U. S. Bank, N.A. v. Phillips
318 Ga. App. 819
| Ga. Ct. App. | 2012Background
- Foreclosure action by U.S. Bank against Phillips; Phillips sought damages and injunction claiming improper HAMP evaluation.
- Phillips alleged four claims: third-party beneficiary contract, breach of implied covenant, negligent implementation of HAMP, wrongful foreclosure.
- Bank moved to dismiss; trial court denied; appellate court granted interlocutory review.
- Court held Phillips lacked standing as third-party beneficiary to HAMP; HAMP imposes no private right of action.
- Court remanded only the wrongful-foreclosure claim pending You v. JPMorgan Chase decision; other claims dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Third-party beneficiary status to enforce HAMP | Phillips seeks enforcement as third party | No private right of action; not intended beneficiary | Dismissed; no third-party beneficiary |
| Breach of implied covenant independent of contract | Covenant independent basis for liability | Covenant cannot breach apart from contract | Dismissed; cannot rely on implied covenant |
| Negligent implementation of HAMP | Statutory scheme creates duty and remedies | No private action; remedy with Secretary/Freddie Mac | Dismissed; no private negligence action |
| Wrongful attempted foreclosure | Bank lacked authority to foreclose | Foreclosure authority based on note/deed; factual question | Remanded; decision stayed pending You v. JPMorgan decision |
Key Cases Cited
- Miller v. Chase Home Finance, LLC, 677 F.3d 1113 (11th Cir. 2012) (HAMP does not create private right; homeowners not third-party beneficiaries)
- Edwards v. Aurora Loan Svcs., LLC, 791 F. Supp. 2d 144 (D.C. Cir. 2011) (breach of covenant premised on HAMP failure not viable)
- Jenkins v. Wachovia Bank, N.A., 314 Ga. App. 257 (Ga. App. 2012) (GA law on duties and third-party beneficiary status)
- Myung Sung Presbyterian Church, Inc. v. North American Assn. &c. Ministries, 291 Ga. App. 808 (Ga. App. 2008) (implied covenant limitations; cannot create liability apart from contract)