Kin Chun Chung v. JP Morgan Chase Bank, N.A.
975 F. Supp. 2d 1333
N.D. Ga.2013Background
- Chung purchased 2755 Sudbury Trace; Chan purchased 2775 Sudbury Trace in Norcross, GA on March 27, 2007.
- Both obtained notes and security deeds in favor of Global Lending, LLC, later assigned to JPMorgan Chase Bank, N.A. (Chase).
- Chase mailed monthly statements with payment coupons; Chung and Chan/payments were historically credited appropriately for over two years.
- Disputes arose after Chung changed statement address; Chung allegedly requested Chung or Chan properties for receiving statements; Chan paid on Chung’s account using Chan’s coupon with extra payments.
- Chase treated the Chan payments as Chan’s and did not apply them to Chung’s account, leading to default notices and near-daily collection efforts; foreclosure process started December 30, 2009, with sale on April 6, 2010.
- Chung asserts wrongful foreclosure, breach of contract and implied covenant, negligence, conversion, RESPA, defamation, intentional infliction of emotional distress; Chase moves for summary judgment, partially granted/denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Wrongful foreclosure timing and default status | Chung contends she did not default because Chan paid Chung’s obligations; extra checks with Chan coupon were intended for Chung. | Chase argues Chung’s failure to pay as required triggered the power of sale. | Denial of summary judgment on wrongful foreclosure; triable issues remain. |
| Breach of contract—payment application (Section 2) | Chase breached by failing to apply payments to Chung’s account when received. | Section 2 governs allocation after applying payments; Chase acted within contract terms by not applying payments due to coupons issue. | Summary judgment denied on breach of contract claim; no independent breach separate from contract. |
| Negligence and gross negligence | Defendant owed independent duty to service loan non-negligently. | No independent duty exists beyond contractual relation; liability cannot arise from mere negligent servicing. | Summary judgment granted for negligence and gross negligence. |
| RESPA claim (qualified written request) | Chung sent a QWR; Chase failed to respond as required. | Chase did not receive the QWR; RESPA obligations were not triggered. | Summary judgment granted for RESPA claim; no evidence Chase received QWR. |
| Defamation | Publications to credit bureaus and Notice of Sale harmed Chung’s business reputation. | Statements were not libel per se as they did not attack professional competency; at most create a negative inference. | Summary judgment granted for defamation. |
Key Cases Cited
- Racette v. Bank of America, N.A., 318 Ga. App. 171, 733 S.E.2d 457 (Ga.App. 2012) (elements of wrongful foreclosure claim under Georgia law)
- McCarter v. Bankers Trust Co., 247 Ga. App. 129, 543 S.E.2d 755 (Ga.App. 2000) (necessity of statutory violation for wrongful foreclosure; duty to exercise power of sale)
- You v. JP Morgan Chase Bank, N.A., 293 Ga. 67, 743 S.E.2d 428 (Ga. 2013) (recognizes power of sale governed by security instrument and contract controls rights)
- Mauldin v. Sheffer, 113 Ga. App. 874, 150 S.E.2d 150 (Ga.App. 1966) (private duties may flow from contractual relations; independent duty concept)
- S & A Industries, Inc. v. Bank of Atlanta, 247 Ga. App. 377, 543 S.E.2d 743 (Ga.App. 2000) (recognizes Stelts/Ga. reliance concepts; duty elements in certain torts)
- Stalvey v. Atlanta Business Chronicle, Inc., 202 Ga. App. 597, 414 S.E.2d 898 (Ga.App. 1992) (defamation/trade reputation context; publication context matters)
- Bellemead, LLC v. Stoker, 280 Ga. 635, 631 S.E.2d 693 (Ga. 2006) (libel per se thresholds; business/trade impact)
- United Parcel Service v. Moore, 238 Ga. App. 376, 519 S.E.2d 15 (Ga.App. 1999) (outrageous conduct standard for intentional infliction of emotional distress)