Joan Haynes v. McCalla Raymer, LLC , 793 F.3d 1246 ( 2015 )


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  •           Case: 14-14036   Date Filed: 07/13/2015    Page: 1 of 14
    [PUBLISH]
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE ELEVENTH CIRCUIT
    ________________________
    No. 14-14036
    Non-Argument Calendar
    ________________________
    D.C. Docket No. 1:11-cv-03149-TWT
    JOAN HAYNES,
    TROY WAYNE HAYNES,
    Plaintiffs - Appellants,
    versus
    MCCALLA RAYMER, LLC,
    BAC HOME LOANS SERVICING, LP,
    MORTGAGE ELECTRONIC REGISTRATION SYSTEMS (MERS),
    Defendants - Appellees,
    CHARLES TROY CROUSE, et al.,
    Defendants.
    ________________________
    Appeal from the United States District Court
    for the Northern District of Georgia
    ________________________
    (July 13, 2015)
    Case: 14-14036     Date Filed: 07/13/2015   Page: 2 of 14
    Before TJOFLAT, MARCUS and WILSON, Circuit Judges.
    MARCUS, Circuit Judge:
    Joan Haynes and Troy Wayne Haynes (the “Haynes”) appeal from the final
    order of the district court granting summary judgment in favor of Defendants-
    Appellees McCalla Raymer, LLC, BAC Home Loans Servicing, LP (now Bank of
    America, N.A. or “BANA”), and Mortgage Electronic Registration Systems
    (“MERS”), in this action arising out of BANA’s foreclosure of the Haynes’s
    residence. In the complaint, as amended, the Haynes alleged wrongful foreclosure,
    fraud, civil conspiracy, as well as violations of the Real Estate Settlement
    Procedures Act, 
    12 U.S.C. § 2601
     et seq. (“RESPA”), the Fair Debt Collection
    Practices Act, 
    15 U.S.C. § 1692
     et seq. (“the FDCPA”), and the Racketeer
    Influenced and Corrupt Organizations Act, 
    18 U.S.C. § 1961
     et seq. (“RICO”). On
    appeal, the Haynes argue that: (1) the district court failed to consider their
    objections to the magistrate judge’s Report and Recommendation (“R&R”); (2) the
    district court erred in denying their motion to add a party and amend the complaint;
    (3) the district court erred in granting summary judgment to McCalla Raymer on
    the FDCPA claim; and (4) the district court erred in granting summary judgment to
    BANA on the wrongful foreclosure claim. After thorough review, we affirm.
    “We review a district court’s grant of summary judgment de novo,” viewing
    all of the facts in the record in the light most favorable to the non-movant. See
    2
    Case: 14-14036      Date Filed: 07/13/2015      Page: 3 of 14
    Skop v. City of Atlanta, 
    485 F.3d 1130
    , 1136 (11th Cir. 2007).                     Summary
    judgment is proper where “there is no genuine dispute as to any material fact and
    the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). We
    review the district court’s denial of a motion for leave to amend for abuse of
    discretion. SFM Holdings, Ltd. v. Banc of Am. Sec., LLC, 
    600 F.3d 1334
    , 1336
    (11th Cir. 2010).      We may affirm the district court’s ruling on any ground
    supported by the record. Kernel Records Oy v. Mosley, 
    694 F.3d 1294
    , 1309 (11th
    Cir. 2012).
    First, we are unpersuaded by the Haynes’s claim that the district court failed
    to consider their objections to the R&R. “In the absence of some affirmative
    indication to the contrary, we assume all courts base rulings upon a review of the
    entire record.” Funchess v. Wainwright, 
    772 F.2d 683
    , 694 (11th Cir. 1985). The
    Haynes have pointed to nothing in the record to suggest that the district court did
    not consider their objections, which were filed before the district court issued its
    order. Thus, we assume the district court reviewed the objections and rejected
    them.
    In any event, even if the objections were not considered, the arguments were
    repetitive of those they had made to the magistrate judge.1 Because, as we discuss
    1
    The Haynes expressly argued in their cross motion for summary judgment that they “were not
    given the proper notice as to who had the full authority to modify all terms of their mortgage
    under O.C.G.A. § 44-14-162.2(a) in the . . . Notice of Foreclosure Sale.” The Haynes also
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    below, there was no merit to the Haynes’s claims, any failure to review them
    would have been harmless error. See Braxton v. Estelle, 
    641 F.2d 392
    , 397 (5th
    Cir. Unit A Apr. 1981) (per curiam) (holding that because “the district judge could
    assess the merits of the petition from its face,” the district court’s failure to review
    objections by the petitioner, who may have not received notice of the R&R, was
    harmless (quotation omitted)); Rutledge v. Wainwright, 
    625 F.2d 1200
    , 1206 (5th
    Cir. 1980) (finding “any error [by the district court] in not reviewing objections
    before issuing the order adopting the report” to be harmless).2
    We also find no merit to the Haynes’s claim that the district court abused its
    discretion in denying their motion for leave to file a third amended complaint.
    Under the Federal Rules of Civil Procedure, parties may amend their pleading once
    as a matter of course within twenty-one days after service of a motion under Rule
    12(b). Fed. R. Civ. P. 15(a). Otherwise, a pleading may be amended only by the
    parties’ consent or leave of court. 
    Id.
     “Although [l]eave to amend shall be freely
    given when justice so requires, a motion to amend may be denied on numerous
    argued that the lack of an official witness and forged signatures on the assignment of the security
    deed from MERS to BANA rendered it unfit for recording in violation of O.C.G.A. § 44-14-
    162(b). Finally, the Haynes argued in their motion to amend their complaint that “Fannie Mae
    [is] a party in interest claiming ownership of the Property,” and thus a necessary party to the
    instant action. The Haynes’s objections to the R&R merely rehashed these very same arguments
    after the magistrate judge rejected them in her R&R.
    2
    In Bonner v. City of Prichard, 
    661 F.2d 1206
    , 1209 (11th Cir.1981) (en banc), we adopted as
    binding precedent all Fifth Circuit decisions issued before October 1, 1981.
    4
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    grounds such as undue delay, undue prejudice to the defendants, and futility of the
    amendment.” Maynard v. Bd. of Regents of Div. of Univs. of Fla. Dep’t of Educ.
    Ex rel. Univ. of S. Fla., 
    342 F.3d 1281
    , 1287 (11th Cir. 2003) (alteration in
    original) (quotations omitted). “A district court may find undue delay when the
    movant knew of facts supporting the new claim long before the movant requested
    leave to amend, and amendment would further delay the proceedings.” Tampa
    Bay Water v. HDR Eng’g, Inc., 
    731 F.3d 1171
    , 1186 (11th Cir. 2013).
    The Haynes claim that they sought to amend the complaint for a third time
    to include Fannie Mae as an indispensable party, and to add a breach of contract
    claim they learned about during discovery.       However, the record reveals that
    discovery closed on August 8, 2013, the Defendants moved for summary judgment
    on September 6, 2013, and the Haynes did not move to file their third amended
    complaint until September 27, 2013 -- two years after the original complaint was
    filed. Moreover, by Ms. Haynes’s own admission, she was in contact with Fannie
    Mae -- the party the Haynes sought to add -- prior to the foreclosure of the property
    in September 2010. And she was aware of the alleged confusion regarding the
    identity of the party that retained the power to modify her mortgage prior to the
    foreclosure and immediately thereafter. The magistrate judge found that “the
    information necessary to assert the new claims [was] available to Plaintiffs at the
    inception of their lawsuit” in September 2011. The Haynes have not explained
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    how the magistrate judge clearly erred in making this factual finding, nor how their
    failure to make these proposed amendments at an earlier stage in the litigation does
    not constitute undue delay. The district court did not abuse its discretion in
    denying the Haynes leave to amend their complaint for the third time given their
    longstanding knowledge of the facts supporting the proposed amendments and the
    late stage at which they sought leave to amend -- after both the close of discovery
    and the defendants’ filing of motions for summary judgment. See Tampa Bay
    Water, 731 F.3d at 1186-87.
    Next, we reject the Haynes’s argument that the district court erred in
    granting summary judgment to the Defendants on the FDCPA claim. We have
    held that we will not consider any arguments a party attempts to incorporate by
    reference to filings in the district court. See Four Seasons Hotels & Resorts, B.V.
    v. Consorcio Barr S.A., 
    377 F.3d 1164
    , 1168 n.4 (11th Cir.2004) (“We now take
    the opportunity to join the many other Circuits that have rejected the practice of
    incorporating by reference arguments made to district courts, and we hold that
    Consorcio has waived the arguments it has not properly presented for review.”). In
    the opening brief before us, the Haynes say: “In the interest of judicial economy
    Appellants ask this court to refer to their Objections brief section ‘III’ for their
    argument.” Because the Haynes have failed to make any substantive argument to
    us on the propriety of their FDCPA claims in their opening brief, they have
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    Case: 14-14036      Date Filed: 07/13/2015    Page: 7 of 14
    abandoned this claim on appeal.         See Tallahassee Mem’l Reg’l Med. Ctr. v.
    Bowen, 
    815 F.2d 1435
    , 1446 n.16 (11th Cir. 1987) (“It is well settled that a party
    cannot argue an issue in its reply brief that was not preserved in its initial brief.”).
    Finally, we are unconvinced by the Haynes’s argument that the district court
    erred in granting summary judgment to BANA on the wrongful foreclosure claim.
    They assert three theories of wrongful foreclosure: (1) the lack of a valid official
    witness to the assignment rendered the deed facially defective and not fit for
    recording in violation of O.C.G.A. § 44-14-162(b); (2) forged signatures on the
    deed violated O.C.G.A. § 23-2-114 and rendered the assigned deed a nullity; and
    (3) the improper identification of BANA as the entity having full authority to
    modify the loan violated the notice requirement in O.C.G.A. § 44-14-162.2. None
    of these theories prevail.
    As for their first two theories, a person who is not a party to a contract, or an
    intended third-party beneficiary of a contract, lacks standing to challenge or
    enforce a contract under Georgia law. Haldi v. Piedmont Nephrology Assocs.,
    P.C., 
    641 S.E.2d 298
    , 300 (Ga. Ct. App. 2007) (holding that the plaintiff did not
    have standing to challenge the contract because he was neither a party to the
    contract nor an intended beneficiary of it); Breus v. McGriff, 
    413 S.E.2d 538
    , 539
    (Ga. Ct. App. 1991) (“Appellants are strangers to the assignment contract between
    appellee and [his privy] and thus have no standing to challenge its validity.”). This
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    case law is consistent with the Georgia Code, which provides that “an action on a
    contract . . . shall be brought in the name of the party in whom the legal interest in
    the contract is vested, and against the party who made it in person or by agent.”
    O.C.G.A. § 9-2-20(a).
    In this case, the Haynes are not parties to the assignment they are
    challenging -- it is between MERS and BANA. Georgia courts have previously
    addressed similar claims and found that the homeowners lacked standing to
    challenge the assignment. See Montgomery v. Bank of Am., 
    740 S.E.2d 434
     (Ga.
    Ct. App. 2013), cert. denied (Sep. 9, 2013).          In Montgomery, a homeowner
    claimed that an assignment between MERS and BANA prior to the foreclosure of
    his home was invalid because the attorney who purportedly executed the
    assignment on MERS’s behalf did not, in fact, execute the assignment -- in
    essence, the claim was one of forgery. 
    Id. at 437-38
    . Under Georgia law, unless it
    is later ratified, a forged deed is a nullity which cannot vest title even in a bona fide
    purchaser for value who takes without notice. See Brock v. Yale Mortg. Corp.,
    
    700 S.E.2d 583
    , 586-87 (Ga. 2010) (noting that forged deeds cannot convey good
    title to a grantee).    Thus, if the assignment was successfully attacked, the
    homeowner would have a valid claim of wrongful foreclosure. See Brown v.
    Freedman, 
    474 S.E.2d 73
    , 75 (Ga. Ct. App 1996) (“A claim for wrongful exercise
    of a power of sale under [O.C.G.A.] § 23-2-114 can arise when the creditor has no
    8
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    legal right to foreclose [such as where they do not possess a valid security deed].”).
    However, relying on O.C.G.A. § 9-2-20(a), the Montgomery court held that the
    homeowner did not have standing to bring his claim because he was not a party to
    the allegedly forged assignment nor an intended beneficiary thereof. Montgomery,
    740 S.E.2d at 437-38 & n.7; see also Larose v. Bank of Am., NA, 
    740 S.E.2d 882
    ,
    884 (Ga. Ct. App. 2013) (noting that a borrower lacked standing to challenge the
    validity of the assignment from MERS to the foreclosing entity). For the same
    reason, the Haynes also lack standing to bring their claim.
    The Haynes argue that Montgomery applies only when defects within an
    assignment -- such as forged signatures -- are latent, and that the notary’s improper
    execution on the assignment in this case was patent. However, there is absolutely
    nothing in Montgomery limiting its holding to latent defects, nor have the Haynes
    cited any case law squarely limiting Montgomery in this way. To be sure, security
    deeds are subject to the same attestation requirements for recording as deeds and
    mortgages. See O.C.G.A. §§ 44-14-61, 44-14-64. Accordingly, they must be
    acknowledged by an officer (such as a notary) before they may be recorded and
    provide constructive notice of the assignment to subsequent bona fide purchasers.
    See O.C.G.A. §§ 44-2-15, 44-14-33; see also Hopkins v. Va. Highland Assocs.,
    L.P., 
    541 S.E.2d 386
    , 390 (Ga. Ct. App. 2000) (“[A] deed not executed in precisely
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    the manner prescribed . . . is not properly recordable and therefore does not give
    constructive notice to all the world.” (quotation omitted)).
    But -- unlike a forged deed -- a deed with a patent defect in attestation is not
    a nullity. Rather, it is still binding between the parties to the assignment. See 
    id.
    (“[A]n improperly attested deed may be valid and binding between the parties
    themselves . . . .”); Bramblett v. Bramblett, 
    310 S.E.2d 897
    , 898 (Ga. 1984)
    (finding that even when a deed is lacking any attestation, the “deed may be valid
    between the parties”). In this context, the inability to record the deed impacts only
    subsequent purchasers of the property. As the Georgia Supreme Court has said,
    the purpose of Georgia’s statutory recording requirements “is to protect third
    parties acting in good faith and without notice who have acquired an interest in the
    same property” after the improperly recorded transfer or assignment. Leeds Bldg.
    Prods., Inc. v. Sears Mortg. Corp., 
    477 S.E.2d 565
    , 568 (Ga. 1996) (emphasis
    added).   However, the Georgia Supreme Court has noted that the statutory
    protection granted to borrowers in the context of foreclosure -- including O.C.G.A.
    § 44-14-162 -- has “evolved as a means of providing limited consumer protection
    while preserving in large measure the traditional freedom of the contracting
    parties.” You v. JP Morgan Chase Bank, 
    743 S.E.2d 428
    , 430-31 (Ga. 2013)
    (emphasis added). The “limited” nature of that consumer protection is further
    evidenced by the language of § 44-14-162(b) itself, which provides only that “[t]he
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    security instrument [providing the power to foreclose] . . . shall be filed prior to the
    time of sale in the office of the clerk of the superior court of the county in which
    the real property is located.” O.C.G.A. § 44-14-162(b) (emphasis added). It says
    nothing of when (or even if) the deed must actually be recorded. See Leeds Bldg.
    Prds., 
    477 S.E.2d at 568
     (noting that a deed provides notice “from the time it is
    filed for record in the clerk’s office” as opposed to when it is actually recorded
    (quotation omitted)).
    In sum, Georgia law is clear that borrowers do not have standing to attack a
    forged assignment of their security deed, which -- if attacked by a party with
    standing -- would provide the basis for a claim of wrongful foreclosure. See
    Brown, 
    474 S.E.2d at 75
    . In light of that fact, as well as the “limited” nature of the
    protection that § 44-14-162 affords the Haynes (who are not bona fide purchasers
    for value after the complained-of assignment), we see no reason that the patent
    defect in attestation at issue here would provide them with standing to challenge an
    otherwise effective, if not properly recordable, assignment of their security deed.
    They were simply not parties to the assignment and have demonstrated no other
    right to challenge it. As a result, the district court did not err in concluding that the
    Haynes lack standing to bring these claims even though the assignment allegedly
    contained a patent defect in attestation.
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    As for the Haynes’s § 44-14-162.2 claim -- that the foreclosure notice
    identified BANA, the loan servicer, as the entity with full authority to modify their
    loan despite the fact that Fannie Mae was ultimately responsible for the decision --
    Georgia courts have repeatedly held that “substantial compliance” is all that is
    required in this context. See TKW Partners, LLC v. Archer Capital Fund, L.P.,
    
    691 S.E.2d 300
    , 303 (Ga. Ct. App. 2010) (holding that identification of attorney as
    individual with full authority “substantially complied” with statute since it
    provided the borrower with “contact information for the ‘entity’ with full
    modification authority”).     Indeed, Georgia courts have found that foreclosure
    notices substantially comply with § 44-14-162.2 so long as the party listed in the
    notice was authorized to convey communications to the party that retains full
    authority to modify the loan, Stowers v. Branch Banking & Trust Co., 
    731 S.E.2d 367
    , 369-70 (Ga. Ct. App. 2012), or if the notice “apprised [the borrower] of the
    appropriate contact information” in the event the borrower “wished to pursue a
    modification,” TKW Partners, 
    691 S.E.2d at 303
    . The Haynes admit that BANA
    directed them to Fannie Mae to modify their loan. They also admit that Fannie
    Mae was the entity with full authority to modify their loan. It thus appears that
    under TKW Partners, the notice the Haynes received substantially complied with
    Georgia’s statutory notice requirements.
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    But even if the notice did not fully comply with Georgia law, the Haynes’s
    claim for wrongful foreclosure would still fail because they cannot show a causal
    connection between this breach and a resulting injury. A plaintiff seeking damages
    for 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). To plead causation, litigants must
    allege that their injury was caused by the defendant’s acts or omissions. 
    Id.
     at 844-
    45. The undisputed record reveals that Ms. Haynes failed to make two payments
    on the loan and thereafter made only partial payments. Moreover, despite being in
    contact with Fannie Mae -- the entity with full authority to modify the loan -- the
    Haynes failed to make payments on a proposed trial modification that could have
    staved off the foreclosure. Thus, any injury the Haynes suffered is the direct result
    of their own default on the loan and failure to successfully negotiate and abide by
    more favorable terms. It is not the result of any allegedly inadequate information
    included in the notice of foreclosure sale. See 
    id.
     (“Heritage Creek’s alleged injury
    was solely attributable to its own acts or omissions both before and after the
    foreclosure [including its loan defaults and its failure to bid on the property at the
    foreclosure sale or repurchase the property after the foreclosure].”). The Haynes
    have failed to show any disputed issue of material fact indicating that their
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    “confusion,” rather than the missed payments, led to the foreclosure. As a result,
    the district court did not err in rejecting their § 44-14-162.2 claim.
    AFFIRMED.
    14
    

Document Info

Docket Number: 14-14036

Citation Numbers: 793 F.3d 1246

Filed Date: 7/13/2015

Precedential Status: Precedential

Modified Date: 1/12/2023

Authorities (18)

Maynard v. Board of Regents of the Division of Universities ... , 342 F.3d 1281 ( 2003 )

SFM Holdings Ltd. v. Banc of America Securities, LLC , 600 F.3d 1334 ( 2010 )

David Livingston Funchess v. Louie L. Wainwright, Secretary,... , 772 F.2d 683 ( 1985 )

Laura Skop v. City of Atlanta, Georgia , 485 F.3d 1130 ( 2007 )

four-seasons-hotels-and-resorts-b-v-four-seasons-hotels-barbados-four , 377 F.3d 1164 ( 2004 )

tallahassee-memorial-regional-medical-center-v-otis-r-bowen-secretary-of , 815 F.2d 1435 ( 1987 )

Charles Ray Braxton, Tdc 243157 v. W. J. Estelle, Jr., ... , 641 F.2d 392 ( 1981 )

Bramblett v. Bramblett , 252 Ga. 21 ( 1984 )

Leeds Building Products, Inc. v. Sears Mortgage Corp. , 267 Ga. 300 ( 1996 )

Haldi v. Piedmont Nephrology Associates , 283 Ga. App. 321 ( 2007 )

Hopkins v. Virginia Highland Associates, L.P. , 247 Ga. App. 243 ( 2000 )

James Rodney Rutledge v. Louie L. Wainwright, Etc. , 625 F.2d 1200 ( 1980 )

Brock v. Yale Mortgage Corp. , 287 Ga. 849 ( 2010 )

You v. JP Morgan Chase Bank, N.A. , 293 Ga. 67 ( 2013 )

TKW Partners, LLC v. Archer Capital Fund, L.P. , 302 Ga. App. 443 ( 2010 )

Brown v. Freedman , 222 Ga. App. 213 ( 1996 )

Heritage Creek Dev. Corp. v. Colonial Bank , 268 Ga. App. 369 ( 2004 )

Breus v. McGriff , 202 Ga. App. 216 ( 1991 )

View All Authorities »