666 Fed.Appx. 766 (11th Cir. 2016), 15-14853, Jones v. CitiMortgage, Inc.

Docket Nº:15-14853
Citation:666 Fed.Appx. 766
Opinion Judge:PER CURIAM:
Party Name:LINDSEY JONES, Retired First Sergeant, Plaintiff-Appellant, v. CITIMORTGAGE, INC., PHELAN HALLINAN DIAMOND & JONES, PLLC, STATE OF GEORGIA, (for Fulton County Superior Court Judge Markle), Defendants-Appellees
Attorney:LINDSEY JONES, Plaintiff - Appellant, Pro se, LITHONIA, GA. For CITIMORTGAGE, INC., Defendant - Appellee: Richard C. Keller, Rachel Blackmon Cash, Erin Cornelius Howell, Burr & Forman, LLP, BIRMINGHAM, AL. For STATE OF GEORGIA, for Fulton County Superior Court Judge Markle, Defendant - Appellee: ...
Judge Panel:Before TJOFLAT, WILLIAM PRYOR, and ROSENBAUM, Circuit Judges.
Case Date:November 09, 2016
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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Page 766

666 Fed.Appx. 766 (11th Cir. 2016)

LINDSEY JONES, Retired First Sergeant, Plaintiff-Appellant,

v.

CITIMORTGAGE, INC., PHELAN HALLINAN DIAMOND & JONES, PLLC, STATE OF GEORGIA, (for Fulton County Superior Court Judge Markle), Defendants-Appellees

No. 15-14853

United States Court of Appeals, Eleventh Circuit

November 9, 2016

Page 767

Editorial Note:

DO NOT PUBLISH. (See Federal Rule of Appellate Procedure Rule 32.1)

Appeal from the United States District Court for the Northern District of Georgia. D.C. Docket No. 1:15-cv-01002-WBH.

LINDSEY JONES, Plaintiff - Appellant, Pro se, LITHONIA, GA.

For CITIMORTGAGE, INC., Defendant - Appellee: Richard C. Keller, Rachel Blackmon Cash, Erin Cornelius Howell, Burr & Forman, LLP, BIRMINGHAM, AL.

For STATE OF GEORGIA, for Fulton County Superior Court Judge Markle, Defendant - Appellee: Michelle Jeanette Hirsch, Attorney General's Office, ATLANTA, GA.

For PHELAN HALLINAN DIAMOND & JONES, PLLC, Defendant - Appellee: Stephen Ryan Starks, Phelan Hallinan Diamond & Jones, PLLC, ALPHARETTA, GA.

Before TJOFLAT, WILLIAM PRYOR, and ROSENBAUM, Circuit Judges.

OPINION

Page 768

PER CURIAM:

Plaintiff-Appellant Lindsey Jones, proceeding pro se, appeals the district court's dismissal of his lawsuit challenging the scheduled foreclosure of his home by Defendants-Appellees CitiMortgage, Inc. (" CitiMortgage" ), and the law firm of Phelan Hallinan Diamond & Jones, PLLC (the " Phelan firm" ). The scheduled foreclosure sale in April 2015 followed Jones's discharge from bankruptcy in 2006, an earlier foreclosure in August 2010, and Jones's state-court lawsuit challenging the 2010 foreclosure, which ended in an adverse ruling by Defendant-Appellee Fulton County Superior Court Judge Todd Markle (" Judge Markle" ).

In his current complaint filed in federal district court, Jones primarily alleges that CitiMortgage, acting through foreclosure counsel (the Phelan firm), lacked authority

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to foreclose a second time and violated the 2006 bankruptcy discharge injunction. Jones also alleges that the defendants, over the course of several years, violated his constitutional rights and various state and federal statutes.

The district court dismissed Jones's complaint, concluding, among other things, that Jones could not enjoin the second foreclosure because the loan connected with the property was in default, that CitiMortgage and the Phelan firm did not violate the bankruptcy-discharge injunction, and that Judge Markle was entitled to judicial immunity. Jones contends that the court erred in dismissing his complaint and should have given him leave to amend before dismissing the action altogether.

After careful review, we affirm the dismissal with prejudice of Jones's complaint in nearly all respects, though, for some claims, on different grounds than those offered by the district court. We vacate the dismissal with prejudice of Jones's claim alleging violations of the bankruptcy-discharge injunction, and we remand this claim to the district court with instructions, as detailed below. Finally, we conclude that Jones was not entitled to leave to amend his complaint because amendment would have been futile.

I. BACKGROUND

A. Factual Background1

In June 2002, Jones financed the purchase of his home (the " Property" ) in Lithonia, Georgia, with a loan insured by the Federal Housing Administration. In connection with the loan, Jones executed a promissory note and a deed to secure the debt. The note was endorsed immediately to CitiMortgage, and the security deed was transferred to CitiMortgage in April 2010.2 The security deed included a non-judicial power-of-sale provision. See You v. JP Morgan Chase Bank, 293 Ga. 67, 743 S.E.2d 428, 430 (Ga. 2013) (" Georgia law clearly authorizes the use of 'non-judicial power of sale foreclosure' as a means of enforcing a debtor's obligation to repay a loan secured by real property." ).

Although he was current on his mortgage loan, Jones filed for bankruptcy in 2005 and received a discharge of his debts, including the mortgage loan debt, in January 2006. In general, when going through bankruptcy, the debtor must indicate what he plans to do with the collateral, including real property, for his debts. Taylor v. AGE Fed. Credit Union (In re Taylor), 3 F.3d 1512, 1514-15 (11th Cir. 1993); see also Failla v. Citibank, N.A. (In re Failla), No. 15-15626, 838 F.3d 1170, manuscript op. at 5 (11th Cir. Oct. 4, 2016). If the collateral is not exempt, the debtor must surrender the collateral, redeem the collateral, or reaffirm the debt. In re Taylor, 3 F.3d at 1514 & n.2. While CitiMortgage suggests that Jones initially may have intended to reaffirm the debt, Jones does not allege that a reaffirmation agreement

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was ever reached. So, consistent with his allegations, Jones never assumed personal liability for the mortgage after his bankruptcy. Without reaffirming the debt or redeeming the collateral, the debtor has no right to retain the collateral, id. at 1516, though the debtor can continue to maintain mortgage payments on a principal residence after discharge without reaffirming the debt, and a creditor can take such payments rather than pursue an in rem foreclosure, see 11 U.S.C. § 524(j).

It appears that, after his 2006 bankruptcy discharge, Jones continued to make mortgage payments until some point in 2010. Thereafter, CitiMortgage retained the law firm of McCurdy & Candler, LLC, to initiate a non-judicial foreclosure action. McCurdy & Candler sent Jones letters in June 2010 indicating that the loan was in default, that a foreclosure sale would occur on August 3, 2010, and that title to the Property would likely be transferred to the Secretary of Housing and Urban Development (" HUD" ) after foreclosure. One letter claimed that Jones owed around $130,000.00, but it also noted that he was not personally liable if he had received a bankruptcy discharge.

On August 3, 2010, CitiMortgage foreclosed the mortgage on the Property.3 Jones alleges that, as a result of the August 2010 foreclosure and based on statements in the June 2010 letters from McCurdy & Candler, HUD is the current owner of the note and security deed, while CitiMortgage is the servicer.

Jones and CitiMortgage unsuccessfully attempted settlement both before and after the August 2010 foreclosure. Jones offered to purchase the property for $50,000, and the parties later discussed a proposal to purchase it for $25,000. CitiMortgage eventually rejected both proposals.

After the foreclosure, Jones moved most of his belongings to a warehouse and waited for a demand of the Property, but it never came. Instead, in December 2010, he received another notice from McCurdy & Candler stating that the mortgage for the Property was about to be foreclosed.

Fed up with CitiMortgage's confusing actions, Jones challenged the August 2010 foreclosure in the Superior Court of Fulton County, naming as defendants CitiMortgage, MERS, and counsel for CitiMortgage.4 He alleged assorted federal claims and state-law claims of wrongful foreclosure, fraud, conspiracy, and theft by deception/" crimen falsi." The defendants removed the complaint to federal district court, which, on May 25, 2011, dismissed with prejudice the federal claims and remanded the remainder of the lawsuit to the Superior Court of Fulton County. For reasons unknown, the federal court's remand order was not filed in state court until August 22, 2011, despite Jones's efforts to have the case reinstated earlier. According to Jones, the only explanation for the delay in restatement is a conspiracy

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between the defendants and various persons with the Superior Court of Fulton County to discriminate against him and to allow the defendants to " judge shop." Jones explains that his case before removal had been assigned to a judge who, in Jones's view, would have ruled in his favor but who resigned in June 2011, so the delay allowed the case to be re-assigned to Judge Markle, who was sworn in on August 5, 2011.

In June 2012, Judge Markle granted summary judgment to the defendants on all claims raised in the Fulton County state-court lawsuit. In relevant part, Judge Markle concluded that it was " clear that Defendants had the ability to foreclose," because CitiMortgage had obtained the note in June 2002 and the security deed in April 2010. Jones unsuccessfully appealed Judge Markle's decision to the Georgia Court of Appeals and the Supreme Court of Georgia.

In August 2014, nearly four years after the first foreclosure, Jones received a notice-of-foreclosure letter from the Phelan firm on behalf of CitiMortgage. This letter indicated that the mortgage for the Property was about to be foreclosed, that title to the Property would be transferred to the mortgage lender within 60 to...

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