McGinnis v. Am. Home Mortg. Servicing Inc.

• Decision Date: 30 June 2014
• Docket Number: Civil Action No. 5:11-CV-284 (CAR)
• Court: U.S. District Court — Middle District of Georgia
• Parties: JANE MCGINNIS, Plaintiff, v. AMERICAN HOME MORTGAGE SERVICING INC., Defendant.

JANE MCGINNIS, Plaintiff, v. AMERICAN HOME MORTGAGE SERVICING INC., Defendant.

Civil Action No. 5:11-CV-284 (CAR)

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF GEORGIA MACON DIVISION

SO ORDERED: June 30, 2014

ORDER ON RENEWED MOTION FOR JUDGMENT

AS A MATTER OF LAW & MOTION FOR NEW TRIAL

Following a jury verdict and entry of judgment in favor of Plaintiff Jane McGinnis, Defendant Homeward Residential, Inc. f/k/a American Home Mortgage Servicing Inc. (herein "Homeward") filed a Renewed Motion for Judgment as a Matter of Law [Doc. 105] and, in the alternative, a Motion for New Trial and/or Remittitur [Doc. 104]. Homeward has also filed a Request for Hearing [Doc. 116] on these motions.

Because Homeward's motions are based on much of the same evidence and repeat many of the same arguments the Court previously considered on summary judgment and during Homeward's oral motion for judgment as a matter of law at the close of the evidence, the Court finds that a hearing and further oral argument is unnecessary. Homeward's Request for a Hearing [Doc. 116] is therefore DENIED.

After having now considered the extensive written briefs, the evidence present at trial, and the relevant law, the Court agrees with Homeward that the evidence at trial was not legally sufficient for a reasonable jury to find a "specific intent to harm." The Renewed Motion for Judgment as a Matter of Law is thus GRANTED in part; and it is ORDERED that the punitive damages award be reduced to $250,000.00.¹ The remainder of Homeward's Renewed Motion for Judgment as a Matter of Law and Homeward's Motion for a New Trial are, however, DENIED.

BACKGROUND

This is an action for wrongful foreclosure, conversion, interference with property rights, and intentional infliction of emotional distress filed by a borrower, Plaintiff Jane McGinnis, against the company that serviced her loans, Defendant Homeward Residential, Inc. The evidence at trial showed that, shortly after Homeward began servicing Plaintiff's non-residential mortgage in the Fall of 2009, there was in increase in the amount of her monthly payment, from $605.38 to $843.58, which Homeward attributed to an increase in the escrow. Following two more escrow analyses, Plaintiff's monthly payment was reduced to $638.32. Plaintiff disputed and refused to pay the increased amounts, and instead continued to submit her original monthly payment of $605.38. Because of this, Plaintiff went into default, and Homeward foreclosed on the property.

At trial, Plaintiff claimed that the foreclosure was wrongful and that her default was caused by Homeward's breach of their lending agreement. Plaintiff asserts that Homeward breached a duty owed to her by unreasonably increasing her escrow payment, failing to give her proper notice of the increase, and failing to credit her account at the time payments were made. Plaintiff put forth evidence that Homeward refused to reconsider its position that she was in default, harassed her for payments, and foreclosed on her property despite her attempts to cure the deficiency and pay the account in full, and in so doing, caused Plaintiff to suffer severe emotional distress.

Homeward, on the other hand, takes the position that Plaintiff simply refused to pay a routine increase in her escrow payment because she did not agree with it. It presented evidence at trial that Plaintiff was in default, remained in default even after her escrow payments were reduced, failed to cure the deficiencies despite being given opportunities to do so, and thus left Homeward with no choice but to foreclose.

At the close of evidence, Homeward moved, pursuant to Federal Rule of Civil Procedure 50(a), for judgment as a matter of law on Plaintiff's claims for wrongful foreclosure, conversion, interference with property rights, and intentional infliction of emotional distress.² The Court took the motion under advisement.³ The jury then returned a verdict in favor of Plaintiff and against Homeward as to all claims and awarded Plaintiff $6,000.00 in economic, compensatory damages, $500,000.00 inemotional damages, and $3,000,000.00 in punitive damages. After accepting the jury's verdict, the Court denied Homeward's motion for judgment as a matter of law.⁴

PROCEDURAL POSTURE

Homeward has now filed two timely post-judgment motions challenging the jury's verdict in the case: a Renewed Motion for Judgment as a Matter of Law, under Federal Rule of Civil Procedure 50(b) and, in the alternative, a Motion for a New Trial and/or Remittitur, under Federal Rule of Civil Procedure 59(a). Although the arguments in both motions are very similar, the two motions "have wholly distinct functions and entirely different standards govern their allowance."⁵ If a motion for new trial is granted, the case is simply tried again; if the court grants a motion for judgment as a matter of law under Rule 50(b), the case is at an end.⁶ A Rule 50(b) motion is thus measured by a far more rigorous standard. "On a motion for a new trial, the court has a wide discretion to order a new trial whenever prejudicial error has occurred. On a motion for judgment as a matter of law, it has no discretion whatsoever and considers only the question of whether there is sufficient evidence to raise a jury issue."⁷

Where, as in this case, a party files alternative motions under Rules 50 and 59 making materially indistinguishable arguments, the arguments may be consideredtogether though the legal standards differ.⁸ In such cases, "the trial judge should rule on the motion for judgment. Whatever his ruling thereon he should also rule on the motion for a new trial, indicating the grounds of his decision."⁹

STANDARDS OF REVIEW

I. Standard of Review under Rule 50(b)

"The standard for granting a renewed motion for judgment as a matter of law under Rule 50(b) is precisely the same as the standard for granting the pre-submission motion under 50(a)."¹⁰ Thus, regardless of whether the district court's analysis is undertaken before or after submitting the case to the jury, the question before the district court is, "whether the evidence is legally sufficient to find for the party on that issue."¹¹ "Any renewal of a motion for judgment as a matter of law under Rule 50(b)," however, "must be based upon the same grounds as the original request for judgment as a matter of law made under Rule 50(a) at the close of the evidence and prior to the case being submitted to the jury."¹²

"[I]n ruling on a party's renewed motion under Rule 50(b) after the jury has rendered a verdict, a court's sole consideration of the jury verdict is to assess whetherthat verdict is supported by sufficient evidence."¹³ "[T]he court must evaluate all the evidence, together with any logical inferences, in the light most favorable to the non-moving party."¹⁴ "[I]t is not the function of the Court to make credibility or factual determinations"; and "if there are conflicting inferences that can be drawn from that evidence, it is not the [c]ourt's role to pick the better one."¹⁵ "It is the jury's task - not [the court's] - to 'weigh conflicting evidence and inferences, and determine the credibility of the witnesses.'"¹⁶

A party seeking judgment as a matter of law under Rule 50 based on the sufficiency of the evidence has a heavy burden to carry. The motion may be granted only "when the facts and inferences . . . point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict.'"¹⁷ The Court must "affirm the jury verdict unless there is no legal basis upon which the jury could have found for [the prevailing party]."¹⁸ "Conversely, if there is substantial evidence opposed to the motion such that reasonable people, in the exercise of impartial judgment, might reach differing conclusions," the jury's verdict must beleft intact.¹⁹ Simply stated, a Rule 50 motion must be denied if there is any evidence from which the jury "reasonably could have resolved the matter the way it did."²⁰

If a pure legal error is detected, the district court has an obligation and the power "to correct the error by vacating or reversing the jury's verdict."²¹ "Similarly, where a portion of a verdict is for an identifiable amount that is not permitted by law, the court may simply modify the jury's verdict to that extent and enter judgment for the correct amount."²² "If a reduction in damages is necessitated by legal error, the reduction is not a remittitur and a new trial is not required."²³

II. Standard of Review under Rule 59(a)

A losing party may move for a new trial on grounds that "the verdict is against the great weight of the evidence, that the damages are excessive, or that, for other reasons, the trial was not fair . . . ; and may raise questions of law arising out of alleged substantial errors in admission or rejection of evidence or instructions to the jury."²⁴ Thus, under Rule 59(a), a district judge may, in his discretion, grant a new trial "if in his opinion, 'the verdict is against the clear weight of the evidence . . . or will result in amiscarriage of justice, even though there may be substantial evidence which would prevent the direction of a verdict.'"²⁵

When ruling on a motion for new trial, however, the judge should not substitute his own credibility choices and inferences for the reasonable credibility choices and inferences made by the jury.²⁶ For this reason, "new trials should not be granted on evidentiary grounds unless, at a minimum, the verdict is against the great - not merely the greater - weight of the evidence."²⁷ "A trial court should not grant a new trial merely because the losing party could probably present a better case on another trial";²⁸ nor is the court free "to set aside the verdict merely because the judge might have awarded a different amount of damages."²⁹ Rule 59 also cannot be used by the losing party to raise arguments that could, and should, have been made before the judgment was issued;³⁰ a motion for...