Mbigi v. Wells Fargo Home Mortg.

• Decision Date: 22 March 2016
• Docket Number: No. A15A2067.,A15A2067.
• Citation: 785 S.E.2d 8,336 Ga.App. 316
• Parties: MBIGI v. WELLS FARGO HOME MORTGAGE.
• Court: Georgia Court of Appeals

336 Ga.App. 316

785 S.E.2d 8

MBIGI

v.WELLS FARGO HOME MORTGAGE.

No. A15A2067.

Court of Appeals of Georgia.

March 22, 2016.

Lovemore Mbigi, pro se.

Baker, Donelson, Bearman, Caldwell & Berkowitz, Joshua N. Tropper, Dylan W. Howard, Daniel P. Moore, for appellee.

ELLINGTON, Presiding Judge.

Lovemore Mbigi sued Wells Fargo Home Mortgage, a division of Wells Fargo Bank, N.A. (“Wells Fargo”) after Wells Fargo sold his home in a foreclosure sale. In his complaint, as amended, Mbigi asserted claims against Wells Fargo for wrongful foreclosure, violation of the Georgia Racketeer Influenced and Corrupt Organizations Act (“RICO”),¹ fraudulent and/or negligent misrepresentation, intentional infliction of emotional distress, punitive damages, breach of duty of good faith and fair dealing, and promissory estoppel. The trial court granted Wells Fargo's motion to dismiss Mbigi's complaint for failure to state a claim. See OCGA § 9–11–12(b)(6). On appeal, Mbigi contends that the trial court erred in dismissing his claims. We affirm in part and reverse in part for the reasons set forth below.

A motion to dismiss for failure to state a claim should not be granted unless:

(1) the allegations of the complaint disclose with certainty that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof; and (2) the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought.

(Citation and punctuation omitted.) Stendahl v. Cobb County, 284 Ga. 525(1), 668 S.E.2d 723 (2008). In other words, “[i]f, within the framework of the complaint, evidence may be introduced which will sustain a grant of relief to the plaintiff, the complaint is sufficient.” (Citation and punctuation omitted.) Austin v. Clark, 294 Ga. 773, 775, 755 S.E.2d 796 (2014). On appeal, this Court “review[s] de novo a trial court's determination that a pleading fails to state a claim upon which relief can be granted, construing the pleadings in the light most favorable to the plaintiff and with any doubts resolved in the plaintiff's favor.” (Citation and punctuation omitted.) Babalola v. HSBC Bank, USA, N.A., 324 Ga.App. 750, 751 S.E.2d 545 (2013).

In his complaint, Mbigi alleges that, in 2007, he executed a security deed in favor of Wells Fargo's predecessor² to secure a loan used to fund a 60% portion of the $2.68 million purchase price of a Gwinnett County home (the “Property”). The terms of the loan, an “Option ARM,” allowed Mbigi to pick a monthly payment that was less than the amount needed to pay the accruing interest, resulting in negative amortization. Mbigi was not informed by Wells Fargo or the closing attorney that certain payment options would result in negative amortization. When Mbigi later inquired about the mortgage balance, which he had noticed was “very high,” Wells Fargo told him that it would investigate and modify the loan. In December 2008, Wells Fargo told Mbigi to stop loan payments until the loan was modified. In 2009, Mbigi attempted to pay the loan in full, but Wells Fargo refused to accept the payment. Wells Fargo accepted a loan payment in 2010, but then informed Mbigi that he should not make further payments until the loan was modified. Wells Fargo later informed Mbigi that, because of the negative amortization, the loan had to be modified before he could resume payments, and that he should ignore any communications regarding mortgage payments. Mbigi continued to inquire with Wells Fargo about the loan modification status in 2011, 2012, and 2013. Wells Fargo then referred the loan to its attorneys for foreclosure, “at the same time it was purportedly working on a loan modification.”

On February 8, 2014, Mbigi left the United States on business. While he was away, Wells Fargo's counsel mailed the foreclosure sale notice to a previous notice address and not the address that Mbigi had requested in writing that Wells Fargo use for all correspondence. On June 3, 2014, Wells Fargo sold the Property in a foreclosure sale.

1. Mbigi asserted a claim against Wells Fargo for wrongful foreclosure. A claim of wrongful foreclosure requires the plaintiff to “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.” (Citations, punctuation, and footnote omitted.) DeGolyer v. Green Tree Servicing, LLC, 291 Ga.App. 444, 448(4), 662 S.E.2d 141 (2008). Under OCGA § 23–2–114, “[p]owers of sale in deeds of trust, mortgages, and other instruments shall be strictly construed and shall be fairly exercised.” And “[t]he legal duty imposed upon a foreclosing party under a power of sale is to exercise that power fairly and in good faith.” Wells Fargo Bank, N.A. v. Molina–Salas, 332 Ga.App. 641, 642(1), 774 S.E.2d 712 (2015).

(a) In his complaint, Mbigi contended that Wells Fargo breached its duty to exercise the power of sale fairly and in good faith in that it failed to provide him with notice of the foreclosure sale in compliance with OCGA § 44–14–162.2(a). Mbigi contends that the trial court erred in dismissing his wrongful foreclosure claim to the extent that the claim was based on this alleged breach of duty. We agree.

OCGA § 44–14–162.2(a) provides, in relevant part, that the notice of the initiation of proceedings to exercise a power of sale shall be sent “to the property address or to such other address as the debtor may designate by written notice to the secured creditor.” Id. In the complaint, Mbigi stated that he provided written notice to Wells Fargo of the designated address it was to use for all correspondence, but that Wells Fargo did not send the notice of the foreclosure sale to that address. The complaint does not disclose with certainty that Mbigi would not be entitled to any relief on account of his contention that Wells Fargo failed to provide the proper statutory notice of foreclosure. See Farris v. First Financial Bank, 313 Ga.App. 460, 464(2), 722 S.E.2d 89 (2011) (“The plain language of OCGA § 44–14–162.2(a) requires the secured creditor send notice to the property address unless the debtor designates in writing another address.”) (Emphasis supplied; punctuation and footnote omitted). See also Babalola v. HSBC Bank, USA, N.A., 324 Ga.App. at 753(2)(a), 751 S.E.2d 545 (2013) (allegation that lender failed to provide notice of foreclosure as required by OCGA § 44–14–162.2 supported a wrongful foreclosure claim under Georgia law).

The trial court concluded that Wells Fargo's alleged failure to comply with the notice requirement afforded no basis for a claim of wrongful foreclosure because Wells Fargo had denied the allegation and maintained that it had provided Mbigi's counsel with copies of the notices sent to the Property's address. The order also referenced a copy of the notice of sale under power which was attached to the motion of a third party. Pretermitting whether anything referenced by the trial court, if later established, would conclusively establish that Wells Fargo complied with the statutory notice requirement, the attachment to a motion of a third party was not part of the pleadings in the case and could not be considered as part of the motion to dismiss. See, e.g., Babalola, 324 Ga.App. at 751 n. 4, 751 S.E.2d 545 (2013) (attachment to a brief cannot be considered in a motion to dismiss). See also OCGA § 9–11–10(c) (“[a] copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes”). Wells Fargo's factual contentions constituted “evidence which may or may not be developed during discovery and can be considered on a subsequent motion for summary judgment.” Austin v. Clark, 294 Ga. at 775, 755 S.E.2d 796. If a trial court considers evidence outside the pleadings, then “when it does so it converts the motion to dismiss into a motion for summary judgment.” Babalola, 324 Ga.App. at 751 n. 4, 751 S.E.2d 545. In such case, the trial court would have been required to inform Mbigi that he “would have no less than 30 days within which to submit his own evidence in response to the motion for summary judgment.” (Citation and punctuation omitted.) Id. The trial court did not follow that procedure here, and Mbigi did not acquiesce to consideration of matters outside the pleadings. Accordingly, we conclude that the trial court erred in finding that Mbigi's claim that Wells Fargo breached its duty in failing to provide proper notice of the foreclosure sale showed no basis for a wrongful foreclosure claim.

(b) Mbigi also contended in his complaint that Wells Fargo breached its duty by failing to include in the notice of foreclosure “the name, address, and telephone number of the individual or entity who shall have full authority to negotiate, amend, and modify all terms of the mortgage with the debtor,” as required by OCGA § 44–14–162.2(a). According to the complaint, the notice of foreclosure sale named Wells Fargo as the entity with such authority but, in fact, Wells Fargo did not have full authority to negotiate, amend and modify all terms of the mortgage. Rather, Mbigi contends that the entity with full authority was the owner of the note, and that the owner of the note was an entity different than Wells Fargo. The trial court held that the complaint nevertheless failed to state any basis for a wrongful foreclosure claim because a reasonable person would construe Wells Fargo to be the proper agent of the entity with full authority, and that, in addition, Mbigi “appears to concede” that Wells Fargo had the authority to modify the loan by seeking a loan modification from Wells Fargo as part of the relief Mbigi sought in this action. Mbigi claims that the trial court erred in these rulings.

In You v. JP Morgan Chase Bank, N.A., 293 Ga. 67, 74(2), 743 S.E.2d 428 (2013), the Georgia Supreme Court looked to the plain language of OCGA § 44–14–162.2 to...