Lead Opinion
Lovemore Mbigi sued Wells Fargo Home Mortgage, a division of Wells Fargo Bank, N.A. (“Wells Fargo”) after Wells Fargo sold his home in a foreclosure sale. In his complaint, as amended, Mbigi asserted claims against Wells Fargo for wrongful foreclosure, violation of the Georgia Racketeer Influenced and Corrupt Organizations Act (“RICO”),
A motion to dismiss for failure to state a claim should not be granted unless:
(1) the allegations of the complaint disclose with certainty that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof; and (2) the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought.
(Citation and punctuation omitted.) Stendahl v. Cobb County, 284 Ga. 525 (1) (668 SE2d 723) (2008). In other words, “[i]f, within the
In his complaint, Mbigi alleges that, in 2007, he executed a security deed in favor of Wells Fargo’s predecessor
On February 8, 2014, Mbigi left the United States on business. While he was away, Wells Fargo’s counsel mailed the foreclosure sale notice to a previous notice address and not the address that Mbigi had requested in writing that Wells Fargo use for all correspondence. On June 3, 2014, Wells Fargo sold the Property in a foreclosure sale.
1. Mbigi asserted a claim against Wells Fargo for wrongful foreclosure. A claim of wrongful foreclosure requires the plaintiff to “establish a legal duty owed to it by the foreclosing party, a breach of that duty, a causal connection between the breach of that duty and the
(a) In his complaint, Mbigi contended that Wells Fargo breached its duty to exercise the power of sale fairly and in good faith in that it failed to provide him with notice of the foreclosure sale in compliance with OCGA § 44-14-162.2 (a). Mbigi contends that the trial court erred in dismissing his wrongful foreclosure claim to the extent that the claim was based on this alleged breach of duty. We agree.
OCGA § 44-14-162.2 (a) provides, in relevant part, that the notice of the initiation of proceedings to exercise a power of sale shall be sent “to the property address or to such other address as the debtor may designate by written notice to the secured creditor.” Id. In the complaint, Mbigi stated that he provided written notice to Wells Fargo of the designated address it was to use for all correspondence, but that Wells Fargo did not send the notice of the foreclosure sale to that address. The complaint does not disclose with certainty that Mbigi would not be entitled to any relief on account of his contention that Wells Fargo failed to provide the proper statutory notice of foreclosure. See Farris v. First Financial Bank, 313 Ga. App. 460, 464 (2) (722 SE2d 89) (2011) (“The plain language of OCGA § 44-14-162.2 (a) requires the secured creditor send notice to the property address unless the debtor designates in writing another address.”) (Punctuation and footnote omitted; emphasis supplied). See also Babalola, 324 Ga. App. at 753 (2) (a) (allegation that lender failed to provide notice offoreclosure as required by OCGA § 44-14-162.2 supported a wrongful foreclosure claim under Georgia law).
The trial court concluded that Wells Fargo’s alleged failure to comply with the notice requirement afforded no basis for a claim of wrongful foreclosure because Wells Fargo had denied the allegation and maintained that it had provided Mbigi’s counsel with copies of the notices sent to the Property’s address. The order also referenced a copy of the notice of sale under power which was attached to the motion of a third party. Pretermitting whether anything referenced by the trial court, if later established, would conclusively establish that Wells Fargo complied with the statutory notice requirement, the attachment to a motion of a third party was not part of the pleadings in the case and could not be considered as part of the motion to
(b) Mbigi also contended in his complaint that Wells Fargo breached its duty by failing to include in the notice of foreclosure “the name, address, and telephone number of the individual or entity who shall have full authority to negotiate, amend, and modify all terms of the mortgage with the debtor,” as required by OCGA § 44-14-162.2 (a). According to the complaint, the notice of foreclosure sale named Wells Fargo as the entity with such authority but, in fact, Wells Fargo did not have full authority to negotiate, amend and modify all terms of the mortgage. Rather, Mbigi contends that the entity with full authority was the owner of the note, and that the owner of the note was an entity different than Wells Fargo. The trial court held that the complaint nevertheless failed to state any basis for a wrongful foreclosure claim because a reasonable person would construe Wells Fargo to be the proper agent of the entity with full authority, and that, in addition, Mbigi “appears to concede” that Wells Fargo had the authority to modify the loan by seeking a loan modification from Wells Fargo as part of the relief Mbigi sought in this action. Mbigi claims that the trial court erred in these rulings.
In You v. JP Morgan Chase Bank, N.A., 293 Ga. 67, 74 (2) (743 SE2d 428) (2013), the Supreme Court of Georgia looked to the plain language of OCGA § 44-14-162.2 to determine whom the notice contemplated thereby must name. Under the statute, the Court noted, the notice must name “the individual or entity who shall have full
[i]f that individual or entity is the holder of the security deed, then the deed holder must be identified in the notice; if that individual or entity is the note holder, then the note holder must be identified. If that individual or entity is someone other than the deed holder or the note holder, such as an attorney or servicing agent, then that person or entity must be identified. The statute requires no more and no less.
You, 293 Ga. at 74-75 (2).
Wells Fargo argues that its notice fully complied with OCGA § 44-14-162.2 because the complaint shows that it held the security deed, and under You, the holder of the security deed may be the party identified under the statute. However, while the party to be identified might be the holder of the security deed, if that is the entity which has full authority to negotiate, amend, and modify the terms of the mortgage, the entity with such authority could also be “someone other than the deed holder,” including, as alleged here, the owner of the note. You, 293 Ga. at 74 (2). Thus, Wells Fargo does not show, for purposes of the motion to dismiss, that it fully complied with OCGA § 44-14-162.2.
Moreover, Wells Fargo cannot show, for purposes of its motion to dismiss, that it substantially complied with the statute. This Court has “permitted substantial compliance with OCGA § 44-14-162.2 (a) in a limited circumstance involving the requirement to provide certain contact information.” Peters v. CertusBank Nat. Assn., 329 Ga. App. 29, 31 (3) (763 SE2d 498) (2014). See TKW Partners v. Archer Capital Fund, 302 Ga. App. 443, 445-446 (1) (691 SE2d 300) (2010) (notice that provided the name of the lender/secured party and the contact information for the lender’s attorney, who had “as much authority as any individual to negotiate a loan modification on [the lender’s] behalf,” substantially complied with OCGA § 44-14-162.2). See also Stowers v. Branch Banking & Trust Co., 317 Ga. App. 893, 896 (1) (731 SE2d 367) (2012) (concluding that holding in TKW Partners stands for the principle “that substantial compliance with the contact information requirement of OCGA § 44-14-162.2 (a) is sufficient”). However, in TKW Partners and Stowers, the notice at issue provided contact information for the attorney for the entity with modification authority, which entity was named in the notice, and we have indicated that TKW and Stowers apply only to the limited circumstances of those cases. See Peters v. CertusBank Nat. Assn.,
The trial court also found that, because Mbigi also sought relief from Wells Fargo by seeking a loan modification, he “appears to concede that Defendant Wells Fargo is the entity with full authority to modify the loan.” However, even assuming that Mbigi’s claims were inconsistent, he was free to plead alternative and inconsistent theories in his complaint. See Southern v. Sphere-Drake Ins. Co., 226 Ga. App. 450, 451 (486 SE2d 674) (1997). See also OCGA § 9-11-8 (e) (2) (“A party máy also state as many separate claims or defenses as he has, regardless of consistency and whether based on legal or on equitable grounds or on both.”). The trial court erred in finding that the complaint’s allegation that the notice of foreclosure failed to comply with OCGA § 44-14-162.2 (a) did not state any basis for a wrongful foreclosure claim.
(c) Mbigi further asserted in his complaint that Wells Fargo directed him to stop making payments on the loan in 2008, and then held him in default for failure to pay. Mbigi alleged that Wells Fargo’s directive to stop making payments and his detrimental reliance thereon was sufficient consideration to support a “quasi-new agreement.” He contends that Wells Fargo therefore breached its duty to exercise the power of sale fairly and in good faith by failing to provide him before it foreclosed with reasonable notice and opportunity to cure, as contemplated by OCGA § 13-4-4. The trial court found the alleged quasi-contract to be unenforceable because, among other reasons, an instruction “not to pay” could not constitute a quasi-contract. Mbigi claims that the trial court erred in dismissing his wrongful foreclosure claim to the extent the claim was based on the alleged “quasi-new agreement.”
OCGA § 13-4-4 provides:
Where parties, in the course of the execution of a contract, depart from its terms and pay or receive money under such departure, before either can recover for failure to pursue the letter of the agreement, reasonable notice must be given to the other of intention to rely on the exact terms of the agreement. The contract will be suspended by the departure until such notice.
Under the statute, the parties must not only depart from the terms of the contract, but must also “pay or receive money under such departure.” OCGA § 13-4-4. Thus, there could be no departure from the
2. Mbigi also asserted a claim against Wells Fargo for violation of the Georgia RICO statute. To establish “a civil RICO claim, [Mbigi] is required to show by a preponderance of the evidence that [Wells Fargo] violated the RICO statute, OCGA § 16-14-4, that [he] has suffered injury, and that [Wells Fargo’s] violation of the RICO statute was the proximate cause of the injury.” (Citations omitted.) Cox v. Mayan Lagoon Estates Ltd., 319 Ga. App. 101, 109 (2) (b) (734 SE2d 883) (2012). To demonstrate a violation of OCGA § 16-14-4, Mbigi must “show an injury by a pattern of racketeering activity. A pattern requires at least two interrelated predicate offenses.” (Citations omitted.) Brown v. Freedman, 222 Ga. App. 213, 217 (3) (474 SE2d 73) (1996).
Mbigi identified seven different acts or omissions which, he contended, constituted residential mortgage fraud and were part of a fraudulent scheme to wrongfully foreclose on his home. Mbigi also claimed that Wells Fargo committed an additional predicate act by stealing the equity in his home through the wrongful foreclosure. The
Under OCGA § 16-14-3 (8) (A) (2014),
Further, theft by deception and residential mortgage fraud, if shown, would constitute RICO predicate acts. See OCGA § 16-14-3 (9) (A) (ix) (2014); OCGA § 16-14-3 (9) (A) (xl) (2014). Wells Fargo does not contest that the alleged act of theft could be a predicate act. Wells Fargo argues, however, that five of the acts alleged to be residential mortgage fraud are not crimes for purposes of OCGA § 16-8-102 and that the other two acts, which involved allegations of misrepresentations and omissions that must have occurred at or before the loan closing in 2007, were too remote to be part of a pattern of racketeering activity for purposes of OCGA § 16-14-3 (8) (A) (2014).
Aperson commits residential mortgage fraud when, as pertinent here, such person, “with the intent to defraud,” “[f]iles or causes to be filed with the official registrar of deeds of any county of this state any document such person knows to contain a deliberate misstatement, misrepresentation, or omission.” OCGA § 16-8-102 (5). To “defraud,” in its ordinary meaning, is to “[t]o deprive of some right, interest, or property by a deceitful device; to cheat; to overreach.” Berry v. State, 153 Ga. 169, 174 (111 SE 669) (1922).
3. Mbigi contends that the trial court erred in dismissing his claims of fraudulent and negligent misrepresentation. Mbigi asserted in his complaint that Wells Fargo made false statements which induced Mbigi into defaulting on the loan, and that he reasonably relied thereon when he stopped making loan payments. Wells Fargo
A four-year statute of limitation applies to actions for fraud and negligent misrepresentation. See OCGA § 9-3-31; Willis v. City of Atlanta, 265 Ga. App. 640, 643 (595 SE2d 339) (2004); Shapiro v. Southern Can Co., 185 Ga. App. 677, 677-678 (365 SE2d 518) (1988). Further,
[i]t has been long recognized and is well established that a statute of limitation begins to run on the date a cause of action on a claim accrues. In other words, the period within which a suit may be brought is measured from the date upon which the plaintiff could have successfully maintained the action.
(Citations omitted.) Jankowski v. Taylor, Bishop & Lee, 246 Ga. 804, 805 (1) (273 SE2d 16) (1980). See Colormatch Exteriors v. Hickey, 275 Ga. 249, 251 (1) (569 SE2d 495) (2002) (“The true test to determine when a cause of action accrues is to ascertain the time when the plaintiff could first have maintained his or her action to a successful result.”) (citation and punctuation omitted).
Nevertheless, “[t]o establish a cause of action for fraud, a plaintiff must show that actual damages, not simply nominal damages, flowed from the fraud alleged.” Glynn County Fed. Employees Credit Union v. Peagler, 256 Ga. 342, 344 (2) (348 SE2d 628) (1986). And, as to negligent misrepresentation, “in a claim for economic injury sustained due to reliance upon false information negligently provided by a defendant, the statute of limitation begins to run when the plaintiff suffers pecuniary loss with certainty, and not as a matter of pure speculation.” Hardaway Co. v. Parsons, Brinckerhoff, Quade & Doug-las, 267 Ga. 424, 428 (1) (479 SE2d 727) (1997). The complaint does not show that Mbigi was necessarily damaged in December 2008, at the time of the allegedly false representation, such that he could have successfully maintained an action for fraud or negligent misrepresentation at that time. See id. at 427 (1) (finding that “until it suffered economic loss, [appellant] did not even have a claim for negligent misrepresentation”). It follows that the complaint did not show with
4. Mbigi claims that the trial court erred in dismissing his claim for intentional infliction of emotional distress. The elements of the tort are: “(1) The conduct must be intentional or reckless; (2) The conduct must be extreme and outrageous; (3) There must be a causal connection between the wrongful conduct and the emotional distress; [and] (4) The emotional distress must be severe.” (Citation and punctuation omitted.) Bridges v. Winn-Dixie Atlanta, 176 Ga. App. 227, 230 (1) (335 SE2d 445) (1985). See Odem v. Pace Academy, 235 Ga. App. 648, 654 (2) (510 SE2d 326) (1998) (accord).
It has not been enough that the defendant has acted with an intent which is tortious or even criminal, or that he has intended to inflict emotional distress, or even that his conduct has been characterized by malice, or a degree of aggravation which would entitle the plaintiff to punitive damages for another tort. Liability has been found only where the conduct has been extreme and outrageous.
(Punctuation and footnote omitted.) Jarrard v. United Parcel Svc., 242 Ga. App. 58, 61 (529 SE2d 144) (2000). “Whether the alleged conduct is sufficiently extreme or outrageous is a question of law for the trial court.” (Punctuation and footnote omitted.) Kirkland v. Earth Fare, Inc., 289 Ga. App. 819, 823 (4) (658 SE2d 433) (2008).
An intentional wrongful foreclosure may be the basis for an action for intentional infliction of emotional distress. See Blue View Corp. v. Bell, 298 Ga. App. 277, 279 (1) (679 SE2d 739) (2009); DeGolyer v. Green Tree Servicing, 291 Ga. App. 444, 449-450 (4) (662 SE2d 141) (2008). Wells Fargo contends that the circumstances alleged by the complaint are nevertheless not sufficiently outrageous and extreme. We disagree. Mhigi could show, within the framework of the complaint, not only that Wells Fargo wrongfully foreclosed on his home, but that it engineered a default on the loan by instructing Mbigi not to pay, lied about why it could not accept payment, and improperly refused to accept Mbigi’s attempt to pay the loan in full. See Webb v. Bank of America, 328 Ga. App. 62, 62-63 (761 SE2d 485) (2014) (allegations in the complaint, which included that lender intentionally refused to accept loan payments and intentionally
5. Mbigi further contends that the trial court erred in dismissing his claim for breach of duty of good faith and fair dealing. “This implied duty requires both parties to a contract to perform their promises and provide such cooperation as is required for the other party’s performance.” (Citation and punctuation omitted.) Brown v. Freedman, 222 Ga. App. 213, 216 (2) (474 SE2d 73) (1996).
The trial court found that Mbigi failed to plead or otherwise demonstrate a breach of contract by Wells Fargo, and so dismissed his claim of breach of the implied duty of good faith and fair dealing. Although “[e]very contract implies a covenant of good faith and fair dealing in tbe contract’s performance and enforcement, . . . the covenant cannot be breached apart from the contract provisions it modifies and therefore cannot provide an independent basis for liability.” (Punctuation and footnote omitted.) OnBrand Media v. Codex Consulting, Inc., 301 Ga. App. 141, 147 (2) (c) (687 SE2d 168) (2009). Thus,
to prevail on [his] claim for breach of the duty of good faith and fair dealing, [Mbigi] must establish that [Wells Fargo] owed a contractual obligation. . . . And to prevail on [his] claim for breach of an implied duty of good faith and fair dealing, [Mbigi] must demonstrate that [Wells Fargo] somehow violated ... an implied duty.
Id.
6. Lastly, Mbigi contends that the trial court erred in dismissing his claim for promissory estoppel. The elements of promissory estoppel are: “the defendant made a promise upon which he reasonably should have expected the plaintiff to rely, the plaintiff relied on the promise to his detriment, and injustice can be avoided only by enforcing the promise because the plaintiff forwent a valuable right.” (Citation omitted.) Thompson v. Floyd, 310 Ga. App. 674, 682 (3) (713 SE2d 883) (2011). See OCGA § 13-3-44.
The complaint alleges that in 2007, in response to Mbigi’s inquiry concerning his mortgage balance, Wells Fargo advised him that it “was going to investigate and modify the loan.” Wells Fargo thereafter directed Mbigi in 2008 and 2010 to cease making mortgage payments until the loan was modified, and told him, in or after 2011, that the loan “had to be modified before he could resume payment.” Notwithstanding Mbigi’s subsequent inquiries and his repeated submission of modifications proposals, Wells Fargo never processed his loan for a modification.
In his complaint, Mbigi gave notice that he contended Wells Fargo made promises to modify the loan through at least 2011, and that he relied on those promises to his detriment by complying with Wells Fargo’s directives to withhold payments on the loan. Mbigi was not required to set forth every material term of the alleged promises in the complaint to avoid dismissal of his claim. See, e.g., Scott v. Scott, 311 Ga. App. 726, 729 (716 SE2d 809) (2011) (trial court erred in concluding that plaintiff was required to allege additional facts sufficient to support a claim for change of custody from parent to grandparent where petition gave fair notice of the claim). See also Austin, 294 Ga. at 775 (At the motion to dismiss stage, it did “not matter that the existence of [facts that would be required to show a violation of ministerial duty, the pivotal determination in the case] is unlikely.”).
Nor does the complaint show that Mbigi would not be entitled to any relief on the claim for promissory estoppel. Mbigi prayed for both damages and that “he be allowed to complete the loan modification process.” Pretermitting whether the alleged promise to modify the loan could be enforced after foreclosure, Mbigi was not precluded from recovering damages. “Under [a] promissory estoppel theory, [plaintiff] may recover those damages as are equitable and necessary to prevent injustice from occurring.” (Punctuation and footnote omitted.) Hendon Properties v. Cinema Dev., LLC, 275 Ga. App. 434, 441 (3) (620 SE2d 644) (2005).
Judgment affirmed in part and reversed in part.
See OCGA § 16-14-1 et seq.
Wells Fargo is the successor by merger to the original lender, World Savings Bank, F.S.B.
We note that a departure or modification from a contract can be accomplished other than by the exchange of money; however, the breach of duty alleged by the complaint arises from Wells Fargo’s failure to take the actions required by OCGA § 13-4-4 before he could he held to the strict terms of the loan. See Turem v. Sinowski & Jones, 195 Ga. App. 829, 830 (1) (395 SE2d 60) (1990) (OCGA § 13-4-4 “sets forth a plain statutory consequence of the receipt or payment of money under a departure,” but does not supplant other legal circumstances which would constitute a modification or novation).
Compare Curl v. Federal Sav. & Loan Assn., 241 Ga. 29 (244 SE2d 812) (1978) (Where lender had accepted late and irregular payments for several years, preferring to contact borrower and convince her to make up the defaults, at least in part, and where lender failed to give notice of intention to insist on compliance with the exact terms of the agreement prior to accelerating the loan, lender failed to show that the borrower’s complaint lacked any essential element of a cause of action under OCGA § 13-4-4.).
This provision was renumbered as OCGA § 16-14-3 (4) (A), effective July 1,2015. See Ga. L. 2015, p. 693, § 2-25.
To the extent that Wells Fargo suggests that OCGA § 16-14-3 (8) (A) (2014) requires that the last predicate act be committed within four years of the filing of the complaint, that is not what the statute provides. Compare OCGA § 16-14-8 (2014) (civil action “may be commenced up until five years after the conduct in violation of a provision of this chapter terminates or the cause of action accrues.”). However, its contention that Mbigi could not show any acts of residential mortgage fraud following the closing of the loan in 2007 is relevant. For purposes of OCGA § 16-14-3 (8) (A) (2014), apattern of racketeering activity requires “[e]ngaging in at least
See OCGA § 1-3-1 (b) (Other than words of art or words connected with a particular trade or subject matter, “[i]n all interpretations of statutes, the ordinary signification shall be applied to all words [.]”).
Mbigi’s complaint also alleged that a 2010 class action settlement agreement entered in the United States District Court for the Northern District of California regarding the “Option ARM” loans, such as the loan which had been made to Mligi, “required Wells to offer [him] a loan modification.” In his reply brief, Mbigi concedes that he cannot base a promissory estoppel
See also Funderburk v. Fannie Mae, 2014 U. S. Dist. LEXIS 41689 (II) (E) (N.D. Ga. 2014) (claim that agent for defendant promised to modify loan if she made a payment on her account, then denied the modification and conducted foreclosure proceedings, supported a claim for promissory estoppel under Georgia law).
See also Insilco Corp. v. First Nat. Bank, 248 Ga. 322, 323 (2) (283 SE2d 262) (1981) (trial court erred in dismissing complaint as it did not show with certainty that appellant would not be entitled to relief under the doctrine of promissory estoppel; the complaint prayed for damages on account of appellant’s reliance on appellee’s promises).
Concurrence Opinion
concurring in judgment only.
I concur in judgment only because I do not agree with all that is said in the majority opinion. As a result, the majority’s opinion decides only the issues presented in the case sub judice and may not be cited as binding precedent. See Court of Appeals Rule 33 (a).