accept the factual allegations in the
complaint as true and construe the complaint in the light most favorable to the
plaintiff. SEC v. ESM Group, Inc., 835 F.2d 270, 272 (11th Cir. 1988). To survive
a motion to dismiss, “a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim for relief that is plausible on its face.’” Ashcroft v. Iqbal,
--- U.S. ---, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. v. Twombly, 550 U.S.
544, 570, 127 S.Ct. 1955 (2007)). “Where the well pleaded facts do not permit
the court to infer more than the mere possibility of misconduct, the complaint has
alleged – but it has not ‘shown’ – that the pleader is entitled to relief.” Id. at 1950.
A complaint must contain enough facts to indicate the presence of the required
elements. Watts v. Fla. Int’l Univ., 495 F.3d 1289, 1302 (11th Cir. 2007).
However, “conclusory allegations, unwarranted deductions of fact, or legal
conclusions masquerading as facts will not prevent dismissal.” Oxford Asset
Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002).
III.
Claims against Defendants
Plaintiff has asserted a wide variety of claims against Defendants. Each of
these claims is addressed below in the order in which Plaintiff alleges them in his
Amended Complaint. (Doc. 8.)
a. Counts I – VI: Fair Debt Collection Practices Act
In Plaintiff’s Amended Complaint (Doc. 8), he alleges six counts against
Defendants under the Fair Debt Collection Practices Act (“FDCPA”). However,
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five out of six of these charges are immediately dismissed because the FDCPA
provisions are inapplicable to Defendants.
The FDCPA applies to situations where there is evidence that: (1) the
plaintiff is objecting to a collection activity arising from consumer debt; (2) the
defendant who is attempting to collect debt qualifies as a “debt collector;” and (3)
the defendant engaged in a prohibited act or failed to perform certain
requirements under the statute. Buckley v. Bayrock Mortg. Corp., No. 1:09-cv1387-TWT, 2010 WL 476673, at *6 (N.D. Ga. Feb. 5, 2010). “Debt collector”
means “any person who uses any instrumentality of interstate commerce or the
mails in any business the principal purpose of which is the collection of any
debts, or who regularly collects or attempts to collect, directly or indirectly, debts
owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a.
It is well-established that mortgage servicers do not fall within the definition
of debt collector. See Warren v. Countrywide Home Loans, Inc., 342 Fed. Appx.
458, 460 (11th Cir. 2009) (determining that “the act of foreclosing on a security
interest is not debt collection activity for the purposes of the FDCPA.”); Bentley v.
Bank of Am., N.A., 773 F.Supp.2d 1367, 1371 (S.D. Fla. Mar. 23, 2011)
(concluding that plaintiff’s claims under the FDCPA should be dismissed because
“neither Defendants are ‘debt collectors’ as contemplated by the statute which
explicitly excludes mortgage servicing companies”); Hennington v. Greenpoint
Mortg. Funding, Inc., Nos. 1:09-cv-676-RWS, 1:09-cv-962-RWS, 2009 WL
1372961, at *6 (N.D. Ga. May 15, 2009) (noting that “[i]t is well established that
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the FDCPA applies only to ‘debt collectors’ and not to creditors or mortgage
servicers.”).
In this case, Plaintiff has not shown that either Defendant was acting as a
“debt collector” within the scope of the statute. Since mortgage servicing is not
considered debt collection activity, neither Defendant can be considered a “debt
collector” for purposes of the FDCPA. Thus, Defendant BAC Home Loan
Servicing, LP (“BAC”), a mortgage servicer, and Defendant McCalla, a law firm
acting under the direction of BAC, are exempt from almost all claims under the
FDCPA. Thus, Count I under 15 U.S.C. § 1692d, Count II under 15 U.S.C. §
1692e, Count III under 15 U.S.C. § 1692e(10), Count IV under 15 U.S.C. §
1692f, and Count VI under 15 U.S.C. § 1692g(b) are all barred because the
FDCPA is not applicable.
Count V of Plaintiff’s Amended Complaint is the only claim under the
FDCPA that merits further discussion. Count V alleges a violation of section
1692f(6) of the FDCPA, which contains an exception to the definition of “debt
collector” that arises in the context of foreclosure.
Under section 1692f(6), the term “debt collector” includes “any person who
uses any instrumentality of interstate commerce or the mails in any business the
principal purpose of which is the enforcement of security interests.” Warren, 342
Fed. Appx. at 460. The statutory language in this section refers to “enforcement
of security interests” as opposed to “enforcement of debts,” significantly
broadening the reach of this particular provision. Under section 1692f(6), a debt
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collector, as broadly defined for purposes of this section, may not take or
threaten to take a consumer’s property in a non-judicial action if “(a) there is no
present right to the property through an enforceable security interest, (b) there is
no present intention to take possession of the property, or (c) the property is
exempt from being taken.” 15 U.S.C. § 1692f(6).
In this case, section 1692f(6) is broad enough to include Defendants;
however, neither Defendant violated the provisions of the statute. Section
1692f(6) only forbids threats against a consumer’s property if there is no
enforceable security interest in the property. Here, BAC had a present interest in
the property since BAC was the mortgagee and in possession of the Security
Deed, and McCalla pursued foreclosure at the direction of BAC. Thus, the
actions of the Defendant do not constitute violations of the FDCPA and Count
Five must be dismissed.
Accordingly, none of the six counts alleged under the FDCPA contain
claims upon which relief can be granted, and therefore, they are dismissed.
b. Count VII: Georgia Fair Business Practices Act
Count VII of the Amended Complaint alleges that Defendants violated the
Georgia Fair Business Practices Act (“FBPA”). The FBPA was created “to protect
consumers and legitimate business enterprises from unfair or deceptive practices
in the conduct of any trade or commerce.” O.C.G.A. § 10-1-391(a). The statute
includes a private right of action that allows individuals who are injured under the
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statute to file a claim against violators to recover injunctive relief, as well as
general and exemplary damages. See O.C.G.A. § 10-1-399(a).
A violation of the FBPA has three elements: (1) a violation of the Act, (2)
causation, and (3) injury. Zeeman v. Black, 156 Ga. App. 82, 86-87, 273 S.E.2d
910, 916 (Ga. Ct. App. 1980). Additionally, courts have implied a reliance
component into the causation element of the prima facie case under the FBPA.
Id. Thus, “a claimant who alleges the FBPA was violated as a result of a
misrepresentation must demonstrate that he was injured as the result of the
reliance upon the alleged misrepresentation.” Id.
Before analyzing the elements of the prima facie case, the applicability of
the FBPA must be addressed as a threshold question. The FBPA was created by
the Georgia Legislature to protect the public interest, and therefore only
transactions affecting the general public are regulated under the FBPA.
The legislature has evidenced a clear intent to limit the scope of the
[FBPA] to the consumer market … Taking into consideration the
legislature’s express and precise language which refines and limits
the scope of the [FBPA] to consumer commerce … we hold that, to
be subject to direct suit under the FBPA, the alleged offender must
have done some volitional act to avail himself of the channels of
consumer commerce.
Zeeman, 156 Ga. App. at 83, 273 S.E.2d 910 (citing State of Ga. v. Meredith
Chevrolet, 145 Ga. App. 8, 11-12, 244 S.E.2d 15 (1978)).
Based on the intent of the statute, only the unregulated consumer
marketplace falls within the scope of the FBPA, not regulated areas of activity.
See Chancellor v. Gateway Lincoln-Mercury, 233 Ga. App. 38, 45, 502 S.E.2d
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799, 805 (Ga. Ct. App. 1998); Brogdon v. Nat’l Healthcare Corp., 103 F.Supp.2d
1322, 1336 (N.D. Ga. 2000). Since the area of mortgage transactions is heavily
regulated by the Truth in Lending Act, the Real Estate Settlement Procedures
Act, and the Georgia Residential Mortgage Act, courts have found it appropriate
to dismiss FBPA claims that allege injury based on mortgage transactions.
Jackman v. Hasty, No. 1:10-cv-2485-RWS, 2011 WL 854878, at *6 (N.D. Ga.
Mar. 8, 2011); Figueroa v. JP Morgan Chase Bank, N.A., No. 1:09-cv-1874RWS, 2010 WL 4117032, at *5 (N.D. Ga. Oct. 7, 2010); Zinn v. GMAC Mortg.,
No. 1:05-cv-01747, 2006 WL 418437, at *4 (N.D. Ga. Feb. 21, 2006).
In this case, Plaintiff’s claims all arise from a private mortgage transaction.
Mortgages are heavily regulated under both state and federal law, and also do
not affect the public consumer marketplace. The FBPA was only intended to
provide relief to individuals who suffer harm within the context of the unregulated
consumer marketplace, and therefore, Plaintiff’s claims are exempt from the
FBPA. As a result, Claim VII of Plaintiff’s complaint must be dismissed.
c. Count VIII: Real Estate Settlement Procedures Act
Count VIII of the Amended Complaint alleges that Defendants violated the
Real Estate Settlement Procedures Act (“RESPA”). RESPA establishes certain
disclosure requirements that ensure that those people responsible for servicing a
federally-related mortgage loan are forthcoming with information relating to the
assignment, sale, or transfer of a loan. McCarley v. KPMG Intern., 293 Fed.
Appx. 719, 722 (11th Cir. 2008) (citing 12 U.S.C. § 2605(a), (b)). When a
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borrower submits a “qualified written request,” a written acknowledgement must
be provided by the lender within twenty days, 12 U.S.C. § 2605(e)(1)(A), and a
full response is due to the borrower within sixty days, 12 U.S.C. § 2605(e)(2). A
“qualified written request” is a written correspondence relating to the servicing of
a loan that identifies the borrower and requests information from the lender. See
12 U.S.C. § 2605e(1).
If a lender does not comply with the terms of RESPA and declines to
respond to the borrower, the borrower can recover actual damages for the failure
to communicate. Id. at § 2605(f). However, to recover damages, the borrower
has the responsibility to present “specific evidence to establish a causal link
between the financing institution’s violation and their injuries.” McClean, 398
Fed.Appx. at 471. The testimony of the borrower “must establish that the plaintiff
suffered demonstrable emotional distress, which must be sufficiently articulated;
neither conclusory statements that the plaintiff suffered emotional distress nor the
mere fact that a … violation occurred supports an award for compensatory
damages.” Id. (citing Akouri v. Fla. Dep’t of Transp., 408 F.3d 1338, 1345 (11th
Cir. 2005)). Without a proper allegation of the injury and damages resulting from
the alleged RESPA violation, the claim will fail. Frazile v. EMC Mortg. Corp., 382
Fed. Appx. 833, 836 (11th Cir. 2010) (finding that plaintiff’s failure to allege facts
relevant to the necessary element of damages supported dismissal for failure to
state a claim under § 2605).
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In this case, Plaintiff alleges that “Defendants have violated the terms of
RESPA in multiple and repeated instances, acts and conduct to the degree that it
is impracticable for Plaintiff to enumerate herein each and every instance of the
same.” (Doc. 8, ¶ 84.) Plaintiff then goes on to recite a lengthy list of allegations
that he claims are RESPA violations. These allegations include misapplication of
payments, failure to credit payments to Plaintiff’s account, making repeated false
claims of default, falsification of mortgage balances, and foreclosing on the
Subject Property when the loan was overpaid. (Doc. 8, ¶ 85.) However, none of
these claims relates to a failure to communicate that signifies a violation of
RESPA.
Plaintiff does allege that Defendants failed to respond to his “qualified
written request,” an allegation that, if true, is actionable under RESPA. (Doc. 8, ¶
86.) Plaintiff states that “Defendant either failed or [sic] refused to respond to
each of these Qualified Written Requests, and/or ‘responded’ in an intentionally
evasive and deceptive manner by simply denying that the said account was
misstated.” Id. He goes on to say that “as a result of this pattern and practice of
noncompliance with the servicing provisions of RESPA, Defendant is liable to
Plaintiff for all actual damages in the amount of $2,500,000.00.” Id. However,
Plaintiff fails to establish the necessary causal link between his allegations and
his claim for damages. The absence of a factual statement that demonstrates
how the alleged injuries caused damages in excess of $2,500,000.00 is fatal to
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Plaintiff’s RESPA claim. Therefore, for reasons stated above, Count VIII must be
dismissed.
d. Count IX: Mortgage Fraud and Abuse; Wrongful Foreclosure;
Unjust Enrichment; Breach of Contract; Breach of Duty and
Implied Covenant of Good Faith and Fair Dealing; Conversion;
Misrepresentation; Defamation; Libel; Fraud and Deceit
Count IX does not appear to be a substantive cause of action, but rather is
a list of other claims made by Plaintiff in his Amended Complaint. This list of
allegations is devoid of any factual application, and is merely an amalgamation of
other causes of action that Plaintiff asserts against Defendants. The Court cannot
discern any of the specifics upon which Plaintiff alleges the causes of action
listed, and therefore, Count IX is dismissed for failure to state a claim.
e. Count X: Unjust Enrichment
Unjust enrichment is an equitable concept that applies when there is no
actual legal contract, but yet there has been a benefit conferred for which there
deserves to be some compensation given to the party delivering the benefit.
Renee Unlimited, Inc. v. City of Atlanta, 301 Ga. App. 254, 258, 687 S.E.2d 233,
238 (Ga. Ct. App. 2009). A claim of unjust enrichment is not a tort, but is “an
alternative theory of recovery if a contract claim fails.” Wachovia Ins. Servs., Inc.
v. Fallon, 299 Ga. App. 440, 449, 682 S.E.2d 657, 665 (Ga. Ct. App. 2009). The
elements of unjust enrichment are: (1) the plaintiff has conferred a benefit on the
defendant; (2) the defendant has knowledge of the benefit; (3) the defendant has
accepted or retained the benefit conferred; and (4) the circumstances are such
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that it would be inequitable for the defendant to retain the benefit without paying
for it. Baptista v. JPMorgan Chase Bank, N.A., 640 F.3d 1194, 1198 n. 3 (11th
Cir. 2011).
In this case, Plaintiff has not only failed to plead the prima facie case for
unjust enrichment, but there is also an actual legal contract in existence between
the parties. Therefore, unjust enrichment is not applicable in this case and Count
X must be dismissed.
f. Breach of Implied Covenant of Good Faith and Fair Dealing
In contract law, “it is a well-recognized principle … that both parties are
under an implied duty of good faith in carrying out the mutual promises of their
contract.” Tommy McBride Realty, Inc. v. Nicholson, 286 Ga. App. 135, 136, 648
S.E.2d 468, 470 (Ga. Ct. App. 2007) (citing Southern Bus. Mach. of Savannah v.
Norwest Fin. Leasing, 194 Ga. App. 253, 256, 194 S.E.2d 402, 405 (1990)).
Further, “[a] duty of good faith and fair dealing is implied in all contracts in [the
state of Georgia].” Id. However, “there can be no breach of an implied covenant
of good faith where a party to a contract has done what the provisions of the
contract expressly give him the right to do.” Robin v. Bellsouth Adver. & Pub. Co.,
221 Ga. App. 360, 361, 471 S.E.2d 294, 296 (Ga. Ct. App. 1996) (citing Southern
Bus. Mach. of Savannah, 194 Ga. App. at 256, 390 S.E.2d 402).
In this case, Plaintiff has not shown that Defendants were involved in any
activity beyond the scope of their contract. Plaintiff’s only factual allegations
under Count XI state “Defendants have repeatedly and egregiously violated [the
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implied covenant of good faith and fair dealing] in the conduct set forth herein.”
(Doc. 8, ¶ 90.) Plaintiff attempts to pool all of the allegations set forth in the entire
complaint into his claim of a violation of the implied duty of good faith. However,
the Court is not required to sift through allegations set forth in the complaint.
Washington v. Dept. of Children and Families, 256 Fed.Appx. 326, 328 (11th Cir.
2007) (noting that the Eleventh Circuit “does not require the district court, or the
defendants, to sift through the facts presented and decide for [itself] which were
material to the particular cause of action asserted”). The allegations listed
throughout the Complaint are numerous and are unsupported except for
conclusory statements. Thus, it is impossible for the Court to determine which
allegations Plaintiff intends to incorporate into his claim of a breach of the implied
covenant of good faith and fair dealing. Therefore, Count XI is dismissed for
failure to state a claim.
g. Count XII: Conversion
Conversion is defined as “an unauthorized assumption and exercise of the
right of ownership over personal property belonging to another, in hostility to his
rights; an act of dominion over the personal property of another inconsistent with
his rights; or an unauthorized appropriation.” Parris Prop. LLC v. Nichols, 305
Ga. App. 734, 744-45, 700 S.E.2d 848, 858 (Ga. Ct. App. 2010) (citing Williams
v. Nat. Auto Sales, 287 Ga. App. 283, 285, 651 S.E.2d 194 (Ga. Ct. App. 2007)
(citations, punctuation, and footnotes omitted)). The prima facie case for
conversion requires a plaintiff to show that “she has title to the property, that the
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defendant wrongfully possessed it, and that she demanded possession but the
defendant refused to surrender it.” Dierkes v. Crawford Orthodontic Care, P.C.,
284 Ga. App. 96, 98, 643 S.E.2d 364, 367 (Ga. Ct. App. 2007).
In this case, Plaintiff claims that “Defendants have wrongfully, illegally and
fraudulently converted to their own use Plaintiff’s funds” and Defendants
“misuse[d] and misappli[ed] … funds in Plaintiff’s escrow account.” (Doc. 8, ¶ 91.)
However, these allegations do not establish the prima facie case for conversion.
Plaintiff fails to show that Defendants were in wrongful possession, and therefore
Plaintiff has not alleged a valid claim for conversion. As a result, Count XII must
be dismissed.
h. Count XIII: Libel, Slander, and Defamation
To establish a cause of action for defamation, “a plaintiff must submit
evidence of (1) a false and defamatory statement about himself; (2) an
unprivileged communication to a third party; (3) fault by the defendant amounting
at least to negligence; and (4) special damages or defamatory words ‘injurious on
their face.’” Chaney v. Harrison & Lynam, LLC, 308 Ga. App. 808, 811, 708
S.E.2d 672, 676 (Ga. Ct. App. 2011) (citing Lewis v. Meredith Corp., 293 Ga.
App. 747, 748(1), 667 S.E.2d 716, 718 (Ga. Ct. App. 2008)). Additionally, a
plaintiff must show that the statement was published. Lewis, 293 Ga. App. at
748, 667 S.E.2d 716. Publication must be proven with “evidence of the specific
statement used in an allegedly defamatory communication.” Id. (citing ITT
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Rayonier, Inc. v. McLaney, 204 Ga. App. 762, 765, 420 S.E.2d 610 (Ga. Ct. App.
1992)).
Slander is a type of defamation and is defined as one of the following types
of action:
(1) imputing to another a crime punishable by law; (2) charging a
person with having some contagious disorder or with being guilty of
some debasing act which may exclude him from society; (3) making
charges against another in reference to his trade, office, or
profession, calculated to injure him therein; or (4) uttering any
disparaging words productive of special damage which flows
naturally therefrom.
O.C.G.A. § 51-5-4. As with defamation, slander requires publication. Brown v.
Rader, 299 Ga. App. 606, 609, 683 S.E.2d 16, 19 (Ga. Ct. App. 2009).
Publication occurs when the statement is “communicated to anyone other than
the person slandered.” Id.
Libel is essentially defamation in written form. It is defined as “a false and
malicious defamation of another, expressed in print, writing, pictures, or signs,
tending to injure the reputation of the person and exposing him to public hatred,
contempt, or ridicule.” O.C.G.A. § 51-5-1(a). Publication is also an element that
must be proven to demonstrate a prima facie case for libel. O.C.G.A. § 51-5-1(b).
In this case, Plaintiff has alleged that “Defendants have uttered and
published false and malicious defamations of Plaintiff, expressed in print and
writings, tending to injure the reputation of Plaintiff and exposing him to public
hatred, contempt, or ridicule.” (Doc. 8, § 92.) However, Plaintiff fails to reveal the
details of these statements, and even more detrimental to his claim, Plaintiff does
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not show evidence of any publication. Publication is vital to show defamation,
libel, or slander. Without any evidence of publication, Count XIII must be
dismissed for failure to state an actionable claim.
i. Count XIV: Breach of Contract
In Georgia, the elements of a breach of contract claim are: “(1) breach and
(2) resultant damages (3) to the party who has the right to complain about the
contract being broken.” Norton v. Budget Rent A Car Sys., Inc., 307 Ga. App.
501, 502, 705 S.E.2d 305, 306 (Ga. App. Ct. 2010). “The breach must be more
than de minimus and substantial compliance with the terms of the contract is all
that the law requires.” Kuritzky v. Emory Univ., 294 Ga. App. 370, 371, 669
S.E.2d 179, 181 (Ga. Ct. App. 2008).
Here, Plaintiff alleges that his breach of contract claim relates to the
“repeated, unlawful and intentional misapplication of payments, the charging of
unauthorized fees, … improperly using, applying, misapplying, and converting
Plaintiff’s escrow funds, and the imposition of the above described ‘forceplaced’
insurance.” (Doc. 8, ¶ 93.) These allegations are insufficient to properly state a
claim for breach of contract. A plaintiff must “provide more than conclusory
grounds for relief.” Watts, 495 F.3d at 1302. In this case, Plaintiff makes
sweeping allegations with no factual information to support his claims. Plaintiff
does not indicate which specific contract has been breached, nor does he
provide evidence of the resultant damages. Therefore, as a result of his failure to
sufficiently plead the prima facie elements of his claim, Count XIV is dismissed.
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j. Count XV: Fraud and Deceit
The elements in an action for fraud are: “(1) false representation by a
defendant, (2) scienter, (3) intent to induce the plaintiff to act or refrain from
acting, (4) justifiable reliance by the plaintiff, and (5) resulting damages to the
plaintiff.” Martin v. Centre Pointe Investments, Inc., 310 Ga. App. 253, 256-57,
712 S.E.2d 638, 641 (Ga. Ct. App. 2011) (citing Potts v. UAP-GA AG CHEM,
Inc., 256 Ga. App. 153, 155, 567 S.E.2d 316 (2002). According to Federal Rule
of Civil Procedure 9(b), the elements of a fraud claim must be stated with
particularity. FED. R. CIV. P. 9(b). “Particularity means that a plaintiff must plead
facts as to time, place, substance of the defendant[‘s] alleged fraud, specifically
the details of the defendant’s allegedly fraudulent acts, when they occurred, and
who engaged in them.” Mullinax v. United Mktg. Group, LLC, No. 1:10-cv-03585JEC, 2011 WL 4085933, at *12 (N.D. Ga. Sept. 13, 2011) (citing Atkins v.
McInteer, 470 F.3d 1350, 1357 (11th Cir. 2006) (internal citations omitted)). This
means that to state an actionable claim for fraud, the plaintiff must state the
“who, what, when[,] where, and how.” Mullinax, 2011 WL 4085933, at *12 (citing
Garfield v. NDC Health Corp., 466 F.3d 1255, 1262 (11th Cir. 2006)).
In this case, Plaintiff’s fraud claim recites the basic elements of fraud, but
gives no additional details to support his allegation. Plaintiff merely states that
“Defendants have engaged in multiple and numerous acts of fraud and deceit …
with scienter, and intention to induce Plaintiff to justifiably act or refrain from
acting in reliance on Defendants.” (Doc. 8, ¶ 94.) Unsupported by specific
17
allegations, Plaintiff’s claim for fraud and deceit is insufficient to maintain an
action upon which relief can be granted. Therefore, Count XV must be dismissed.
k. Count XVI: Mortgage Fraud and Abuse
In Georgia, residential mortgage fraud is a criminal offense that can rise to
the level of a felony. A person is guilty of residential mortgage fraud when that
person:
(1) knowingly makes any deliberate misstatement,
misrepresentation, or omission during the mortgage lending process
with the intention that it be relied on by a mortgage lender, borrower,
or any other party to the mortgage lending process;
(2) knowingly uses or facilitates the use of any deliberate
misstatement, misrepresentation, or omission, knowing the same to
contain a misstatement, misrepresentation, or omission, during the
mortgage lending process with the intention that it be relied on by a
mortgage lender, borrower, or any other party to the mortgage
lending process;
(3) receives any proceeds or any other funds in connection with a
residential mortgage closing that such person knew resulted from a
violation of paragraph (1) or (2);
(4) conspires to violate any of the provisions of paragraph (1), (2),
or (3) of this Code section; or
(5) files or causes to be filed with the official registrar of deeds of any
county of this state any document such person knows to contain a
deliberate misstatement, misrepresentation, or omission.
O.C.G.A. § 16-8-102. However, “the violation of a penal statute does not
automatically give rise to a civil cause of action on the part of one who is
purportedly injured thereby.” Bates v. Novastar/Nationstar Mortg. LLC, No. 1:08cv-1443-TWT, 2008 WL 2622810, at *7 (N.D. Ga. June 24, 2008) (citing Verdi v.
Wilkinson Co., 288 Ga. App. 856, 858, 655 S.E.2d 642, 643 (Ga. Ct. App. 2007)).
Specifically, section 16-8-102 does not provide a private cause of action. Bates,
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2008 WL 2622810, at *7 (“Plaintiffs do not have the right to bring a criminal
action based on O.C.G.A. § 16-8-102. Nor do they have the right to bring a civil
action based on the cited statute.”).
In this case, Plaintiff attempts to bring a civil cause of action for mortgage
fraud, which is governed in Georgia under O.C.G.A. § 16-8-102, a criminal code
section. Section 16-8-102 is not a proper vehicle for civil relief, and therefore
Plaintiff’s claim for mortgage fraud fails to state an appropriate claim. Therefore,
Count XVI must be dismissed.
IV.
Conclusion
In his Amended Complaint (Doc. 8) and his Motion to Deny Defendants’
Motion to Dismiss (Doc. 21), Plaintiff asks the Court to address the question “who
is the owner of the beneficial interest of the Note and Deed as related to the
[Subject Property].” (Doc. 21, p. 1-2.) However, the Court finds this question
inappropriate for judicial inquiry. It is the Court’s responsibility to address only
those claims upon which relief can be granted. Plaintiff has failed to present any
actionable claims before this Court, and therefore, the Court cannot continue to
investigate Plaintiff’s allegations.
For the reasons stated above, Defendants’ Motion to Dismiss (Doc. 13) is
granted.
SO ORDERED, this 29th day of September, 2011.
s/Hugh Lawson
HUGH LAWSON, SENIOR JUDGE
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