Johnson v. Citimortgage, Inc.

• Citation: 351 F.Supp.2d 1368
• Decision Date: 28 December 2004
• Docket Number: No. CIV.A.1:04-CV-856-OD.,CIV.A.1:04-CV-856-OD.
• Parties: Eddie Lee JOHNSON, III Plaintiff v. CITIMORTGAGE, INC. Defendant
• Court: U.S. District Court — Northern District of Georgia

351 F.Supp.2d 1368

Eddie Lee JOHNSON, III Plaintiff v. CITIMORTGAGE, INC. Defendant

No. CIV.A.1:04-CV-856-OD.

United States District Court, N.D. Georgia, Atlanta Division.

December 28, 2004.

COPYRIGHT MATERIAL OMITTED

Lisa Dionne Wright, Law Office of Lisa D. Wright, Atlanta, GA, for Plaintiff.

William Coppedge Collins, Jr., John O'Shea Sullivan, Ashby Leigh Kent, Burr & Forman, Kenneth Lee Millwood, Nelson Mullins Riley & Scarborough, Atlanta, GA, for Defendant.

ORDER

EVANS, District Judge.

This civil Action filed pursuant to the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 et seq., and other state law claims is currently before the Court on Defendant's Motion to Dismiss; Plaintiff's Motion for a Scheduling and Settlement Conference; and Defendant's Motion to Dismiss Amended Complaint. For reasons set forth below, Defendant's Motion to Dismiss [# 4] is DISMISSED as moot; Plaintiff's Motion for a Scheduling and Settlement Conference [# 21] is GRANTED in part and DENIED in part; and Defendant's Motion to Dismiss Amended Complaint [# 23] is GRANTED in part and DENIED in part.

I. Procedural Background

Plaintiff, Eddie Lee Johnson, III ("Plaintiff") filed his original Complaint on March 29, 2004. Defendant CitiMortgage filed a Motion to Dismiss [# 4] on April 19, 2004, and Plaintiff filed an Opposition to CitiMortgage's Motion to Dismiss on May 5, 2004.

On May 13, 2004, Plaintiff filed a Motion for Leave to File Plaintiff's Amended Complaint. This Court granted Plaintiff's Motion for Leave to File Plaintiff's Amended Complaint on June 4, 2004. Accordingly, and as requested by Defendant,¹ Defendant's Motion to Dismiss [# 4] is DISMISSED as moot. Plaintiff's Amended Complaint was filed with this Court on June 4, 2004. On July 7, 2004, CitiMortgage filed it Motion to Dismiss Amended Complaint [# 23], moving this Court to dismiss Counts Two, Three, Four, Seven, Eight, and Ten on the grounds that those counts failed to state a claim upon which relief can be granted. Defendant also moves this Court to dismiss Count Six for breach of contract or, in the alternative, require Plaintiff to provide CitiMortgage with a more definitive statement of the claim.

II. Summary of Allegations in Plaintiff's Amended Complaint

On or about March 21, 2003, Plaintiff closed on a residential real estate loan (the "Loan") for the purpose of financing Plaintiff's purchase of a home in Atlanta, Georgia. (Am.Compl., ¶¶ 5, 7). The lender under the original note was Pine State Mortgage Corporation. (Am.Compl., ¶ 6). After the Loan closed, Pine State transferred the Loan and its servicing to Defendant CitiMortgage. (Am.Compl., ¶ 8). Plaintiff alleges that CitiMortgage failed to properly apply and/or account for payments Plaintiff made on his Loan, despite notice by Plaintiff to CitiMortgage of the incorrect accounting. (Am.Compl., ¶ 12-31). Furthermore, Plaintiff contends that CitiMortgage incorrectly reported to credit reporting agencies that Plaintiff's Loan was overdue and delinquent even after Plaintiff notified CitiMortgage of the alleged inaccurate accounting. (Am.Compl., ¶ 29).

Based on the foregoing allegations, Plaintiff asserts ten separate counts: (1) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601, et seq. (Am. Compl., ¶¶ 35-39); (2) conversion (Am.Compl., ¶ 40); (3) defamation (Am.Compl., ¶ 41); (4) negligence (Am.Compl., ¶ 42); (5) violation of the Georgia Residential Mortgage Act (Am.Compl., ¶ 43-44); (6) breach of contract (Am.Compl., ¶ 45); (7) breach of the covenant of good faith and fair dealing (Am.Compl., ¶ 46); (8) stubborn litigiousness (Am.Compl., ¶ 47); (9) punitive damages (Am.Compl., ¶ 48); and (10) intentional infliction of emotional distress (Am.Compl., ¶ 49).

III. Standard of Review

When considering a motion to dismiss under Federal Rules of Civil Procedure 12(b)(6), the court considers all well-pleaded facts in the complaint as true and draws all reasonable inferences in the light most favorable to Plaintiff. Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1273 n. 1 (11th Cir.1999). A complaint may not be dismissed under Federal Rules of Civil Procedure 12(b)(6) "`unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Rosen v. TRW, Inc., 979 F.2d 191, 194 (11th Cir.1992) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Accordingly, this Court treats the assertions made in Plaintiff's complaint as true.

IV. Discussion

A. Count Two: Conversion

Plaintiff's basis for his conversion claim is Citimortgages's failure to apply his October 31, 2003 loan payment in the amount of $1,749.40. As the Court of Appeals of Georgia recently stated:

[C]onversion involves an unauthorized assumption and exercise of the right of ownership over personal property belonging to another, in hostility to [her] rights. The very essence of conversion is that the act of dominion is wrongfully asserted. Thus, if a party has a right to assert ownership, the act of dominion is not wrongful and does not constitute conversion.

Kilburn v. Patrick, 241 Ga.App. 214, 525 S.E.2d 108 (1999) (punctuation and footnotes omitted). "To make out a prima facie case, in an action for damages for conversion of personal property, the plaintiff must show title to the property, possession by the defendant, demand for possession, and refusal to surrender the property, or an actual conversion prior to the filing of the suit." Atlantic Coast Line R. Co. v. McRee, 12 Ga.App. 137, 76 S.E. 1057 (1913). Any distinct act of dominion and control wrongfully asserted over another's personal property, in denial of his right or inconsistent with his right, is a conversion of such property. Lovinger v. Hix Green Buick Co., 110 Ga.App. 698, 140 S.E.2d 83 (1964). When someone comes into lawful possession of personal property, however, in the absence of a demand for its return and a refusal to return the personal property, there is no conversion. McDaniel v. White, 140 Ga.App. 118, 230 S.E.2d 500 (1976).

Applying the above principles to the facts alleged in the Amended Complaint, the Court finds that Plaintiff states a claim for the tort of conversion. The Court must assume as true Plaintiff's allegation that Citimortgage failed to apply the funds to his account. Am. Compl., ¶ 27 ("The Plaintiff's October 31, 2003 payment in the amount of $1,749.90 was received by Citimortgage but never posted to the Plaintiff's mortgage account"). Such an action amounts to an act of dominion by Defendant that is wrongfully asserted, even though Defendant came into lawful possession of Plaintiff's personal property. According to the Amended Complaint, when Plaintiff demanded that the funds be located and/or applied to his account, Defendant only partially complied with this request. While the funds were applied to the September 2003 installment of $871.70 with the balance of $862.70 placed in "unapplied funds," (Am.Compl., ¶ 24), Citimortgage repeatedly refused Plaintiff's requests to apply the funds held in "unapplied funds" to his mortgage (Am.Compl., ¶ 28). Based on the foregoing allegations, the Court is unable to conclude that Plaintiff can prove no set of facts in support of his claim for conversion. Accordingly, Defendant's Motion to Dismiss Count Two of Plaintiff's Amended Complaint is DENIED.

B. Count Three: Defamation

In Count Three, Plaintiff alleges that "Citimortgage's reporting to the credit reporting agencies that Mr. Johnson was delinquent and overdue in his payment for May 2003, October 2003 and November 2003 constituted the tort of defamation." Am. Compl., ¶ 41.

Defendant argues that Plaintiff fails to state a claim for defamation because the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., preempts the state law claim. First Citimortgage contends that 15 U.S.C. § 1681t(b)(1)(F), passed in a 1996 amendment to the FCRA, preempts all state law causes of action against furnishers of credit information. Additionally, according to Citimortgage, 15 U.S.C. § 1681h(e) preempts state law claims of defamation "except as to false information furnished with malice or willful intent to injure such consumer," and Plaintiff's allegations do not meet this heightened standard.

Prior to the 1996 amendments, the availability of state law actions against furnishers of credit information was governed by 15 U.S.C. § 1681h(e), which provides, in relevant part, as follows:

Except as provided in section 1681n and 1681o of this title, no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against ... any person who furnishes information to a consumer reporting agency, based on information disclosed pursuant to section 1681g, 1681h, or 1681m of this title, or based on information disclosed by a user of a consumer report to or for a consumer against whom the user has taken adverse action, based in whole or in part on the report except as to false information furnished with malice or willful intent to injure such consumer.

(Emphasis added). As part of the 1996 amendments, Congress added § 1681t, which provides in pertinent part as follows:

(b) General Exceptions. No requirement or prohibition may be imposed under the laws of any State —

(1) with respect to any subject matter regulated under —

* * * * * *

(F) section 1681s-2 of this title, relating to the responsibilities of persons who furnish information to consumer reporting agencies, except that this paragraph shall not apply —

(i) with respect to section 54A(a) of chapter 93 of the Massachusetts Annotated Laws ...; or

(ii) with respect to section 1785.25(a) of the California Civil Code .....

15 U.S.C. § 1681t. This newer language provides limits on state law liability that are both broader and more narrow than the older § 1681h(e) language. The...