Stubbs v. Bank of America
844 F. Supp. 2d 1267
N.D. Ga.2012Background
- Plaintiff Stubbs seeks cancellation of a foreclosure sale and damages for wrongful foreclosure in Fulton County, Georgia.
- Defendants Bank of America (as servicer) and BAC and Fannie Mae removed the case to federal court based on diversity jurisdiction.
- Plaintiff amended his complaint after a motion to dismiss; the court allows amendment and proceeds to merits.
- Plaintiff alleges that the foreclosure notice misidentified the secured creditor and that Fannie Mae owned the loan at sale without a recorded assignment.
- Georgia foreclosure statutes require clear disclosure of the secured creditor and pre-sale assignment to the secured creditor; the servicer’s notice may violate these requirements.
- The court grants in part and denies in part the motion to dismiss, upholding the wrongful-foreclosure claim and dismissing the registration-based and fraud claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff states a wrongful-foreclosure claim. | Stubbs alleges misidentification of the secured creditor and failure to record the assignment to Fannie Mae. | Defendants contend proper notice was provided by the servicer and that the secured creditor was properly identified. | Denied; wrongful-foreclosure claim survives based on misidentification and pre-sale assignment issues. |
| Whether BAC’s lack of Georgia registration vitiates foreclosure. | BAC’s unregistered status to transact business in Georgia invalidates foreclosure. | Statutory exemptions apply to lending and debt collection, so registration is not required. | Dismissed; registration deficiency not a proper basis for relief given exemptions. |
| Whether plaintiff sufficiently pleads fraud. | BOA made misrepresentations about evaluating him for modification. | Plaintiff failed to plead a specific misrepresentation; mere denial of modification is not fraud. | Dismissed; fraud claim insufficient under Rule 9(b). |
| Whether the 2008 amendments require public-record identification of the secured creditor. | Identity and authority to modify must be disclosed to foreclose. | Servicer can act for the secured creditor in sending notice. | Plaintiff plausibly alleges the secured creditor identification was not properly disclosed prior to sale. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for pleading)
- Twombly v. Bell Atlantic Corp., 550 U.S. 544 (U.S. 2007) (pleading must state a plausible claim)
- Hill v. White, 321 F.3d 1334 (11th Cir. 2003) (standard for evaluating complaints in federal court)
- Weems v. Coker, 70 Ga. 746 (Ga. 1883) (Georgia notice/record requirements context)
- Morgan v. Ocwen Loan Servicing, LLC, 795 F.Supp.2d 1370 (N.D. Ga. 2011) (Georgia foreclosure-law interpretation and secured creditor identity)
- O'Neal v. State, 288 Ga.219 (Ga. 2010) (statutory construction applies to terms in foreclosure statute)
- Osborne Bonding & Surety Co. v. Georgia, 224 Ga.App. 590 (Ga. Ct. App. 1997) (interpretation of statutory phrases affecting foreclosures)