JAMES v. BANK OF AMERICA, N.A. Et Al.

FIRST DIVISION
PHIPPS, C. J.,
ELLINGTON, P. J., and MCMILLIAN, J.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules/
May 15, 2015
In the Court of Appeals of Georgia
A14A2159. RAYMONA JAMES v. BANK OF AMERICA, N. A.
et al.
ELLINGTON, Presiding Judge.
Raymona James filed this action in the Superior Court of Cobb County against
Bank of America, N. A. (“BANA”) and Federal National Mortgage Corporation
(“Fannie Mae”), asserting claims for, among other things, wrongful foreclosure,
breach of contract, intentional infliction of emotional distress, and violation of the
Fair Business Practices Act. After discovery and an unsuccessful mediation, BANA
and Fannie Mae filed a joint motion to dismiss the complaint for failure to state a
claim upon which relief could be granted. James filed a motion for contempt against
Fannie Mae for its conduct during mediation. The trial court granted BANA and
Fannie Mae’s motion and dismissed James’s claims, and denied James’s motion for
contempt. For the reasons that follow, we reverse the trial court’s ruling as to James’s
claims for wrongful foreclosure and breach of contract, but we affirm in all other
respects.
On appeal, BANA’s and Fannie Mae’s motion to dismiss will be treated as a
motion for judgment on the pleadings, because it was filed after the pleadings were
closed and was predicated on the complaint and the documents incorporated therein.
See OCGA § 9-11-12 (c); Haldi v. Piedmont Nephrology Assoc., P.C., 283 Ga. App.
321, 321-22 (641 SE2d 298) (2007). We construe the complaint and all reasonable
inferences in favor of James, and conduct a de novo review of the trial court’s ruling.
See McCobb v. Clayton Cnty., 309 Ga. App. 217 (710 SE2d 207) (2011). The motion
“should not be granted unless the averments in the complaint disclose with certainty
that [James] would not be entitled to relief under any state of facts which could be
proved in support of [her] claim.” (Citation and punctuation omitted.) Id.So construed, the record shows that in March 2012, James filed the instant
complaint against BANA and Fannie Mae stemming from the foreclosure of certain
real property (the “Property”) that secured a promissory note executed by James. The
non-judicial foreclosure sale was conducted pursuant to a power of sale contained in
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Paragraph 22 of the security deed executed by James. That provision required that,
prior to a foreclosure, James be provided notice specifying:
(a) the default; (b) the action required to cure the default; (c) a date, not
less than 30 days from the date the notice is given to [her], by which the
default must be cured; and (d) that failure to cure the default on or
before the date specified in the notice may result in acceleration of the
sums secured by [the security deed] and sale of the Property.
James alleged in her complaint, among other things, that she was not provided
notice prior to the conduction of the foreclosure sale.1 This alleged lack of notice, at
least in part, forms the basis of her claims for wrongful foreclosure, breach of
contract, intentional infliction of emotional distress, and violation of the Fair
Business Practices Act.2
1
To the extent that James’s brief raises alternative bases for her claims that are
not contained in the complaint, they will not be considered.
2
In her complaint, James also included a claim to quiet title and sought
declarative and injunctive relief based upon what she alleged to be an invalid
assignment of the security deed. The trial court rejected her argument and held that
the assignment was valid, and her brief contains vague assertions that the trial court
erred in doing so. Her assertions are not supported by argument or legal authority,
however, and will therefore not be considered. See Court of Appeals Rule 23 (c) (2);
Cuyler v. Capital One Bank (USA), N.A., 304 Ga. App. 687, 689 (4) (698 SE2d 14)
(2010).
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The parties attended a mediation but failed to resolve the dispute. Following
the mediation, James filed a motion for contempt, asserting that Fannie Mae violated
the local court rules by failing to send a representative to the proceeding with the
authority to settle the lawsuit.
BANA and Fannie Mae also filed a motion, contending that James failed to
state a claim upon which relief could be granted in that she alleged only that she had
not received notice, but failed to properly assert that notice had not been sent. The
trial court accepted this argument and dismissed James’s complaint after concluding
that “[her] contention that she did not receive any notice does not equate to a properly
supported allegation that BANA did not mail notice to her.” This appeal follows.
1. James contends that the trial court erred in granting judgment on the
pleadings as to her claim for wrongful foreclosure. Georgia law requires that
“[p]owers of sale in deeds of trust, mortgages, and other instruments shall be strictly
construed and shall be fairly exercised.” OCGA § 23-2-114. This includes a mandate
that “[n]otice of the initiation of proceedings to exercise a power of sale . . . be given
to the debtor by the secured creditor no later than 30 days before the date of the
proposed foreclosure.” OCGA § 44-14-162.2 (a). And “[when] a foreclosing creditor
fails to comply with the statutory duty to provide notice of sale to the debtor in
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accordance with OCGA § 44-14-162.2 et seq., the debtor may either seek to set aside
the foreclosure or sue for damages for the tort of wrongful foreclosure.” Roylston v.
Bank of Am., N.A., 290 Ga. App. 556, 559 (1) (b) (660 SE2d 412) (2008); accord
Calhoun First Nat. Bank v. Dickens, 264 Ga. 285, 285-86 (1) (443 SE2d 837) (1994).
BANA and Fannie Mae continue to assert on appeal that James alleged only
that she failed to receive notice of the foreclosure. But this argument is belied by the
record. In the complaint, James specifically pled that BANA foreclosed on the
Property “without having sent proper notice to [her] as required by OCGA § 44-14-
162.2 or indeed any notice at all.” Further, James repeats in numerous places
throughout the complaint that BANA failed to “send” or to “provide” her with the
requisite notice of the foreclosure proceedings. These allegations are sufficient to set
forth a claim for wrongful foreclosure, and the trial court erred in dismissing that
claim.3 See Babalola v. HSBC Bank, USA, N.A., 324 Ga. App. 750, 753 (2) (a) (751
SE2d 545) (2013) (holding that debtor’s allegation that mortgage holder failed to
provide him with the statutorily required notice of foreclosure was sufficient to state
a claim for wrongful foreclosure); see also Roylston, 290 Ga. App. at 559 (1) (b)
3
Contrary to the trial court’s holding, the boilerplate language contained in the
deed under power which states that the requisite notices were sent in compliance with
Georgia law is not conclusive evidence of that fact.
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(reversing grant of summary judgment to foreclosing creditor based on evidence that
it failed to afford debtor the statutory notice provided by OCGA § 44-14-162.2 (a)).
2. James further argues that the trial court erred in granting judgment on the
pleadings as to her claim for breach of contract. Under Georgia law, “a security deed
which includes a power of sale is a contract and its provisions are controlling as to
the rights of the parties thereto and their privies.” Stewart v. Suntrust Mortgage, Inc.,
___ Ga. App. ___, *3 (3) (Case No. A14A2047, March 27, 2015). Further, “[a] lender
owes a borrower a duty to exercise a power of sale in a security deed fairly, which
includes complying with statutory and contractual notice requirements.”
Thompson-El v. Bank of Am., N.A., 327 Ga. App. 309, 310-11 (2) (759 SE2d 49)
(2014).
In her complaint, James asserts that BANA breached the terms of the security
deed by failing to provide proper notice of default and her right to cure as mandated
by Paragraph 22 of that deed. These allegations are sufficient to support a breach of
contract claim, and the trial court erred in dismissing it. See Babalola, 324 Ga. App.
at 755 (2) (b) (holding that complaint alleging that creditors failed to comply with the
notice provisions contained in the security deed stated a claim for breach of contract);
see also Stewart, ___ Ga. App. at *3 (3) (same).
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3. James contends that the trial court erred in granting judgment on the
pleadings as to her claim for intentional infliction of emotional distress.
Georgia has long recognized a cause of action for intentional infliction
of emotional distress. However, the burden which the plaintiff must
meet in order to prevail in this cause of action is a stringent one. To
prevail, a plaintiff must demonstrate that: (1) the conduct giving rise to
the claim was intentional or reckless; (2) the conduct was extreme and
outrageous; (3) the conduct caused emotional distress; and (4) the
emotional distress was severe. The defendant’s conduct must be so
extreme in degree, as to go beyond all possible bounds of decency, and
to be regarded as atrocious, and utterly intolerable in a civilized
community. Whether a claim rises to the requisite level of
outrageousness and egregiousness to sustain a claim for intentional
infliction of emotional distress is a question of law.
Thompson-El, 327 Ga. App. at 312 (3) (punctuation omitted).
In her complaint, James sets forth no additional facts in support of her
intentional infliction of emotional distress claim beyond those asserted above, namely
BANA’s failure to provide her with proper notice of the foreclosure. The trial court
did not err in concluding that she “failed to allege any acts by [BANA] that were
extreme and outrageous or that [her] emotional distress was so severe that no
reasonable person could be expected to endure it.” Thompson-El , 327 Ga. App. at
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313 (3). Consequently, the grant of judgment on the pleadings as to this claim was
proper. See id. (affirming dismissal of plaintiff’s claim for intentional infliction of
emotional distress based upon bank’s foreclosure, allegedly without her knowledge,
and subsequent attempts to remove her from the property); Racette v. Bank of Am.,
N.A., 318 Ga. App. 171, 179 (3) (733 SE2d 457) (2012) (holding that appellant’s
allegation that creditor conducted foreclosure sale despite knowing of inaccuracies
in the published foreclosure advertisements “cannot be described as extreme,
outrageous, atrocious, intolerable or beyond the bounds of decency”) (punctuation
omitted). Compare DeGolyer v. Green Tree Servicing, LLC, 291 Ga. App. 444,
449-50 (4) (662 SE2d 141) (2008) (reversing trial court’s directed verdict on
plaintiff’s claim for intentional infliction of emotional distress when evidence showed
that creditor foreclosed on the wrong property despite having received notice of that
fact).
4. James asserts that the trial court erred in granting judgment on the pleadings
as to her claim for a violation of Georgia’s Fair Business Practices Act (“FBPA”),
again based upon the same lack of notice allegations. The FBPA prohibits “[u]nfair
or deceptive acts or practices in the conduct of consumer transactions and consumer
acts or practices in trade or commerce.” OCGA § 10-1-393 (a). Exempted from its
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scope, however, are “[a]ctions or transactions specifically authorized under laws
administered by or rules and regulations promulgated by any regulatory agency of this
state or the United States.” OCGA § 10-1-396 (1). And because residential mortgage
transactions are regulated by both state and federal law, the FBPA does not apply. See
Stewart, __ Ga. App. at *4 (5); Chancellor v. Gateway Lincoln-Mercury, Inc., 233
Ga. App. 38, 45 (2) (502 SE2d 799) (1998) (“The General Assembly intended that the
Georgia FBPA have a restricted application only to the unregulated consumer
marketplace and that FBPA not apply in regulated areas of activity . . .”); see also
Zinn v. GMAC Mortg, No. 1:05 CV 01747 MHS, 2006 WL 418437, at *4 (N.D. Ga.
Feb. 21, 2006) (“[T]he GFBPA does not apply to residential mortgage transactions.”).
It follows that the trial court did not err in granting judgment on this claim.
5. Finally, James argues that the trial court erred in denying her motion for
contempt, in which she alleged that Fannie Mae failed to participate in the mediation
in good faith by refusing to sent a representative with the authority to settle the case
in violation of the local mediation rules. The trial court held as a factual matter,
however, that the representative sent to the mediation on behalf of both BANA and
Fannie Mae possessed full knowledge of the facts and dispute at issue, and possessed
full authority to settle the case on behalf of both defendants without further
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consultation. This holding is supported by a sworn affidavit by the representative in
attendance.
We will affirm a trial court’s order granting or denying a motion for civil
contempt if there is any evidence to support the ruling. See Harrison v. CGU Ins. Co.,
269 Ga. App. 549, 554 (604 SE2d 615) (2004). The trial court’s denial of James’s
motion is fully supported by the record and we will not disturb it.
In summary, we reverse the trial court’s grant of judgment on the pleadings as
to James’s claims of wrongful foreclosure and breach of contract, but we affirm the
judgment in all other respects.
Judgment affirmed in part and reversed in part. Phipps, C. J., concurs.
McMillian, J., concurs in the judgment only.
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