Williams v. Wells Fargo, N.A. et al
Filing
12
ORDER AND OPINION granting 6 Defendants' Motion to Dismiss. If plaintiff intends to file a motion for reconsideration, she should follow the directions set out at 5, n.2, of this Order. Signed by Judge Julie E. Carnes on 3/20/13. (ddm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
CATHY WILLIAMS,
Plaintiff,
CIVIL ACTION NO.
v.
1:12-cv-0752-JEC
WELLS FARGO BANK, N.A. and U.S.
BANK NATIONAL ASSOCIATION, as
Trustee for SASCO 2006-BC3
TRUST,
Defendants.
ORDER & OPINION
This case is before the Court on defendants’ Motion to Dismiss
[6].
The Court has reviewed the record and the arguments of the
parties
and,
for
the
reasons
set
out
below,
concludes
that
defendants’ Motion to Dismiss [6] should be GRANTED.
BACKGROUND
This case arises out of an allegedly wrongful foreclosure.
(Compl. [1] at 2-3.)
In April 2006, plaintiff entered into a
mortgage contract with third-party lender Fieldstone Mortgage Company
(“Fieldstone”).
1
(Security Deed [6] at Ex. A.1)
The contract was
As the property records are undisputed and central to
plaintiff’s claims, the Court may consider them in deciding the
motion to dismiss. See Horsley v. Feldt, 304 F.3d 1125, 1134 (11th
Cir. 2002)(a court may consider an undisputed document that is
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evidenced by a Note that plaintiff executed in favor of Fieldstone in
the principal amount of $335,000.
(Id.)
The debt was secured by a
Deed on plaintiff’s home located at 1534 Tallulah Street NW, Atlanta,
GA, 30318 (the “property”).
(Id.)
Third-party Mortgage Electronic
Registration Systems (“MERS”) was designated as the grantee of the
Deed.
(Id.)
Plaintiff’s mortgage was serviced by defendant Wells Fargo Bank,
N.A.
(“Wells
Fargo”).
(Assignment
[6]
at
Ex.
B.)
Plaintiff
eventually fell behind on her payments and defaulted on her mortgage.
(Deed Under Power [6] at Ex. C.)
At the time of the default, the
mortgage was owned by defendant U.S. Bank National Association as
Trustee for
Ex. B.)
SASCO 2006-BC3 TRUST (“U.S. Bank”).
(Assignment [6] at
In December, 2011 Wells Fargo sold the property at a non-
judicial foreclosure sale.
(Deed Under Power [6] at Ex. C.)
U.S.
Bank was the highest bidder at the sale, and obtained the property
for the sum of $140,250.
(Id.)
A Deed evidencing the sale was
recorded in the Georgia Deed Book in January, 2012.
(Id.)
Plaintiff filed this pro se action approximately three months
after the sale of the property was concluded.
(Compl. [1].)
In the
complaint, plaintiff seeks to invalidate the foreclosure based on
“central to the plaintiff’s claim”) and Maxcess, Inc. v. Lucent
Techs., Inc., 433 F.3d 1337, 1340 (11th Cir. 2005)(permitting
consideration of a purchase agreement on a motion to dismiss).
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various state statutes and legal theories.
(Id.)
Defendants have
filed a motion to dismiss the complaint under Federal Rule 12(b)(6).
(Defs.’ Mot. to Dismiss [6].)
In response, plaintiff has submitted
an amended complaint in which she essentially restates her initial
factual allegations and adds several potential grounds for recovery.
(Am. Compl. [8].)
DISCUSSION
I.
APPLICABLE STANDARD
In deciding a motion to dismiss under Federal Rule 12(b)(6), the
Court assumes that all of the allegations in the complaint are true
and construes all of the facts in favor of the plaintiff.
Scott, 610 F.3d 701, 705 (11th Cir. 2010).
Randall v.
That said, in order 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, 556 U.S. 662, 678
(2009)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
A claim is “facial[ly] plausib[le]” when it is supported with facts
that “allow[] the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
II.
Id.
PLAINTIFF’S AMENDMENTS
As noted, plaintiff responded to defendants’ motion to dismiss
with an amended complaint.
(Am. Compl. [8].)
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The amendment is
untimely and technically improper.
To amend the complaint as a
matter of course, plaintiff was required to submit the amendment
within “21 days after
service” of defendants’ Rule 12(b)(6) motion.
FED. R. CIV. P. 15(a)(1)(B).
Plaintiff missed that deadline, and
failed to seek permission for the amendment under Rule 15(a)(2).
Nevertheless, the Court will consider the allegations in both the
original and the amended complaint in deciding the motion to dismiss.
See Hughes v. Lott, 350 F.3d 1157, 1160 (11th Cir. 2003)(“‘[p]ro se
pleadings are held to a less stringent standard than pleadings
drafted by attorneys. . .’”)(quoting Tannenbaum v. United States, 148
F.3d 1262, 1263 (11th Cir. 1998)).
III. PLAINTIFF’S CLAIMS
The legal foundation of plaintiff’s claims is difficult to
discern from either the original or the amended complaint.
Both
pleadings consist primarily of quotes and citations to cases and
state statutes that do not obviously give rise to any claim for
relief under the facts alleged by plaintiff.
Reading the complaints
very liberally, the following claims are potentially encompassed by
the complaint:
(1) wrongful foreclosure based on the securitization
of the mortgage, (2) fraud, (3) unfair business practices under
O.C.G.A. § 10-1-393, (4) unjust enrichment, and (5) a claim based on
various allegedly “unconscionable” acts by defendants.
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(Compl. [1]
and Am. Compl. [8].)
As discussed below, none of these claims
survives scrutiny under Twombly and Iqbal.
A.
Wrongful Foreclosure
In Georgia, the essential elements of a wrongful foreclosure
claim include: (1) a legal duty owed to plaintiff by the foreclosing
party, (2) a breach of that duty, (3) a causal connection between the
breach and the alleged injury, and (4) damages.
Gregorakos v. Wells
Fargo Nat’l Ass'n, 285 Ga. App. 744, 747-48 (2007) (citing Heritage
Creek Dev. Corp. v. Colonial Bank, 268 Ga. App. 369, 371 (2004)).
The complaint does not include any allegations to suggest that
defendants breached a duty to plaintiff.
Plaintiff does not deny
that she defaulted on her mortgage, triggering foreclosure rights
that were expressly preserved in the Deed.
(Pl.’s Resp. [9] and
Security Deed [6] at Ex. A.)
Much of plaintiff’s complaint and amended complaint focuses on
her theory that the process whereby her mortgage became securitized
somehow voided her obligation to repay the money that she had
borrowed to purchase the home,2 albeit plaintiff still wants to live
2
Many debtors seeking to avoid foreclosure of their homes argue
that, because the Note and the Deed have been “split” and are being
held by different entities, Georgia law disallows foreclosure.
Plaintiff does not formally make this argument. Likewise, she does
not cite the pertinent caselaw or statutes that are regularly cited
by debtors who pursue this theory. At most, she makes a couple of
oblique suggestions in her pleadings and complaints that nibble at
the edges of such a claim.
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in the home and to be considered the legal owner of the property.
In
essence, plaintiff argues that because her mortgage was made part of
a security, she now no longer owes any money and can obtain the
windfall of a free home.
Not surprisingly, plaintiff offers no
support for her argument that the securitization process somehow
invalidated the Note and thereby extinguished the debt associated
with it.
(Id. at 3.)
Neither does she support her assertion that
the “veil[ed]” securitization process converted her Note into stocks
and bonds.
(Id.)
Assuming that plaintiff’s Note was used as an
investment instrument, there is no legal or factual basis for
concluding that the Note was invalidated, or the debt rendered
uncollectable, by that process.
In short, plaintiff does not cite and the Court has not found
any legal authority to support a claim for wrongful foreclosure based
on the facts alleged in the complaint.
Plaintiff does not deny that
she defaulted on her loan and that the mortgage documents that she
executed gave rise to a right of sale upon default.
She does not
challenge any technical aspect of the non-judicial foreclosure sale
conducted by Wells Fargo.
Accordingly, plaintiff fails to state a
Nevertheless, in deference to plaintiff’s pro se status, the
Court will permit her to move for reconsideration of the dismissal of
the wrongful foreclosure claim if she, in fact, intended to make the
above claim. Any such motion should be filed within 14 days of this
Order and should include a second Amended Complaint that contains
only a claim relating to the split note/deed issue.
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claim for wrongful foreclosure that is “plausible on its face.”
Iqbal, 556 U.S. at 678.
To the extent plaintiff intended to assert
a claim for wrongful foreclosure, that claim is therefore DISMISSED.
B.
Fraud
To state a claim for fraud under Georgia law, plaintiff must
allege:
(1) a false representation by defendant, (2) scienter, (3)
an intention to induce plaintiff to act or refrain from acting, (4)
justifiable reliance, and (5) damage to plaintiff.
Floyd, 310 Ga. App. 674, 683 (2011).
Thompson v.
Federal Rule of Civil
Procedure 9(b) requires that in pleading fraud, “the circumstances
constituting fraud . . . [shall be] state[d] with particularity.”
FED. R. CIV. P. 9(b).
To comply with Rule 9(b), plaintiff must plead
“facts as to [the] time, place, and substance of [defendants’]
alleged fraud, specifically the details of defendants’ allegedly
fraudulent acts, when they occurred, and who engaged in them.”
United States ex rel. Clausen v. Lab. Corp. of Am., Inc. 290 F.3d
1301, 1310 (11th Cir. 2002).
Neither the original nor the amended complaint comes close to
meeting the above standard. In support of her fraud claim, plaintiff
asserts in a conclusory manner that defendants “falsely represented”
that her mortgage complied with “certain servicing guidelines” and
that they failed to disclose their intent to convert her Note into an
investment instrument. (Am. Compl. [18] at 2.) She further alleges,
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without any factual context at all, that defendants participated in
a “phony assignment chain.”
(Id. at 18.)
These allegations do not
include sufficient facts to support a viable claim for fraud under
Georgia law, and they omit several details that are required by
Federal Rule 9(b).
Accordingly, the Court DISMISSES plaintiff’s
claim for fraud.
C.
Unconscionability
Plaintiff suggests in the amended complaint that her mortgage
contract was “unconscionable.”
(Am. Compl. [8] at 8-9, 12-13.)
As
a general rule in Georgia, “‘parties may contract with one another on
whatever terms they wish.’”
Hall v. Fruehauf Corp., 179 Ga. App.
362, 363 (1986)(quoting Wilcher v. Orkin Exterminating Co., Inc., 145
Ga.
App.
551,
552
(1978)).
A
contract
will
only
be
found
“unconscionable” if it reflects an agreement that “‘no sane man not
acting under a delusion would make and that no honest man would take
advantage
of.’”
Id.
(quoting
R.L.
Ferguson, 233 Ga. 962, 966 (1975)).
Nelson,
267
Ga.
390,
396
Kimsey
Cotton
Co.,
Inc.
v.
See also NEC Tech., Inc. v.
(1996)(rejecting
an
unconscionability
argument where the Court could not find as a matter of law that
“decent,
fairminded
persons
would
possess
a
profound
sense
of
injustice from [its] enforcement”).
Plaintiff does not allege any facts that plausibly suggest her
mortgage was an “unconscionable” contract as defined by Georgia law.
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In fact, the property records reflect a standard mortgage contract.
Plaintiff received $335,000 in loan proceeds that she used to
purchase the property.
(Security Deed [6] at Ex. A.)
She executed
a Note in which she promised to repay the loan and a Deed in which
she granted her creditor a right to sell the property in the event of
a
default.
(Id.)
Those
facts
cannot
unconscionability claim under Georgia law.
at
396.
Accordingly,
plaintiff’s
conceivably
support
an
NEC Tech., Inc., 267 Ga.
unconscionability
claim
is
DISMISSED.
D.
Unjust Enrichment
Plaintiff does not deny that she executed a Note and Deed in
connection with her mortgage, and that she accepted the proceeds of
the mortgage.
plaintiff’s
As discussed above, there is no authority to support
theory
securitization
that
the
process,
or
unconscionability.
It
is
mortgage
as
the
therefore
an
was
invalidated
result
of
indisputable
by
the
fraud
or
fact
that
plaintiff’s relationship with defendants is governed by a mortgage
contract.
The theory of unjust enrichment only applies “‘when there
is no legal contract and when there has been a benefit conferred
which would result in an unjust enrichment unless compensated.’”
Tidikis v. Network for Med. Commc’ns & Research, LLC, 274 Ga. App.
807, 811 (2005)(quoting Smith Serv. Oil Co., Inc. v. Parker, 250 Ga.
App. 270, 272 (2001)(emphasis added)).
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See also, Am. Casual Dining,
L.P. v. Moe’s Sw. Grill, L.L.C., 426 F. Supp. 2d 1356, 1372 (N.D. Ga.
2006)(Thrash,
J.)(recognizing
that,
under
Georgia
law,
“unjust
enrichment is available only when there is no legal contract”).
Accordingly, plaintiff’s claim for unjust enrichment is facially
implausible and should be DISMISSED.
The other equitable relief referenced in the complaint, such as
a constructive trust that essentially transfers ownership of the
property to plaintiff, is likewise unavailable.
Under Georgia law,
a debtor who executes a security deed and defaults on a loan cannot
obtain equitable relief to cancel the deed unless the debtor has
first paid or tendered the amount due on the loan.3
Taylor, Bean &
Whitaker Mortg. Corp. v. Brown, 276 Ga. 848, 850 (2003).
See also
Hill v. Filsoof, 274 Ga. App. 474, 475 (2005)(“‘Before one who has
given a deed to secure his debt can have set aside in equity a sale
by the creditor in exercise of the power conferred by the deed . . .
he must pay or tender to the creditor the amount of principal and
interest due.’”)(quoting Coile v. Fin. Co. of Am., 221 Ga. 584, 585
(1965)).
mortgage.
Plaintiff does not deny that she defaulted on her $335,000
(Pl.’s Resp. [9].)
She does not allege that she payed or
tendered the amount of principal and interest due on the loan to
defendants.
Accordingly, her claim for a constructive trust or
3
This is an application of the more general principle that
“[h]e who would have equity must do equity.” O.C.G.A. § 23-1-10.
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other equitable relief that cancels the Deed or extinguishes the debt
due under the Note is DISMISSED.4
E.
Georgia Fair Business Practices Act
Plaintiff refers briefly in her complaint to the Georgia Fair
Business Practices Act (the “FBPA”), O.C.G.A. § 10-1-393.
Compl. [8] at 19-20.)
It is not clear whether plaintiff intends to
assert a claim under the Act.
is not viable.
(Am.
To the extent she does, any such claim
By its terms, the FBPA applies to “deceptive acts or
practices in the conduct of consumer transactions” such as “passing
off goods or services” or causing confusion as to the source of goods
or services.
O.C.G.A. § 10-1-393.
Plaintiff does not allege any
acts that could conceivably give rise to a cause of action under the
FBPA.
See O.C.G.A. § 10-1-396 (noting that the FBPA does not apply
to transactions that are otherwise regulated by the state or federal
government) and Chancellor v. Gateway Lincoln-Mercury, Inc., 233 Ga.
App. 38, 45 (1998)(the areas of “finance charges, disclosure, and
truth in lending fall[] outside the FBPA”). Accordingly, plaintiff’s
claim under § 10-1-393 is DISMISSED.
4
Plaintiff’s citation to various definitions found in the
Georgia Trust Act is similarly ineffective to give rise to a cause of
action. See O.C.G.A. § 53-12-1 (stating the title of the Georgia
Trust Act) and O.C.G.A. § 53-12-90 (a repealed provision that
formerly defined the term “implied trust”).
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CONCLUSION
For the foregoing reasons, the Court GRANTS defendants’ Motion
to Dismiss [6] and directs the Clerk to CLOSE this case.
If
plaintiff intends to file a motion for reconsideration, she should
follow the directions set out at 5, n.2, of this Order.
SO ORDERED, this 20th day of March, 2013.
/s/ Julie E. Carnes
JULIE E. CARNES
CHIEF UNITED STATES DISTRICT JUDGE
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