Shawna Bates v. JP Morgan Chase Bank, NA
2014 U.S. App. LEXIS 18655
| 11th Cir. | 2014Background
- Bates obtained an FHA-insured mortgage later owned by JPMorgan Chase and fell into default by April 2011.
- Bates attempted to make late payments in Sept. and Nov. 2011 by personal check; Chase returned/ rejected the funds because they were not certified and referred the loan to foreclosure counsel.
- Chase published notices of sale beginning Dec. 2011; sales were postponed while Chase researched account status and no sale occurred.
- Bates sent a Qualified Written Request (QWR) asserting Chase had failed to credit her Sept. payment; Chase replied explaining funds were returned and that certified funds were required for reinstatement after referral to counsel.
- Bates sued alleging breach of contract (based on HUD regulations incorporated into the deed), RESPA violation, wrongful attempted foreclosure, trespass, and conversion; district court granted summary judgment for Chase and Bates appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HUD regulations incorporated in deed create enforceable contractual duties that support breach of contract | Bates: deed conditions acceleration/ sale on HUD regs; Chase violated those regs → breach | Chase: HUD regs do not create private rights; cannot base contract claim on regulations | Court: HUD-regulation language in deed can be a condition precedent enforceable under Georgia law, but Bates showed no damages/causation so breach claim fails on summary judgment |
| Whether plaintiff suffered cognizable damages from alleged premature acceleration | Bates: threatened acceleration/ publication caused harm | Chase: no foreclosure occurred; deed allows reinstatement by paying arrears, so no injury | Held: No cognizable damages or causal harm because reinstatement provision negated alleged injury |
| Whether property inspections by Chase constituted trespass | Bates: inspections were wrongful entries | Chase: deed permits inspections when loan is in default | Held: No trespass; inspections were contractually permitted because Bates was in default |
| Whether Chase’s QWR response violated RESPA §2605(e) | Bates: Chase’s explanations were inadequate and created a factual dispute | Chase: response explained returned funds and provided contacts; no damages from any alleged insufficiency | Held: Chase’s response complied and Bates suffered no RESPA damages; summary judgment affirmed |
Key Cases Cited
- Roberts v. Cameron-Brown Co., 556 F.2d 356 (5th Cir.) (HUD regulations do not create a private right enforceable by mortgagors)
- Coll. Loan Corp. v. SLM Corp., 396 F.3d 588 (4th Cir.) (state law claim may enforce federal regulation when incorporated in contract, absent preemption)
- Mathews v. PHH Mortg. Corp., 724 S.E.2d 196 (Va.) (enforcing HUD-regulation-based contract terms incorporated in mortgage)
- Norton v. Budget Rent A Car Sys., Inc., 705 S.E.2d 305 (Ga. Ct. App.) (elements of breach of contract under Georgia law)
- Aetna Fin. Co. v. Culpepper, 320 S.E.2d 228 (Ga. Ct. App.) (elements for tort of wrongful attempted foreclosure)