Jane McGINNIS, Plaintiff-Appellant Cross Appellee, v. AMERICAN HOME MORTGAGE SERVICING, INC., Defendant-Appellee Cross Appellant.
No. 14-13404.
United States Court of Appeals, Eleventh Circuit.
March 22, 2016.
817 F.3d 1241
But like damages, affirmative defenses are still relevant to the question of predominance. See Waste Mgmt. Holdings, 208 F.3d at 295. Individual affirmative defenses can defeat predominance in some circumstances. For example, the affirmative defenses could apply to the vast majority of class members and raise complex, individual questions. See, e.g., Sacred Heart Health Sys., Inc. v. Humana Military Healthcare Servs., Inc., 601 F.3d 1159, 1177-83 (11th Cir.2010). Or the affirmative defenses could be coupled with several other individual questions. See Barnes v. Am. Tobacco Co., 161 F.3d 127, 147 n. 25 (3d Cir.1998).
We again leave these questions to the district court on remand. As explained, the district court too hastily concluded that several questions in this litigation were common to the class. On remand, the district court must reconsider these questions. We express no view about them and leave them, like all questions of class certification, to the discretion of the district court.
IV. CONCLUSION
We VACATE the class certification and REMAND for further proceedings consistent with this opinion.
Daniel S. Reinhardt, Michael E. Johnson, Troutman Sanders, LLP, Benjamin Wayne Cheesbro, Caplan Cobb, LLP, Russell J. Rogers, Thompson Hine, LLP, Two Alliance Ctr., Atlanta, GA, for Defendant-Appellee-Cross Appellant.
Naveen Ramachandrappa, Michael B. Terry, Bondurant Mixson & Elmore, LLP, Atlanta, GA, Miranda J. Brash, Charles A. Gower, Charles A. Gower, PC, Columbus, GA, for Plaintiff-Appellant-Cross Appellee.
Before JORDAN and JULIE CARNES, Circuit Judges, and ROBRENO,* District Judge.
ROBRENO, District Judge:
Plaintiff-Appellant/Cross Appellee Jane McGinnis (McGinnis), a landlord of rental properties, brought suit against Defendant-Appellee/Cross Appellant American Home Mortgage Servicing, Inc. (Homeward),1 the servicer of the loans on seven of her residential properties, alleging that Homeward violated terms of the deed and promissory note governing the loans. At the end of a bifurcated trial, the jury found in McGinnis‘s favor on all claims and awarded her $6,000 in compensatory damages, $500,000 in emotional distress damages, and $3,000,000 in punitive damages.
Following the verdict, however, the district court granted Homeward‘s renewed motion for judgment as a matter of law (JMOL) on the issue of punitive damages and reduced the jury‘s punitive damages award to $250,000 based on a cap imposed by a Georgia statute. Both parties now appeal on several grounds.
After careful review, and having had the benefit of oral argument, we will affirm all
I. FACTUAL BACKGROUND
McGinnis owns a number of residential rental properties, and she has entrusted her son Adam with managing the properties and their financial affairs.2 On October 31, 2006, McGinnis refinanced seven of her rental properties with Taylor, Bean & Whitaker (TB & W). She granted security deeds and promissory notes to TB & W, and each loan was subject to a family rider providing that a default on any one of the loans triggers a default on all of the others.
According to the deed, the lender may collect and hold Funds in an amount ... not to exceed the maximum amount a lender can require under
Once TB & W originated McGinnis‘s loans, it packaged and sold them as part of a mortgage-backed security. On October 17, 2009, Homeward obtained the rights to service McGinnis‘s seven loans, upon which it sent McGinnis a welcome letter for each of McGinnis‘s seven loans.
Although McGinnis‘s monthly payments to TB & W had been $605.58 until that point, the welcome letter included a payment coupon stating—with no explanation—that McGinnis‘s November 2009 payment had risen to $843.58. The same thing happened with McGinnis‘s other loans. Believing that she did not in fact owe $843.58, McGinnis disputed and refused to pay the increased amount. Instead, she submitted a check to Homeward for $605.58 to cover her November 2009 payment for the loan for 172 Hilton Street, and made similar payments for the other loans.
In December 2009, after McGinnis again submitted payments on all of her loans in the amounts she had previously been paying, Homeward conducted an escrow analysis for 172 Hilton Street and mailed this escrow disclosure statement to McGinnis on December 17, 2009. The statement describes McGinnis‘s present payment as $843.58, consisting of $490.13 for principal and interest and $353.45 for escrow deposit. Thus, McGinnis‘s escrow deposit payment—which had previously been $115.45—had inexplicably increased by roughly 200% to $353.45. The statement also describes her new payment effective 02/01/2010 as $630.08, consisting of $490.13 for principal and interest, $138.46
In response to the escrow statement, McGinnis sent Homeward a fax, which asserted that she had made all of her payments to TB & W and Homeward, she had not been receiving billing statements, she should not be charged any late fees, and the escrow amounts were too high.
On January 15, 2010, Homeward sent McGinnis a letter explaining that the recent escrow analysis on [her] loan ... could have erroneously reflected either an escrow overage or shortage due to missing information. The letter instructed McGinnis to disregard the December 17 escrow analysis and to continue making payments at the present monthly payment amount. However, on February 20, 2010, Homeward sent a second escrow analysis statement that described McGinnis‘s present payment as $843.59 (somehow the payment had been increased by one cent)4 through March 2010, and described McGinnis‘s new payment effective April 1, 2010 as $638.32—consisting of $490.13 for principal and interest, $140.55 for escrow deposit, and $7.64 for escrow shortage.
Pursuant to the terms of the Security Deed, Homeward placed the $605.58 payments (which it deemed to be partial) into a suspense account until enough funds accrued to pay off the oldest past-due monthly payment. Any remaining funds were held in the suspense account until enough funds accumulated to cover the next past due payment, and the process repeated itself for the entire time that Homeward serviced McGinnis‘s loans. As these patterns persisted, the interest, collection calls, and late fees continued to mount alongside the increasing amounts McGinnis owed on her monthly escrow payments. Moreover, over the course of 2010, Homeward also began assessing fees for collection letters, inspections, and other expenses relating to the default that Homeward caused.
On May 19, 2010, McGinnis sent Homeward another fax explaining that McGinnis‘s correct payment for November 2009 through March 2010 should be $605.58, and providing Homeward with Adam‘s own escrow analysis and offering to pay that amount:
The new total tax and insurance is 1686.59 for the year divided by 12 equals 140.55/month plus the 490.13 is ($630.68). I have tried to explain this over and over again showing you that in February the 24th via fax and conversation with someone that I though[t] understood was helping resolve this and still nothing. I know I owe you little more for the shortage in the escrow (tax and insurance) only but I have not at any time had a payment of $843.59.... I want to pay this loan off ASAP. I will not pay any late fees or any differences in monthly payments.... I need for AHMSI to come up with a payoff as of June 1st 2010[.]
Adam‘s analysis was essentially identical to Homeward‘s February 19, 2010, escrow analysis as to the correct amount for McGinnis‘s payments from April 2010 onward. The only difference is that McGinnis refused to pay the $843.58 amount that Homeward insisted was owed for November 2009 through March 2009 and any late fees or other fees associated with those payments.
On June 30, 2010, Homeward sent a letter in response that offered justifications for the assessment of the late fees and explained that the total amount due on the loan was $1,491.36, but failed to pro
The same issues persisted through the rest of 2010, and McGinnis continued to pay only $605.58 until January 2011, when she began paying the $638.32 amount that first appeared in the February 2010 escrow analysis statement.
Homeward began returning or rejecting McGinnis‘s payments from February 2011 through May 2011, and on March 22, 2011, Homeward‘s attorneys sent a formal notice of foreclosure for 172 Hilton Street. For several weeks starting in April 2011, Homeward ran foreclosure advertisements in the local newspaper. Finally, on July 7, 2011, Homeward foreclosed on 172 Hilton Street.
Following the foreclosure of 172 Hilton Street, Homeward continued the same pattern—holding payments in suspense accounts, assessing late fees, returning checks, and threatening foreclosure—with respect to the remaining properties.
At trial, McGinnis‘s clinical psychologist, Dr. Andrew Sappington, opined that the circumstances leading up to this foreclosure have been a major cause of depression for McGinnis. The severity of her emotional distress has caused her to suffer major physical symptoms, including projectile vomiting, and she views the situation as as life or death. McGinnis, a retiree, described the effect of the dispute with Homeward in her own words: I am too old to start over. They have taken my life away from me.
II. PROCEDURAL HISTORY
McGinnis filed suit against Homeward in the United States District Court for the Middle District of Georgia. After some initial proceedings and discovery, McGinnis filed an amended complaint, asserting a number of claims, including: (1) wrongful foreclosure; (2) violation of
Upon completion of discovery, Homeward filed a motion for summary judgment. The district court granted summary judgment for Homeward on McGinnis‘s claims for violation of
After the district court‘s disposition of the motion for summary judgment, Homeward moved to bifurcate the trial into two phases—one for liability and another for punitive damages and attorney fees. The district court granted this motion. Homeward also moved to exclude various types of evidence, including the testimony of its own 30(b)(6) witness, Christopher Delbene.5 The district court denied the motion to exclude Delbene‘s escrow analysis testimony.
The case then proceeded to the first phase of trial. After the end of McGinnis‘s case, the district court held a charge conference, during which it heard objections to the proposed jury instructions. At the charge conference, Homeward moved, under
Thereafter, the trial resumed and Homeward put on its case, which consisted of one witness—Christopher Delbene, who testified by video deposition. After the end of Homeward‘s case, the district court submitted only the issue of liability to the jury. By special verdict, the jury found in McGinnis‘s favor on each of her claims—conversion, wrongful foreclosure, interference with property rights, and IIED. The jury awarded McGinnis $6,000 in compensatory damages and $500,000 in emotional distress damages. The jury further found that McGinnis could recover attorney fees and punitive damages.
The trial then proceeded to the second phase, during which neither party offered additional evidence and McGinnis waived her claim for attorneys’ fees. The jury again found in McGinnis‘s favor, finding that the Defendant acted with specific intent to cause the Plaintiff harm and awarding McGinnis $3,000,000 in punitive damages. Jury Verdict, Doc. 96 at 1.
Following the district court‘s entry of judgment consistent with the jury‘s verdict, Homeward moved for judgment as a matter of law under
III. DISCUSSION
On appeal, McGinnis brings one challenge to the district court‘s summary judgment ruling, asserting that the district court erred in granting Homeward‘s summary judgment motion as to McGinnis‘s Georgia RICO Act claim. Both parties also challenge the district court‘s post-trial decisions: Homeward contends that the district court erred in denying Homeward‘s renewed motion for JMOL and motion for a new trial on the grounds that (1) McGinnis failed to prove that Homeward‘s increase of her escrow calculation was improper, and (2) McGinnis was not entitled to recover emotional distress damages, while McGinnis argues that the district court erred in granting Homeward JMOL on the issue of specific intent.7 We will address each issue in turn.
A. Summary Judgment on McGinnis‘s Georgia RICO Act Claim
First, we consider McGinnis‘s challenge to the district court‘s granting of summary judgment to Homeward on her Georgia RICO Act claim. We review this claim de novo, reviewing all facts and reasonable inferences in the light most favorable to the nonmoving party, and applying the same standard as the district court. Allison v. McGhan Medical Corp., 184 F.3d 1300, 1306 (11th Cir.1999). A grant of summary judgment is appropriate if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.
Reasoning that Homeward‘s acts constituted a single extended transaction, rather than a pattern of racketeering activity, the district court ruled that McGinnis could not establish her RICO claim. On appeal, McGinnis asserts that a 2001 amendment to the Georgia RICO Act eliminated what she terms the single transaction defense, and thus the district court should not have dismissed her claim. In the alternative, McGinnis argues that, contrary to the district court‘s opinion, Homeward‘s conduct constituted at least two separate transactions, and hence can qualify as a pattern of racketeering activity.
Georgia courts have long held that a single extended transaction cannot provide the basis for a Georgia RICO claim. See Sec. Life Ins. Co. of Am. v. Clark, 273 Ga. 44, 535 S.E.2d 234, 238 (2000) (recognizing the single transaction defense); Stargate Software Int‘l, Inc. v. Rumph, 224 Ga.App. 873, 482 S.E.2d 498, 503 (1997) (The fact that elements of two crimes may have been present at two separate points in time does not create two predicate acts out of what is in reality a single transaction.); Cobb v. Kennon Realty Servs., Inc., 191 Ga.App. 740, 382 S.E.2d 697, 699 (1989) (affirming summary judgment on Georgia RICO claim based on one extended transaction). See generally S. Intermodal Logistics, Inc. v. D.J. Powers Co., Inc., 10 F.Supp.2d 1337, 1359 (S.D.Ga.1998) (discussing Georgia state court cases involving the single transaction defense).
Although this single transaction defense has been consistently recognized by Georgia state and federal courts since the Georgia RICO Act was amended in 2001,8
According to McGinnis, the plain meaning of the one or more transactions language adopted by Georgia General Assembly‘s amendment clearly provides that a pattern of racketeering can arise out of even a single transaction. Notably, however, McGinnis does not cite any cases for the proposition that the single transaction defense was eliminated by the 2001 amendment, nor does she point to any legislative history supporting her contention that the 2001 amendment was intended to eliminate that defense.
In considering the significance of the textual changes to the statute, we note some analytical complexities injected by the new language. Before, the text of the statute directed courts to look to whether there was evidence of two or more incidents (or predicate acts) of racketeering activity.
Although it is plausible that this amended language may have been enacted to preclude the single transaction defense, we need not reach that question here—for this is not a case where the distinction would avail McGinnis.
Georgia courts have held that [a] pattern requires at least two interrelated predicate offenses, Brown v. Freedman, 222 Ga.App. 213, 474 S.E.2d 73, 77 (1996), and such acts must be linked, but distinguishable enough to not be merely two sides of the same coin. S. Intermodal Logistics, Inc. v. D.J. Powers Co., Inc., 10 F.Supp.2d 1337, 1359 (quoting Raines v. State, 219 Ga.App. 893, 467 S.E.2d 217, 218 (1996)).
Under the traditional analysis, the facts in this case constitute a single extended transaction—and the two predicate acts asserted by McGinnis (i.e., theft by conversion in the taking of fees from the funds in the suspense account, and theft by taking in the wrongful foreclosure of the property) are most accurately viewed as two sides of the same coin.
Homeward increased the McGinnis‘s escrow payment on the loan on the 172 Hilton Street Property, and McGinnis disputed the increase; according to the procedures laid out in the security deed, McGinnis‘s payments were (if wrongly) deemed partial, were consistently placed in a suspense account, resulting in the continual accrual of late fees and other
Even assuming, arguendo, that the 2001 amendment to the Georgia RICO Act theoretically permits a claim to proceed involving only a single transaction, McGinnis‘s claim would still fail.
Under the amended language, to demonstrate a pattern of racketeering activity, a plaintiff must show at least two [predicate] acts of racketeering activity.
Accordingly, it still falls to courts to inquire into whether a defendant has committed two or more predicate acts in order to determine if the defendant has engaged in a pattern of such acts—as opposed to an isolated act. However, even speaking in these terms, the concern still remains that the two alleged predicate incidents must be sufficiently ‘linked’ to form a RICO pattern, but nevertheless sufficiently distinguishable so that they do not become ‘two sides of the same coin.’ S. Intermodal Logistics, Inc., 10 F.Supp.2d at 1359 (quoting Raines, 467 S.E.2d at 218). Hence, while alleged predicate acts can be too dissimilar and disconnected to constitute a pattern of racketeering activity, such acts can also be too indistinguishable to give rise to such a pattern—even if a court could technically ascribe more than one criminal offense to different aspects of the conduct.
Under this reading, the two predicate acts asserted by McGinnis are still most appropriately viewed as two sides of the same coin. Again, everything that occurred regarding McGinnis‘s loan on the 172 Hilton Street property was the logical result of that same core thread of misconduct. Thus, even under McGinnis‘s reading, Homeward‘s essential actions were not sufficiently distinguishable predicate acts to constitute a pattern of racketeering activity, and the district court correctly granted summary judgment on this claim.
For these reasons, McGinnis‘s Georgia RICO Act claim fails under either the pre- or the post-2001 amendment‘s language. Although we are not foreclosing the possibility that, under certain circumstances, a claim involving a single transaction and two sufficiently distinct predicate acts may well establish a viable RICO claim, this is not that case.
The standard for granting a renewed motion for judgment as a matter of law under
In considering whether the verdict is supported by sufficient evidence, the court must evaluate all the evidence, together with any logical inferences, in the light most favorable to the non-moving party. Beckwith v. City of Daytona Beach Shores, 58 F.3d 1554, 1560 (11th Cir:1995). And, as we have stressed, [i]t is the jury‘s task—not [the court‘s]—to weigh conflicting evidence and inferences, and determine the credibility of witnesses. Shannon v. Bellsouth Telecomms., Inc., 292 F.3d 712, 715 (11th Cir. 2002) (quoting Lipphardt v. Durango Steakhouse of Brandon, Inc., 267 F.3d 1183, 1186 (11th Cir.2001)).
A ruling on a party‘s motion for judgment as a matter of law is reviewed de novo, applying the same legal standard as the district court. Bianchi v. Roadway Express, Inc., 441 F.3d 1278, 1282 (11th Cir.2006); see also Nat‘l Fire Ins. Co. of Hartford v. Fortune Constr. Co., 320 F.3d 1260, 1267-68 (11th Cir.2003) (We review a district court‘s grant of judgment as a matter of law de novo, evaluating whether such sufficient conflicts exist in the evidence to necessitate submitting the matter to the jury or whether the evidence is so weighted in favor of one side that one party must prevail as a matter of law. (quoting Thosteson v. United States, 304 F.3d 1312, 1316 (11th Cir.2002))).
A losing party may also move for a new trial under
Although a trial judge cannot weigh the evidence when confronted with a motion [for judgment] notwithstanding the verdict, in a motion for a new trial the judge is free to weigh the evidence. Ra-ban v. Kimberly-Clark Corp., 678 F.2d 1053, 1060 (11th Cir.1982) (quoting King v. Exxon Co., U.S.A., 618 F.2d 1111, 1115 (5th Cir.1980)). [W]hen independently weighing the evidence, the trial court is to view not only that evidence favoring the jury verdict but evidence in favor of the moving party as well. Williams. v. City of Valdosta, 689 F.2d 964, 973 (11th Cir. 1982).
We review a ruling on a motion for a new trial for abuse of discretion. Middlebrooks v. Hillcrest Foods, Inc., 256 F.3d 1241,, 1247 (11th Cir.2001). Deference to the district court ‘is particularly appropriate where a new trial is denied and the jury‘s verdict is left undisturbed. ’
1. Proof of Improper Escrow Payment Increase
At trial, McGinnis advanced three primary arguments on liability: (1) Homeward increased her escrow deposit without proper notice, (2) Homeward increased her escrow deposit by an unreasonable amount, and (3) Homeward did not properly apply her monthly payments. In its cross-appeal, Homeward asserts that the district court erred in denying its
a. Notice of the escrow increase
Beginning in. November 2009 and continuing through March 2010, Homeward increased McGinnis‘s escrow deposit from $115.45 to $353.45. McGinnis claims that in making this increase, Homeward did not provide her with proper notice. Homeward claims that it did provide proper notice, in the form of a payment coupon in October 2009. Homeward is mistaken.
Homeward did not provide an initial escrow account statement within 60 days of the servicing transfer. Adam testified that he did not receive any escrow analysis explaining the escrow deposit increase to $353.45. The earliest escrow analysis McGinnis received was Homeward‘s December 17, 2009 escrow analysis, but that analysis did not explain the escrow deposit increase to $353.45—and Homeward actually withdrew it and told McGinnis to ignore it. See also McGinnis v. Am. Home Mortg. Servicing Inc., No. 5:11-CV-284 (CAR), 2013 WL 3338922, at *13 n. 164 (M.D.Ga. July 2, 2013) (rejecting the December 17 escrow analysis because the time ... is [at least] 61 days, not 60).
Homeward responds that Adam admitted to receiving one payment coupon in October 2009, but this coupon says essentially nothing more than Monthly Payment 843.58. And the coupon is clearly not an initial escrow account statement. See
Moreover, as the district court aptly noted, when Mr. McGinnis acknowledged that Plaintiff may have received this payment coupon, he also testified that, even if the coupon was attached to the letter, it
b. Reasonableness of the escrow increase
Homeward next contends that McGinnis failed to show that the escrow deposit increase was unreasonable. Again, Homeward‘s argument is unavailing.
The deed requires that Homeward shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with Applicable Law. The deed also provides that payment of escrow shortages must be spread out over a twelve-month period.10
The district court succinctly and correctly summarized the compelling circumstantial evidence of the unreasonableness of the escrow increase that was presented to the jury as follows:
At trial, the jury was also instructed that, if there was a shortage in Plaintiff‘s escrow, Homeward only had two options under the terms of the Security Deed: It could choose to either allow a shortage to exist or require Plaintiff to repay the shortage in equal monthly payments over at least twelve months. The jury was then presented with evidence that Homeward‘s escrow increase would have recouped any shortage in much less than twelve months and that if the amount demanded was collected over twelve months, the escrow collected would total two or three times the amount needed to cover Plaintiff‘s tax and insurance costs. The evidence additionally showed that Homeward performed a third escrow analysis, in February of 2010, that reduced Plaintiff‘s payment from $843.58 to $638.32, a number much more in line with what she had previously been paying. Yet, Homeward still insisted that Plaintiff owed payments of $843.59 from November, 2009 through April, 2010.
From this circumstantial evidence, a reasonable jury could have inferred that the payments demanded by Homeward were unreasonable and that, by demanding these payments, Homeward breached a duty owed to Plaintiff.
On this issue, Mr. McGinnis also testified that he knew the increase was an error based on his calculations and experience managing Plaintiff‘s properties. This went factually unrebutted by Homeward, as it chose not to offer any evidence as to exactly how it arrived at the $843.58 payment. The evidence in the case instead showed that Plaintiff repeatedly brought this error to Homeward‘s attention, but Homeward failed
McGinnis, 2014 WL 2949216, at *6.
Homeward now argues that McGinnis‘s evidence does not address escrow items, deficiencies, shortages, time for recoupment, and a two month cushion. However, these issues were all addressed by the documentary and testamentary evidence introduced at trial, and the jury was fully capable of reviewing the evidence, drawing reasonable deductions and inferences, deciding what is material, and making ultimate findings on these issues. Moreover, Adam‘s escrow analysis, which was introduced in evidence, did in fact touch on several of these items.
The fact that Homeward failed to offer any clear evidence at trial explaining how exactly it arrived at the $843.58 payment speaks volumes. Indeed, it was unreasonable for Homeward to expect from McGinnis a comprehensive, in-depth escrow analysis, when Homeward itself failed to produce one.
c. Application of monthly payments
Finally, Homeward challenges McGinnis‘s claim that the monthly payments were wrongfully applied. But because this argument stands or falls with the argument regarding the reasonableness of the escrow increase, it must also fall.
Neither party disputes that McGinnis‘s account was not credited as her monthly payments were made and that Homeward instead placed her monthly payments in a suspense account until additional funds arrived. Homeward argues that it was entitled to withhold the funds in the suspense account under the terms of the Security Deed. This argument, however, assumes that Plaintiff‘s monthly payments were reasonable and correct and thus that Plaintiff was required to pay the amount Homeward charged. McGinnis, 2013 WL 3338922, at *16.
If, at trial, the jury found that the monthly payments demanded by Homeward were unreasonable and incorrect, then it follows that the jury could also have found that Homeward was not entitled to hold McGinnis‘s monthly payments in suspense. Accordingly, we find that a reasonable jury could, based on this evidence, also conclude that Homeward did not properly credit payments to McGinnis‘s account.
*
We conclude that the district court correctly ruled that McGinnis met her evidentiary burden to prove liability at trial. Under
2. Emotional Distress Damages
Homeward also argues that the district court erred in finding that its acts constituted extreme and outrageous conduct as a matter of law, such that Homeward was not entitled to JMOL or a new trial on the issue of damages for emotional
Whether a claim rises to the requisite level of outrageousness and egregiousness to sustain a claim for intentional infliction of emotional distress is a question of law. Racette v. Bank of Am., N.A., 318 Ga.App. 171, 733 S.E.2d 457, 465 (2012) (quoting Frank v. Fleet Finance, Inc. of Ga., 238 Ga.App. 316, 518 S.E.2d 717, 720 (1999)). To support a claim of IIED, the conduct at issue must go beyond all reasonable bounds of decency so as to be regarded as atrocious and utterly intolerable in a civilized community and naturally give rise to such intense feelings of humiliation, embarrassment, fright or extreme outrage as to cause severe emotional distress. United Parcel Serv. v. Moore, 238 Ga.App. 376, 519 S.E.2d 15, 17 (1999) (quoting Peoples v. Guthrie, 199 Ga.App. 119, 404 S.E.2d 442, 444 (1991)).
[I]t is true that an intentional wrongful foreclosure can be the basis for an action for intentional infliction of emotional distress under certain circumstances. Blue View Corp. v. Bell, 298 Ga.App. 277, 679 S.E.2d 739, 742 (2009) (quoting Ingram v. JIK Realty Co., 199 Ga.App. 335, 404 S.E.2d 802, 805 (1991)). However, a finding of wrongful foreclosure does not, of itself, mean that the misconduct at issue rises to the level of extreme, outrageous, atrocious or intolerable conduct required to support a claim for intentional infliction of emotional distress. Clark v. PNC Bank, N.A., No. 1:13-cv-1305-WSD, 2014 WL 359932, at *6 (N.D.Ga. Feb. 3, 2014). Nor are [s]harp or sloppy business practices generally considered as going beyond all reasonable bounds of decency as to be utterly intolerable in a civilized community. Moore, 519 S.E.2d at 17. When there is evidence of more egregious conduct, however, Georgia courts have held that a jury can properly infer intentional infliction of emotional distress in actions related to a wrongful foreclosure.12 And as the district court correctly found, this is one of those cases. McGinnis, 2014 WL 2949216, at *11.
A number of factors demonstrate the extreme and outrageous nature of Homeward‘s conduct. For one thing, evidence indicated that over the course of Homeward‘s relationship with McGinnis, Homeward‘s agents frequently harassed McGinnis by phone and mail. Because Homeward‘s misconduct involved all seven properties, McGinnis alleges that this harassment has become a constant fixture of their lives—and in fact, if you stacked all the collection letters together, they would reach [f]ive feet high. See, e.g., Margita v. Diamond Mortg. Corp., 159 Mich.App. 181, 406 N.W.2d 268, 272 (1987)
Even more crucially, however, we find that Homeward‘s awareness of its error rendered its opaqueness, unresponsiveness, and belligerence—in pursuing foreclosure in a fairly short amount of time for a relatively small amount of money—extreme and outrageous as a matter of law. The evidence introduced at trial showed that, through Adam, McGinnis repeatedly notified Homeward of errors in the handling of her account and attempted to resolve the errors in good faith. However, McGinnis‘s months of requests for clarification and correction were fruitless. Homeward‘s agents continually failed to justify the increased payment, insisted that McGinnis was behind in payment, and—despite Homeward‘s own tacit admission of its erroneous calculation and subsequent decrease in the escrow amount—failed to retract its demand that McGinnis pay the inflated amount.
This case is not unlike the case of DeGolyer v. Green Tree Servicing, LLC, 291 Ga.App. 444, 662 S.E.2d 141, 148 (2008), in which the court held that action in light of a known error can constitute extreme and outrageous conduct and support a claim for mental anguish damages.
Moreover, as the district court observed, Homeward‘s
As noted by the district court, [a]lthough this was not Plaintiff‘s residence, the evidence did show that this property and all of the others threatened with foreclosure are Plaintiff‘s livelihood, her nest egg, her security, her life‘s work, and a representation of her character in the community. Plaintiff likewise provided evidence from which the jury could find that all of this has had a severe effect on Plaintiff both emotionally and physically.
As with Homeward‘s other cross-appeal claim, we conclude that the district court correctly ruled that, as a matter of law, Homeward‘s conduct was outrageous and extreme enough to support McGinnis‘s IIED claim. Under
3. Specific Intent
Finally, McGinnis challenges the district court‘s ruling that Homeward was entitled to judgment as a matter of law on the issue of specific intent, and that McGinnis was thus entitled to only $250,000 in punitive damages.
Georgia law provides a bifurcated procedure for assessing the award of punitive damages.
In the second phase, if the jury has determined that an award of punitive damages is warranted, the trial shall immediately be recommenced in order to receive such evidence as is relevant to a decision regarding what amount of damages will be sufficient.
In its JMOL motion under
On appeal, McGinnis argues that the district court erred in granting JMOL on the issue of specific intent because Homeward did not request JMOL on that issue during trial.
Again, a motion for JMOL may be brought under
Accordingly, we have recognized an exception to that rule when confronting grounds that are closely related to those raised in an initial JMOL motion. If the grounds argued in a motion under
In its
Homeward moved for judgment as a matter of law specifically as to McGinnis‘s claims of conversion, wrongful foreclosure, interference with property rights, and IIED. As to conversion, Homeward argued that it was authorized by the deed and note to remove fees from the suspense account. As to wrongful foreclosure and interference with property rights, Homeward essentially repeated its same argument that its decisions complied with the deed and note. And finally, as to IIED,
The grounds raised in Homeward‘s
I‘m not aware of a holding from the Court of Appeals that says that you can get emotional damages for an intentional wrongful foreclosure.
So I don‘t think that is consistent with Georgia Law, Your Honor. And I think maybe this would ultimately redound to my benefit, but Mr. Gower is now trying to turn wrongful foreclosure into an intentional tort which would require a specific intent presumably. And just to be honest there isn‘t any evidence of specific intent in this case.
Mr. Delbene testified that the computer spat out a list and somebody confirmed that the payment hadn‘t been made required to bring it current.
So, you know, I think that the wrongful foreclosure claim is—my motion starts sounding better if you include the intentional element in there, Your Honor. It‘s just not an intentional tort. This remark, whether viewed alone or in context, does not constitute a ground closely related to the specific intent argument that Homeward raised—for the first time—in its post-verdict
Applying our liberal view of what constitutes a motion for directed verdict, a party must clearly point[] out a claimed evidentiary deficiency to court and counsel, not by way of conversation or speculation but on the record in an unambiguous formal motion for relief. Quinn, 597 F.2d at 1025 (emphasis added). Were we to permit otherwise, trial courts would be required to countenance countless post hoc challenges to verdicts based on such general comments made at any time during a trial, and the exception would engulf the rule. In fact, the statement by Mr. Rogers here is a prime example of the sort of speculative comment which we referred to in Quinn that—unmoored from any discussion or formal motion regarding the sufficiency of the evidence of Homeward‘s specific intent—failed to provide sufficient notice of a forthcoming evidentiary challenge15 to either McGinnis or the district court. See id.
Aside from the substance of the closely related exception, McGinnis further asserts that the exception does not extend to arguments made during a jury charge conference. However, in Splitt v. Deltona Corp., 662 F.2d 1142 (5th Cir.1981 Unit B), we held that a defendant‘s
Had Mr. Rogers not simply made an offhand remark, but instead presented a fleshed out argument regarding the sufficiency of the evidence of Homeward‘s specific intent to harm during the charge conference, this case would be closer to Splitt.
That said, the setting of Homeward‘s purported
For these reasons—and finding no other closely related
Homeward asserts that even if it did not properly preserve its
We agree.
Here, after granting Homeward‘s renewed JMOL based on insufficient evidence of specific intent to harm, the district court declined to conditionally rule on this portion of Homeward‘s motion for a new trial, which made out the same argument as to specific intent, as well as the argument that the $3,000,000.00 punitive damages award violated due process. McGinnis, 2014 WL 2949216, at *16. Accordingly, we will remand the case for a ruling on Homeward‘s
IV. CONCLUSION
For the foregoing reasons, the district court‘s ruling that Homeward‘s
AFFIRMED IN PART, VACATED IN PART, AND REMANDED.
JULIE CARNES, Circuit Judge, concurring in part and dissenting in part:
I join in all parts of the majority‘s very thorough opinion in this case, with one exception: its holding that Homeward‘s post-verdict
As the majority notes, a
On the other hand, given the harshness of a determination that a
Since National Industries, we have continued to characterize our approach to assessing the adequacy of a
In determining whether a ground identified in a
Applying the above principles to the present case, I agree with the district court that Homeward‘s motion for JMOL, based on the absence of evidence showing a specific intent to harm, did not cause McGinnis unfair surprise. Along those same lines, I further agree that Homeward‘s arguments during the consolidated charge conference and
As our caselaw explains, the purpose behind
In this case, however, there is no indication that McGinnis had any additional evidence in her arsenal to prove what she knew was the only factual question for the jury to decide in this second phase of the trial:2 whether Homeward had acted with specific intent to harm. Indeed, even though Homeward‘s counsel emphasized in his closing argument that McGinnis had failed to offer any evidence of a specific intent to harm, the response of McGinnis‘s attorney in his own subsequent closing argument was comparatively cursory and not entirely responsive. There is no reason to believe that there was some other piece of evidence that McGinnis had available to introduce if, in the jury charge/motion colloquy, Homeward had explicitly articulated its position that any punitive damages would be subject to a cap, given the absence of evidence of a specific intent to harm.
As to whether the grounds for JMOL urged by Homeward in both the pre-verdict colloquy and post-verdict written motion were related closely enough to alert McGinnis to the possibility of a claim of insufficient evidence concerning the specific-intent-to-harm element, it is true that during the colloquy, Homeward mostly discussed McGinnis‘s purported failure to prove that Homeward had been unreasonable in calculating escrow payment amounts and in ultimately foreclosing on her property after McGinnis continued to refuse to pay the amounts Homeward said it was owed. Thus, much of the colloquy focused directly on the wrongful foreclosure claim. But the remaining claims were largely derivative of that claim. In fact, Homeward‘s counsel asked for judgment on the intentional infliction of emotional distress claim, whose elements were closely related to the question whether Homeward acted with the intent to harm McGinnis. Finally, at the end of the colloquy, Homeward‘s counsel asked for JMOL as to all claims.
Yet, even assuming that the above remarks were too subtle or imprecise for purposes of preserving the argument at issue here, Homeward‘s counsel at one point in the colloquy actually pointed out the absence of evidence of specific intent, stating: And just to be honest[,] there isn‘t any evidence of specific intent in this case. Granted counsel was not speaking about punitive damages, but was instead observing that McGinnis was trying to turn a wrongful foreclosure claim into an intentional tort warranting emotional distress damages. Nevertheless, counsel did make clear his position that evidence of specific intent was lacking in the case. Given that the only claim in the case calling for proof of specific intent was the claim for punitive damages exceeding $250,000, McGinnis should have immediately recognized that the evidentiary basis for that claim was likewise in play.
There is no bright-line rule in deciding a question such as the one before us in this case. Instead, one must make a judgment
Connie BISHOP, on behalf of herself and all others similarly situated, Plaintiff-Appellant, v. ROSS EARLE & BONAN, P.A., a Florida professional association, Jacob E. Ensor, individually, Defendants-Appellees.
No. 15-12585.
United States Court of Appeals, Eleventh Circuit.
March 25, 2016.