Chung v. Jpmorgan Chase Bank, N.A.

• Decision Date: 24 September 2013
• Docket Number: Civil Action No. 1:11–CV–2131–TWT.
• Citation: 975 F.Supp.2d 1333
• Parties: KIN CHUN CHUNG, Plaintiff, v. JPMORGAN CHASE BANK, N.A., Defendant.
• Court: U.S. District Court — Northern District of Georgia

975 F.Supp.2d 1333

KIN CHUN CHUNG, Plaintiff,

v.JPMORGAN CHASE BANK, N.A., Defendant.

Civil Action No. 1:11–CV–2131–TWT.

United States District Court,

N.D. Georgia,

Atlanta Division.

Sept. 24, 2013.

Aaron Matthew Clark, Alan Kan, Kan & Clark, LLP, Atlanta, GA, for Plaintiff.

Joseph Duane Wargo, Julie Christine Jared, Jessica Cox Casey, Wargo & French LLP, Amy Lucy Hanna, Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., Atlanta, GA, for Defendant.

OPINION AND ORDER

THOMAS W. THRASH, JR., District Judge.

This is a wrongful foreclosure action. It is before the Court on the Defendant's Motion for Summary Judgment [Doc. 87]. For the reasons set forth below, the Defendant's Motion for Summary Judgment [Doc. 87] is GRANTED in part and DENIED in part.

I. Background

This is an unusual foreclosure case. On March 27, 2007, the Plaintiff Kin Chun Chung purchased property (“Chung Property”) located at 2755 Sudbury Trace in Norcross, Georgia. (Def.'s Statement of Undisputed Material Facts ¶ 1.) On the same day, the Plaintiff's then-husband Kam Biu Chan purchased property (“Chan Property”) located at 2775 Sudbury Trace in Norcross, Georgia. ( Id. ¶ 37.) In connection with their purchases, both the Plaintiff and Chan executed a note and a security deed in favor of Global Lending, LLC. ( Id. ¶¶ 2, 38.) Following these transactions, both loans were assigned to the Defendant JPMorgan Chase Bank, N.A. (“Chase”). ( Id. ¶¶ 3, 39.) The monthly payments for both loans were identical. ( Id. ¶ 40.)

Chase had a policy where it would send borrowers a mortgage statement every month, which included a payment coupon to be returned with the payment. (Id. ¶ 5; Mullen Decl. ¶ 10.) Each mortgage statement indicated that the borrower was to “detach and return [the coupon] with [the] payment.” (Def.'s Statement of Undisputed Material Facts ¶ 8.) Consistent with this policy, the Plaintiff made payments for more than two years without any issues. ( Id. ¶ 53.)

On January 21, 2009, the Plaintiff called Chase to change the address for where she wished to receive her mortgage statements. ( Id. ¶ 41.) Chase alleges that the Plaintiff instructed it to send the mortgage statements to the Chung Property. ( Id. ¶ 41.) The Plaintiff alleges that she instructed Chase to send the mortgage statements to the Chan Property. (Pl.'s Statement of Material Facts ¶ 7.) The mortgage statements, along with the payment coupons, were sent to the Chung Property. However, the Plaintiff was not residing in the Property at the time. (Def.'s Statement of Undisputed Material Facts ¶ 42.) The events giving rise to this action then followed. Generally, Chan would make the payments for both properties. ( Id. ¶ 50.) As a result of not having the payment coupon for the Property, Chan would send in two checks along with the payment coupon for the Chan Property. ( Id. ¶ 55.) One of the checks was intended to cover the Plaintiff's monthly obligation. The Plaintiff alleges that Chase informed her that she could “note the loan number on the check and send it in without the corresponding payment coupon.” (Pl.'s Statement of Material Facts ¶ 10.) Furthermore, Chan alleges that he spoke to Chase multiple times and that he was told the same thing. ( Id. ¶¶ 11–13.) The additional checks sent by Chan included the account number of the Plaintiff's loan in the memorandum section. ( Id. ¶ 76; Chung Aff., Ex. F.) Beginning in June of 2009, Chan and the Plaintiff made payments for the Property in this manner. (Def.'s Statement of Undisputed Material Facts ¶¶ 54, 60, 81, 84.)

Upon receipt, Chase would credit all of the checks to Chan's account because only his coupon was included. ( Id. ¶¶ 57, 62, 82, 86, 103, 118.) Chase admits that it never referenced the memorandum section on the checks. ( Id. ¶ 62.) Thus, Chan was repeatedly being informed that his account was credited with multiple advanced payments. ( Id. ¶¶ 58, 63, 83, 87, 98, 104, 119.) On September 1, 2009, the Plaintiff was informed that her account was “in default because [she] failed to pay the required monthly installments commencing with the payment due 07/01/2009.” ( Id. ¶ 66.) Chase began contacting the Plaintiff on a near daily basis to resolve the situation. ( Id. ¶ 75.) The Plaintiff, Chan, and their son say that they informed Chase that the additional payments made by Chan were intended to cover the Plaintiff's obligations. (Pl.'s Statement of Material Facts ¶¶ 21, 27, 33–34, 36.)

On September 10, 2009, the Plaintiff called Chase and requested an investigation. (Def.'s Statement of Undisputed Material Facts ¶ 69.) Chase informed the Plaintiff that she must send her bank statements and copies of the cancelled checks in order to validate her claim. ( Id. ¶ 71.) The Plaintiff alleges that a request was sent, via facsimile and U.S. mail, along with the required documents. (Pl.'s Statement of Material Facts ¶¶ 25–26.) Chase contends that it never received it. (Def.'s Statement of Undisputed Material Facts ¶ 73.) Thus, no investigation took place. ( Id. ¶ 74.) Chase never credited the Plaintiff's account with the payments. Consequently, Chase maintained that the account was in default. (Pl.'s Br. Opp'n Def.'s Mot. Summ. J., at 5.)

On December 30, 2009, Chase initiated the foreclosure process. (Def.'s Statement of Undisputed Material Facts ¶ 88.) Chase retained McCalla Raymer, LLC to handle the foreclosure. ( Id. ¶ 89.) In January of 2010, the Plaintiff submitted a payment to Chase for the amount of her monthly charge without a payment coupon attached. ( Id. ¶ 91.) The check included the account number for the Plaintiff's loan in the memorandum section. (Id.) Chase returned the check to the Plaintiff and indicated that the check could not be accepted because the account was in foreclosure, and that the funds were insufficient to cure the default. ( Id. ¶ 92.) In March of 2010, the Plaintiff once again sent in a payment for the amount of her monthly charge without a payment coupon. ( Id. ¶ 105.) Chase again returned the check. ( Id. ¶ 106.) Chase, through McCalla Raymer, then published a Notice of Sale for the Property. (Pl.'s Statement of Material Facts ¶ 62.) On April 6, 2010, the home was sold at an auction where Chase was the highest bidder. ( Id. ¶ 59.) Chase then subsequently transferred the Property to the Federal National Mortgage Association, and the Property was then sold. ( Id. ¶¶ 61, 63.)

The Plaintiff asserts claims for wrongful foreclosure, breach of contract and the implied covenant of good faith and fair dealing, negligence and gross negligence, conversion, violation of RESPA, defamation, and intentional infliction of emotional distress. The Plaintiff alleges that the foreclosure caused her to suffer injuries aside from loss of the Property. The Plaintiff alleges that multiple fees were levied against the Plaintiff, including late fees, property preservation fees, fax fees, and corporate advance fees. ( Id. ¶¶ 66–73.) The Plaintiff alleges that the stress alone brought about a serious stomach condition. ( Id. ¶ 80.) The Plaintiff further alleges that her credit rating suffered as a result of Chase informing credit bureaus of the foreclosure. ( Id. ¶ 85.) The Plaintiff alleges that she lost certain possessions due to the foreclosure, such as a washer, dryer, dishwasher, and certain “irreplaceable items.” ( Id. ¶ 88.) Chase moves for summary judgment on all claims.

II. Summary Judgment Standard

Summary judgment is appropriate only when the pleadings, depositions, and affidavits submitted by the parties show that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). The court should view the evidence and any inferences that may be drawn in the light most favorable to the nonmovant. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158–59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The party seeking summary judgment must first identify grounds that show the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323–24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the nonmovant, who must go beyond the pleadings and present affirmative evidence to show that a genuine issue of material fact does exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “A mere ‘scintilla’ of evidence supporting the opposing party's position will not suffice; there must be a sufficient showing that the jury could reasonably find for that party.” Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir.1990).

III. Discussion

A. Wrongful Foreclosure

The Plaintiff claims that the Defendant could not foreclose upon her property because she was not in default. (Second Am. Compl. ¶¶ 88–90.) Consequently, the Plaintiff argues, the Property was wrongfully foreclosed upon. Under Georgia law, to recover for wrongful foreclosure a plaintiff must “[1] establish a legal duty owed to it by the foreclosing party, [2] a breach of that duty, [3] a causal connection between the breach of that duty and the injury it sustained, and [4] damages.” Racette v. Bank of America, N.A., 318 Ga.App. 171, 174, 733 S.E.2d 457 (2012). “[A] violation of the [foreclosure] statute is necessary to constitute a wrongful foreclosure.” McCarter v. Bankers Trust Co., 247 Ga.App. 129, 132, 543 S.E.2d 755 (2000). “A claim for wrongful exercise of a power of sale under OCGA § 23–2–114 can arise when the creditor has no legal right to foreclose.” DeGolyer v. Green Tree Servicing, LLC, 291 Ga.App. 444, 449, 662 S.E.2d 141 (2008); see alsoBrown v. Freedman, 222 Ga.App. 213, 214, 474 S.E.2d 73 (1996); Adams v. Mortgage Electronic Registration Systems Inc., No. 1:11–CV–04263–RWS, 2012 WL 1319453, *7 (N.D.Ga. Apr. 16, 2012) (“Plaintiff alleges that Defendants foreclosed on the Property notwithstanding the fact that Plaintiff was not in arrears ... [t]his allegation is sufficient to plausibly show that Defendants breached their duty...