Jane McGinnis v. American Home Mortgage Servicing, Inc.
2016 U.S. App. LEXIS 5321
| 11th Cir. | 2016Background
- McGinnis refinanced seven rental properties; loans contained an escrow/collection scheme and a family rider tying defaults across loans.
- Homeward became the mortgage servicer in Oct 2009 and sent notices that increased monthly payment amounts (e.g., from $605.58 to ~$843.58) without adequate explanation.
- McGinnis paid the former amounts; Homeward placed those payments into a suspense account, assessed fees/late charges, returned checks, and ultimately foreclosed on at least one property (172 Hilton St.).
- Jury found for McGinnis on conversion, wrongful foreclosure, interference with property rights, and IIED, awarding $6,000 compensatory, $500,000 emotional distress, and $3,000,000 punitive damages.
- District court granted partial JMOL post-trial, holding insufficient evidence of specific intent to cause harm and reduced punitive damages to Georgia’s $250,000 cap; both parties appealed.
- Eleventh Circuit affirmed all rulings except it vacated the reduction of punitive damages, holding Homeward failed to preserve the specific-intent JMOL ground and remanded for consideration of Homeward’s Rule 59 motion on punitive damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Georgia RICO claim dismissed on summary judgment | McGinnis: 2001 amendment eliminated single-transaction defense; conduct forms a pattern | Homeward: conduct is a single extended transaction, not a RICO pattern | Affirmed: conduct was essentially one extended transaction; RICO claim fails under pre- and post-amendment analyses |
| Sufficiency of evidence for liability (escrow increase, notice, payment application) | McGinnis: Homeward failed to give proper RESPA-based escrow notice, made unreasonable escrow demands, misapplied payments | Homeward: provided notice (payment coupon) and acted within deed terms; payments lawfully held in suspense | Affirmed: reasonable jury could find lack of proper notice, unreasonable escrow increase, and improper suspense handling; JMOL/new trial denied |
| Emotional distress damages / IIED element of extreme & outrageous conduct | McGinnis: Homeward’s knowing persistence after notice, harassment, and wrongful foreclosure caused severe distress | Homeward: conduct was at most sloppy or contractual, not extreme or outrageous as a matter of law | Affirmed: conduct (knowledge of error, persistent collection, and foreclosure threats) was extreme/outrageous enough to support IIED and damages |
| Preservation of Rule 50(b) JMOL on specific intent for punitive damages cap | McGinnis: Homeward did not move re: specific intent before verdict, so argument waived | Homeward: sufficiently preserved by related pre-verdict motions/remarks at charge conference | Reversed district court: Homeward did not preserve the specific-intent JMOL ground; vacated reduction of punitive damages and remanded for Rule 59 consideration on punitive damages |
Key Cases Cited
- Allison v. McGhan Medical Corp., 184 F.3d 1300 (11th Cir.) (summary-judgment standard and de novo review)
- Chaney v. City of Orlando, 483 F.3d 1221 (11th Cir.) (standard for renewed JMOL under Rule 50(b))
- Quinn v. Sw. Wood Prods., Inc., 597 F.2d 1018 (5th Cir.) (purpose of pre-verdict JMOL to avoid ambush)
- Ross v. Rhodes Furniture, Inc., 146 F.3d 1286 (11th Cir.) ("closely related" exception for preservation of JMOL grounds)
- Boeing Co. v. Shipman, 411 F.2d 365 (5th Cir.) (weight-of-evidence standard cited in JMOL context)
- Sec. Life Ins. Co. of Am. v. Clark, 273 Ga. 44 (Ga.) (single-transaction defense in Georgia RICO jurisprudence)
- DeGolyer v. Green Tree Servicing, LLC, 291 Ga.App. 444 (Ga. Ct. App.) (awarding mental anguish where defendant foreclosed despite known error)