Ziad Abdullahi v. Bank of America, NA

Case: 13-11643 Date Filed: 11/20/2013 Page: 1 of 9
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
___________________________
No. 13-11643
Non-Argument Calendar
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D. C. Docket No. 2:12-cv-00162-RWS
ZIAD ABDULLAHI,
Plaintiff-Appellant,
versus
BANK OF AMERICA, NA,
BAC HOME LOANS, et al.
Defendants-Appellees.
______________________________
Appeal from the United States District Court
for the Northern District of Georgia
_______________________________
(November 20, 2013)
Before MARTIN, FAY, and EDMONDSON, Circuit Judges.
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PER CURIAM:
Ziad Abdullahi appeals the district court’s dismissal of his suit for wrongful
foreclosure, promissory estoppel, and constructive fraud. 1 Abdullahi’s complaint
named as defendants Bank of America, NA (“BOA”), Federal Home Loan
Mortgage, Corp., a/k/a Freddie Mac, and Pendergast & Associates, P.C.
(“Defendants”).2 No reversible error has been shown; we affirm.
This dispute arose out of the non-judicial foreclosure sale of Abdullahi’s
property in Cumming, Georgia (“Property”). In 2005, Abdullahi obtained a loan
which was secured by a Security Deed on the Property. The Security Deed granted
to Mortgage Electronic Registration Systems, Inc. (“MERS”), and to MERS’s
successors and assigns, the power of sale in the event of Abdullahi’s default under
the note. The Security Deed was later transferred and assigned to BAC Home
Loans Servicing, LLC. BOA then became the rightful holder of the Security Deed
when it merged with BAC. See O.C.G.A. § 14-2-1106(a)(2) (providing that the
1
Because Abdullahi does not challenge the district court’s dismissal of his claims for quiet title,
violation of the Fair Debt Collection Practices Act, and for injunctive relief, these claims are
abandoned. See Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1330 (11th Cir. 2004).
For the same reason, Abdullahi has also abandoned his motion for leave to amend his first
amended complaint.
2
Abdullahi’s complaint also named as a defendant BAC Home Loans Servicing, LP, which has
since merged with BOA.
2
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contract rights of each party to a merger are vested automatically in the surviving
corporation).
After Abdullahi failed to make one or more payments required under the
2005 note, BOA -- through its lawyers at Pendergast -- began foreclosure
proceedings on the Property. While Abdullahi was in the process of applying for a
modification of his loan, the Property was foreclosed on. Ownership of the
Property was later transferred to Freddie Mac.
Abdullahi filed suit against Defendants in state court, seeking monetary
damages and rescission of the foreclosure. The suit was removed to federal court.
The district court granted Defendants’ motions to dismiss the complaint for failure
to state a claim under Fed.R.Civ.P. 12(b)(6).
We review de novo the district court’s dismissal of a case under Rule
12(b)(6), “accepting the allegations in the complaint as true and construing them in
the light most favorable to the plaintiff.” Hill v. White, 321 F.3d 1334, 1335 (11th
Cir. 2003). To survive dismissal for failure to state a claim, “a plaintiff’s
obligation to provide the grounds of his entitlement to relief requires more than
labels and conclusions, and a formulaic recitation of the elements of a cause of
action will not do.” Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1964-65 (2007)
(quotations omitted).
3
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Wrongful Foreclosure
On appeal, Abdullahi challenges the district court’s dismissal of his claim
for wrongful foreclosure.3 In Georgia, “a plaintiff asserting a claim of wrongful
foreclosure [must] 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.” Heritage Creek Dev. Corp. v. Colonial Bank,
601 S.E.2d 842, 844 (Ga. Ct. App. 2004).
Because BOA was the only “foreclosing party” and because Abdullahi failed
to allege that either Freddie Mac or Pendergast owed him a specific legal duty, the
district court dismissed properly Abdullahi’s claim for wrongful foreclosure
against Freddie Mac and Pendergast.
Abdullahi has also not alleged sufficiently that BOA breached a legal duty
or that such a breach caused his injuries. On the day of the foreclosure, BOA was
the rightful holder of the Security Deed. The Security Deed grants explicitly the
“successors and assigns of MERS” the power of sale and “the right to foreclose
and sell the Property” in the event of Abdullahi’s default. Because Abdullahi
3
In support of his wrongful foreclosure claim, Abdullahi raises here two arguments that were not
raised in the district court: (1) that he filed for Chapter 13 bankruptcy on the day of the
foreclosure sale and, thus, the foreclosure sale was prohibited by an automatic stay; and (2) that
the foreclosure newspaper advertisements were defective. We do not review issues raised for the
first time on appeal. See Access Now, Inc., 385 F.3d at 1331.
4
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defaulted on the loan, BOA was entitled to foreclose on the Property. BOA
breached no duty to Abdullahi. And Abdullahi’s complained-of injuries were
caused proximately by Abdullahi’s own failure to make loan payments.
On appeal, Abdullahi contends that the foreclosure notice letter 4 violated
O.C.G.A. § 44-14-162.2 because it failed to identify the secured creditor. This
argument differs from Abdullahi’s complaint, in which he alleged only that the
foreclosure notice letter failed to identify the owner of the loan. In any event, the
Georgia Supreme Court has concluded that section 44-14-162.2 does not
categorically require the foreclosure notice to name either the secured creditor or
the note holder. See You v. JP Morgan Chase Bank, N.A., 743 S.E.2d 428, 433-34
(Ga. 2013). Instead, the notice must name “the individual or entity who shall have
full authority to negotiate, amend, and modify all terms of the mortgage with the
debtor.” Because Abdullahi’s complaint alleged only that the foreclosure letter
failed to identify the owner of the loan -- and did not allege that the owner of the
loan was in fact the entity with full authority to negotiate, amend, and modify the
mortgage -- Abdullahi has not alleged sufficiently a violation of Georgia law. 5
4
Abdullahi received three notice letters. Because he does not challenge expressly the district
court’s dismissal of his claims for attempted wrongful foreclosure based on the first two
foreclosure notices, he has abandoned that argument. See Access Now, Inc., 385 F.3d at 1330.
5
Abdullahi also argues that the district court misconstrued his argument about the enforceability
of the promissory note. To preserve an issue for appeal, a party “must first clearly present it to
the district court . . . in such a way as to afford the district court an opportunity to recognize and
rule on it.” Juris v. Inamed Corp., 685 F.3d 1294, 1325 (11th Cir. 2012). Nowhere in his
5
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Promissory Estoppel
Abdullahi argues that the district court erred in dismissing his claim for
promissory estoppel based on BOA’s alleged promise that the foreclosure sale had
been rescinded. To state a claim for promissory estoppel under Georgia law,
Abdullahi must allege “that (1) defendant made certain promises, (2) defendant
should have expected that plaintiffs would rely on such promises, (3) the plaintiffs
did in fact rely on such promises to their detriment, and (4) injustice can be
avoided only by enforcement of the promise.” Canterbury Forest Ass’n v. Collins,
532 S.E.2d 736, 739 (Ga. Ct. App. 2000). “Promissory estoppel cannot be applied
unless the promisee reasonably relied on the promise.” Gerdes v. Russell Rowe
Commc’ns, 502 S.E.2d 352, 354 (Ga. Ct. App. 1998).
Abdullahi’s promissory estoppel claim is based on these statements made by
BOA employee Stephanie Beal: 6 (1) Beal was told that the Property had been sold,
but had been told that it was “possible” to have the foreclosure rescinded; (2) that
her supervisor and the underwriter had put in “escalated requests” to have the
foreclosure rescinded; (3) that she had been told that the foreclosure had been
complaint does Abdullahi raise clearly the issue he now asserts on appeal: that the promissory
note was unenforceable because it was not delivered properly to the lender. Because this
argument was presented for the first time on appeal, it is waived. See id.
6
Because Abdullahi makes no allegations about promises made by Freddie Mac or by
Pendergast, he stated no claim for promissory estoppel against those defendants.
6
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rescinded; and (4) that BOA’s computer system still showed that the Property had
been foreclosed on and that it may take time for the system to be updated.
Nothing in these statements constituted a promise by BOA to rescind the
foreclosure sale. Instead, Beal was merely relaying what she understood the status
of Abdullahi’s foreclosure proceedings to be.
Even if Beal’s statements could be construed as a promise, Abdullahi has not
alleged sufficiently that his reliance on those statements was reasonable. First,
Beal -- a Home Servicing Specialist in BOA’s Loan Modification Department --
told Abdullahi expressly that she was “not in the foreclosure department” and had
no “updated status information” on foreclosures. Thus, Abdullahi had no good
reason to believe that Beal had authority to make promises about his foreclosure
proceedings.
Second, the Security Deed provided expressly that “[e]xtension of the time
for payment or modification of amortization of the sums secured by this Security
Instrument . . . shall not operate to release the liability of Borrower . . . .” The
Security Deed also described the circumstances under which Abdullahi could
reinstate after acceleration of his loan payments and made clear that Abdullahi’s
failure to cure a default authorized BOA to invoke its power of sale. Based on the
Security Deed’s “clear and unambiguous” language, Abdullahi could not rely
reasonably on Beal’s representations about the possibility of a rescission. See
7
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Gerdes, 502 S.E.2d at 355 (rejecting a promissory estoppel claim when the “clear
and unambiguous provision [in an employment contract] served to place appellant
on due notice that he could not thereafter reasonably rely upon any words or other
course of dealing to his inducement, other than a modification agreement actually
reduced to writing.”).
Constructive Fraud
To state a claim for constructive fraud under Georgia law, Abdullahi must
allege, among other things, the existence of a confidential relationship between
himself and Defendants. See Delta Diversified, Inc. v. Citizens & S. Nat’l Bank,
320 S.E.2d 767, 776 (Ga. Ct. App. 1984). A confidential relationship exists
“where one party is so situated as to exercise a controlling influence over the will,
conduct, and interest of another . . . .” First Union Nat’l Bank v. Gurley, 431
S.E.2d 379, 381 (Ga. Ct. App. 1993). “The mere fact that one reposes trust and
confidence in another does not create a confidential relationship.” Id. Abdullahi
has the burden of showing the existence of a confidential relationship. See Jerry
Dickerson Presents, Inc. v. Concert/Southern Chastain Promotions, 579 S.E.2d
761, 770 (Ga. Ct. App. 2003).
8
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Abdullahi has failed to allege sufficiently the existence of a confidential
relationship with Defendants. Georgia courts have said that “no confidential
relationship [exists] between a bank and its customers borrowing funds.” Delta
Diversified, Inc., 320 S.E.2d at 776; see also Dixie Diners Atlanta v. Gwinnett Fed.
Bank FSB, 439 S.E.2d 53, 56 (Ga. Ct. App. 1993) (“There is, moreover,
particularly no confidential relationship between lender and borrower . . . for they
are creditor and debtor with clearly opposite interests . . . .”). And Abdullahi
cannot show that he had a confidential relationship with Pendergast, when
Pendergast was representing BOA in the foreclosure proceedings.
AFFIRMED.
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