Wendy Jenkins v. McCalla Raymer, LLC , 492 F. App'x 968 ( 2012 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 11-14483
________________________
D. C. Docket No. 10-cv-03732-CAP
WENDY JENKINS and ELEANOR CRAWFORD,
Plaintiffs-Appellants,
versus
McCALLA RAYMER, LLC, et al.
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
_________________________
(October 25, 2012)
Before JORDAN, FAY, and EDENFIELD,* Circuit Judges.
PER CURIAM:
*
Honorable Judge B. Avant Edenfield United States District Judge for the Southern District
of Georgia, sitting by designation.
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Wendy Jenkins and Eleanor Spratlin Crawford appeal from the district court’s
order dismissing their second amended complaint for failure to state a claim. After
reviewing the record, reading the parties’ briefs, and having the benefit of oral
argument, we affirm.
I
The appellants are Georgia homeowners who brought this putative class action
against multiple defendants after foreclosure proceedings were initiated against their
respective properties. The appellants sought damages and asserted the following
claims against various defendants: (1) notary fraud; (2) wrongful foreclosure; (3)
aiding and abetting; (4) mail and wire fraud; (5) negligence; (6) conversion; (7)
violations of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601, et seq.; (8)
violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq.; (9)
illegal fee splitting and unauthorized practice of law; and (10) violations of the
Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962.
Several defendants moved to dismiss the claims asserted against them pursuant
to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.1 The motions
1
Specifically, the district court considered motions to dismiss from the following defendants:
McCalla Raymer LLC, Charles Course, Esq., and Thomas Sears, Esq.; Wells Fargo Bank, N.A. and
America’s Servicing Company; Iris Gisella Bey, Chiquita Raglin, Crystal Wilder, Elizabeth Lofaro,
Latasha Daniel, Debbie Foushee, and Korinna Miller; Prommis Solutions, LLC; Prommis Solutions
Holding, Inc; Great Hill Partners, Inc.; BAC Home Loans Servicing, LP and Bank of America; and
MERSCORP and Mortgage Electronic Registration Systems, Inc.
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to dismiss were referred to a magistrate judge who recommended that they be granted.
The appellants filed objections to the magistrate judge’s report and recommendations.
The district court overruled the objections, adopted the report and recommendations,
and dismissed the appellants’ claims.
The appellants assert two issues on appeal. The first issue, which was not
raised below, is whether the magistrate judge erred in failing to sua sponte recuse
himself from the case pursuant to 28 U.S.C. § 455(a) & (b)(1). The second issue
raised on appeal is whether the district court erred in dismissing the appellants’
wrongful foreclosure claim.2
II
“Ordinarily, we review a judge’s decision not to recuse him or herself for an
abuse of discretion. However, because [the appellants] failed to seek recusal of the
[magistrate judge] in the proceedings below, we review [the] recusal request for plain
error.” United States v. Berger, 375 F.3d 1223, 1227 (11th Cir. 2004) (internal
citations omitted).
In relevant part, § 455(a) requires “[a]ny justice, judge, or magistrate judge ...
[to] disqualify himself in any proceeding in which his impartiality might reasonably
2
To the extent that the appellants challenge the dismissal of their other claims, we affirm
based on the district court’s order.
3
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be questioned.” Under this provision, the test is whether an “objective, disinterested,
lay observer ... would entertain a significant doubt about the judge’s impartiality.”
McWhorter v. City of Birmingham, 906 F.2d 674, 678 (11th Cir. 1990) (quotations
omitted). In comparison, § 455(b) requires disqualification under specific
circumstances, including when a judge “has a personal bias or prejudice concerning
a party, or personal knowledge of disputed evidentiary facts concerning the
proceeding.” § 455(b)(1). Unlike subsection (a), which requires recusal when there
is an appearance of impartiality, subsection (b)(1) mandates recusal only where the
judge has an actual bias or prejudice against a litigant. See United States v. Amedeo,
487 F.3d 823, 828 (11th Cir. 2007).
The appellants contend that the magistrate judge was required to sua sponte
disqualify himself from the case pursuant to both §§ 455(a) and (b)(1) because of his
participation in two seminars on residential mortgage regulation. Specifically, the
appellants state that on two occasions—one prior to the filing of the complaint and
the other after the reports and recommendations were issued—the magistrate judge
spoke at the American Conference Institute’s forum on “Residential Mortgage
Litigation and Regulatory Enforcement” during segments entitled “View from the
Bench.” The purpose of the seminars, according to the appellants, was to prepare
residential mortgage lenders and servicers to defend against new types of claims and
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to learn about recent regulatory and legislative developments in the area of mortgage
foreclosure law. Without providing any information regarding the substance of the
magistrate judge’s comments or statements at the seminars, the appellants argue that
recusal was required because the magistrate judge was presumably “giving his
judicial perspective on claims like the instant case,” and therefore, “the dismissals
were fully a part of the Courts[’] bias.” Appellants’ Brief at 18–19.
Generally, the mere fact that a judge has spoken or written on a particular issue
or area of law does not require him to automatically recuse himself when that issue
arises in a case over which he is presiding. See, e.g., In re Sherwin-Williams Co., 607
F.3d 474, 478–79 (7th Cir. 2010) (judge not automatically required to recuse himself
because he wrote a law review article on a subject at issue in the litigation); United
States v. Pitera, 5 F.3d 624, 626–27 (2d Cir. 1993) (holding that judge who gave a
lecture to government agents and prosecutors, including advice on how to increase
the prospects of a conviction in narcotics cases, was not required to recuse herself
from narcotics prosecution). Where, however, a judge makes specific remarks that
indicate that he harbors a bias towards or against a litigant (or group of litigants) or
a particular legal claim or theory, recusal is required under § 455. See, e.g., Hathcock
v. Navistar Int’l Transp. Corp., 53 F.3d 36, 41 (4th Cir. 1995) (recusal necessary
where, among other things, “the judge’s blunt remarks at the auto torts
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seminar—while a jury trial on the issue of damages in this [auto products liability]
case was pending—reflect a predisposition against ... product liability defendants.”).
The essence of the appellants’ argument is that the magistrate judge’s
participation in two seminars geared towards mortgage lenders and servicers indicates
that the magistrate judge is in fact partial towards the defendants in this case, or at a
minimum brings his impartiality into question. As noted, the appellants do not
provide any information regarding the substance of the magistrate judge’s comments
or even the topics discussed during the portions of the seminars the magistrate judge
participated in. Nor do the appellants allege that any of the defendants attended or in
any way sponsored the seminar. Based on the appellants’ limited allegations, we
cannot conclude that an objective observer would entertain a significant doubt about
the magistrate judge’s impartiality and we are certainly unable to find that the
magistrate judge harbors an actual bias or prejudice towards any litigant in this case.
Accordingly, we hold that recusal was not required under either §§ 455(a) or
(b)(1). There was no error, much less plain error.
III
We review an order granting a motion to a dismiss for failure to state a claim
de novo. See Rosenberg v. Gould, 554 F.3d 962, 965 (11th Cir. 2009). “On a motion
to dismiss for failure to state a claim, we accept as true the facts as alleged in the
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complaint.” Corsello v. Lincare, Inc., 428 F.3d 1008, 1012 (11th Cir. 2005). In order
to survive a motion to dismiss, “[t]he ‘allegations must be enough to raise a right to
relief above the speculative level, on the assumption that all the allegations in the
complaint are true (even if doubtful in fact).’” Lanfear v. Home Depot, Inc., 679 F.3d
1267, 1275 (11th Cir. 2012) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
555 (2007)).
The appellants’ wrongful foreclosure claim was based on the contention that
certain non-judicial foreclosure proceedings were improperly commenced on the
appellants’ respective properties. Specifically, the appellants claimed that certain
defendants did not have the power to initiate the foreclosure proceedings because the
security deeds were not properly assigned to the foreclosing parties.
The magistrate judge recommended dismissing the wrongful foreclosure claims
on the ground that the appellants failed to allege that their properties had been sold
at foreclosure and under Georgia law a claim for wrongful foreclosure may only be
maintained where a property has already been foreclosed on. Over the appellants’
objections, the district court adopted the magistrate judge’s report and
recommendations and dismissed the wrongful foreclosure claim.
Georgia is a non-judicial foreclosure state, allowing a mortgagee or its assignee
to foreclose on a property without first initiating an action in court. See O.C.G.A. §
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44-14-160, et seq. Although there does not appear to be any Georgia case law directly
on point, other non-judicial foreclosure states hold that a homeowner cannot seek
damages in a wrongful foreclosure action unless there has been an actual foreclosure
sale. See, e.g., Ayers v. Aurora Loan Servs. LLC, 787 F. Supp. 2d 451, 454 (E.D. Tex.
2011) (applying Texas law); Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F. Supp.
2d 952, 961 (N.D. Cal. 2010) (applying California law); Krienke v. Chase Home Fin.,
LLC, 140 Wash. App. 1032, 2007 WL 2713737 at *4–5 (Wash. Ct. App. 2007)
(applying Washington law); Hardy v. Jim Walter Homes, Inc., No. 06-0687, 2007 WL
174391 at *6 (S.D. Ala. 2007) (applying Alabama law); Collins v. Union Fed. Sav.
& Loan Ass’n, 662 P.2d 610, 623 (Nev. 1983) (applying Nevada law). The appellants
fail to cite any authority indicating that the Georgia courts would rule any differently.3
In the absence of such authority, we conclude that Georgia law requires a plaintiff
seeking damages for wrongful foreclosure to establish that the property at issue was
actually sold at foreclosure. Because the appellants failed to allege their properties
3
The appellants cite Sears Mortg. Corp. v. Leeds Bldg. Prods., Inc., 464 S.E.2d 907, 909
(Ga. App. 1995), for the proposition that “it is not necessary that the foreclosure be completed to
bring an action for wrongful foreclosure.” However, the portion of the case cited by the appellants
was subsequently vacated after a partial reversal of the opinion by the Georgia Supreme Court. See
Sears Mortg. Corp. v. Leeds Bldg. Prods., Inc., 488 S.E.2d 131, 131 (Ga. App. 1997) (“Accordingly,
our decision is vacated with respect to Divisions 1 and 2, the judgment of the Supreme Court is made
the judgment of this Court with respect to Divisions 1 and 2, and the trial court’s judgment is
affirmed.”). As a result, we find this aspect of the cited case has no precedential value and does not
represent the current state of Georgia law.
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were foreclosed upon, they did not state a claim for wrongful foreclosure.
To be sure, there is case law to suggest that under Georgia law a plaintiff may
maintain a cause of action for wrongful foreclosure where the plaintiff is primarily
seeking an injunction to prevent the actual foreclosure sale from being completed (as
opposed to only seeking damages). See Morgan v. Ocwen Loan Servicing, LLC, 795
F. Supp. 2d 1370, 1377 (N.D. Ga. 2011) (citing cases). Here, although the appellants’
various complaints indicated that they were seeking injunctive relief, they made no
allegations that the defendants were still attempting to foreclose on the properties,
that a foreclosure sale was scheduled, or even what they sought to enjoin. Therefore,
this line of authority does not help the appellants.
Finally, to the extent that the appellants attempted to assert a cause of action
for attempted wrongful foreclosure, they also failed to state a cognizable claim under
Georgia law. In order to assert a claim for attempted wrongful foreclosure, a plaintiff
must allege “a knowing and intentional publication of untrue and derogatory
information concerning the debtor’s financial condition, and that damages were
sustained as a direct result of this publication.” Aetna Fin. Co. v. Culpepper, 320
S.E.2d 228, 232 (Ga. App. 1984). Because the appellants failed to allege that any of
the defendants knowingly published any false or derogatory information, any claim
for attempted wrongful foreclosure was also properly dismissed.
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IV
For the foregoing reasons, we affirm.
AFFIRMED.
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