36 F. Supp. 3d 1364
N.D. Ga.2014Background
- In May 2007 the Sheelys took a $461,000 refinance loan from Countrywide secured by a security deed listing MERS as nominee; assignments later transferred the deed to BAC and then to Bank of New York Mellon.
- After financial hardship, the Sheelys applied for a loan modification from Bank of America in July 2012; they repeatedly submitted documents but never obtained a permanent modification and fell into default.
- Bank of New York Mellon sent a notice of acceleration and scheduled foreclosure for Feb. 5, 2013; the Sheelys filed multiple bankruptcies and a lawsuit in Fulton County in Jan. 2014.
- Anthony Sheely sent a 15‑page letter asserting a Qualified Written Request (QWR) under RESPA; Bank of America responded twice within the statutory period but the Sheelys claimed the responses were inadequate.
- The complaint asserted RESPA claims (against BofA), fraud (against both banks), wrongful foreclosure (against both banks), and intentional infliction of emotional distress (against BofA); defendants moved to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sheely's Jan. 28 letter was a valid RESPA QWR and whether BofA failed to respond | Sheely: the letter was a QWR seeking servicing‑related info; BofA’s replies were inadequate | BofA: most requests were not servicing‑related/overbroad; it responded within statutory time | Court: Dismissed RESPA claim with prejudice — letter not a valid QWR for most requests and BofA satisfied obligations |
| Fraud claim against BofA for mishandling modification | Sheely: BofA made misleading statements and intentionally misprocessed applications (supported by third‑party affidavits) | BofA: failure to plead fraud with Rule 9(b) particularity; statute of frauds bars oral‑promise based fraud | Court: Fraud claim dismissed without prejudice for lack of particularity; statute‑of‑frauds question left open |
| Fraud claim against Bank of New York Mellon re: notice of acceleration (authority to foreclose) | Sheely: assignments (MERS→BAC→BNY Mellon) were defective, so foreclosure notice was false | BNY: Sheelys lack standing to challenge validity of assignments; notice statement not false as a matter of law | Court: Dismissed with prejudice — plaintiffs lack standing to attack assignments, fraud not pleaded |
| Wrongful foreclosure (damages) | Sheely: advertising of sale and defective assignments make wrongful foreclosure claim ripe | Defendants: foreclosure not completed; claim is premature and, on merits, no statutory violation alleged | Court: Dismissed without prejudice as premature; also failed on merits because notice complied with O.C.G.A. §44‑14‑162.2(a) |
| Intentional infliction of emotional distress (IIED) against BofA | Sheely: BofA’s conduct caused severe physical and psychological harm | BofA: alleged distress flows from default and foreclosure risk, not extreme/outrageous conduct by bank | Court: Dismissed without prejudice — allegations not extreme or severe enough to state IIED |
| Request for injunctive relief | Sheely: equitable relief to stop foreclosure | Defendants: equitable relief barred absent payment/tender of amount due | Court: Injunctive relief denied — plaintiffs not entitled because they have not tendered payment |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (apply plausibility and disregard legal conclusions)
- Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1288 (11th Cir. 2010) (Rule 9(b) fraud‑pleading particularity requirements)
- Ziemba v. Cascade Int’l, Inc., 256 F.3d 1194 (11th Cir. 2001) (purpose of Rule 9(b))
- Chandler v. Sec’y of Fla. Dep’t of Transp., 695 F.3d 1194 (11th Cir.) (Twombly/Iqbal application)
- Racette v. Bank of Am., N.A., 318 Ga.App. 171 (Ga. Ct. App.) (elements of wrongful foreclosure claim)
- You v. JP Morgan Chase Bank, 293 Ga. 67 (Ga.) (statutory notice under O.C.G.A. §44‑14‑162.2(a) requires naming the party with authority to negotiate/modify)
- Brown v. Freedman, 222 Ga.App. 213 (Ga. Ct. App.) (wrongful foreclosure claim may be asserted despite default)