Humphrey v. JP Morgan Chase Bank, N.A.

• Citation: 787 S.E.2d 303,337 Ga.App. 331
• Decision Date: 08 June 2016
• Docket Number: A16A0289
• Parties: Humphrey v. JP Morgan Chase Bank, N.A. et al.
• Court: Georgia Court of Appeals

337 Ga.App. 331

787 S.E.2d 303

Humphrey

v.JP Morgan Chase Bank, N.A. et al.

A16A0289

Court of Appeals of Georgia.

June 8, 2016

Grady Alexander Roberts III, Roberts Law, Atlanta, or Appellant.

Teah Glenn Kirk, David Marino Pernini, Dustin Scott Sharpes, Wargo & French, Atlanta, John C. Pennington, for Appellees.

Phipps

, Presiding Judge.

Virgil Humphrey sued JP Morgan Chase Bank, N.A. (“Chase”) and the law firm of Martin & Brunavs (“M&B”) for damages allegedly arising from the initiation of foreclosure proceedings on certain property. The trial court granted Chase's motion to dismiss and entered summary judgment for M&B. Humphrey appeals both rulings. For reasons that follow, we affirm the grant of summary judgment to M&B, but reverse the dismissal of Humphrey's claims against Chase.

1. We will first address the summary judgment ruling. Summary judgment is appropriate when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”¹ We review the grant of summary judgment de novo, construing the evidence and all reasonable inferences and conclusions drawn from it in the light most favorable to the non-movant.²

So viewed, the record shows that Washington Mutual Bank loaned Humphrey $136,000 in 2005. To secure the loan, Humphrey granted Washington Mutual a security interest in a parcel of property he owned in Paulding County. Washington Mutual was subsequently closed, and, in 2008, Chase purchased its assets. Chase later assigned the security deed relating to Humphrey's property to Wells Fargo Bank, N.A., but remained as servicer of the indebtedness.

In 2012, Humphrey sued Chase, Washington Mutual, and another entity in federal court, alleging that (1) the security deed he had originally granted to Washington Mutual was invalid; (2) the defendants enjoyed no rights under the deed and underlying promissory note; (3) given the invalidity of the deed, any foreclosure proceedings commenced pursuant to it would be wrongful; and (4) the defendants had fraudulently demanded and collected payments on the indebtedness from Humphrey. At Humphrey's request, the federal court dismissed the suit without prejudice on June 6, 2013. A few months later, Humphrey filed a new lawsuit against Washington Mutual, a Chase entity, and other defendants in the Superior Court of Paulding County, again alleging that the defendants lacked a valid security interest in the property and thus had no standing to foreclose. It appears that the second lawsuit was removed to federal court, and Humphrey voluntarily consented to its dismissal in March 2014.

On July 24, 2014, M&B, as counsel for Chase, sent Humphrey a Notice of Acceleration and Foreclosure, informing Humphrey that his indebtedness had been declared due in full for failure to pay, that Chase had retained M&B to commence foreclosure proceedings against the property, and that a foreclosure sale would be conducted on September 2, 2014. Less than a week before the scheduled foreclosure sale, Humphrey filed this lawsuit against Chase and M&B. The complaint focused primarily on the sufficiency of the July 24 foreclosure notice, asserting that the notice failed to meet applicable statutory and security deed requirements. Based on these alleged failings, Humphrey claimed that the defendants had (1) wrongfully commenced foreclosure proceedings; (2) interfered with his property rights; (3) committed a Georgia RICO violation; (4) defrauded him; and (5) converted his personal property. He further claimed that Chase had breached the security deed's contractual terms governing notice and debt acceleration.

M&B moved for summary judgment as to all claims against it. In support, it provided copies of the July 24, 2014 Notice of Acceleration and Foreclosure, as well as the Notice of Sale Under Power that M&B had submitted for publication in anticipation of the foreclosure sale. M&B also offered evidence that it had never completed a foreclosure on the property and did not have a contractual relationship with Humphrey.

The trial court granted summary judgment to M&B. Humphrey now appeals, arguing that issues of fact remain as to wrongful foreclosure and breach of contract.³ We disagree.

(a) Wrongful Foreclosure . To support an action for wrongful foreclosure, a claimant “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.”⁴ The claimant must also show that a foreclosure sale occurred. As we recently noted, “as a matter of law, a plaintiff cannot state a claim for wrongful foreclosure when no foreclosure sale has taken place.”⁵

M&B presented evidence that it never held a foreclosure sale on the property, undermining the wrongful foreclosure claim.⁶ Humphrey does not dispute this evidence or contend that the sale took place. Instead, he now argues that his allegations should be viewed as a claim for wrongful attempted foreclosure. It is true that Georgia law recognizes separate causes of action for wrongful foreclosure and wrongful attempted foreclosure.⁷ But Humphrey's complaint clearly referenced wrongful foreclosure, rather than an attempted foreclosure.⁸ And although M&B asserted below that the wrongful foreclosure allegation could not succeed because no foreclosure had occurred, Humphrey did not respond to M&B's summary judgment motion or otherwise argue before the trial court that he was alleging a wrongful attempted foreclosure claim.

“It is well settled [that] appellate courts will not consider new arguments in opposition to a motion for summary judgment raised for the first time on appeal.”⁹ As explained by our Supreme Court, “[t]o consider the case on a completely different basis from that presented below would be contrary to the line of cases holding, ‘He must stand or fall upon the position taken in the trial court.’ ”¹⁰ We will not, therefore, consider Humphrey's assertions regarding wrongful attempted foreclosure. Moreover, given the undisputed evidence that the foreclosure originally scheduled for September 2, 2014, did not take place, the trial court properly granted M&B summary judgment on the wrongful foreclosure claim.¹¹

(b) Breach of Contract . Humphrey also argues that questions of fact remain as to breach of contract. Humphrey's complaint, however, did not assert a breach of contract claim against M&B. On the contrary, the complaint alleged that Humphrey had a contractual relationship with Chase and that Chase breached the contract by “failing to abide by the terms of the security deed.” All of the contractual assertions related to Chase, rather than M&B.

Furthermore, M&B presented evidence—not disputed by Humphrey below or on appeal—that it never entered into a contract with Humphrey. To the extent the complaint could be construed as alleging a breach of contract claim against M&B, therefore, the trial court properly granted summary judgment to the law firm.¹²

2. The trial court erred, however, in dismissing Humphrey's claims against Chase. The record shows that Chase moved to dismiss the complaint, asserting that it was barred by res judicata and failed to state a claim upon which relief could be granted. The trial court rejected the failure to state a claim argument, but agreed with Chase that res judicata precluded Humphrey's claims. We review this ruling de novo.¹³

The doctrine of res judicata “prevents the re-litigation of all claims which have already been adjudicated, or which could have been adjudicated, between identical parties or their privies in identical causes of action.”¹⁴ Before res judicata applies, therefore, three prerequisites must be met: “(1) identity of the cause of action, (2) identity of the parties or their privies, and (3) previous adjudication on the merits by a court of competent jurisdiction.”¹⁵ Humphrey argues that Chase did not meet the first requirement—identity of cause of action. We agree.

According to Chase, Humphrey's decision to voluntarily dismiss his two prior federal-court cases relating to the security deed bars this lawsuit.¹⁶ The allegations asserted in the current complaint, however, primarily arose from events occurring after Humphrey dismissed the previous actions in June 2013 and March 2014. Specifically, he alleged that the July 2014 foreclosure notice and resulting foreclosure proceedings were legally insufficient and did not meet the requirements of the security deed. These claims could not have been raised in the prior lawsuits because the underlying circumstances had not yet occurred. Res judicata, therefore, does not preclude the claims, and the trial court erred in granting Chase's motion to dismiss.¹⁷

On appeal, Chase argues that even if res judicata does not apply, the trial court properly dismissed Humphrey's claims because the evidence supporting M&B's summary judgment motion also authorized dismissal. In essence, Chase asks us to consider evidence outside the pleadings, convert its motion to dismiss into a request for summary adjudication, and enter judgment in its favor.¹⁸ This we decline to do. Chase did not file—and the trial court never ruled on—a motion for summary judgment as to the claims against it. We cannot sua sponte grant summary judgment to Chase on appeal.¹⁹

Judgment affirmed in part and reversed in part.

Dillard

and Peterson, JJ., concur.

1 OCGA § 9–11–56 (c)

.

2 See Morrow v. Angkawijana, LLC , 327 Ga.App. 1, 755 S.E.2d 561 (2014).

3 The trial court granted summary judgment to M&B on all claims, including Humphrey's claims for fraud, RICO violation, interference with property rights, and conversion. Humphrey's appellate brief, however, presents argument and citation of authority only with respect to the wrongful foreclosure and breach of contract claims. To the extent Humphrey's enumerated error...