USCA11 Case: 21-10537 Date Filed: 12/15/2021 Page: 1 of 15
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-10537
Non-Argument Calendar
____________________
FIRST IC BANK,
Plaintiff-Appellant,
versus
NORTH AMERICAN TITLE INSURANCE COMPANY,
Defendant-Appellee,
INVESTORS TITLE INSURANCE COMPANY,
Defendant.
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2 Opinion of the Court 21-10537
____________________
Appeal from the United States District Court
for the Northern District of Georgia
D.C. Docket No. 1:19-cv-05055-SDG
____________________
Before BRANCH, LUCK, and LAGOA, Circuit Judges.
PER CURIAM:
First IC Bank appeals the district court’s order granting
North American Title Insurance Company’s motion to dismiss
First IC Bank’s complaint, alleging breach of contract and
conversion, for failure to state a claim upon which relief can be
granted. First IC Bank argues that the district court erred by
holding that it was bound to the decisions of its closing attorney to
obtain a new closing protection letter from a different insurer and
by holding that an action for conversion could not lie. After
review, we affirm the district court’s ruling.
I. Background
On March 15, 2019, Ying Duan executed an agreement with
Israel and Jill Malowany to purchase real property located in Johns
Creek, Georgia. 1 The parties selected Dickason Law Group
1
The following facts from the plaintiff’s amended complaint and exhibits are
taken as true for the purposes of this appeal. See McGroarty v. Swearingen,
977 F.3d 1302, 1306 (11th Cir. 2020).
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21-10537 Opinion of the Court 3
(collectively, Dickason) as the closing attorney. To finance the
purchase of the property, Duan executed a loan agreement with
Plaintiff First IC Bank. The loan agreement provided that a
portion of the loan would be used to satisfy an existing security
interest on the property held by J.P Morgan Chase Bank (Chase),
thereby giving First IC Bank a first-priority interest in the property
after closing.
On March 25, 2019, Dickason, as an issuing agent of North
American Title Insurance Company (North American), issued a
closing protection letter (CPL) and a Commitment Letter for Title
Insurance to First IC Bank.2 The CPL described North American’s
offer to indemnify First IC Bank for “losses due to either (1) the
failure of the Issuing Agent to follow the lender’s closing
instructions or (2) dishonesty of the Issuing Agent in connection
with the closing,” “subject to the [c]onditions and [e]xclusions”
2
Under Georgia law, a closing protection letter is “insurance that indemnifies
a buyer, lender, or seller in transactions where title to real estate is being
conveyed solely against losses not to exceed the amount of the settlement
funds only because of the following acts of the person responsible for the
disbursement of settlement funds: (A) Acts of fraud, theft, dishonesty, or
negligence in handling settlement funds or documents in connection with a
closing, but only to the extent that the acts affect status or priority of title in
the real estate insured by the title insurance; and (B) Failure to comply with
written closing instructions by a proposed insured when agreed to by the title
agency or title agent relating to title insurance coverage, but only to the extent
that the acts affect status or priority of title in real estate insured by the title
insurance.” O.C.G.A. § 33-7-8.1. See also The Law of Closing Protection
Letters, 36 TORT & INS. L.J. 845 (2001).
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4 Opinion of the Court 21-10537
listed in the letter, and provided that “the Company [North
American] issues or is contractually obligated to issue title
insurance for your [First IC Bank’s] protection in connection with
the closing of the Real Estate Transaction.”
Thereafter, on April 15, 2019, North American terminated
Dickason as an issuing agent for its CPL’s and title insurance
policies. Three days later, Dickason arranged to obtain a CPL and
title insurance policy from a different insurance company,
Investors Title Insurance Company (Investors). According to First
IC Bank, Dickason did not inform it of the change in title insurance
companies or send First IC Bank a copy of the Investors CPL. The
Investors CPL specified that First IC Bank’s “transmittal of Funds
or documents to the Issuing Agent or Approved Attorney for the
Real Estate Transaction constitutes Your acceptance of this letter”
and that “[t]his letter supersedes and cancels any previous letter or
similar agreement for closing protection that applies to the Real
Estate Transaction.”
On April 19, 2019, First IC Bank sent Dickason instructions
to perform the closing for Duan’s purchase of the Malowany’s
property and wired Dickason $826,724.58 to fund the purchase.
The instructions listed an “estimate of fees and costs” that included
an entry for payment for title insurance and CPL fees to North
American.
After the closing, Dickason sent First IC Bank a settlement
statement which stated that Dickason had paid Investors, rather
than North American, for the CPL and for the title insurance policy.
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Notwithstanding the information in the post-closing statement,
First IC Bank alleged that it did not learn of Investors involvement until
May 24, 2019, when Duan notified First IC Bank that Chase’s security
interest had not been satisfied and Chase had demanded that the
Malowanys make further mortgage payments or Chase would
foreclose on the property. Additionally, First IC Bank alleged it did
not learn of Dickason’s termination as an issuing agent for North
American until May 29, 2019, when First IC Bank received a letter
from North American, backdated April 19, 2019, saying Dickason’s
issuing agency authority was terminated effective April 15.
According to First IC Bank’s pleadings, Dickason did not use
the funds First IC Bank wired to him to satisfy Chase’s security
interest as directed, but instead misappropriated them. The
Malowanys made three mortgage payments to Chase before First
IC Bank, on September 17, 2019, paid Chase $643,363.23 to satisfy
the loan. First IC Bank demanded Investors indemnify it for its
losses under the Investors CPL, but Investors refused to do so.
In September 2019, First IC Bank sued North American in
the State Court of Gwinnett County, Georgia. North American
removed the suit to the U.S. District Court for the Northern
District of Georgia. In June 2020, the district court granted First IC
Bank’s motion for leave to file an amended complaint.
First IC Bank’s amended complaint added Investors as a
named defendant, pleading in the alternative and asserting six
claims for relief: three against North American (breach of contract,
conversion by its agent, and attorney’s fees and expenses under
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O.C.G.A. § 13-6-11) and three against Investors (breach of contract,
conversion by its agent, and attorney’s fees and expenses under
O.C.G.A. § 13-6-11).
In the amended complaint, First IC Bank alleged that North
American was liable in contract because the CPL North American
issued to First IC Bank on March 25 was still enforceable. In that
CPL, North American expressly agreed to indemnify the plaintiff
for its losses if Dickason failed to follow First IC Bank’s closing
instructions or for theft or fraud by Dickason in connection with
the closing.
First IC Bank alleged North American was liable for
Dickason’s actions because North American’s revocation of
Dickason’s status as its issuing agent did not become effective until
First IC Bank received notice of it in May.
With regard to its claims against Investors, First IC Bank
alleged that Dickason was an issuing agent of Investors when it
issued the CPL and title insurance policy in April. Because “the
only consideration required by” Investors was “acceptance of the
CPL by Plaintiff, not reliance on the CPL,” and because “First IC
Bank accept[ed] the CPL” or would have if it had been notified by
Dickason, IC Bank alleged that the Investors CPL was enforceable
against Investors and that Investors was liable for its breach and its
agent’s conversion.
In July 2020, North American moved to dismiss First IC
Bank’s amended complaint and the district court granted the
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21-10537 Opinion of the Court 7
motion in January 2021. In its order dismissing the amended
complaint, the district court held that First IC Bank’s pleaded facts
confirmed that there was no valid and enforceable contract with
North American. Rather, First IC Bank acknowledged in its
pleading that Dickason, acting as an agent of First IC Bank,
“obtained a subsequent CPL and title policy from Investors prior
to closing,” which the bank accepted when it wired closing funds
to Dickason. And by the express terms of the Investors CPL, the
North American CPL was superseded by the Investors CPL when
First IC Bank accepted it.
First IC Bank did not dispute the chronology of events but
alleged that it should not be bound by Dickason’s action obtaining
a new CPL from Investors because it had no knowledge until well
after the closing that Dickason had been terminated as an issuing
agent by North American or that Dickason had obtained a new title
and CPL policy with Investors. The district court rejected First IC
Bank’s argument. Specifically, the district court noted that First IC
Bank’s own allegations confirmed that Dickason was acting as its
agent, and under Georgia law an agent’s actions are binding on the
principal. And even if Dickason did not inform the bank of the
change, First IC Bank was charged with constructive knowledge
because, as an agent, Dickason’s knowledge was imputed to
principal First IC Bank. The court also rejected First IC Bank’s
claim for conversion because the money it was seeking to recover
for the amounts it paid to satisfy the Chase loan was not a “specific,
separate, identifiable fund.” Thus, the district court dismissed IC
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Bank’s claims against North American with prejudice and ordered
IC Bank to show cause why its claims against Investors should not
be dismissed for failure to timely effectuate service. Thereafter,
First IC Bank voluntarily dismissed without prejudice its claims
against Investors. This appeal followed.
II. Discussion
First IC Bank argues that the case should have been allowed
to proceed to discovery because the bank set out a viable claim for
breach of contract and conversion and the trial court erred in ruling
Dickason was the bank’s agent as a matter of law.
“We review de novo the district court’s grant of a motion to
dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6),
accepting the allegations in the complaint as true and construing
them in the light most favorable to the plaintiff.” Ga. State Conf. of
the NAACP v. City of LaGrange,
940 F.3d 627, 631 (11th Cir. 2019)
(citations omitted). “To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to state a
claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
556
U.S. 662, 678 (2009) (citations omitted). As explained in Ashcroft,
“[a] claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Id. We may
“affirm the district court’s dismissal on any ground that is
supported by the record.” Michel v. NYP Holdings, Inc.,
816 F.3d
686, 694 (11th Cir. 2016) (quotation omitted).
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21-10537 Opinion of the Court 9
A. Breach of Contract Claim
“Under OCGA § 13–3–1, the plaintiff in a breach of contract
action has the burden of pleading and proving the existence of a
valid contract by showing that there are parties able to contract, a
consideration moving to the contract, the assent of the parties to
the terms of the contract, and a subject matter upon which the
contract can operate.” Eastview Healthcare, LLC v. Synertx, Inc.,
674 S.E.2d 641, 646 (Ga. App. 2009). Therefore, First IC Bank must
properly allege that an enforceable contract existed with North
American to survive a motion to dismiss.
An offer to contract is “‘the manifestation of willingness to
enter into a bargain, so made as to justify another person in
understanding that his assent to that bargain is invited and will
conclude it.’” Rakusin v. Radiology Assocs. of Atl., P.C.,
699 S.E.2d
384, 388 (Ga. App. 2010) (citing Restatement (Second) of Contracts
§ 24 (1981)). Consideration is “essential to a contract,” involves “a
performance or a return promise” that is “bargained for by the
parties to a contract” and, under Georgia law, a “valuable
consideration is founded on money or something convertible into
money or having value in money.” O.C.G.A. §§ 13-3-40 to 13-3-42.
Mutual acceptance is required under Georgia law, and, in
determining whether there was acceptance,
courts apply an objective theory of intent whereby
one party’s intention is deemed to be that meaning a
reasonable man in the position of the other
contracting party would ascribe to the first party’s
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10 Opinion of the Court 21-10537
manifestations of assent, or that meaning which the
other contracting party knew the first party ascribed
to his manifestations of assent. Further . . . the
circumstances surrounding the making of the
contract, such as correspondence and discussions, are
relevant in deciding if there was a mutual assent to an
agreement.
Bedsole v. Action Outdoor Advert. JV, LLC,
750 S.E.2d 445, 450
(Ga. App. 2013) (quotation omitted).
Under Georgia agency law, an “agent’s authority shall be
construed to include all necessary and usual means for effectually
executing it.” O.C.G.A. § 10-6-50. “The principal shall be bound
by all representations made by his agent in the business of his
agency and also by his willful concealment of material facts,
although they are unknown to the principal and known only by the
agent.” Id. § 10-6-56. “Notice to the agent of any matter connected
with his agency shall be notice to the principal.” Id. § 10-6-58.
While the district court held that the North American CPL
was superseded by a provision in the Investors CPL, we do not
need to confront this issue to affirm. Instead, we hold that First IC
Bank did not plead that it ever validly accepted North American’s
CPL offer, and therefore did not allege a viable claim for breach of
contract against North American.
First IC Bank pleaded that, on March 25, 2019, Dickason
issued North American’s CPL to First IC Bank. As First IC Bank
concedes in its brief, the CPL was not a contract, but rather an offer
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21-10537 Opinion of the Court 11
to contract. This court agrees. While the closing protection letter
did not explicitly say it was an offer, the letter indicated a
willingness to contract and indemnify First IC Bank according to
the conditions, exceptions, and preconditions listed. 3 The Title
Insurance Commitment Letter issued in conjunction with the CPL
explicitly stated it was an “offer to issue . . . title insurance.”
First IC Bank argues that it accepted the North American
CPL offer when they sent the funds to Dickason on April 19 to
initiate the closing, without actual knowledge that he was no
longer an authorized issuing agent of North American. However,
regardless of Dickason’s status as an issuing agent for North
American, as admitted by First IC Bank, Dickason was at all
relevant times the bank’s closing attorney and agent. Under
Georgia law, Dickason’s knowledge is imputed to the principal
First IC Bank. See O.C.G.A. § 10-6-58; see also Vazemiller v.
Sanders,
861 S.E.2d 626, 791 (Ga. App. 2021) (quotation omitted)
(“notice to an attorney is notice to the client employing him, and
that knowledge of an attorney is knowledge of his client, when
such notice and knowledge come to the attorney in and about the
subject matter of his employment.”). Therefore, at the time that
3Additionally, a contract requires consideration and acceptance, neither of
which appears to have occurred at the time in which the contract was
delivered. See also The Law of Closing Protection Letters, 36 TORT & INS.
L.J. 845, 853 (2001) (“Regardless of whether a lender accepts a closing
protection letter, the letter creates no obligation on the part of the title insurer
unless and until the lender orders title insurance from the company and
delivers closing funds and documents to the settlement agent.”).
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First IC Bank sent the closing funds to Dickason, First IC Bank was
charged with constructive knowledge that he was no longer an
issuing agent of North American and that he had procured title
insurance and a CPL with a different company.4
Taken as true, the pleadings do not indicate an objective
intent by First IC Bank to accept the North American CPL because
at the time First IC Bank wired the money at closing, First IC Bank
knew (1) that Dickason was no longer North American’s issuing
agent and (2) that Investors, through First IC Bank’s issuing agent
Dickason, had issued First IC Bank a subsequent, valid CPL. Under
Georgia law, acceptance is an objective standard “whereby” First
IC Bank’s “intention is deemed to be that meaning a reasonable
man in the position of the other contracting party,” North
American, “would ascribe to” First IC Bank. Bedsole, 750 S.E.2d at
450. Here, First IC Bank was sending money to Dickason knowing
that Dickason had lost his status as an issuing agent of North
American and knowing that Dickason had another valid CPL
pending that was to be accepted in the same manner. Additionally,
4
IC Bank cites Hodgson v. Hart,
142 S.E. 267, 269 (1928) and Downs v.
McNeil,
520 F.3d 1311, 1320 (11th Cir. 2008), to argue for the first time on
appeal that because Dickason was engaged in fraud or otherwise acted against
the interest of IC Bank, the notice from North American that he was no longer
its agent could not be imputed to IC Bank, the principal. However, because
IC Bank did not raise this argument in the district court, and because none of
the recognized exceptions that allow a circuit court to entertain an argument
raised for the first time on appeal apply, we do not consider it. See Access
Now, Inc. v. Sw. Airlines Co.,
385 F.3d 1324, 1332 (11th Cir. 2004).
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21-10537 Opinion of the Court 13
the settlement statement says that Investors was paid, and not
North American, also indicating that there was no acceptance of
North American’s offer. Taken together, no reasonable person
would believe that First IC Bank’s intention was to accept the
North American offer.
B. Claims for Conversion and Promissory Estoppel
Once agency has been established, any person outside the
agency relationship who has dealt with that agent is entitled to
“presume that such authority will continue until it is shown to have
been terminated” and that a third party can assume the former
principal will give notice if agency is terminated. Burch v.
Americus Grocery Co.,
53 S.E. 1008, 1009 (Ga. 1906) (quotations
omitted). “It is a general rule of law, therefore, upon which there
seems to be no conflict of authorities, that all acts of a general agent
within the scope of his authority, as respects third persons, will be
binding on the principal, even though done after revocation.”
Id.
First IC Bank alleges North American is liable for conversion
because Dickason did not use First IC Bank’s settlement funds as
directed to pay off the Chase lien. First IC Bank also alleges that
North American is estopped from alleging that Dickason was no
longer its issuing agent on April 19 because First IC Bank did not
have actual notice that he was no longer North American’s agent.
While Dickason was not acting as North American’s issuing
agent at the time IC Bank sent him the closing funds, the
knowledge that he was not acting as an issuing agent for North
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14 Opinion of the Court 21-10537
American was imputed to First IC Bank on April 15, when
Dickason received that notice. His issuing agency with North
American terminated on April 15 and the closing funds were sent
and directed to Investors on April 19. Therefore, North American
cannot be liable as a principal because Dickason was not its agent,
even if there was a viable action for conversion.5
First IC Bank argues for the first time on appeal that “the
amended complaint establishes a claim for promissory estoppel.”
The bank did not make a motion below to submit a third amended
complaint which included this claim. Because this claim was not
raised in the district court, we will not consider it for the first time
on appeal. 6 See Access Now, Inc. v. Sw. Airlines Co.,
385 F.3d 1324,
1332 (11th Cir. 2004).
5
Generally, in Georgia an action for conversion will not lie for recovery of
money, unless “such money . . . comprise[s] a specific, separate, identifiable
fund to support an action for conversion.” See Taylor v. Powertel, Inc.,
551
S.E.2d 765, 769 (Ga. App. 2001). Although money transferred via wire and
other electronic means has been held to constitute “specific and identifiable
funds” for purposes of a conversion action, First IC Bank is not seeking to
recover all the closing funds it wired to Dickason. Instead, it is seeking to
recover other sums it had to subsequently pay due to North American’s
breach of contract. Therefore, First IC Bank failed to state a claim for
conversion. But even assuming arguendo that First IC Bank’s allegations
could sustain a claim for conversion, its claim fails on the merits for the reasons
stated in this opinion.
6
Because we affirm the dismissal of this cause of action for failure to state a
claim upon which relief could be granted, we do not reach First IC Bank’s
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21-10537 Opinion of the Court 15
AFFIRMED.
request for leave to amend its complaint a third time on remand to add a claim
for promissory estoppel.
