Jason C. Harris v. Chase Home Finance, LLC , 524 F. App'x 590 ( 2013 )

Case: 12-10406 Date Filed: 07/31/2013 Page: 1 of 8
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-10406
Non-Argument Calendar
________________________
D.C. Docket No. 4:11-cv-00116-HLM
JASON C. HARRIS,
LAURA C. HARRIS,
Plaintiffs-Appellants,
versus
CHASE HOME FINANCE, LLC,
FEDERAL HOME LOAN MORTGAGE CORPORATION,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(July 31, 2013)
Before TJOFLAT, MARCUS and PRYOR, Circuit Judges.
PER CURIAM:
Jason and Laura Harris (“the Harrises”) appeal the district court’s dismissal
of their complaint against Chase Home Finance, LLC (succeeded by merger with
Case: 12-10406 Date Filed: 07/31/2013 Page: 2 of 8
JPMorgan Chase Bank, N.A., referred to as “Chase”) and the Federal Home Loan
Mortgage Corporation (“Freddie Mac”) for violating Georgia’s foreclosure laws.
On appeal, the Harrises argue that the district court erred in dismissing their
wrongful foreclosure claim because: (1) Chase, the mortgage company that
foreclosed on their property, did not have the authority to do so; and (2) the notice
of foreclosure was deficient under Georgia law. 1 After careful review, we affirm.
We review de novo a grant of a motion to dismiss under Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim, “accepting the factual
allegations in the complaint as true and construing them in the light most favorable
to the plaintiff.” Glover v. Liggett Grp., Inc., 459 F.3d 1304, 1308 (11th Cir.
2006). To survive dismissal, a complaint “must contain sufficient factual matter,
accepted as true, to state a claim for relief that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quotation omitted). Stating a claim for relief
“requires more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not” be enough to survive a Rule 12(b)(6)
motion to dismiss. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
The relevant background is this. In 2003, the Harrises refinanced their
property and executed a promissory note (“Note”) in favor of Chase Manhattan
1
Because the Harrises’s arguments on appeal concern only their wrongful foreclosure
claim, they have abandoned all other challenges concerning the claims raised in their initial and
amended complaints. See Denney v. City of Albany, 247 F.3d 1172, 1182 (11th Cir. 2001)
(finding that issues that are not briefed on appeal are abandoned).
2
Case: 12-10406 Date Filed: 07/31/2013 Page: 3 of 8
Mortgage Company (“Chase Manhattan”), a predecessor company of Chase, for
$166,000. The Harrises also executed a security deed (“Security Deed”) in favor
of Chase Manhattan, giving Chase Manhattan (and later Chase) the “power of sale”
in the event the Harrises defaulted on the loan. The Harrises defaulted, and in
December 2010, they received a Notice of Foreclosure from the law firm of
McCalla Raymer, LLC. The Notice said that Chase was the entity with the “full
authority to negotiate, amend, and modify all terms of the mortgage with the
debtor.” In January 2011, Chase exercised its “power of sale” under the Security
Deed, and after making the highest bid at auction, purchased the property. In
February 2011, Chase transferred the property to itself by Deed Under Power, and
on the same day, recorded a Special Warranty Deed transferring title of the
property from Chase to Freddie Mac.
Freddie Mac initiated dispossessory proceedings against the Harrises. The
Harrises sued seeking damages and to set aside the foreclosure. In their complaint,
the Harrises alleged on information and belief that Freddie Mac was the holder of
the Note at the time of foreclosure, and Chase was merely acting as its servicing
agent. The district court dismissed their complaint, and this timely appeal follows.
Georgia law permits non-judicial power of sale foreclosures “as a means of
enforcing a debtor’s obligation to repay a loan secured by real property.” You v.
JP Morgan Chase Bank, N.A., No. S13Q0040, 2013 WL 2152562, *2 (Ga. May
3
Case: 12-10406 Date Filed: 07/31/2013 Page: 4 of 8
20, 2013). Non-judicial foreclosures are governed primarily by contract law. Id.The statutory law governing non-judicial foreclosures is codified in O.C.G.A. § 44-
14-160 through § 44-14-162.4. Id. The statute defines debtor as “the grantor of
the mortgage, security deed, or other lien contract.” O.C.G.A. § 44-14-162.1. The
statute refers to the other party to the foreclosure as the “secured creditor,” but
does not define that term. You, 2013 WL 2152562 at *3; see generally O.C.G.A.
§§ 44-14-160-162.4. The statutory requirements “consist primarily of rules
governing the manner and content of notice that must be given to a debtor in
default prior to the conduct of a foreclosure sale.” You, 2013 WL 2152562 at *2.
Pursuant to the statute, the following notice requirements must be given to
the debtor prior to a foreclosure sale:
[n]otice of the initiation of proceedings to exercise a power of sale in a
mortgage, security deed, or other lien contract shall be given to the debtor by
the secured creditor no later than 30 days before the date of the proposed
foreclosure. Such notice shall be in writing, shall include 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, and shall be sent by registered or certified mail or statutory overnight
delivery, return receipt requested, to the property address or to such other
address as the debtor may designate by written notice to the secured creditor.
O.C.G.A. § 44-14-162.2(a). Moreover, any real estate sale “under powers
contained in mortgages, deeds, or other lien contracts [will not be] valid unless the
sale [is] advertised and conducted at the time and place and in the usual manner of
the sheriff’s sales in the county in which such real estate . . . is located.” Id. § 44-
4
Case: 12-10406 Date Filed: 07/31/2013 Page: 5 of 8
14-162(a). Within 90 days of the foreclosure sale, all deeds under power must be
recorded by the holder of a deed to secure debt or a mortgage with the superior
court clerk of the county where the property is located. O.C.G.A. § 44-14-160.
In order to prevail on a wrongful foreclosure claim in Georgia, the plaintiff
must establish that the defendant violated Georgia’s foreclosure statutes. McCarter
v. Banker’s Trust Co., 543 S.E.2d 755, 758 (Ga. Ct. App. 2000). The plaintiff
must also “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 injury it
sustained, and damages.” Gregorakos v. Wells Fargo Nat’l Ass’n, 647 S.E.2d 289,
292 (Ga. Ct. App. 2007) (quotation omitted). “A claim for wrongful exercise of a
power of sale under O.C.G.A. § 23-2-114 can arise when a creditor has no legal
right to foreclose.” DeGoyler v. Green Tree Servicing, LLC, 662 S.E.2d 141, 147
(Ga. Ct. App. 2008) (quotation omitted). The statute provides that “[p]owers of
sale in deeds of trust, mortgages, and other instruments shall be strictly construed
and shall be fairly exercised.” O.C.G.A. § 23-2-114.
In light of the limited statutory law governing non-judicial foreclosures, the
Northern District of Georgia recently certified several questions to the Supreme
Court of Georgia regarding the operation of Georgia’s law governing non-judicial
foreclosures. You, 2013 WL 2152562 at *1-2. In answering one question, the
Georgia Supreme Court concluded that “the holder of a deed to secure debt is
5
Case: 12-10406 Date Filed: 07/31/2013 Page: 6 of 8
authorized to exercise the power of sale in accordance with the terms of the deed
even if it does not also hold the note or otherwise have any beneficial interest in
the debt obligation underlying the deed.” Id. at *6. In answering another, the
Georgia Supreme Court said that:
If that [individual with the authority to negotiate, amend, and modify the
terms of the mortgage] is the holder of the security deed, then the deed
holder must be identified in the notice; if that individual [with the authority]
is the note holder, then the note holder must be identified. If that individual .
. . is someone other than the deed holder or the note holder, such as an
attorney or servicing agent, then that person . . . must be identified.
Id.
Based on this case law, we are unconvinced by the Harrises’ claim that the
district court ignored their well-pled allegations and erred in concluding that Chase
had the authority to foreclose on the Property since, the Harrises argue, Freddie
Mac, and not Chase, was the actual Note holder and secured creditor at the time of
the sale. As the record shows, the district court considered and rejected this
argument. Moreover, we recognize that the record is unclear as to whether Chase
or Freddie Mac held the Note at that time. Nevertheless, it is not necessary to
definitively determine this issue in light of the Georgia Supreme Court’s decision
in You, which holds that Chase did not need to hold both the Note and Security
Deed at the time of the foreclosure sale in order to initiate the foreclosure
proceedings. This is because the record is clear that Chase held the Security Deed
6
Case: 12-10406 Date Filed: 07/31/2013 Page: 7 of 8
at the time of foreclosure, and thus, under You, had the authority to foreclose in
accordance with the deed’s power of sale. Id. at *6.
As for the Harrises’s argument that Chase wrongfully foreclosed on the
property because it did not provide proper notice under O.C.G.A. § 44-14-162.2(a),
we are also unpersauded. The Notice of Foreclosure sent by McCalla Raymer,
LLC, on behalf of Chase, satisfied the statute on its face because it was in writing;
identified Chase as the entity with full authority to amend, negotiate, and modify
the terms of the loan; and provided Chase’s address and telephone number. See
O.C.G.A. § 44-14-162.2(a). The Harrises argue that the Notice was nevertheless
insufficient because it said that Chase had full authority to negotiate, amend, and
modify the terms of their loan, when in fact Freddie Mac, as the holder of the
promissory note, was the entity with such authority. Under You, however, the fact
that Freddie Mac may have been the Note holder and secured creditor does not
mean that Chase did not have the full authority to amend, negotiate, and modify
the terms of the loan. Indeed, the secured creditor did not need to be identified in
the Notice of Foreclosure. The only entity that had to be identified in the Notice
was the one with the full authority to negotiate, amend, or modify the terms of the
loan, and that could be the deed holder, note holder, attorney, or servicing agent.
7
Case: 12-10406 Date Filed: 07/31/2013 Page: 8 of 8
You, 2013 WL 2152562, *6. Therefore, the district court properly concluded that
the notice was sufficient under O.C.G.A. § 44-14-162.2(a). 2
AFFIRMED.
2
Accordingly, Appellants’ motion for reinstatement of oral argument is DENIED.
8