Estate of Ellis v. Am. Advisors Grp.
| Decision Date | 06 January 2023 |
| Docket Number | 21-13270 |
| Parties | ESTATE OF DR. JOHN ELLIS, JR., THE JDE TRUST BY MARK J. PODLIN, Attorney at Law, P.C., as Executor and Trustee, Plaintiffs-Appellants, v. AMERICAN ADVISORS GROUP, INC., a California Corporation, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware Corporation, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
ESTATE OF DR. JOHN ELLIS, JR., THE JDE TRUST BY MARK J. PODLIN, Attorney at Law, P.C., as Executor and Trustee, Plaintiffs-Appellants,
v.
AMERICAN ADVISORS GROUP, INC., a California Corporation, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware Corporation, Defendants-Appellees.
No. 21-13270
United States Court of Appeals, Eleventh Circuit
January 6, 2023
DO NOT PUBLISH
Appeal from the United States District Court for the Southern District of Georgia D.C. Docket No. 2:18-cv-00070-LGW-BWC
Before WILSON, LUCK, and ANDERSON, Circuit Judges.
PER CURIAM
John Ellis got a reverse mortgage from American Advisors Group, Inc. When he died, his Estate sued American Advisors Group for state law violations. The district court dismissed most of the counts for failure to state a claim, and later granted summary judgment on the remaining two counts to American Advisors Group. The Estate appeals. We affirm.
FACTUAL BACKGROUND
From 1995 until his death twenty years later, Ellis owned a house on Saint Simons Island, Georgia. On October 1, 2014, he took out a reverse mortgage on the house, signing a security deed for the loan. Paragraph 10 of the security deed provided: "[the l]ender may require immediate payment in full of all sums secured by [the deed] if a [b]orrower dies and the [p]roperty is not the [p]rincipal [r]esidence of at least one surviving [b]orrower." The deed also provided: "[i]f [the l]ender requires immediate payment in-full under [p]aragraph 10, [the l]ender may invoke the power of sale granted by [the b]orrower and any other remedies permitted
by applicable law." At the time of the loan, the house was appraised at $1,160,000.00.
Ellis died on June 26, 2015. "[A]bout a week" later, the Estate called American Advisors Group and said that Ellis had died. An unidentified woman who "was the person to talk to about" the subject told the Estate: "just let us know formally within the first six months after the date of [Ellis's] death that he's died, and provided you are actively marketing the property for sale, we'll give you two more [ninety]-day periods to sell it so that you'll have one year from the date of his death to sell the property before we would begin to initiate the process of starting a foreclosure."
In November 2015, the Estate received an "annual occupancy request form." The form asked whether Ellis was still occupying the house, because his occupancy was a condition of the reverse mortgage. On December 1, 2015, the Estate put the house up for sale for $1,499,000.00. Nine days later, the Estate sent a letter to American Advisors Group letting it know that Ellis had died. This letter also said that Ellis's personal property had been sold, the house had been marketed for sale, taxes and insurance for the house had been paid for the next year, the house's interior and exterior had been repainted in full, all the carpeting had been replaced, and the roof was being repaired. The same day, the Estate spoke with a representative of American Advisors Group over the telephone. The representative, a "Tamika," said that given the notice of Ellis's death, the Estate "would be given two additional three[-]month periods up until one year following the death." In
follow-up phone calls, other unidentified representatives of American Advisors Group confirmed that the Estate "would have until one year after the death" to sell the house before American Advisors Group would begin foreclosure.
On December 11, 2015, the Estate sent American Advisors Group another letter (addressed to Tamika), along with Ellis's death certificate and related legal papers. This letter mentioned the call with Tamika, the sale of Ellis's personal property, the repainting of the house, the recarpeting of all carpeted rooms, the sanding and refinishing of the wood floor, and ongoing roof repairs and landscaping improvements. The letter concluded: "[w]e expect [Ellis's] house to sell quickly because [it] is located approximately [one hundred] yards from the St. Simons Island beach, and is now, because of our recently completed work on it, in excellent new-looking condition, and has a magnificent roof deck the entire length of the house which provides excellent views of the beach and nearby Jekyll Island across the ocean."
On December 22, 2015, American Advisors Group sent to the Estate, through certified mail, a letter entitled "Mortgage Due [and] Payable Notification." This letter stated that "[t]he reverse mortgage . . . [wa]s technically in default due to the death of the borrower," and "[i]f the debt [wa]s not paid-in-full, or the property [wa]s not sold within [thirty] days," American Advisors Group was "required to initiate foreclosure proceedings." Even after the filing of the foreclosure action, said the letter, the Estate could "still pay all monies due" to stop it. The Estate never received the letter.
American Advisors Group got an extension from the United States Department of Housing and Urban Development (which regulates reverse mortgages) such that the Estate had until March 9, 2016 to sell the house. In exchange for the extension, the Estate had to provide monthly updates about its efforts to market and sell the house. According to American Advisors Group's notes for Ellis's loan account, representatives told the Estate on December 10 and 15, 2015 that American Advisors Group needed monthly updates. But the Estate denied ever being told to provide monthly updates. On January 4, 2016, the Estate provided an update. Between then and the end of the extension period on March 9, the Estate didn't provide any other updates.
After March 9, 2016, American Advisors Group began proceedings to foreclose on the house. In a letter dated March 11, it told the Estate that it was seeking to foreclose. On March 13, the Estate lowered the listing price from $1,499,000.00 to $1,179,000.00 "to sell [the house] quickly." On March 19, a local newspaper published a foreclosure notice for the house stating that American Advisors Group was the holder of the security deed and that the debt secured by the deed was "due because of . . . failure to pay the indebtedness as and when due and in the manner provided in the [n]ote and [s]ecurity [d]eed." After receiving the March 11 letter, the Estate asked for-and received-more time to sell the house.
On April 2, 2016, the Estate received its first written offer on the house. The offer was for $1,000,000.00. The buyers acknowledged that the Estate "recently lowered the price" (to
$1,179,000.00), but explained that they felt "comfortable with" their offer ($179,000.00 less than that) because the house required "extensive updates." After negotiations, the buyers bought the house for $1,145,000.00 on June 10, 2016. The Estate paid the reverse mortgage debt in full on June 22, and American Advisors Group released the lien on the house and ended the foreclosure process.
Shortly after the foreclosure process stopped, representative Brandi O'Bryant from American Advisors Group called the Estate to confirm receipt in December 2015 of the notifications about Ellis's death and the marketing of the house for sale and to apologize for mistakenly initiating foreclosure. She said: "I'm sorry. We just screwed up. We made a mistake. It's our fault. There was no default. You did everything you were supposed to do. The department that received your letter in December was partying over Christmas and with all the Christmas partying and festivities, they just never got the message to the foreclosure department that they had received the letter from you and that we shouldn't start foreclosure." The Estate told Ms. O'Bryant that the improper foreclosure had hurt it because real estate agents wouldn't show a house in foreclosure and they advised their clients to "wait until after foreclosure" to "buy [the house] for a bargain price."
PROCEDURAL HISTORY
The Estate brought nine counts against American Advisors Group, five of which are on appeal: (one) promissory estoppel; (two) wrongful attempted foreclosure; (three) negligence (because
American Advisors Group didn't tell its foreclosure department not to foreclose on the house); (four) negligence (in commencing wrongful attempted foreclosure); and (seven) elder abuse in breach of a private duty.[1] American Advisors Group moved to dismiss for failure to state a claim. The district court granted the motion in part, dismissing all counts except one and two for promissory estoppel and wrongful attempted foreclosure.
The district court dismissed counts three and four-for negligence-because the alleged negligence arose from a contract without an independent duty in tort, and it dismissed count eight because the count made liability arguments without stating a cause of action. Count seven failed, the district court explained, because American Advisors Group's purported misconduct wasn't elder abuse under the Disabled Adults and Elder Persons Protection Act, O.C.G.A. section 30-5-1 et seq., and because the statute that supposedly allowed the Estate to bring a claim under the Act, O.C.G.A. section 51-1-8, didn't create an independent cause of action.
After taking discovery, American Advisors Group moved for summary judgment on counts one and two. The district court granted the motion. As to count one, the district court explained that it was unreasonable for the Estate to rely on unwritten promises by unidentified representatives about possible extensions for
paying off the reverse mortgage. Count two failed, said the district court, because the record didn't support that American Advisors Group knowingly published untrue information about the reverse mortgage.
STANDARD OF REVIEW
We review de novo a dismissal for failure to state a claim. Cinotto v. Delta Air Lines, Inc., 674 F.3d 1285, 1291 (11th Cir. 2012). We accept the well-pleaded factual allegations as true and...
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