HARRIS Et Al. v. DEUTSCHE BANK NATIONAL TRUST COMPANY
338 Ga. App. 838
| Ga. Ct. App. | 2016Background
- Clarence and Althea Harris owned a home refinanced in 2006; loan was later assigned to Deutsche Bank and serviced by American Home Mortgage Servicing, Inc. (AHM).
- Deutsche Bank conducted a non-judicial foreclosure sale in March 2012 and purchased the property at auction.
- The Harrises filed three successive suits: (1) federal suit (filed Apr. 2012) alleging wrongful foreclosure and breach (dismissed for failure to state a claim; appeal voluntarily dismissed); (2) state suit (Nov. 2013) seeking declaratory/injunctive relief (dismissed with prejudice; affirmed on appeal); (3) the instant state suit (Apr. 2015) alleging breach of contract and wrongful foreclosure based on defective notice and that AHM’s payments cured any default.
- The trial court considered materials beyond the pleadings (prior pleadings and judgments) and treated Deutsche Bank’s motion as one for summary judgment, dismissing the Harrises’ claims as barred by res judicata.
- The Court of Appeals reviewed de novo and affirmed, holding the Harrises’ current claims arise from the same operative facts as earlier suits and therefore were or could have been litigated previously.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Harrises’ 2015 breach and wrongful-foreclosure claims are barred by res judicata (identity of cause of action) | The 2015 suit alleges new operative facts (AHM’s advance payments kept account current; specific statutory defects in notices) that were not in prior complaints, so there is no identity of cause | Prior suits concerned the same 2012 foreclosure and alleged defective notice and lack of authority to foreclose; any facts arising before the first suit could have been raised then and are barred now | Held: Claims barred. The operative misconduct (defective notice/unauthorized foreclosure) arose before the first suit and the new factual allegations could have been litigated earlier, so res judicata applies |
| Whether conversion of the motion to a summary judgment and de novo review was proper | (implicit) The Harrises argued the court erred in dismissing their complaint on res judicata grounds | Deutsche Bank relied on prior pleadings and judgments, prompting consideration of matters outside the pleadings | Held: Court properly treated the motion as for summary judgment and applied de novo review; dismissal on res judicata was affirmed |
Key Cases Cited
- Host Intl., Inc. v. Clayton County, 311 Ga. App. 414 (court may review de novo where motion to dismiss considers matters outside the pleadings)
- Body of Christ Church Overcoming God, Inc. v. Brinson, 287 Ga. 485 (defines three elements of res judicata under OCGA § 9-12-40)
- Crowe v. Elder, 290 Ga. 686 (cause of action is the entire set of facts giving rise to a claim; recasting same misconduct does not create a new cause)
- Haley v. Regions Bank, 277 Ga. 85 (distinguishes claims based on operative facts that arose only after earlier litigation)
- Neely v. City of Riverdale, 298 Ga. App. 884 (res judicata bars claims that were or could have been litigated earlier; new factual allegations do not avoid preclusion if they arose before the earlier suit)
- Leggett v. Gibson-Hart-Durden Funeral Home, Inc., 123 Ga. App. 224 (res judicata may bar subsequent claims even if plaintiff learned of additional facts after the first judgment)