Roberts v. JP Morgan Chase Bank, Nat'l Ass'n, A17A0138

• Decision Date: 27 June 2017
• Docket Number: A17A0138
• Parties: ROBERTS v. JP MORGAN CHASE BANK, NATIONAL ASSOCIATION et al.
• Court: Georgia Court of Appeals

342 Ga.App. 73

802 S.E.2d 880

ROBERTS

v.JP MORGAN CHASE BANK, NATIONAL ASSOCIATION et al.

A17A0138

Court of Appeals of Georgia.

June 27, 2017

Catherine Gibson McCauley, Atlanta, for Appellant.

Brian Frederick Hansen, David Marino Pernini, Dustin Scott Sharpes, Leslie Kali Eason, Jeffrey William Melcher, Parks Kalervo Stone, Kimberly Council Sheridan, Atlanta, for Appellee.

Rickman, Judge.

Homeowner, James Roberts filed a complaint against JP Morgan Chase Bank, National Association ("Chase"), and Associated Credit Union ("ACU"), alleging claims for breach of contract, emotional distress, fraud, negligent misrepresentation, punitive damages, and attorney fees. The trial court, in two separate orders, granted separate motions to dismiss filed by Chase and ACU, on the ground that the complaint failed to state a claim upon which relief can be granted. Roberts appeals. For the reasons that follow, we affirm the trial court's rulings as to the claim for emotional distress; we reverse the rulings as to the claims for breach of contract, fraud, negligent misrepresentation, and attorney fees; we affirm in part and reverse in part as to the claim for punitive damages; and we remand this case with direction and for further proceedings not inconsistent with this opinion.

"We review de novo the dismissal of a complaint for failure to state a claim." (Citation omitted.) Benedict v. State Farm Bank, FSB , 309 Ga. App. 133, 134 (1), 709 S.E.2d 314 (2011). This Court will "accept as true all well-pled material allegations in the complaint and ... resolve any doubts in favor of [Roberts]." (Citations, punctuation, and footnotes omitted.)

Roberson v. Northr up , 302 Ga. App. 405, 691 S.E.2d 547 (2010).¹ And in this appeal, because there is no indication that the trial court converted the motions to dismiss into motions for summary judgment, we consider documents attached only to the complaint and answers, and not any additional document attached to Roberts' pleadings opposing the motions to dismiss.² See Babalola v. HSBC Bank, USA , 324 Ga. App. 750, 751, n. 4, 751 S.E.2d 545 (2013).

The complaint, answers, and the exhibits attached thereto show the following.³ In June 2009, Roberts obtained a loan from Chase in the amount of $265,255, to refinance a prior loan secured by Roberts' home property. The June 2009 loan (hereinafter "the Chase Loan" or "mortgage loan") is secured by a security deed executed by Roberts in favor of Chase and filed on July 9, 2009. The security deed provides that Roberts and Chase did "covenant and agree" to the provisions set forth in 26 paragraphs of the security deed. Paragraph 19 of the security deed, entitled "Borrower's Right to Reinstate After Acceleration," provides the mechanism for reinstatement, which includes curing the default of any covenant or agreement under the deed or note. Paragraph 19 further provides that "Upon reinstatement by Borrower, this Security Instrument and obligation secured hereby shall remain fully effective as if no acceleration had occurred."

In October 2009, Roberts entered into a home equity line of credit agreement with ACU, in the amount of $100,000. The October 2009 loan (hereinafter "the HELOC Loan") is secured by a "Deed to Secure Debt" executed by Roberts in favor of ACU and filed on October 8, 2009. Paragraph 5 of the deed to secure debt pertinently provides:

If Borrower fails to perform the covenants and agreements contained in this Deed, or if any action or proceeding is commenced which materially affects Lender's interest in

the Property, ... then Lender at Lender's option, upon notice to Borrower, may ... disburse such sums and take such action as is necessary to protect Lender's interest, including, but not limited to, disbursement of reasonable attorney's fees.... Any amounts disbursed by Lender pursuant to this paragraph 5, with interest thereon, shall become additional indebtedness of Borrower secured by this Deed.

In 2013, Roberts fell behind on both his mortgage loan and the HELOC Loan. Chase began foreclosure proceedings; Chase also notified Roberts of the amount due in order to stop the foreclosure sale and reinstate his mortgage loan, and of the time period within which to pay the reinstatement amount.

Three days before the expiration of the reinstatement period, Roberts paid the requisite amount to stop foreclosure and reinstate the Chase Loan, i.e., his mortgage loan with Chase, and on that same day he executed a document entitled "Reinstatement Agreement." The reinstatement agreement listed Chase as the "Lender" and Roberts as the "Borrower," and provided that henceforth "strict and complete compliance with the terms of the Note and Security Deed in effect immediately prior to Borrower's default ... including prompt payment of each monthly installment when due" would be required. A representative from a company employed by Chase's law firm also signed the reinstatement agreement, acknowledging receipt of the funds "to cancel the pending foreclosure sale."

One day past the reinstatement period, ACU paid Chase $261,410.43, representing the full amount of the Chase Loan. Thereafter, Chase cancelled the security deed and closed Roberts' mortgage loan account. ACU added the Chase Loan pay-off amount to Roberts' HELOC Loan.

After ACU's pay-off to Chase, Roberts' monthly loan payment/indebtedness on his property increased by $1,225.97. Roberts repeatedly contacted Chase and requested a reinstatement of the Chase Loan, and although Chase promised to resolve the matter, the Chase Loan was not reinstated, resulting in Roberts filing the instant complaint. Roberts also alleged that as a consequence of the increased payment on his home indebtedness, he had to forego helping his daughter with college tuition, and he complains of fees and costs "incurred by ACU for their error" that have been added to the balance of his loan.

As against both Chase and ACU, Roberts asserted separate claims for breach of contract, and joint claims for emotional distress, punitive damages, and attorney fees. As against only Chase, Roberts asserted additional claims for fraud and negligent misrepresentation.

At a minimum, a complaint must contain "[a] short and plain statement of the claims showing that the pleader is entitled to relief," OCGA § 9-11-8 (a) (2) (A), and this short and plain statement must include enough detail to afford the defendant fair notice of the nature of the claim and a fair opportunity to frame a responsive pleading. If a complaint gives the defendant fair notice of the nature of the claim, it should be dismissed for failure to state a claim only if, as our Supreme Court has explained, its allegations disclose with certainty that no set of facts consistent with the allegations could be proved that would entitle the plaintiff to the relief he seeks. Put another way, if, within the framework of the complaint, evidence may be introduced which will sustain a grant of relief to the plaintiff, the complaint is sufficient. In assessing the sufficiency of the complaint, we view its allegations of fact in the light most favorable to the plaintiff.

(Citations and punctuation omitted.) Benedict , 309 Ga. App. at 134 (1), 709 S.E.2d 314. "[I]t is no longer necessary for a complaint to set forth all of the elements of a cause of action in order to survive a motion to dismiss for failure to state a claim." (Citation omitted.) Scott v. Scott , 311 Ga. App. 726, 729 (1), 716 S.E.2d 809 (2011).

1. Breach of Contract . Roberts contends that the trial court erred in granting Chase's and ACU's motions to dismiss his breach of contract claims.

"The elements for a breach of contract claim in Georgia are the (1) breach and the (2) resultant damages (3) to the party who has the right to complain about the contract being broken." (Citation, punctuation, and footnotes omitted.) Houghton v. Sacor Financial, Inc ., 337 Ga. App. 254, 256 (1) (a), 786 S.E.2d 903 (2016). The security deed Roberts executed in favor of Chase contained a power of sale and was thus "a contract and its provisions are controlling as to the rights of the parties thereto and their privies." (Citation and punctuation omitted.) Stewart v. Sun t rust Mtg ., 331 Ga. App. 635, 638 (3), 770 S.E.2d 892 (2015). Likewise, regarding the deed to secure debt Roberts executed in favor of ACU, "powers contained in a deed to secure debt are matters of contract, and will be enforced as written." (Citation and punctuation omitted.) Hilton v. Millhaven Co ., 158 Ga. App. 862, 863, 282 S.E.2d 415 (1981).

(a) Chase . Roberts' breach of contract claim against Chase is based on Chase's acceptance of payment from ACU after Roberts had timely paid the requisite amount to stop the foreclosure and reinstate his mortgage loan. The security deed and reinstatement agreement reflect that after Roberts cured the default on his mortgage loan, Roberts had the right to have enforcement of the security deed discontinued, and the security deed and the obligation secured thereby would remain fully effective under the terms applicable immediately prior to Roberts' default, as if no acceleration of the debt had occurred. The complaint, coupled with the attached security deed and reinstatement agreement as exhibits thereto, was sufficient to put Chase on notice of the breach of contract claim being asserted against it. Therefore, the trial court erred in dismissing the breach of contract claim against Chase. See James v. Bank of America, N. A. , 332 Ga. App. 365, 367-368 (2), 772 S.E.2d 812 (2015) (physical precedent only); Stewart , 331 Ga. App. at 638-639 (3), 770 S.E.2d 892 ; Babalola , 324 Ga. App. at 755 (2) (b), 751 S.E.2d 545.

(b) ACU . Roberts' breach of contract claim against ACU is based on ACU's payment in full of the mortgage loan after Roberts was no longer in default and was current on said loan. The deed to secure debt pertinently provides that ACU could "disburse such sums and take such action as is necessary to protect"⁴ its interest in the...