345 Ga. App. 135
Ga. Ct. App.2018Background
- Zhong bought a house in 2004 and financed it; PNC acquired the loan in 2005 and later served as servicer while Wells Fargo was the creditor. PNC paid Zhong’s delinquent 2009 property taxes in 2010 and then recalculated escrow, increasing her monthly payment substantially.
- Zhong disputed the escrow shortage and, on January 27, 2011, allegedly agreed with a PNC representative to make monthly payments of $3,891.98 to resolve the dispute; PNC later refused to accept those payments and returned checks.
- Zhong retained counsel and directed PNC to communicate with her attorney; nonetheless foreclosure notices were sent to the vacant property address and neither Zhong nor her attorney received timely notice; Wells Fargo foreclosed in 2012 and Zhong lost the property.
- Procedurally, Wells Fargo defaulted for failing to answer; the trial court initially granted summary judgment to defendants, this Court reversed in Zhong I and remanded; after further discovery the trial court again granted summary judgment to both defendants and Zhong appealed.
- On remand, the court evaluated: (a) whether Wells Fargo’s default estopped it from contesting liability and whether damages remain triable; (b) whether PNC breached the security deed or the alleged oral payment agreement (statute of frauds), and whether promissory estoppel, RESPA-based negligence, or wrongful-foreclosure claims survive.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Effect of Wells Fargo default and liability for wrongful foreclosure/damages | Zhong: Wells Fargo defaulted and admitted well-pled facts showing wrongful foreclosure and damages including credit harm | Wells Fargo: Even with default admitted, Zhong has no recoverable damages (e.g., no equity) and no evidence to fix amount | Held: Default establishes Wells Fargo’s liability; genuine issue remains on amount. Nominal and punitive damages available; reversed summary judgment for Wells Fargo |
| 2. PNC breach of security deed by how it handled tax payment/escrow | Zhong: PNC mishandled taxes/escrow and breached the security deed | PNC: Security deed expressly authorized paying taxes and demanding repayment; incorporating repayment into escrow/monthly payment was permitted | Held: PNC did not breach the security deed; summary judgment to PNC on that claim affirmed |
| 3. Enforceability of January 27 oral payment agreement; promissory estoppel | Zhong: Parties agreed PNC would accept $3,891.98 payments and that would resolve default; she relied and paid that amount | PNC: Oral agreement unenforceable under statute of frauds; written coupon/escrow statements insufficient; no acceptance or part performance that satisfies exceptions | Held: Oral contract unenforceable under statute of frauds, but promissory estoppel claim survives because facts could show reasonable reliance and detriment; summary judgment on contract claim affirmed, promissory estoppel claim survives |
| 4. Negligence (RESPA) and wrongful-foreclosure notice claim against PNC | Zhong: PNC violated RESPA response deadlines and failed to send required foreclosure notice to the address designated by counsel, causing loss | PNC: Applicable RESPA deadlines at the time were longer than plaintiff asserts and PNC met them; notice was sent to property address as required; attorney’s written designation was ineffective or unauthorized | Held: Summary judgment for PNC on RESPA-based negligence affirmed (no RESPA violation shown); wrongful-foreclosure claim against PNC survives because evidence raises triable issues whether counsel’s written address designation operated to shift notice and whether lack of proper notice caused damages |
Key Cases Cited
- Zhong v. PNC Bank, N.A., 334 Ga. App. 653 (Ga. Ct. App.) (prior appellate decision remanding on damages scope)
- Pollman v. Swan, 289 Ga. 767 (Ga.) (plaintiff need not specify exact dollar amount at summary judgment but must provide basis for a factfinder to calculate damages)
- Freese II v. Mitchell, 318 Ga. App. 662 (Ga. Ct. App.) (complaint allegations and fair inferences can support proximate-cause finding)
- Roylston v. Bank of America, N.A., 290 Ga. App. 556 (Ga. Ct. App.) (wrongful foreclosure claim where lender failed to provide statutorily required notice)
- Babalola v. HSBC Bank, USA, N.A., 324 Ga. App. 750 (Ga. Ct. App.) (alleged failure to give statutory foreclosure notice sufficiently states wrongful foreclosure claim)
- Bishop v. Intl. Paper Co., 174 Ga. App. 863 (Ga. Ct. App.) (nominal damages issue need not be specifically pleaded under Civil Practice Act)
- Hodson v. Whitworth, 173 Ga. App. 863 (Ga. Ct. App.) (nominal damages authorized in wrongful foreclosure)