Mbigi v. Wells Fargo Home Mortgage
336 Ga. App. 316
| Ga. Ct. App. | 2016Background
- Mbigi borrowed on an Option ARM secured by a Gwinnett County home; negative amortization occurred and he alleged he was not warned about it.
- He repeatedly contacted Wells Fargo for loan modification; Wells Fargo allegedly told him to stop payments and to await modification, refused a 2009 payoff, and later referred the loan to foreclosure while purportedly working on modification.
- Foreclosure notices were mailed to a prior address instead of the address Mbigi had designated in writing; the property was sold at foreclosure in June 2014 while Mbigi was abroad.
- Mbigi sued pro se asserting wrongful foreclosure, Georgia RICO, fraud and negligent misrepresentation, intentional infliction of emotional distress, breach of implied covenant of good faith and fair dealing, promissory estoppel, and punitive damages; the trial court dismissed under OCGA § 9-11-12(b)(6).
- The Court of Appeals reviewed de novo and affirmed in part and reversed in part, finding several claims survived dismissal (notice-based wrongful foreclosure, RICO, fraud/negligent misrep as not time-barred at pleading stage, intentional infliction of emotional distress, breach of implied covenant, promissory estoppel) while others failed (quasi-new agreement under OCGA §13-4-4).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Wrongful foreclosure — statutory notice (OCGA §44-14-162.2(a)) | Mbigi alleged he gave Wells Fargo a written designated address and the foreclosure notice was not sent there | Wells Fargo said it sent notices to the property address/counsel and attached a notice to a third-party filing | Reversed dismissal as to this theory; plaintiff’s allegation suffices at pleading stage and court cannot consider non-pleading exhibits on a motion to dismiss |
| Wrongful foreclosure — naming entity with modification authority (OCGA §44-14-162.2(a)) | Notice named Wells Fargo but plaintiff alleges the note owner, not Wells Fargo, had full modification authority | Wells Fargo argued naming the deed holder (Wells Fargo) satisfied the statute and substantial compliance applies | Reversed dismissal; whether Wells Fargo was the entity with full authority is a factual question; plaintiff may plead alternative theories |
| Quasi-new agreement / OCGA §13-4-4 (induced nonpayment) | Wells Fargo instructed Mbigi not to pay and he relied, constituting a departure that suspended strict contract terms | Wells Fargo argued an instruction not to pay cannot satisfy §13-4-4 because no money was paid or received under a departure | Affirmed dismissal on this theory; §13-4-4 requires money paid or received under the departure, which was not alleged |
| Georgia RICO (OCGA §16-14-4) | Alleged multiple predicate acts (residential mortgage fraud, theft by deception, recording deed under power with false statements) forming a pattern causing injury | Wells Fargo argued the acts arose from a single transaction and some alleged mortgage-fraud acts were not crimes or too remote from foreclosure | Reversed dismissal; complaint alleges at least two predicate acts (including recording deed under power) that could form a pattern and proffers injury — pleading survives dismissal |
| Fraud and negligent misrepresentation — statute of limitations | Mbigi contends he did not suffer recoverable harm until the foreclosure sale in 2014, so claims are timely | Wells Fargo argued claims accrued at the 2008 representations and are time-barred by the four-year statute | Reversed dismissal; at pleading stage damages may not have been certain in 2008, so accrual and limitations cannot be resolved against plaintiff |
| Intentional infliction of emotional distress | Alleged that Wells Fargo engineered default, refused payments, and foreclosed wrongfully causing severe distress | Wells Fargo argued conduct was not extreme or outrageous as a matter of law | Reversed dismissal; factual allegations could support a finding of extreme and outrageous conduct sufficient to proceed |
| Breach of implied covenant of good faith and fair dealing | Alleged Wells Fargo breached contractual duties by inducing default and failing to cooperate for performance | Wells Fargo argued no separate contractual breach was pleaded | Reversed dismissal; claim tied to contract obligations and allegations of bad-faith inducement survive pleading stage |
| Promissory estoppel | Wells Fargo promised loan modification and instructed nonpayment; Mbigi relied to his detriment and sought enforcement or damages | Wells Fargo argued promises were too indefinite and plaintiff sought damages not specific performance | Reversed dismissal; pleadings sufficiently allege promissory estoppel and damages may be an appropriate remedy |
Key Cases Cited
- Stendahl v. Cobb County, 284 Ga. 525 (Georgia 2008) (motion to dismiss standard explained)
- Austin v. Clark, 294 Ga. 773 (Georgia 2014) (complaint sufficiency at pleading stage; evidence may later be unlikely but dismissal improper if relief possible)
- Babalola v. HSBC Bank, USA, N.A., 324 Ga. App. 750 (Ga. Ct. App. 2013) (attachments outside pleadings cannot be considered on motion to dismiss)
- You v. JP Morgan Chase Bank, N.A., 293 Ga. 67 (Georgia 2013) (OCGA §44-14-162.2 requires naming the entity with full authority to modify)
- DeGolyer v. Green Tree Servicing, LLC, 291 Ga. App. 444 (Ga. Ct. App. 2008) (elements of wrongful foreclosure claim)
- TKW Partners v. Archer Capital Fund, 302 Ga. App. 443 (Ga. Ct. App. 2010) (limited circumstances permitting substantial compliance with contact-info requirement)
- Webb v. Bank of America, 328 Ga. App. 62 (Ga. Ct. App. 2014) (allegations of refusing payments and breaching modification promises can support wrongful foreclosure and emotional distress claims)