Mayhew et al v. Bank America

Filing 12

ORDER DENYING Plaintiffs' Emergency 4 Motion for Hearing and Preliminary Injunction; GRANTING Defendants' Consolidated 10 Motion to Dismiss. The Clerk is DIRECTED to close the case. Signed by Judge Richard W. Story on 02/19/13. (sk)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
GAINESVILLE DIVISION
WILLIAM BOBBY BROWN,
RONALD MAYHEW, and
CONNIE MAYHEW,
Plaintiffs,
v.
BANK OF AMERICA, N.A. and
WELLS FARGO BANK, N.A.,

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CIVIL ACTION NO.
2:12-CV-00132-RWS

Defendants.

ORDER
This case comes before the Court on the following motions: (i) Plaintiffs’
Emergency Motion for Hearing and Injunction [4], and (ii) Defendants’
Consolidated Motion to Dismiss [10]. After reviewing the record, the Court
enters the following Order.
Background
This case arises out of the purchase and foreclosure of Plaintiff William
Bobby Brown’s (“Brown”) property, located at 165 Lick Log Road, Ellijay,
Georgia 30540 (“Property”). Accepting the allegations in the Complaint and

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the Amended Complaint (together the “Complaints”) as true, as the Court must
on a motion to dismiss,1 the facts are as follows.2
Plaintiff Brown first acquired the Property on July 6, 1974. (Compl.,
Dkt. [1] ¶ 14(a).) Brown conveyed the Property to Plaintiffs Ronald Mayhew
and Connie Mayhew (“Mayhews”) on August 4, 1989. (Id. at ¶ 14(b).) Brown
reacquired the property on December 29, 2003, when the Mayhews conveyed
the Property to Brown by warranty deed. (Id. at ¶ 14(b).) Also on December
29, 2003, Brown executed a security deed (“Security Deed”) on the Property in
favor of Defendant Bank of America, N.A. (“Bank of America”) and entered
into a loan agreement with Bank of America for the principal amount of
$336,600.00, plus interest (the “Loan”). (Defendants’ Memorandum of Law in
Support of Defendants’ Consolidated Motion to Dismiss (“Defs.’ Mem.”), Dkt.
[10-1] at 4 (citing Compl., Dkt. [1] ¶ 16, 17).) Brown used the Loan to
purchase the Property from the Mayhews. (Id.)

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Cooper v. Pate, 378 U.S. 546, 546 (1964).

2

Where necessary for a more complete statement of the events giving rise to
Plaintiffs’ claims, the Court includes some facts from Defendants’ briefs that Plaintiffs
do not appear to dispute.
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Sometime thereafter, but before July 2, 2009, Bank of America assigned
the Security Deed to Wells Fargo. (Defs.’ Mem., Dkt. [10-1] at 4.) A
corrective assignment was recorded on June 12, 2012 to correct the assignee to
“Wells Fargo Bank, N.A. as Trustee for Banc of America Alternative Loan
Trust 2004-2 Mortgage Pass-Through Cert 2004-2” (“Wells”). (Id. at 4-5).
According to Defendants, “[p]ursuant to Brown’s default on his obligations
owed under the Loan and Security Deed, and by reason of that default, Wells
accelerated the debt owed and initiated non-judicial foreclosure proceedings
against the Property in May 2012.” (Id. at 5; see also Compl., Dkt. [1] ¶ 10;
Am. Compl., Dkt. [6] ¶ 11.) Plaintiffs’ default is uncontested. The foreclosure
sale was scheduled for August 7, 2012. (Defs.’ Mem., Dkt. [10-1] at 5.) It is
unclear from the record whether the foreclosure sale has taken place as of the
date of this Order.
Plaintiffs claim that the Loan and transfer of the Property were shrouded
in fraud. Plaintiffs allege that Bank of America failed to disclose “the title
defects of record in the [P]roperty,” which occurred “as a result of a
conspiracy” between Mr. Bob E. Thomas and United Community Bank (neither
is named in this action). (Compl., Dkt. [1] ¶ 18.) Plaintiffs aver that these title
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defects “existed and were outstanding” at the time the Loan was executed, and
that Plaintiffs had no knowledge of the title defects. (Id. at ¶ 26.)
Plaintiffs assert that, as a result of the “title defects and the encumbrance
on the property,” Bank of America’s claim to the Property is “defective.” (Id.
at ¶ 27.) Plaintiffs further allege that Bank of America now seeks to “profit
from the fraud” by foreclosing on the Property and offering it for sale to another
“unsuspecting” and “innocent” person. (Id. at ¶ 29-30.) Moreover, Plaintiffs
allege that Bank of America seeks to foreclose on the Property in order to
prevent “the[] deficiencies on the [P]roperty from ever coming out so that
[Bank of America] can continue the illegal profiteering from this type of
criminal activity.” (Id. at ¶ 32.)
On June 4, 2012, Plaintiffs filed this action in the Northern District of
Georgia, Gainesville Division. The Complaint names only “Bank America
[sic]” as Defendant and contains a prayer for injunctive relief.3 (Compl., Dkt.
[1] ¶ 31-35.) On July 9, 2012, Plaintiffs filed their Amended Complaint, adding

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Plaintiffs seek a temporary restraining order, a preliminary injunction, and a
permanent injunction. Injunctive relief is not a cause of action but a remedy. Alabama
v. U.S. Army Corps of Engineers, 424 F.3d 1117, 1127 (11th Cir. 2005) (“any motion
or suit for either a preliminary or permanent injunction must be based upon a cause of
action”).
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Wells Fargo Bank, N.A. as a Defendant and correcting the name of “Bank
America” to “Bank of America, N.A.” [6]. The Complaints do not identify
enumerated counts or causes of action. However, the Court reads the
Complaints to include claims for fraud, wrongful foreclosure, racketeering, and
violation of the Fair Debt Collection Practices Act (“FDCPA”).4
On July 9, 2012, Plaintiffs filed an Emergency Motion for Hearing and
Injunction [4]. On July 26, 2012, Defendants moved to dismiss the Complaints
under Federal Rule of Civil Procedure (“Rule”) 12(b)(6) for failure to state a
claim against them [10].5 Plaintiffs have not responded to Defendants’ motion.
Therefore, the Court considers it as unopposed. See LR 7.1(B).

Discussion
I.

Legal Standard for a Motion to Dismiss
When considering a Rule 12(b)(6) motion to dismiss, a federal court is to
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See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (“a pro se complaint,
however inartfully pleaded, must be held to less stringent standards than formal
pleadings drafted by lawyers”). Plaintiffs state that the FDCPA, 15 U.S.C. §§ 1692 et
seq., provides the basis for federal question jurisdiction under 28 U.S.C. § 1331.
5

Defendants claim that Plaintiffs did not effectuate service of process on Bank
of America, but do not move to dismiss under Rule 12(b)(5). (Defs.’ Mem., Dkt. [101] at 2, 7.)
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accept as true “all facts set forth in the plaintiff’s complaint.” Grossman v.
Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000) (internal citation
omitted). Further, the court must draw all reasonable inferences in the light
most favorable to the plaintiff. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 55556 (2007) (internal citations omitted); Bryant v. Avado Brands, Inc., 187 F.3d
1271, 1273 n.1 (11th Cir. 1999). However, “[a] pleading that offers ‘labels and
conclusions’ or ‘a formulaic recitation of the elements of a cause of action will
not do.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550
U.S. at 555). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’
devoid of ‘further factual enhancement.’” Id.
The United States Supreme Court has dispensed with the rule that a
complaint may only be dismissed under Rule 12(b)(6) when “it appears beyond
doubt that the plaintiff can prove no set of facts in support of his claim which
would entitle him to relief.’” Twombly, 550 U.S. at 561 (quoting Conley v.
Gibson, 355 U.S. 41, 45-46 (1957)). The Supreme Court has replaced that rule
with the “plausibility standard,” which requires that factual allegations “raise
the right to relief above the speculative level.” Id. at 556. The plausibility
standard “does not[, however,] impose a probability requirement at the pleading
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stage; it simply calls for enough facts to raise a reasonable expectation that
discovery will reveal evidence [supporting the claim].” Id.
Additionally, because Plaintiffs are acting pro se, their “pleadings are
held to a less stringent standard than pleadings drafted by attorneys and will,
therefore, be liberally construed.” Tannenbaum v. United States, 148 F.3d
1262, 1263 (11th Cir. 1998). “This leniency, however, does not require or
allow courts to rewrite an otherwise deficient pleading in order to sustain an
action.” Thomas v. Pentagon Fed. Credit Union, 393 F. App’x 635, 637 (11th
Cir. 2010).
II. Defendants’ Consolidated Motion to Dismiss [10]
A.

Fraud

First, Plaintiffs allege that Defendants failed to disclose “title defects of
record in the [P]roperty.” (Compl., Dkt. [1] ¶ 18). Plaintiffs allege further that
Defendants seek to fraudulently profit from the foreclosure of the Property. (Id.
at ¶ 29-30). Moreover, Plaintiffs allege that Defendants seek to “offer the
property for sale to another unsuspecting buyer, this [sic] passing a fraudulent
transfer on to another innocent person.” (Id. at ¶ 29). Defendants seek to
dismiss the fraud claim on grounds that: (1) Defendants owed Brown no
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affirmative duty to verify the title’s status because no confidential relationship
existed between Bank of America and Brown; and (2) Plaintiffs fail to state a
claim under the pleading standards established by Iqbal, Twombly, and Rule 8.
(Defs.’ Mem., Dkt. [10-1] at 13, 16-17.)
“The tort of fraud has five elements: a false representation by a defendant,
scienter, intention to induce the plaintiff to act or refrain from acting, justifiable
reliance by the plaintiff, and damage to the plaintiff.” Irving v. Bank of Am.,
12-10712, 2012 WL 5869321 (11th Cir. Nov. 19, 2012) (quoting Baxter v.
Fairfield Fin. Servs., Inc., 704 S.E.2d 423, 429 (Ga. Ct. App. 2010)). Under
Georgia law, “[a] party can be held liable for fraudulently concealing a material
fact only if the party has a duty to disclose or communicate the fact.” Baxter v.
Fairfield Fin. Services, Inc., 704 S.E.2d 423, 429 (Ga. Ct. App. 2010) (quoting
Lilliston v. Regions Bank, 653 S.E.2d 306, 310 (Ga. Ct. App. 2007)). In
Georgia, “no fiduciary relationship exists merely because of two parties' relative
relationships as lender and borrower.” White v. Americas Servicing Co., 461 F.
App'x 841, 843 (11th Cir. 2012) (citing Moore v. Bank of Fitzgerald, 483 S.E.2d
135, 139 (Ga. Ct. App. 1997)); see also Arp v. United Cmty. Bank, 612 S.E.2d

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534, 538 (Ga. Ct. App. 2005) (“no confidential relationship between lender and
borrower or mortgagee and mortgagor. . . .”) (internal citation omitted).
Additionally, to prevail on a claim for fraud, the plaintiff must meet Rule
9(b)’s heightened pleading standard. A plaintiff “must state with particularity
the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). A
plaintiff must allege: “(1) the precise statements, documents, or
misrepresentations made; (2) the time, place, and person responsible for the
statement; (3) the content and manner in which these statements misled the
[p]laintiffs; and (4) what the defendants gained by the alleged fraud.” White v.
Americas Servicing Co., 461 F. App'x 841, 843 (11th Cir. 2012) (internal
citation omitted).
The Court agrees that Plaintiffs have not adequately pled a fraud claim
against Defendants. The Complaints do not allege with particularity any
materially false representations made by Defendants. Nor do Plaintiffs state how
Defendants could be held liable for concealing material information, given the
lack of a fiduciary relationship between the parties. Accordingly, Defendants’
Motion to Dismiss Plaintiffs’ claim for fraud is GRANTED.

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B.

Wrongful Foreclosure

Second, Plaintiffs raise a claim for attempted wrongful foreclosure,
alleging that “Bank America’s [sic] claim to the [P]roperty is defective.”
(Compl., Dkt. [1] ¶ 27). Defendants move to dismiss the claim on grounds that
(1) Plaintiffs defaulted on their obligations under the Loan and Security Deed,
and (2) the Security Deed provides Wells the right to foreclose on the Property.
(Defs.’ Mem., Dkt. [10-1] at 5, 20.)
The Court agrees that the Security Deed granted Wells the right to
foreclose on the Property. The Security Deed explicitly grants the lender and the
lender’s successors and assigns the right to “accelerate the debt” and “sell the
premises by nonjudicial foreclosure upon default by Grantor.” (Defs.’
Consolidated Mot. to Dismiss Ex. B, Dkt. [10-3] at 20.) In 2009, Bank of
America assigned the Security Deed to Wells Fargo. (Defs.’Consolidated Mot.
to Dismiss Ex. C, Dkt. [10-4].) The validity of the assignment has not been
questioned. Further, Plaintiffs have not contested Defendants’ assertion that
Plaintiffs were in default.6 Thus, the record shows clearly that Defendant Wells

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Defendants note that the Security Deed gives Wells authority to foreclose
(Defs. Mem., Dkt. [10-1] at 17), and that Plaintiffs “have not alleged tender of any
amounts owed on the Loan and Security Deed to [Bank of America], Wells, or any
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had the right to initiate foreclosure proceedings on the Property. Accordingly,
Defendants’ Motion to Dismiss Plaintiffs’ claim for wrongful foreclosure is
GRANTED.
C.

Racketeering

Third, Plaintiffs claim that Defendants are engaged in “illegal
profiteering” and “criminal racketeering activities.” (Compl., Dkt. [1] ¶ 32).
Plaintiffs allege that Bank of America “is trying to foreclose [sic] us . . . so that
they can continue the illegal profiteering from this type of criminal activity,”and
that foreclosure “will make Bank America [sic] party to the criminal
racketeering activities divulged [in the Complaint].” Id. Defendants move to
dismiss on grounds that Plaintiffs fail to set forth sufficient factual allegations to
support a cause of action against Defendants. (Defs.’ Mem., Dkt. [10-1] at 1213).
The Court agrees that Plaintiffs have failed to state a claim against
Defendants for racketeering. Rule 8 pleading requirements are intended to “give
the defendant fair notice of what the . . . claim is and the grounds upon which it

other entity.” (Id. at 20 (emphasis in original).) Plaintiffs have not responded to
Defendants’ motion. Therefore, the Court considers these statements as unopposed.
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rests.” Twombly, 550 U.S. at 545 (quoting Conley v. Gibson, 355 U.S. 41, 47
(1957)). The Complaints do not meet this standard. It is unclear from the
Complaints which racketeering law Defendants have allegedly violated. The
Complaints allege no specific facts in support of a racketeering claim. Rather,
the Complaints tender only a “naked assertion” of racketeering, “devoid of
‘further factual enhancement.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550
U.S. at 555). Accordingly, Defendants’ Motion to Dismiss Plaintiffs’ claim for
racketeering is GRANTED.
D.

Fair Debt Collection Practices Act

Fourth, Plaintiffs allege that Defendants violated the FDCPA. (Compl.,
Dkt. [1] ¶ 7; Am. Compl., Dkt. [6] ¶ 9.) Defendants argue that Plaintiffs have
failed to set forth sufficient facts to demonstrate a violation of the FDCPA.
(Defs.’ Mem., Dkt. [10-1] at 12 n.8.) “In order to prevail on an FDCPA claim, a
plaintiff must prove that: (1) the plaintiff has been the object of collection
activity arising from consumer debt, (2) the defendant is a debt collector as
defined by the FDCPA, and (3) the defendant has engaged in an act or omission
prohibited by the FDCPA.” Moore v. McCalla Raymer, LLC, No. 1:12-CV1714, 2013 WL 28253 (N. D. Ga. Jan. 2, 2013) (Thrash, J., adopting report and
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recommendation of King, Magistrate J.) (citing Kaplan v. Assetcare, Inc., 88 F.
Supp. 2d 1355, 1360-61 (S. D. Fla.2000)).
The Court agrees that Plaintiffs have failed to state a claim against
Defendants for violations of the FDCPA. Rule 8 requires that a complaint
“contain sufficient factual matter, accepted as true, to ‘state a claim to relief that
is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at
570). The Complaints allege no specific facts that would give rise to a claim
under the FDCPA. Accordingly, Defendants’ Motion to Dismiss Plaintiff’s
claim for violations of the FDCPA is GRANTED.
E.

Injunctive Relief (“First Cause of Action”)

Finally, Plaintiffs in their sole enumerated “Cause of Action” seek (1) a
Temporary Restraining Order and a preliminary injunction enjoining Bank of
America from pursuing non-judicial foreclosure on the Property while this
action is pending, and (2) a permanent injunction enjoining Defendants from
foreclosing on the Property. (Compl., Dkt. [1] ¶ 33-35). Defendants move to
dismiss this count on grounds that Plaintiffs fail to state a viable cause of action,
and alternatively, that Plaintiffs must tender the amount owed on the Loan and
Security Deed. (Defs.’ Mem., Dkt. [10-1] at 18-19).
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To obtain a preliminary injunction, a plaintiff must demonstrate, among
other things, “a likelihood of success on the merits.” Munaf v. Geren, 553 U.S.
674, 690 (2008) (quoting Gonzales v. O Centro Espirita Beneficente Uniao do
Vegetal, 546 U.S. 418, 428 (2006)). The standard for a permanent injunction is
“essentially the same as for a preliminary injunction except that the movant must
show actual success on the merits instead of a likelihood of success on the
merits.” St. James Entm't LLC v. Crofts, 837 F. Supp. 2d 1283, 1292-93 (N.D.
Ga. 2011) (citing Siegel v. LePore, 234 F.3d 1163, 1213 (11th Cir.2000)).
The Court found in Parts II(A)-(D), supra, that Plaintiffs failed to state a
substantive claim against Defendants upon which relief may be granted.
Further, Plaintiffs do not allege that they are current on their loan payments.
Thus, because Plaintiffs fail to show a likelihood of success or actual success on
the merits, and because Wells may rightfully foreclose (see discussion supra Part
II(B)), Defendants’ Motion to Dismiss Plaintiff’s First Cause of Action
(injunctive relief) is GRANTED.
In sum, the Complaints fail to state a claim against Defendants Bank of
America and Wells. Accordingly, Defendants’ Consolidated Motion to Dismiss
[10] is GRANTED with regard to all claims.
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III. Plaintiffs’ Emergency Motion for Hearing and Inju[n]ction [4]
As a final matter, Plaintiffs move the Court to enjoin Defendants from
foreclosing on the Property “while this action is pending.” (Pls.’ Emergency
Mot. For Hr’g & Inj., Dkt. [4] ¶ 18(1).) Again, because Plaintiffs have failed to
state any viable claim for relief in either the original Complaint [1] or Amended
Complaint [6], they are unable to show a substantial likelihood of success on the
merits. See discussion supra Part II(E). Thus, Plaintiffs’ Emergency Motion for
Hearing and Injunction [4] is DENIED.
Conclusion
In accordance with the foregoing, the Court finds the following: Plaintiffs’
Emergency Motion for Hearing and Injunction [4] is DENIED and Defendants’
Consolidated Motion to Dismiss [10] is GRANTED. The Clerk is directed to
close the case.
SO ORDERED, this 19th day of February, 2013.

_______________________________
RICHARD W. STORY
UNITED STATES DISTRICT JUDGE

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