USCA11 Case: 21-13847 Date Filed: 07/01/2022 Page: 1 of 16
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-13847
Non-Argument Calendar
____________________
RICHARD DURHAM,
Plaintiff-Appellant,
versus
AERIAL FUNDING, LLC,
Defendant-Appellee.
____________________
Appeal from the United States District Court
for the Northern District of Georgia
D.C. Docket No. 1:20-cv-04035-TCB
____________________
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2 Opinion of the Court 21-13847
Before JILL PRYOR, BRANCH, and LAGOA, Circuit Judges.
PER CURIAM:
Richard Durham appeals from the district court’s dismissal
of his complaint against Aerial Funding, LLC (“Aerial Funding”).
After Aerial Funding foreclosed on Durham’s property, Durham
asserted various claims against Aerial Funding in connection with
the foreclosure. The district court dismissed Durham’s amended
complaint for failure to state a claim under Federal Rule of Civil
Procedure 12(b)(6). After careful review, we affirm the district
court’s order.
I. BACKGROUND
A. Alleged Facts
In 2006, Durham financed the purchase of his home in Hall
County, Georgia, through a mortgage loan from IndyMac Bank,
F.S.B. (“IndyMac”). 1 The mortgage loan was secured by a first-po-
sition security deed on Durham’s home.
1 This is an appeal from an order dismissing Durham’s amended complaint
under Federal Rule of Civil Procedure 12(b)(6). We therefore accept the com-
plaint’s factual allegations “as true and constru[e] them in the light most favor-
able to” Durham. Hunt v. Aimco Props., L.P.,
814 F.3d 1213, 1221 (11th Cir.
2016). But we do not accept as true allegations that contradict an exhibit to
the amended complaint. See Griffin Indus., Inc. v. Irvin,
496 F.3d 1189, 1206
(11th Cir. 2007) (“[W]hen the exhibits contradict the general and conclusory
allegations of the pleading, the exhibits govern.”).
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21-13847 Opinion of the Court 3
In 2007, Durham executed a home equity line-of-credit
agreement (the “HELOC”) with IndyMac. Under the HELOC, In-
dyMac extended a line of credit to Durham “in the amount of
$108,500.00 due and payable in full on March 15, 2027,” which was
secured by a second-position security deed on Durham’s home (the
“Junior Security Deed”). The Junior Security Deed included a
“power of sale” if Durham defaulted on the HELOC.
In 2008, IndyMac “failed . . . and was taken over by” the Fed-
eral Deposit Insurance Corporation (“FDIC”). “IndyMac was later
reconstituted as a division of OneWest Bank.” OneWest Bank
thereby became the loan servicer for Durham’s mortgage loan and
for his HELOC.
In 2012, Durham was unable to make the payments he owed
for his mortgage loan and HELOC. Representatives of OneWest
Bank suggested that he seek a modification of his mortgage loan
and of his HELOC, and they told Durham that he could modify
both loans by including both loan numbers on a “Borrower Re-
sponse Package.” Based on this advice, Durham completed the
Borrower Response Package, listing the mortgage loan number on
the line, “Loan I.D. Number,” and listing the information for the
HELOC under, “Additional Liens/Mortgages or Judgments on this
Property.”
In 2013, Durham signed and transmitted to OneWest Bank
a loan modification agreement (the “Modification Agreement”).
According to Durham, around this time he owed $350,060 for his
mortgage loan, and the Modification Agreement included an
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4 Opinion of the Court 21-13847
additional $51,567.60, which “represented good and valuable con-
sideration [for] the extinguishment of the HELOC.” “On infor-
mation and belief,” Durham alleged that OneWest Bank later “ex-
tinguished[] and marked the HELOC as being canceled and/or sat-
isfied,” even though the Junior Security Deed was never canceled.
But the Modification Agreement, itself, did not reference the
HELOC. By its plain language, the Modification Agreement only
“amend[ed] and supplement[ed] . . . the Mortgage, Deed of Trust,
or Security Deed (the ‘Security Instrument’), and Timely Payment
Rewards Rider, if any, dated 1/24/2006 and recorded on 2/9/2006
. . . and the Note, bearing the same date as, and secured by, the
Security Instrument . . . .” The Modification Agreement also stated
that the amount Durham owed for his mortgage loan was
“$401,717.60 consisting of the unpaid amount(s) loaned to
[Durham] by [the] [l]ender plus any interest and other amounts
capitalized.” And only “the following terms and provisions [were]
forever canceled, null and void” under the Modification Agree-
ment:
(a) all terms and provisions of the Note and Security
Instrument (if any) providing for, implementing, or
relating to, any change or adjustment in the rate of
interest payable under the Note, including, where ap-
plicable, the Timely Payment Rewards rate reduction
. . . . By executing this Agreement, Borrower waives
any Timely Payment Rewards rate reduction to
which Borrower may have otherwise been entitled;
and
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21-13847 Opinion of the Court 5
(b) all terms and provisions of any adjustable rate
rider, or Timely Payment Rewards Rider, where ap-
plicable, or other instrument or document that is af-
fixed to, wholly or partially incorporated into, or is
part of, the Note or Security Instrument and that con-
tains any such terms and provisions as those referred
to in (a) above.
After he executed the Modification Agreement, Durham
stopped making payments in connection with the HELOC, but he
made payments in connection with the Modification Agreement.
According to Durham, around that time he also stopped receiving
“statements, bills, loan coupons, or any other document[s] regard-
ing the HELOC,” and, for more than eight years, “[n]o collection
efforts were made regarding the HELOC.”
In 2014, the FDIC assigned the Junior Security Deed to an-
other bank, which was identified as the trustee for “the IndyMac
Residential Asset-Backed Trust.” According to Durham, no value
was given in consideration for the assignment, and the FDIC lacked
the power to transfer rights in the HELOC.
In 2020, following additional assignments of the Junior Se-
curity Deed and of the “Secure Debt,” the Junior Security Deed was
assigned to Aerial Funding. Soon after, Aerial Funding sought to
foreclose on Durham’s property. But, according to Durham, the
assignments in Aerial Funding’s “chain of assignments” were inva-
lid under Georgia’s Uniform Commercial Code.
B. Procedural Background
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6 Opinion of the Court 21-13847
In his initial complaint filed in Georgia state court, Durham
sought a temporary restraining order barring Aerial Funding from
taking further foreclosure-related actions, among other relief. Aer-
ial Funding removed Durham’s suit to the federal district court
based on diversity jurisdiction. And Durham moved for a tempo-
rary restraining order in the district court.
The district court denied Durham’s motion, and Aerial
Funding foreclosed on Durham’s property in October 2020.
Durham then filed an amended complaint and attached the Modi-
fication Agreement as an exhibit.
In his amended complaint, Durham asserted claims for:
(1) wrongful foreclosure; (2) breach of contract; (3) declaratory
judgment; (4) conventional quia timet; (5) bad-faith litigation ex-
penses; (6) prejudgment interest; and (7) nominal damages. As to
his claim for wrongful disclosure, Durham alleged that Aerial
Funding “cannot provide proof of an unbroken chain of written se-
curity agreements putting it in contractual privity with the original
contracting party” or its successors and that “[w]ithout a proper
‘transfer and assignment of’ the HELOC, Aerial was not author-
ized” to foreclose on his property. As to his claim for breach of
contract, Durham asserted that Aerial Funding was bound by the
Modification Agreement, which constituted a “‘quasi new agree-
ment[,]’ by dint of the parties’ mutual deviation from [the
HELOC’s] written terms and of their subsequent acceptance of
payments,” which, Durham claimed, extinguished the HELOC.
Durham incorporated by reference, and relied on, his allegations
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21-13847 Opinion of the Court 7
concerning wrongful foreclosure and breach of contract to support
his other claims.
Aerial Funding moved to dismiss Durham’s amended com-
plaint under Rule 12(b)(6) for failure to state a claim. Then, on June
8, 2021, the district court granted Aerial Funding’s motion.
As to Durham’s wrongful foreclosure claim, the district
court held that Durham lacked standing to challenge the validity of
the assignment to Aerial Funding and that Georgia’s Uniform
Commercial Code did not apply to the assignment of the Junior
Security Deed. As to Durham’s claim that Aerial Funding breached
the Modification Agreement, the district court found that
Durham’s allegations were dependent on oral representations and,
under Georgia’s statute of frauds, the alleged modifications had to
be in writing. As to Durham’s remaining claims, the district court
held that because Durham failed to plausibly allege his wrongful
foreclosure and breach of contract claims, he failed to plausibly al-
lege that Aerial Funding lacked the ability to foreclose, or that Aer-
ial Funding wrongfully foreclosed, on his property.
Durham moved for reconsideration of the district court’s or-
der and argued that, in dismissing his wrongful foreclosure claim,
the district court misapplied Georgia’s Uniform Commercial Code.
The district court found that Durham was “simply repackaging his
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8 Opinion of the Court 21-13847
prior arguments” and denied Durham’s motion. This appeal fol-
lowed. 2
II. STANDARD OF REVIEW
We review de novo an order dismissing a complaint under
Rule 12(b)(6), accepting all well-pleaded allegations as true and
construing the allegations in the light most favorable to the plain-
tiff. Davidson v. Cap. One Bank (USA), N.A.,
797 F.3d 1309, 1312
(11th Cir. 2015). “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) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544,
570 (2007)). “A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable infer-
ence that the defendant is liable for the misconduct alleged.”
Id.
III. ANALYSIS
On appeal, Durham asserts that the district court erred be-
cause he plausibly alleged that: (1) the assignment of the HELOC
to Aerial Funding was invalid; and (2) Aerial Funding was bound
by the Modification Agreement, which, together with the oral
2 Durham appealed both the dismissal order and the order denying his motion
for reconsideration. But on appeal Durham has made no arguments related
to the order denying his motion for reconsideration. And as the district court
correctly noted, Durham’s motion for reconsideration reasserted the same ar-
guments he made in connection with his wrongful foreclosure claim. We
therefore do not separately address the district court’s order denying
Durham’s motion for reconsideration.
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21-13847 Opinion of the Court 9
representations and post-execution conduct surrounding that
agreement, formed a quasi-new agreement that either merged or
suspended the HELOC. While Durham does not tailor these argu-
ments to the specific claims he asserted against Aerial Funding, it is
clear, based on his amended complaint, that his argument concern-
ing the validity of the assignment to Aerial Funding corresponds to
his wrongful foreclosure claim and that his argument concerning a
quasi-new agreement corresponds to his breach of contract claim.3
We consider Durham’s arguments in turn.
A. Wrongful Foreclosure Due to Invalid Assignment
Durham asserts that Aerial Funding lacked the authority to
foreclose on his property because the assignment and transfer of
the HELOC, and therefore the assignment of the Junior Security
Deed, were invalid. In so doing, Durham argues that the district
court erred in finding that he lacked standing to challenge the va-
lidity of the assignment to Aerial Funding and that the district court
applied the wrong section of Georgia’s Uniform Commercial Code
to his claim.
3 Durham does argue that if the district court erred in dismissing his wrongful
foreclosure and breach of contract claims, the district court also erred in dis-
missing his other claims. Because we conclude that the district court did not
err in dismissing Durham’s claims for wrongful foreclosure or breach of con-
tract, and Durham concedes that his other claims are dependent on his wrong-
ful foreclosure or breach of contract claims, the district court did not err in
dismissing Durham’s other claims.
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10 Opinion of the Court 21-13847
We begin with the threshold issue of standing, which is dis-
positive here. See Baloco ex rel. Tapia v. Drummond Co.,
640 F.3d
1338, 1342 (11th Cir. 2011); Rondowsky v. Beard,
835 S.E.2d 28, 33
(Ga. Ct. App. 2019). Under Georgia law, “a lawsuit on a contract
generally may be brought only by a party to the contract or an in-
tended third-party beneficiary of the contract.” Ames v. JP Morgan
Chase Bank, N.A.,
783 S.E.2d 614, 620 (Ga. 2016) (citing O.C.G.A.
§ 9-2-20). And in a case analogous to the one at hand, the Georgia
Supreme Court held that the plaintiffs lacked standing to challenge
a defendant’s ability to foreclose on a property based on an alleg-
edly invalid assignment of the security deed. See id. at 616.
In Ames, the plaintiffs asserted that the defendant was una-
ble to foreclose on their property because “the assignment of the
security deed was invalid.” Id. at 617. The Georgia Supreme Court
held that because the plaintiffs “were not a party to the assignment
at issue” and “were plainly not intended third-party beneficiaries of
the assignment at issue,” they “lack[ed] standing to challenge the
assignment of the security deed.” Id. at 620, 622. As to whether
the plaintiffs were intended third-party beneficiaries of the assign-
ment, the Georgia Supreme Court found that the plaintiffs were
“not intended to directly benefit from the transfer of the power of
sale.” Id. at 620. The Georgia Supreme Court also stated that “[i]n
a situation where . . . the entity attempting to foreclose has no le-
gitimate claim to the security deed, such as where the alleged as-
signment was fraudulent, calling the foreclosure to the attention of
the true deed holder would be expected to lead to remedial action
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21-13847 Opinion of the Court 11
by the true holder.” Id. at 621. The Georgia Supreme Court con-
cluded that if the plaintiffs “believe[d] that the assignment of their
security deed . . . was invalid,” they could notify the true deed
holder, but they could not “manufacture standing for themselves
by asserting a claim that the party with standing has not asserted.”
Id. at 620–21.
Durham tries to distinguish Ames by arguing that the loan
at issue in Ames was evidenced by a negotiable instrument, while
Durham’s challenge is based on an underlying nonnegotiable in-
strument, the HELOC. 4 But ultimately, Durham is challenging
Aerial Funding’s ability to foreclose on his property based on the
assignments through which a third-party “transfer[red] . . . the
power of sale” to Aerial Funding. Id. at 620. And like the plaintiffs
in Ames, Durham has failed to allege that he was “a party to” the
assignments or that he was an “intended third-party beneficiar[y]
of the assignment[s] at issue”—i.e., that he was “intended to di-
rectly benefit from [any of] the transfer[s] of the power of sale.” Id.
Therefore, if Durham believes that another party is the “true
holder” of the ability to foreclose on his property, he can alert that
party. See id. at 621. But Durham lacks standing to challenge the
validity of the assignments to Aerial Funding, and he cannot
4 Specifically, Durham is challenging the validity of the assignment of the Jun-
ior Security Deed to Aerial Funding based on the validity of the assignment of
the HELOC under Article 9 of Georgia’s Uniform Commercial Code.
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12 Opinion of the Court 21-13847
maintain a suit “for wrongful foreclosure or the like” based on the
validity of those assignments.5 See id. at 619–22.
B. Breach of Quasi-New Agreement
Durham also asserts that the terms of the Modification
Agreement between Durham, along with the conduct surrounding
the execution of that agreement, reflect a quasi-new agreement be-
tween Durham and OneWest Bank that “merged” or “suspended
the operation of the HELOC.” According to Durham, Aerial Fund-
ing was bound by that quasi-new agreement and therefore could
not foreclose on the extinguished HELOC.
Under Georgia law, “[t]he parties to a contract, even a con-
tract subject to the Statute of Frauds, may mutually depart from its
terms and form a ‘quasi-new agreement.’” 280 Partners, LLC v.
Bank of N. Ga.,
835 S.E.2d 377, 382 (Ga. Ct. App. 2019). But, to
establish a quasi-new agreement, “there must be some considera-
tion for that new agreement.” 6 Id.; accord Turem v. Sinowski &
5 In Ames, the Georgia Supreme Court left open the possibility that O.G.C.A.
§ 44-14-162(b), which requires that “[t]he security instrument or assignment
thereof vesting the secured creditor with title to the security instrument shall
be filed prior to the time of sale,” may “provide a debtor with standing to chal-
lenge a foreclosure based on an unrecorded or facially invalid assignment.”
783 S.E.2d at 622 n.7. But like the plaintiffs in Ames, Durham has “not brought
a distinct challenge under this statute.” Id.
6To form a quasi-new agreement under Georgia law, there must also “be
more than a simple breach on the part of one of the parties; there must be a
mutual departure.” Crawford v. First Nat’l Bank of Rome,
223 S.E.2d 488, 490
(Ga. Ct. App. 1976). But because we conclude that Durham failed to allege
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21-13847 Opinion of the Court
13
Jones, 395 S.E.2d 60, 61 (Ga. Ct. App. 1990) (explaining that a quasi-
new agreement must be “founded on . . . sufficient consideration”).
Turning to Durham’s allegations, Durham alleged that
OneWest Bank represented that both loans would be modified and
that, around the time the Modification Agreement was executed,
“the balance due on [his mortgage loan] was $350,060” and that the
Modification Agreement’s “addition of $51,567.60 to the principal
balance of the [mortgage loan] represented good and valuable con-
sideration [for] the extinguishment of the HELOC.” In other
words, Durham alleged that, consistent with OneWest Bank’s oral
representations that the Modification Agreement would incorpo-
rate both loans, the $401,717.60 he owed under the Modification
Agreement reflected consideration for both the mortgage loan and
the HELOC. While we must accept as true all of Durham’s well-
pleaded allegations, Davidson, 797 F.3d at 1312, when an exhibit
attached to the complaint “contradict[s] the general and conclusory
allegations of the pleading, the exhibit[] govern[s],” Griffin Indus.,
Inc. v. Irvin,
496 F.3d 1189, 1206 (11th Cir. 2007).
that the quasi-new agreement was supported by consideration, we need not
address whether he has sufficiently alleged conduct demonstrating a mutual
departure. Cf. 280 Partners, 835 S.E.2d at 382 (holding that the defendants’
“mutual departure defense” failed because, “[a]lthough the defendants
pointed to evidence that the bank departed from the terms of the April 2013
note . . . , they did not point to evidence that any consideration was paid or
received under this alleged departure.”).
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14 Opinion of the Court 21-13847
Durham attached the Modification Agreement to his
amended complaint, and therefore we must treat the Modification
Agreement as “part of the pleading ‘for all purposes.’” Id. at 1205
(quoting Fed. R. Civ. P. 10(c)). Under Georgia law, “[i]t is well-
established that no construction of a contract is required or is even
permissible when the language used by the parties is plain, unam-
biguous and capable of only one reasonable interpretation.” Grif-
fin v. Adams,
334 S.E.2d 42, 44 (Ga. Ct. App. 1985). Thus, “[w]here
the terms of a written contract are clear and unambiguous, the
court will look to it, and it alone, to determine the intention of the
parties.”
Id. By its plain language, the Modification Agreement is
specific to Durham’s mortgage loan. Indeed, the Modification
Agreement does not even reference the HELOC, let alone merge
or suspend it. And as the district court correctly held, oral repre-
sentations that the Modification Agreement incorporated and im-
pacted the HELOC are irrelevant under Georgia’s statute of frauds.
See O.C.G.A. § 13-5-30(a)(7), (b) (stating that “[a]ny agreement to
modify, alter, cancel, repeal, revoke, release, or rescind” a commit-
ment to lend money “must be in writing and signed by all parties
to such agreement”).
Looking at the terms of the Modification Agreement
alone—i.e., without crediting Durham’s allegations that OneWest
Bank orally represented that the Modification Agreement would
incorporate both loans and his allegations interpreting the terms of
the Modification Agreement—the $401,717.60 in that agreement
represents the debt Durham owed exclusively for his mortgage
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21-13847 Opinion of the Court 15
loan.7 Contrary to Durham’s allegations, the Modification Agree-
ment’s reference to $51,657.60 represents the amount of Durham’s
$401,717.60 mortgage debt that is “deferred,” meaning that
Durham is not required to “pay interest or make monthly pay-
ments” for this amount of the mortgage debt.
The $51,657.60 deferred mortgage debt is the only consider-
ation Durham alleged in connection with the quasi-new agreement
to merge or suspend the HELOC. But according to the plain lan-
guage of the Modification Agreement, that $51,657.60 was not con-
sideration for merging or suspending the HELOC. Because
Durham’s allegations concerning the Modification Agreement’s in-
clusion of the HELOC conflict with its plain language, we cannot
“credit [his] allegations.” Crenshaw v. Lister,
556 F.3d 1283, 1292
(11th Cir. 2009); accord Griffin Indus.,
496 F.3d at 1206. And by
failing to plausibly allege that he gave consideration in exchange
for a quasi-new agreement, Durham has failed to plausibly allege
the existence of a quasi-new agreement that departed from, and
merged or suspended, the HELOC. See Mbigi v. Wells Fargo
Home Mortg.,
785 S.E.2d 8, 16 (Ga. Ct. App. 2016) (finding that
7In dismissing Durham’s breach of contract claim, based on his reliance on
oral representations, the district court did not elaborate on the effect of the
Modification Agreement’s plain language. We may nevertheless consider the
effect of the Modification Agreement’s plain language here. See Kernel Recs.
Oy v. Mosley,
694 F.3d 1294, 1309 (11th Cir. 2012) (“[T]his Court may affirm
the judgment of the district court on any ground supported by the record, re-
gardless of whether that ground was relied upon or even considered by the
district court.”).
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16 Opinion of the Court 21-13847
plaintiff failed to sufficiently allege a “quasi-contract” because
“there could be no departure from the terms of the contract” in the
absence of allegations supporting consideration).8
IV. CONCLUSION
For all these reasons, we affirm the district court’s order dis-
missing Durham’s complaint.
AFFIRMED.
8 On appeal, Durham also suggests that his quasi-new agreement theory could
support a claim for wrongful foreclosure. Notwithstanding that, in his
amended complaint, Durham’s claim for wrongful foreclosure was specific to
the validity of the assignments to Aerial Funding, a wrongful foreclosure claim
premised on his quasi-new agreement theory would similarly fail for lack of
consideration. See Mbigi, 785 S.E.2d at 16 (determining that “[t]he trial court
did not err in concluding that . . . [plaintiff’s] assertion that the parties to the
loan had entered into a ‘quasi-contract’ did not state any basis for a wrongful
foreclosure claim” when the plaintiff failed to allege that the quasi-contract
was supported by consideration).
