DeSouza v. Federal Home Mortgage Corp.

Filing 37

ORDER granting 34 Motion to Dismiss; denying 35 Motion to Deny Defendants' Second Motion to Dismiss Plaintiff's Complaint; dismissing without prejudice Plaintiff's claims for wrongful foreclosure, illegal dispossession, unjust en richment, and breach of express warranty; and dismissing without prejudice Plaintiff's fraud claim. Plaintiff shall have 14 days from the date of this Order to file a second amended complaint correcting the deficiencies. Signed by Judge J. Randal Hall on 08/06/2012. (thb)

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF GEORGIA
AUGUSTA DIVISION

LISA DESOUZA,
Plaintiff,

V.
FEDERAL HOME MORTGAGE CORP.
d/b/a Fannie Mae, OCWEN LOAN
SERVICING LLC, and J.P.
MORGAN CHASE BANK, N.A.,
Defendants.

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CV 110-130

ORDER

Presently pending before the Court is Federal Home Mortgage
Corporation ("FHMC"), Ocwen Loan Servicing, Inc. ("OCWEN") and J.P.
Morgan Chase Bank, N.C.'s ("Chase") (collectively "Defendants")
motion to dismiss Plaintiff's Amended Complaint (doc. no. 34) and
Lisa DeSouza's ("Plaintiff") Motion to Deny Defendants' Second
Motion to Dismiss Plaintiff's Complaint. (doc. no. 35). Upon due
consideration, Defendants' motion is GRANTED and Plaintiff's motion
is DENIED.

I. Background
A.

Factual Background'

This case arises from foreclosure proceedings initiated
against two properties located in and around Augusta, Georgia,
which were previously owned by Plaintiff. On August 17, 2007,
Plaintiff purchased a rental property located at 3740 Woodlake
Road, in Hephzibah, Georgia ("Woodlake property") . 2

(Compi. at 2.)

Plaintiff purchased the Woodlake property for $120,000.00 from
Taylor, Bean, & Whitaker Mortgage Corporation ("TB&W") .
3.)

(Id. at 2,

On December 20, 2008, Plaintiff began having trouble paying

her mortgage due to a drop in rental income and, as a result,
sought assistance from TB&W.

(Id.)

On May 22, 2009, TB&W informed Plaintiff that she could seek
assistance from its Loss Mitigation Department.

(Id.)

A few

months later, however, OCWEN acquired TB&W. (Id.) Around this
time, Plaintiff filled out the necessary paperwork for a loan
modification, but on December 4, 2009, she received notice from
OCWEN that it was foreclosing on her home. (Id.) FHMC
dispossessed Plaintiff of this property several months after the
foreclosure occurred. (Am. Compl. at 5.)
On February 13, 2006, Plaintiff purchased another property
located at 3713 London Boulevard, in Augusta, Georgia ("London

1

In deciding this motion to dismiss, the Court must accept all facts
alleged in the Complaint as true and must construe all reasonable inferences
in the light most favorable to Plaintiff. See Hoffman-Pugh v. Ramsey, 312
F.3d 1222, 1225 (11th Cir. 2002)
2
Given Plaintiff's pro se status and the fact that the Amended
Complaint does not provide a statement of facts, the Court has incorporated
certain facts from the original Complaint into this Order.

2

property").

(Compl. at 4.) Plaintiff purchased this property from

Washington Mutual Bank ("Washington Mutual") at a price of
$110,000.00. (Id.) As with the Woodlake property, Plaintiff could
not pay her mortgage due to a drop in rental income and sought
assistance from Washington Mutual. (Id. at 5.)
Chase informed Plaintiff on June 1, 2009, that it had
purchased Plaintiff's loan from Washington Mutual. (Id.) Chase
asked Plaintiff to re-submit the documents she previously sent to
Washington Mutual regarding her requested loan modification.

(Id.)

On December 4, 2009, Plaintiff received notice from Chase that it
intended to foreclose on the London property.

(Id. at 6.)

FHMC

dispossessed Plaintiff from this property several months after the
foreclosure occurred.
B.

(Am. Compl. at 5.)

Procedural Background

On September 27, 2010, Plaintiff, proceeding pro Se, filed a
complaint against Defendant FHMC asserting various claims under
federal and state law. (Doc. no. 1.) FHMC subsequently filed a
motion to dismiss on the grounds that Plaintiff failed to state an
actionable claim for relief and failed to meet the requisite
pleading standards of Federal Rules of Civil Procedure 8, 9(b), and
65.

(Doc. no. 12.)
In its September 14, 2011 Order, the Court dismissed

Plaintiff's claims without prejudice and provided Plaintiff with
the opportunity to file an amended complaint

.3

(Doc. no. 30.) As

In granting Plaintiff leave to amend her complaint, the court stated
that, "Plaintiff's claim of wrongful foreclosure is clearly based upon a
misunderstanding of the applicable law and is belied by public documents of

3

instructed, Plaintiff filed her Amended Complaint on September 27,
2011. (Doc. no. 31.) Plaintiff's Amended Complaint alleges that
Defendants Chase and OCWEN wrongfully foreclosed upon her two
rental properties. (Am. Compl. at 3, 4.) Additionally, Plaintiff
alleges that FHMC illegally dispossessed her from these properties
and that the actions of all three Defendants constitute fraud.
(Id. at 4, 5.)

On October 18, 2011, Defendants filed a motion to

dismiss. (Doc. no. 34.) Defendants argue that Plaintiff's Amended
Complaint fails to state a claim for relief and meet the requisite
pleading standards of Rules 8, 9(b), and 65.

II. MOTION TO DISMISS STANDARD
In considering a motion to dismiss under Rule 12(b) (6), the
court tests the legal sufficiency of the complaint, not whether the
plaintiff will ultimately prevail on the merits. Scheur v. Rhodes,
416 U.S. 232, 236 (1974) . The court must accept as true all facts
alleged in the complaint and construe all reasonable inferences in
the light most favorable to the plaintiff.

See Hoffman-Pugh v.

Ramsey, 312 F.3d 1222, 1225 (11th Cir. 2002) . The court, however,
need not accept the complaint's legal conclusions as true, only its
well-pled facts. Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009)

which the Court is allowed to take judicial notice. Moreover, with regard to
Plaintiff relies almost exclusively on legal
the remaining claims,
conclusions... ." (Doc. no. 30 at 10.) The Court warned that Plaintiff's
amended complaint must contain 'sufficient factual allegations to support
those claims deemed too conclusory to overcome Defendant's motion to
dismiss . ?! (Id. at 11.)

19

A complaint also must "contain sufficient factual matter,
accepted as true, 'to state a claim to relief that is plausible on
its face.'"

Id. at 678 (citing Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007)) . The plaintiff is required to plead "factual
content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged." Igbal, 556
U.S. at 663. Although there is no probability requirement at the
pleading stage, 550 U.S. at 556, "something beyond . . . mere
possibility . . . must be alleged." Twombly, 550 U.S. at 557
(citing Durma Pharm., Inc. v. Broudo, 544 U.S. 336, 347 (2005)).

III. DISCUSSION
A. Wrongful Foreclosure
In her Original Complaint, Plaintiff alleged that the
foreclosures were wrongful because FHMC lacked a legal right to
foreclose. However, in her Amended Complaint, Plaintiff adds Chase
and OCWEN as Defendants and appears to abandon her initial theory
that FHMC did not have the right to foreclose. Instead, Plaintiff
now claims that Chase and OCWEN, not FHMC, wrongfully foreclosed on
her properties by failing to provide proper notice under O.C.G.A.
§44-14-162.2 and the Due Process Clause of the United States
Constitution. The Court will address these arguments in turn.
1.

Notice Pursuant to O.C.G.A. § 44-14-162.2

Plaintiff contends that O.C.G.A. § 44-14-162.2 required
Defendants Chase and OCWEN to send the foreclosure notices to her

5

California address because they were aware that the California
address was her primary residence.

Because Chase and OCWEN sent

the notices to the Woodlake and London properties instead,
Plaintiff alleges that the notice was improper.4
Under Georgia law, "notice shall be in writing and shall be
sent by registered or certified mail, return receipt requested, to
the property address or to such other address as the debtor may
designate by written notice to the secured creditor." O.C.G.A. §
44-14-162.2; see also Zeller v. Home Fed. Sa y . & Loan Ass'n. of
Atlanta, 220 Ga. App. 843, 845 (1996).

Further, "O.C.G.A. § 44-14-

162.2(a) plainly requires the secured creditor send notice to the
property address unless the debtor designates in writing another
address." Zeller, 220 Ga. App. at 845 (emphasis added)
Based on Plaintiff's concession that notices were sent to the
rental properties, it is clear that the notice Defendants provided
was sufficient. If Plaintiff wished to receive notice at a
location other than the rental properties, she was required to
specify another address in writing, which she failed to do.
Further, Defendants' actual knowledge of Plaintiff's California
address did not trigger a duty for Defendants to send the notice to
that address. See Id. (disagreeing with the plaintiff's assertion

The Court may take judicial notice of the foreclosure notices sent to
Plaintiff's rental properties because they are undisputed and central to
Plaintiff's claim. See Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005).
(holding that where documents are undisputed and central to a plaintiff's
claim, a court may consider them on a motion to dismiss without converting it
into a motion for summary judgment)

that the defendant's actual knowledge of plaintiff's home address
triggered a duty to send the notice there)
Plaintiff cites Nat'l Bldg. Assn. v. Quin, 120 Ga. 358 (1904),
Bankers Nut. Cas. Co. v. Peoples Bank of Talbotton, 127 Ga. 326
(1907), and Barnett v. Floyd Cnty. Nova Kola Bottling Co., 18 Ga.
App. 413 (1916) for the proposition that Defendants improperly
addressed the notices, and thus there is no presumption that
Plaintiff ever received the notices.

These cases, however, are

inapposite as they do not involve O.C.G.A. § 44-14-162.2.

Chase

and OCWEN complied with the Georgia notice provisions and
foreclosure statutes, and therefore, Plaintiff's claim for wrongful
foreclosure based on improper notice must be dismissed.
2.

Notice Pursuant to the Due Process Clause

Plaintiff further alleges that Defendants' failure to provide
notice at her California address violates the Due Process Clause of
Specifically, Plaintiff alleges

the United States Constitution.

that Defendants "failed to give [her] Notice . . . pursuant to the
due [sic] Process Clause of the U.S. Constitution, which also
require [sic] Notice and an opportunity to be heard before losing
private property." (Am. Compl. at 4.) Plaintiff claims that "the
Due Process Clause to the U.S. Constitution . . . demand [sic] that
prior to the taking of Private Property, the property owner must be
notified and given an opportunity to show cause as to why his or
her property should not be confiscated." Id. at 7.

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"The Due Process Clause prohibits state action that deprives a
United States citizen of life, liberty, or property. . .

if

McCiskill v. Deidrich, No. 3:10-CV-56, 2010 WL 1187882, at *2 (N.D.
Fla. Feb. 24, 2010) (emphasis added) .

The Eleventh Circuit has

held that there can be no due process violation in a private
foreclosure sale because there is no state action. Crooked Creek
Props., Inc. v. Hutchinson, 432 Fed. Appx. 948, 949 (11th Cir.
2011) . Here, Plaintiff's properties were foreclosed upon by
Defendants Chase and OCWEN, both of whom are private actors .5
Accordingly, Plaintiff's due process claim is meritless and must be
dismissed.
B. Dispossessory Hearing
Plaintiff

additionally

alleges

that

FHMC

illegally

dispossessed her of the properties by failing to provide notice of
the time and date of the dispossessory hearings. However, "after
[a] foreclosure sale, the former owner cannot attack dispossession
without first setting aside the foreclosure and deed." Owens v.
Green Tree Servicing, LLC, 300 Ga. App. 22, 23 (2009) (quoting Hurt
Defendants are private corporations, and Plaintiff has not alleged
sufficient facts to satisfy any of the three tests whereby their actions as
private actors would be considered state action. She does not allege that
Defendants partake in traditional functions of the state sufficient to
See Focus on the Family v. Pinellas
satisfy the public function test.
Further, she
Suncoast Transit Auth., 344 F. 3d 1263, 1277 (11th Cir. 2003).
does not allege that Defendants' actions were coerced or encouraged by the
government so as to satisfy the state-compulsion test. Id. Finally,
Plaintiff does not allege that the government was in a position of
interdependence with any of the Defendants to satisfy the nexus joint-action
test. Id.; see also Kennedy v. U.S., No.11-14402, 2012 WL 1758660 (11th Cir.
May 17, 2012) (holding plaintiff's due process claim was without merit
because defendants, including 0CWEN, constitute private parties and had not
engaged in any state action)

8

v. Norwest Mortg., 260 Ga. App. 651, 659 (2003)).

"The purchaser

at a foreclosure sale under a power of sale in a security deed is
the sole owner of the property until and unless the sale is set
aside." Jackman v. LaSalle Bank, 299 Ga. App. 894, 895 (2009).
Here, Plaintiff's claim for wrongful dispossession fails because
the foreclosures have not been set aside. Accordingly, Plaintiff's
claim for illegal dispossession shall be dismissed.6
C.

Fraud

Plaintiff lastly alleges that she was "defrauded out of her
property" based on communications she had with Defendants and their
respective attorneys, Specifically, Plaintiff alleges that
Defendants led her to believe that her rental properties were safe
from foreclosure.

6 Even if Plaintiff could attack the dispossession, her claim would prove
unsuccessful because of her failure to comply with Federal Rule of Civil
Procedure 8. Rule 8 requires a plaintiff to plead "a short and plain
statement of the claim that will give the defendant fair notice of what the
plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson,
While this pleading standard does not require
355 U.S. 41, 47 (1957) .
detailed factual allegations, labels and conclusions or "a formulaic
recitation of the elements of a cause of action will not do . . .
Twornbly, 550 U.S. at 545. Rule 8 requires more than merely "naked assertions
Igj, 556 U.S. at 678 (internal
devoid of further factual enhancement."
quotation marks omitted)
Here, Plaintiff merely states that "FHMC failed and refused to Notify
[sic] Plaintiff of the time and date of the Dispossessory Hearings [sic] that
was held that resulted in Plaintiff being dispossessed from her property
listed hereon." (Am. Compi. at 5.) Plaintiff fails to indicate whether FHMC
provided any notice at all, provided deficient notice, or sent the notice to
the Woodlake and London properties instead of her California address.
Plaintiff's claim therefore lacks sufficient factual support to state a claim
for relief that is plausible on its face.

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1.

Rule 9(b)7

"[ I ] n all averments of fraud or mistake, the circumstances
constituting fraud or mistake shall be stated with particularity."
Fed. R. Civ. P. 9(b) .

To sufficiently plead a claim for fraud,

plaintiffs in Georgia must establish five elements: "a false
representation by a defendant, scienter, intention to induce the
plaintiff to act or refrain from acting, justifiable reliance by
plaintiff, and damage to plaintiff."

Kabir v. Statebridge Co.,

LLC, No. 1:11-CV-2747, 2011 WL 4500050, at *6 (N.D.

Ga. Sept. 27,

2011) (quoting Baxter v. Fairfield Fin. Servs., 307 Ga. App. 286,
293 (2010)) . This rule alerts defendants to the precise misconduct
with which they are charged and protects defendants against
spurious charges of fraudulent behavior.

Steinberg v. Barclay's

Nominees, No. 04-60897, 2008 WL 4601043, at *11 (S.D.

Fla. Sept.

30, 2008) (citing Brooks v. Blue Cross Blue Shield of Fla., Inc.,
116 F.3d 1364, 1370-71 (11th Cir. 1997)) . The Eleventh Circuit has
held that compliance with Rule 9(b) requires a complaint to set
forth the following:
(1) precisely what statements were made in what
documents or oral representations or what omissions
were made, and (2) the time and place of each such
statement and the person responsible for making (or,
in the case of omissions, not making) same, and (3)
the content of such statements and the manner in
which they misled the plaintiff, and (4) what the
defendants obtained as a consequence of the fraud.
While pro se pleadings are held to a less stringent standard,
Plaintiff's pro se status will not excuse her mistakes regarding procedural
rules. Gamory v. Suntrust Nortg., Inc., No. 1:10-cV-3749, 2011 WL 7063378,
at *3 (N.D. Ga. Dec. 16, 2011).

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Kabir, 2011 WL 4500050, at *6.
Plaintiff's Amended Complaint is insufficient to satisfy the
heightened pleading standard of Rule 9(b).'

Plaintiff fails to

allege precisely what statements were made and merely states that
"she was under the belief, (tricked-defrauded) based on
communications between herself and each of the Defendants, either
directly or through their respective Lawyers . . . who represented
the Defendants in all of the Foreclosure and Dispossessory
Procedures." (Am. Compl. at 5.) While Plaintiff specifies that
Defendants led her to believe that her loans would be modified, she
fails to allege any supporting details of the loan modification
statements and how they caused her to believe that her properties
were safe from foreclosure. Plaintiff additionally alleges that
Defendants misled her, but does not specify who made the
statements, where they were made, the specific content of the
statements, and how Defendants benefitted as a consequence. While
Plaintiff has sufficiently pled several elements of fraud, her
failure to allege each Rule 9(b) element with the requisite
specificity proves fatal to her claim.9

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In a motion to dismiss, the Court "generally may not consider matters
Darnell v. West, No. 2:10-CV-0281, 2011 WL
outside the pleadings . . . ."
3468376, at *2 (N.D. Ga. July 12, 2011). Therefore, while Plaintiff's
response to Defendants' motion to dismiss provides a more detailed
explanation of the "who, what, when, and where" of her fraud claim, the Court
cannot consider those assertions in its analysis.
Plaintiff's allegation that the communications took place sometime
between February 23, 2009 and March 9, 2009, likely meets the Rule 9(b)
requirement that a plaintiff must specify the time when the statements were
Additionally, Plaintiff has sufficiently alleged how Defendants'
made.
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2. Statute of Frauds
In her Amended Complaint, Plaintiff fails to specify whether
the communications she had with Defendants and their respective
attorneys were oral or in writing. The Court is therefore unable
to determine the applicability of the statute of frauds.
"[ T ] he statute of frauds requires that a contract for the sale
of an interest in lands shall be in writing, and any modification
of a written contract required by law to be in writing must also be
in writing in order to be valid." Ogburn v. Chase Home Fin. LLC,
No. 1:11-CV-1856, 2011 WL 5599150, at *2 (N.D.

Ga. Nov. 16, 2011)

(quoting Jarman v. Westbrook, 134 Ga. 19 (1910) ) .

In Georgia,

contracts for the sale of lands, including non-judicial foreclosure
sales, are subject to the statute of frauds.

James v. Safari

Enters., 244 Ga. App. 813, 814 (2000) (citing Seymour v. Nat'l
Bldg. & Loan Ass'n, 116 Ga. 285, 285 (1902)) .

Because the

foreclosures at issue constitute non-judicial foreclosure sales,
the communications between Plaintiff, Defendants, and their
respective attorneys are subject to the statute of frauds.

The

Court must therefore discern the type of statements made (written
or oral) in order to assess Plaintiff's fraud claim.
Due to Plaintiff's pro se status, the Court will allow
Plaintiff an opportunity to amend her fraud claim to comply with
the Rule 9(b) pleading standard and the statute of frauds.
Plaintiff must specifically allege what statements were made, the
statements misled her, by claiming that Defendants' communications suggested
that Plaintiff's properties were safe from foreclosure.

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content of those statements, who made them, when they were made,
where they were made, how they misled Plaintiff, and what
Defendants obtained as a consequence. Additionally, Plaintiff must
address whether Defendants' statements were oral or in writing.
These allegations must be contained in the Second Amended Complaint
and cannot be made in response to a motion to dismiss.

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IV. CONCLUSION
For the reasons set forth above, Defendants' motion to dismiss
Plaintiff's Amended Complaint (doc. no. 34) is hereby GRANTED and
Plaintiff's Motion to Deny Defendants' Second Motion to Dismiss
Plaintiff's claims for wrongful

Plaintiff's Complaint is DENIED.

10 In her original Complaint, Plaintiff alleged that Defendants
committed fraud and "thereby unjustly enriched himself [sic] by said event."
(Compl. at 7.) Due to Plaintiff's pro se status, the Court will consider
this claim despite its absence in Plaintiff's Amended Complaint.

With regard to her unjust enrichment claim, the Court's September 14,
2011 Order advised Plaintiff that this claim lacked sufficient factual
support to state a claim for relief. Plaintiff's Amended Complaint, however,
does not cure this deficiency. A claim for unjust enrichment must show: "(1)
plaintiff has conferred [a] benefit on the defendant, who has knowledge
thereof; (2) defendant voluntarily accepts and retains the benefit conferred;
and (3) the circumstances are such that it would be inequitable for the
defendant to retain the benefit without paying the value thereof to the
plaintiff." Williams v. Wells Fargo Bank, No. 11-CV-21233, 2011 WL 4368980,
Plaintiff's Amended Complaint does not
at *8 (S.D. Fla. Sept. 19, 2011) .
Moreover, under Georgia law, a valid

set forth these required elements.
contract precludes claims for unjust enrichment. Wideman v. Bank of Am., No.
Here, the
3:11-CV-145, 2011 WL 6749829, at *4 (M.D. Ga. Dec. 23, 2011).
security deeds are valid and thus a claim for unjust enrichment is untenable.
Plaintiff's original Complaint additionally presented a claim for
breach of the "express warranty vested in the Original Contracts, for both
Houses [sic], which guaranteed to Plaintiff the right to be free in her
ownership of her property, free of illegal confiscation of said property by
the Defendant, without Due Process of Law." (Compl. at 8.) As stated above,
Plaintiff's pro se status has prompted the Court to consider this claim. The
Court, however, finds this claim is meritless due to Plaintiff's lack of
sufficient factual support, as required by Iqbal, 556 U.S. 662.

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foreclosure, illegal dispossession, unjust enrichment, and breach
of express warranty are DISMISSED WITH PREJUDICE. Plaintiff's
fraud claim is DISMISSED WITHOUT PREJUDICE. Plaintiff shall have
fourteen (14) days from the date of this Order to file a second
amended complaint correcting the deficiencies identified above."
Failure to plead fraud with the requisite specificity and identify
whether the statements were oral or in writing within the time
period allotted will result in the dismissal of the claim with
prejudice and the closing of this case. In the interest of
judicial efficiency, upon the filing of the second amended
complaint, the Court will review it to ensure that Plaintiff
complied with this Order before setting an appropriate deadline for
Defendants' responses.
ORDER ENTERED at Augusta, Georgia, this

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day of August,

2012.

E J. RAN-DAL HALL
HONO
STATES DISTRICT JUDGE
UNIT
SOUTHERN DISTRICT OF GEORGIA

The Court notes that in order to successfully amend, Plaintiff must
also comply with the service of process requirements set forth in Federal
Rule of Civil Procedure 4. Presently, there is no indication that Chase and
OCWEN waived service, and Plaintiff has not provided proof of service to show
that service was ever perfected. Because this Court may only exercise
personal jurisdiction over Defendants if the procedural requirements of
service of summons are satisfied, Plaintiff must perfect service in order for
the Court to properly consider her fraud claim. Ogburn, 2011 WL 5599150, at
*1.

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