Racette v. Bank of America, N.A.
318 Ga. App. 171
| Ga. Ct. App. | 2012Background
- Racettes filed wrongful foreclosure and other claims against Bank of America (BOA) and Johnson & Freedman (J&F).
- BOA and J&F moved to dismiss; trial court granted dismissal of all claims.
- Complaint alleges 1996 note and security deed; 2010–2011 foreclosures conducted by J&F; sale proceeded despite misstatements.
- Advertisements for 2011 sale mis-stated a senior lien and referenced wrong property details.
- Racettes sought damages, equitable relief (cancellation of sale), and fees; trial court dismissed; on appeal court reverses in part.
- Court holds possible liability for wrongful foreclosure, breach of contract, and related claims; intentional infliction of distress tale dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Wrongful foreclosure viability | Racettes can show breach of duty and causation | Advertisements were not defective as a matter of law and no chilling of bidding | Partial reversal: wrongful foreclosure claim viable for further development |
| Equitable relief—cancellation of sale | Equitable relief available against BOA | No grounds to dismiss equitable relief claim | Reversed: equitable relief claim remains viable against BOA |
| Intentional infliction of emotional distress | Foreclosure conduct could be extreme and outrageous | Conduct not extreme or outrageous | Affirmed: claim properly dismissed |
| Breach of contract against BOA | Complaint and attached Security Deed provide notice of breach | Pleading insufficient | Reversed: sufficient notice pleading; claim viable |
| Breach of the duty of good faith and fair dealing | Duty breached due to conduct in foreclosure | Similar to contract claim; cannot be sustained | Reversed: duty breach viable against BOA |
Key Cases Cited
- Anderson v. Daniel, 314 Ga. App. 394 (Ga. App. 2012) (motion to dismiss standard; liberal pleadingzył)
- Scott v. Scott, 311 Ga. App. 726 (Ga. App. 2011) (notice pleading; evidence may sustain relief)
- Southeast Timberlands v. Security Nat. Bank, 220 Ga. App. 359 (Ga. App. 1996) (advertisement defects and chilling bidding considerations)
- Smith v. Citizens &c. Corp., 245 Ga. 850 (Ga. 1980) (advertising errors not defect per se)
- Walker v. Northeast Production Credit Assn., 148 Ga. App. 121 (Ga. App. 1978) (advertisement errors; scope of duty to bidders)
- Oates v. Sea Island Bank, 172 Ga. App. 178 (Ga. App. 1984) (factual issue on chilling bid)
- Amirfazli v. VATACS Group, 311 Ga. App. 471 (Ga. App. 2011) (factual issue over bid chilling due to error)
- Brown v. Freedman, 222 Ga. App. 213 (Ga. App. 1996) (damages for wrongful foreclosure may lie when price is grossly inadequate)