Hodges v. JPMorgan Chase Bank NA
1:17-cv-00851
N.D. Ga.Sep 8, 2017Background
- In 2004 Timmy and Sharon Hodges executed a promissory note and security deed securing a $438,200 loan for property in Canton, GA; the security deed was recorded.
- HomeBanc assigned the security deed to U.S. Bank (as trustee) and JP Morgan Chase (as servicer) per recorded assignments; parties dispute exact assignment/recording dates.
- Chase notified the Hodges of a servicer change to SPS effective Nov. 1, 2016; plaintiff later received foreclosure notice letters in Dec. 2016 and Jan. 2017.
- Hodges sued in Cherokee County Superior Court on Feb. 6, 2017, alleging defendants violated Georgia foreclosure procedure (O.C.G.A. § 44-2-60) and seeking declaratory and injunctive relief to stop foreclosure and force proper servicer transfer.
- Defendants removed to federal court; they moved to dismiss under Rule 12(b)(6). Plaintiff, proceeding pro se, did not respond; court reviewed the merits and recommended dismissal with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Wrongful foreclosure | Hodges alleges defendants wrongfully foreclosed or attempted to foreclose in violation of Georgia law | Defendants say no completed foreclosure and no actionable wrongful-foreclosure facts | Dismissed: no completed foreclosure alleged, so wrongful-foreclosure claim fails |
| Attempted wrongful foreclosure (publication element) | Notices and foreclosure attempts amount to wrongful attempted foreclosure | Defendants: plaintiff did not plead publication of untrue derogatory financial information or damages | Dismissed: plaintiff failed to plead required elements (false publication and damages) |
| Injunctive relief to stop foreclosure / require servicer transfer | Hodges seeks injunction halting foreclosure and an order compelling a transfer of servicer | Defendants: statute cited (§44-2-60) doesn't create a private cause of action; injunction requires tender or dispute of default | Dismissed: no statutory private right shown and plaintiff failed to tender or dispute default plausibly |
| Procedural: plaintiff’s failure to respond | Hodges did not file opposition to motion to dismiss | Defendants relied on lack of response; court could but declined to dismiss solely on procedural grounds | Court considered merits despite no response and dismissed on substantive grounds |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard requires plausible claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (complaint must allege enough facts to raise claim above speculative level)
- Quality Foods de Centro Am., S.A. v. Latin Am. Agribusiness Dev. Corp., 711 F.2d 989 (11th Cir.) (court must accept pleaded facts as true)
- Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182 (11th Cir.) (courts need not accept conclusory allegations)
- Fin. Sec. Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276 (11th Cir.) (complaint must allege all material elements of a viable legal theory)
- Marshall Cnty. Bd. of Educ. v. Marshall Cnty. Gas Dist., 992 F.2d 1171 (11th Cir.) (dismiss where dispositive legal issue defeats claim)
- DeGolyer v. Green Tree Servicing, LLC, 291 Ga. App. 444 (Ga. Ct. App.) (elements of wrongful foreclosure claim)
- Heritage Creek Dev. Corp. v. Colonial Bank, 268 Ga. App. 369 (Ga. Ct. App.) (wrongful-foreclosure framework)
- Aetna Fin. Co. v. Culpepper, 171 Ga. App. 315 (Ga. Ct. App.) (publication element for attempted wrongful foreclosure)
- Sparra v. Deutsche Bank Nat. Trust Co., 336 Ga. App. 418 (Ga. Ct. App.) (injunction against foreclosure requires tender or dispute of amount due)