Benjamin et al v. Shellpoint Mortgage Servicing et al

Filing 22

ORDER granting Defendants' 8 Motion for Summary Judgment. The Clerk is DIRECTED to enter judgment accordingly and CLOSE the case. Signed by Judge Lisa G. Wood on 8/6/2018. (ca)

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JOSEPH AND EUNIDE A. BENJAMIN,

Plaintiffs,
No. 2:17-cv-81

V.

SHELLPOINT MORTGAGE SERVICING,
and BANK OF NEW YORK MELLON,
Defendants.

ORDER

This

Summary

Matter

comes

the

Court

Defendants Bank of New

on

the

Motion

for

York Mellon

(^'the

Bank") and Shellpoint Mortgage Servicing ("Shellpoint").

Dkt.

No. 8.

Judgment of

before

This Motion has been fully briefed and orally argued and

is now ripe for review.

For the following reasons, this Motion

is GRANTED.

BACKGROUND

In order to understand the present lawsuit, it is important
to review the Benjamins' previous lawsuits.
I.

The

The Initial Lawsuit

record

shows

that

Plaintiffs

sued

BAC

Home

Loans

Servicing LP (^'BAC") in Glynn County Superior Court on April 29,
2011, and that the case was removed to this Court.
A0 72A

(Rev. 8/82)

Dkt. Nos. 8-

4, 8-5.
as

a

In that suit. Plaintiffs complained of damages suffered

result

caused

of

BAG's

Plaintiffs

to

failure

default

to

on

debit

the

their

trial

account,

which

modification

plan.

Specifically, they alleged the following:
Before
the
parties
signed
the
promissory
note.
Countrywide told them their interest rate would be
between

5%

and

6.25%,

that

as

the

date

of

closing

approached, their loan officer told them that their
interest rate would be higher, around 8%, and that at

closing, there were actually two loans, the first with
an interest rate of 8 3/8% and the second with an
interest rate of 12 3/8%.
Dkt. No. 8-4 SIS 7-9.
The
second loan was in the amount of $50,700.
Id. S 17.

Unable to make payments. Plaintiffs sought a loan
modification but were told they needed to wait two
years.
Id. S 24.
Countrywide contacted Plaintiffs
about qualifying for a lower interest rate loan in
October, 2007.
On November 15, 2007, Countrywide told
Plaintiffs they needed to make a lump sum payment of
$6,964.19 in order to get a loan modification.
Id.
S 30. Countrywide told them in January 2008 that they
needed to make monthly payments of $2,500 for six
months in
order to
get caught up.
Id. S 33.
Plaintiffs thought this would cover both loans but
learned several payments in that it was only for the
first.

Id.

S 34.

The

loans

were transferred

around

this point to BAG.
Id. S 42.
BAG told Plaintiffs
they would modify the loan if Plaintiffs moved back
into the Property.
Id. S 44.
(They had moved to
Massachusetts in an effort to improve their financial
condition.)
The modification was approved on August
27, 2009.
Id. SI 45.
Plaintiffs began making monthly
payments of $1,033.33 even though it was not the
figure previously represented.
Id. SISI 49-50.
In
April 2010, BAG failed to debit Plaintiffs' checking
account, causing Plaintiffs to default on the trial
modification plan.
Id. SISI 54-55.
BAG informed
Plaintiffs in

was

in

December, 2010 that one of their loans

foreclosure

and

that

they

needed to pay
Id. SI 62.

$60,179.45 to reinstate one of the loans.

That lawsuit ended in a dismissal with prejudice ordered by
this Court on June 19, 2013.
A0 72A

(Rev. 8/82)

Dkt. No. 8-7.
2

Defendant asserts

that

the

parties

{BAG

and

the

Benjamins)

had

settled

their

dispute (''the Settlement Agreement"), and that BAG thereby paid
Plaintiffs $60,000.
II.

Dkt. No. 8-1 SI 4.

The Second lawsuit

Plaintiffs

2016, in

the

filed

State

suit

against

Gourt of Glynn

Shellpoint

on

January

21,

Gounty, alleging claims of

breach of contract, grief, fraud, and misrepresentation, all of
which

were

based

on

the

theory

that

Shellpoint,

as

Bank

of

America's successor, breached the Settlement Agreement from the

first lawsuit by attempting to collect on the note or by moving
forward

with foreclosure.

hearing

on

Benjamins

Shellpoint's

argued

that

Dkt. No. 8-6; Dkt. No. 8-8.

motion

their

for

settlement

summary
was

At the

judgment,

with

the

Bank

that Shellpoint therefore had no standing to enforce it.
p.

7.

The

state

court

rejected

those

arguments

and

summary judgment in favor of Shellpoint on May 17, 2017.
Ill.

Pro
2017.

the
and
Id.,

granted
Id.

The Present Lawsuit

se
Dkt.

Plaintiffs
No.

1.

filed
They

the
named

present
the

lawsuit

Bank,

Aldridge Pite, LLP ("AP")^ as Defendants.

Id.

on

July

Shellpoint,

7,
and

The Gomplaint

lists claims of breach of contract, fraud, and fraudulent loan

relating to a "mortgage dispute."

Id. III.A.

It asserts that

the events giving rise to the claim began in 2006 and does not

^ The Court has previously ordered dismissal of claims against AP.
18.

3

Dkt. No.

state

an

facts,

end

the

Massachusetts

date.

Id.

Complaint
to

save

III.B.

In

alleges
their

describing

that

house,

the

Plaintiffs

and

moved

bdck

relevant

moved
into

their

Georgia home because of the promise of a loan modification.
III.C.

'''They lied," the Complaint alleges.

Complaint,

the

Defendants

began

refusing

after three payments had been made.

mortgage

to

another

servicer,"^

Plaintiffs, they sold it again.

Id.

and

to

Id.

According to the

Plaintiffs'

payments

Then, "they sold the

after

working

with

Id.

Plaintiffs also attached a letter to their Complaint.

The

letter explains that the house was apparently sold in February
2016,

but

the

letter

asks

for

proof

of

such

a

transfer

alleges that the settlement and the deed completion
without their signature.

and

were done

Dkt. No. 1-1.

Defendants attached to their Motion for Summary Judgment a
promissory

note

dated

July 18, 2006, for the

property at 118

Wentle Circle, Brunswick, GA 31525-9255 ("the Property") between
Countrywide Home Loans, Inc. ("Countrywide") and Plaintiffs in
which Plaintiffs promised to pay $202,800 with a yearly interest
rate

of

8.375%.

Dkt.

No.

8-2.

The

note

appears

to

have

required Plaintiffs to make monthly payments of $1,467.46 that
may change as of August 2008.

Id., p. 1.

Defendants have also

^ The Court is reasonably confident that "servicer" is the handwritten word
Plaintiffs inscribed.

4

produced

a

security

deed

on

the

Countrywide as the secured lender.
Defendants
foreclosed on

have

the

further

Property,

names

Dkt. No. 8-3.

produced

Property on

which

evidence

that

the

Bank

February 2, 2016, and that the

deed signifying that event was signed on March 29, 2016.

Dkt.

No. 8-9.

The

judgment

Bank

and Shellpoint

based

on

the

have filed

preclusion

of

a

motion for

this

suit

by

summary

the

two

previous suits.

Plaintiffs
dated
that

February
the

have
3,

owner

also

2017

who

produced

(^'the

a

letter

February 2017

recently

acquired

from

Shellpoint

letter"),

stating

Property

through

the

foreclosure was willing to ^^make a one-time relocation offer to

help [the Benjamins] with moving expenses if [they we]re willing
to vacate the home at an agreed upon date."

Dkt. No. 12-6, p.

14.

LEGAL STANDARD

Summary judgment is required where ^'the movant shows that
there

is

no

genuine

dispute

as

to

any

material fact

movant is entitled to judgment as a matter of law."
Civ. P. 56(a).

V.

(quoting

FindWhat.com,

Anderson

the

Fed. R.

A fact is ^'material" if it ^^might affect the

outcome of the suit under the governing law."
Grp.

and

v.

658

F.3d

Liberty

1282,

Lobby,

1307

Inc.,

FindWhat Inv^ r

(11th

477

Cir.

U.S.

2011)

242,

248

(1986)).

A dispute is '"genuine" if the "evidence is such that a

reasonable jury could return a verdict for the nonmoving party."
Id.

In making this determination, the court is to view all of

the evidence in the light most favorable to the nonmoving party
and

draw

Johnson

all

v.

reasonable

Booker

T.

inferences

Washington

in

Broad.

that

party's

Serv.,

Inc.,

favor.

234

F.Sd

501, 507 (11th Cir. 2000).

The moving party bears the initial burden of demonstrating
the absence of a genuine issue of material fact.
V. Catrett, 477 U.S. 317, 323 (1986).

court

that

nonmoving

there

party's

is

an

case.

absence
Id.

at

of

Celotex Corp.

The movant must show the

evidence

325.

If

to

the

support
moving

the

party

discharges this burden, the burden shifts to the nonmovant to go

beyond

the

pleadings and

present affirmative evidence to show

that a genuine issue of fact does exist.

Anderson, 477 U.S. at

257.

The nonmovant may satisfy this burden in one of two ways.

First, the nonmovant "may show that the record in fact contains
supporting evidence, sufficient to withstand a directed verdict

motion, which was 'overlooked or ignored' by the moving party,
who has thus failed to meet the initial burden of showing an
absence of evidence."

Fitzpatrick

v.

City of Atlanta, 2 F.Sd

1112, 1116 (11th Cir. 1993) (quoting Celotex Corp., 477 U.S. at

332 (Brennan, J., dissenting)).

Second, the nonmovant "may come

forward

with

directed

additional

verdict

evidentiary

evidence

motion

at

deficiency."

Id.

sufficient

trial
at

based

1117.

to

on

withstand

the

Where

the

a

alleged
nonmovant

attempts to carry this burden instead with nothing more ^^than a
repetition of his conclusional allegations, summary judgment for
the defendants [is] not only proper but required."

Morris v.

Ross, 663 F.2d 1032, 1033-34 (11th Cir. 1981) (citing

Fed. R.

Civ. P. 56(e)).
DISCUSSION

Defendants argue that they should prevail as a matter of
law.

Their argument is based not on the merits of their case,

not on the position that Plaintiffs cannot prove their claims,
but

on

a

more

fundamental

reason:

Plaintiffs

claims

against

Shellpoint and the Bank relating to the servicing of the loan on

Plaintiffs' Property have already been adjudicated.
When

plaintiffs

bring

claims

against

defendants

arising

under state law, they can choose to bring their suit in a state
court, or, in certain instances, in a federal court.

The two

court systems operate parallel, not under a hierarchy.

That is,

federal courts

do

not

have the authority to

judgment of a state court.

Cnty.

Com'rs,

142

F.3d

review

the

final

See Wilkinson v. Pitkin Cnty. Bd. of

1319,

1325

(10th

Cir.

1998)

(citing

District of Columbia Ct. of App. v. Feldman, 460 U.S. 462, 48485 (1983)).

The

Court

is

required,

if

appropriate,

to

apply

the

doctrine of res judicata, or claim preclusion, whereby ^'a final

judgment on the merits bars the parties to a prior action from
re-litigating a

cause

of action that

raised in that action."

was

or could

have

been

In re Piper Aircraft Corp., 244

F.3d

1289, 1296 {11th Cir. 2011).

In the present case. Plaintiffs filed a lawsuit against BAC
in 2011 in Glynn County Superior Court.
dismissed

with

this Court.

prejudice in

June 2013 after being removed to

They filed the second lawsuit against Shellpoint in

January, 2016, in the State
lost.

It was settled and

Court of Glynn County, and they

Shellpoint prevailed on summary judgment on May 17, 2017.

Seven weeks later, on July 7, 2017, Plaintiffs filed the present
lawsuit

in

this

Court

against

Shellpoint,

the

Bank,

and

AP,

complaining of a dispute that began occurring in 2006.
The dates alone hint that Plaintiffs filed the present suit

to

re-litigate

dates

alone

the

are

determination.

claims they had

not

enough

Defendants

to

just lost.

bring

the

However, the

Court

must satisfy three

to

such

a

requirements in

order for the Court to find that Plaintiffs are precluded from

litigating the issues presented in this third suit.

They are:

(1) a

court

previous

adjudication

on

the

merits

by

a

of

competent jurisdiction; (2) identity of the causes of action;
(3) identity of the parties or their privies.
8

Crowe v. Elder,

723 S.E.2d 428, 430 (Ga. 2012) (citing O.C.G.A. § 9-12-40).^
1.

Final judgment on

easily satisfied.

the merits.

The first element is

Regarding the first lawsuit, a dismissal with

prejudice

is

a

final

Vineyard,

405

S.E.2d

decision

678,

681

on

(Ga.

the

merits.

1991);

Fowler

Kaspar

Wire

v.

Works,

Inc., V. Leco Engineering & Mach., Inc., 575 F.2d 530, 534 (5th

Cir. 1978).

Regarding the second lawsuit, a grant of summary

judgment is a final judgment when it ''actually adjudicated the
merits."

Roth v. Gulf Atlantic Media of Ga., Inc., 536 S.E.2d

577,

(Ga.

679

Ct.

App.

2000).

Having

reviewed

the

summary

judgment order from the second suit, the Court easily finds that
it

adjudicated

"Shellpoint
agreement

the
not

did

and

merits.
breach

the

breach

The
any

of

state

court

obligation

contract

in

claim

found

the

fails"

that

settlement
and

that

Plaintiffs produced no facts to support their claims for fraud,
grief,

or

misrepresentation"

required to prove each claim.
There

is

no

doubt

that

after

examining

the

elements

Dkt. No. 8-6, pp. 4-5.
both

courts

had

jurisdiction

to

state law governs the preclusive effect of a state court judgment. See Allen
V. McCurry, 449 U.S. 90, 96 ("Congress has specifically required all federal
courts to give preclusive effect to state-court judgments whenever the courts

of the

State from

which

the judgments emerged

would

do so.") (citing 28

U.S.C. § 1738). That is somewhat more complicated here because there are two
previous final judgments, one by a federal court and one by a state court.
Still, the elements of res judicata under Georgia law do not differ from
those under federal law in a way that would change the result in this suit.
See In re Piper Aircraft Corp., 244 F.3d at 1296 (listing the requirements as
(1) the prior decision was rendered by a court of competent jurisdiction; (2)
there was a final judgment on the merits;' (3) both suits involve the same
parties or their privies; (4) the claims in the present suit were or could
have been brought in the previous).
9

render the judgments.
the

first

lawsuit

This Court had diversity jurisdiction in

because

the

action

was

between

parties

of

different states and the amount in controversy exceeded $75,000.
See

Dkt. No. 8-5 H 7-9; 28 U.S.C. § 1332 (granting diversity

jurisdiction to federal district courts).

The State Court of

Glynn County had jurisdiction in the second lawsuit because the

Property is located in

Glynn

County.

See O.C.G.A. § 15-7-4

(granting jurisdiction with the territorial limits of the county
for

all civil

vested

in

actions in

the

^^respecting

superior

title

to

which

exclusive

courts).

land" as

it

The

jurisdiction

action

involved

misrepresentation, and breach of contract.

was

claims

is

not

not

one

of

fraud,

Ga. Const. Art. 6,

§ 4, SI I.

2.

Identity of causes of action.

also met.

The second element is

A ""cause of action" for res judicata purposes ""has

been deemed to be "the entire set of facts which give rise to an
enforceable claim.'"

Crowe, 723 S.E.2d at 430 (quoting Morrison

V. Morrison, 663 S.E.2d 714 (Ga. 2008)).
second

suit

found

that

all

of

The state court in the

Plaintiffs'

claims

involved

Shellpoint's breach of the settlement agreement from the first
suit by attempting to collect on the note or by moving forward
with foreclosure.

Dkt. No. 8-6, p. 4.

In defining the present

cause of action. Plaintiffs' complaint lists claims of breach of
contract,

fraud,

and

fraudulent
10

loan

relating

to

a

""mortgage

dispute."

Dkt.

No.

III.A.

This

Complaint

asserts that the

events giving rise to the claim began occurring in 2006 and does
not state an end date.

facts,

the

Id. III.B.

Complaint

Massachusetts

to

save

alleges

their

In describing the relevant

that

house,

Plaintiff

and

moved

back

moved

to

into their

Georgia home because of the promise of a loan modification.

III.C.

Id.

"They lied," the Complaint alleges, and began refusing

Plaintiffs' payments after three payments had been made.

Id.

Then, "they sold the mortgage to another servicer," and after

working with Plaintiffs, they sold it again.

Id.

So far, all

of these events are clearly part of the same cause of action at
issue

in

either the first or

the

second

lawsuit.

And

much

of

these allegations mirror those stated with more specificity in
the first lawsuit's complaint.
Because

of

Plaintiffs'

See infra pp. 3-4.
pro

se

status,

the

Court

has

rigorously searched the docket and listened at oral argument,

looking for anything Plaintiffs complain about in this lawsuit
that could not have been handled by the first or second lawsuit.
This Complaint

does

refer

to

Plaintiffs'

Property being

sold

without their signature and without proof of the transfer.

The

Complaint alleges that this occurred in February 2016, one month
after the second lawsuit was filed.
Plaintiffs
occurred

have

after

identified
the

second

in

the

lawsuit
11

The only other allegation
record

and

was filed

is

pleadings
a

that

February 3,

2017 letter

from

Shellpoint

stating

that the

owner

who

newly

acquired the Property through foreclosure was willing to ^^make a
one-time relocation offer to help [the Benjamins] with moving

expenses if [they we]re willing to vacate the home at an agreed

upon date."'' Dkt. No. 12-6, p. 14.
Although

the

foreclosure

occurred

after

Plaintiffs

filed

their complaint in the second lawsuit, it resulted from actions
alleged in the complaint.
that

suit

to

stop

the

It is clear that Plaintiffs filed
foreclosure

and

were

unsuccessful.

Regarding the February 2017 letter, the parties made clear at
oral

argument

that

the

letter

was

related

to

settlement

negotiations during the second lawsuit and not to any actions
that Plaintiffs complain of in this suit.

Therefore, the cause

of action in this lawsuit is identical to the one resolved by
the second lawsuit.

3.

Identity of parties or their privies.

The Benjamins,

Shellpoint, and the Bank are the relevant parties in the present

suit.^

The Benjamins and Shellpoint were the two parties in the

second suit.
a

privy to

The only remaining question is whether the Bank is
Shellpoint.

There

is

no

definition

of

privity

which can be automatically applied to all cases involving the

The Court is unsure whether this is relevant to any claim but is presently

concerned

only

with

whether

it is

part

of the "cause

of action" in

any

previous suits.

^ AP

has

been dismissed from this action

analysis.
12

and is

not considered in

this

doctrines

of

res judicata

circumstances.

[],

since

privity depends upon the

Privity may be . . . established if the party to

the first suit represented the interests of the party to the
second

suit.'"

ALR

Oglethorpe,

LLC

v.

Henderson,

783 S.E.2d

187, 192 (Ga. Ct. App. 2016) (quoting Brown & Williamson Tobacco
Corp. V. Gault, 627 S.E.2d 549 (Ga. 2006)).

The Court finds that the Bank is in privity to Shellpoint

for the purpose of the preclusive effect of the second lawsuit.
Plaintiffs sued

Shellpoint in

the second

relationship as the loan servicer.
the

reason

that

Plaintiffs

named

suit

based on

their

That appears to be exactly

the

Bank

in

this

case.

Both

parties' liability to Plaintiffs would arise based on the terms
of the loan servicing agreements.

Shellpoint serviced the loan;

the Bank acquired the Property after Shellpoint took steps to
collect on the note.

CONCLUSION

Defendants'
GRANTED.

The

Motion
Clerk

of

for

Summary

Court

is

Judgment

DIRECTED

(Dkt.

to

No.

enter

SO ORDERED, this 6th day of August, 2018.

HON. Li«A GDDBEY lApOD, JUDGE
UNITED STATES DISTRICT COURT

13

is

judgment

accordingly and CLOSE the case.

SOUTHERN

8)

DISTRICT OF GEORGIA