Johnston et al v. Wachovia Equity Servicing, LLC, No. 4:2007cv00025 - Document 59 (M.D. Ga. 2013)
Court Description: ORDER denying 43 Motion to Dismiss; denying 8 Motion to Dismiss ComplaintOrdered by Judge W. Louis Sands on 9/26/2013 (tlf).
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Johnston et al v. Wachovia Equity Servicing, LLC Doc. 59 IN TH E U N ITED STATES D ISTRICT COU RT FOR TH E MID D LE D ISTRICT OF GEORGIA COLU MBU S D IVISION LESLIE J OHNSTON, In dividually an d on behalf of a class of sim ilarly situated person s; an d SONIA J OHNSTON, In dividually an d on beh alf of a class of sim ilarly situated person s, : : : : : : Plain tiffs, : : v. : : WACHOVIA EQUITY SERVICING, LLC, : : Defen dan t. : : CASE NO.: 4:0 7-CV-25 (WLS) ORD ER Presen tly pen din g before th e Court is Defendan t’s Motion to Dismiss (Doc. 8) an d Motion to Dism iss Class Allegation s an d Class Claim s. (Doc. 43.) For th e following reason s, Defen dan t’s Motion to Dism iss (Doc. 8) an d Motion to Dism iss Class Allegation s an d Class Claims (Doc. 43) are D EN IED . BACKGROU N D On J anuary 20 , 20 0 7, Plain tiffs Leslie and Son ia J ohn ston , in dividually an d on behalf of a class of similarly situated person s, filed a complain t again st HomEq Servicing Corporation (“Hom Eq”). (Doc. 1.) Therein, Plaintiffs claim ed they are en titled to liquidated damages un der Ga. Code § 44-14-3 because HomEq failed to tran sm it can cellation n otices in relation to various security deeds within sixty days of satisfaction of the associated loan s in accordan ce with Georgia law. (Id. at 5.) Wachovia Equity Servicin g, LLC (“Defen dan t”) was added as successor-in -in terest to HomEq on April 13, 20 0 7. (See Docket.) 1 Dockets.Justia.com On April 12, 20 0 7, Defen dan t filed what it styled as a Motion to Dism iss. (Doc. 8.) In its Memoran dum of Law in Support of its Motion to Dism iss, Defen dan t claims that Plain tiffs “cann ot show that HomEq failed to comply with [Ga. Code] § 44-14-3.” (Doc. 9 at 6.) In support of its position , Defen dan t in troduced an affidavit of J uan ita J en n ette, previous Vice Presiden t of HomEq, an d various exh ibits detailed below. (See Docs. 11, 11-2, 11-3, 11-4, 11-5.) Defen dan t poin ted out th at th e Court may “accept an d con sider materials offered in con jun ction with a [Federal Rule of Civil Procedure] 12(b)(6) m otion [and treat such a m otion] as one for sum m ary judgm ent an d dispose[] of [it] as provided in Rule 56.” (Doc. 9 at 6 (citin g 2 J am es W. Moore et al., Moore’s Federal Practice ¶ 12.34 (3d ed. 1999)). On May 16, 20 0 7, Plain tiffs filed their Response to Defen dan t’s Motion to Dism iss/ Motion for Summary J udgmen t. (Doc. 19.) Therein , Plain tiffs argued that Defen dan t’s motion was in substan ce on e for summary judgmen t, an d was premature as Plain tiffs had yet to have the chan ce to conduct discovery. (Id. at 5.) Addition ally, Plain tiffs argued that, alth ough Defen dan t’s records in dicate th at the various documen ts were drawn , Plain tiffs’ eviden ce in dicates that th ose documen ts were n ever tran sm itted to the proper en tities as required by Ga. Code § 44-14-3. (Id. at 10 .) Th e Court issued a Discovery and Schedulin g Order on J un e 25, 20 0 7. (Doc. 26.) Th e Discovery Order was am en ded by text order on October 25, 20 0 7. (See Docket.) The case was stayed on Decem ber 28, 20 0 7 pen din g th e outcom e of a Georgia Court of Appeals case, SunTrust Bank v. Hightow er, 660 S.E.2d 745 (Ga. Ct. App. 20 0 8 ). (Doc. 40 at 2.) Th e opin ion in that case was issued on Septem ber 24, 20 0 8. (See Docket.) Th is Court issued a Second Am en ded Discovery an d Scheduling Order on February 2, 20 0 9. (Doc. 42.) 2 On February 26, 20 0 9, Defen dan t filed Motion to Dism iss Class Allegation s and Class Claims, relyin g h eavily on SunTrust Bank v. Hightow er. (Doc. 43.) On April 10 , 20 0 9, this Court ordered th e matter to be stayed. (Doc. 47.) Th e Court ordered th at “if Defen dan t’s Motion to Dism iss Class Allegation s an d Class Claims is denied … with in thirty (30 ) days followin g [such a rulin g,] the parties will subm it a proposed order amen din g the curren t Discovery an d Schedulin g Order.” (Id. at 2.) On Septem ber 30 , 20 0 9, th e Court gran ted a third motion to stay pen din g an opinion by th e Georgia Suprem e Court, Schorr v . Coun try w ide Hom e Loan s, In c., 697 S.E.2d 827 (Ga. 20 10 ). (Doc. 51.) The case was re-open ed on Septem ber 29, 20 11. (Doc. 53.) D ISCU SSION I. Mo tio n to D is m is s / Mo tio n fo r Su m m a ry Ju d gm e n t A. Su m m ary Ju d gm e n t Stan d ard Sum m ary judgm ent is proper “if the pleadings, deposition s, answers to in terrogatories, an d admissions on file, together with the affidavits, if an y, show that there is n o genuin e issue as to an y material fact an d that the movin g party is en titled to a judgmen t as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue is “genuine” if the eviden ce is such that a reason able trier of fact could return a verdict for th e n on m ovin g party. Hoffm an v. Allied Corp., 912 F.2d 1379, 1383 (11th Cir. 1990 ). A fact is “m aterial” if it is a legal elemen t of the claim un der the applicable substan tive law an d it migh t affect the outcom e of the n on m ovin g party’s case. Allen v. Ty son Foods, 121 F.3d 642, 646 (11th Cir. 1997) (citin g An derson v. Liberty Lobby , 477 U.S. 242, 248 (1986)). A judgm en t is appropriate “as a m atter of law” when th e n on m ovin g party has failed to m eet its burden of persuadin g th e Court on an essen tial 3 elemen t of th e claim. See Cleveland v. Policy Mgm t. Sy s. Corp., 526 U.S. 795, 80 4 (1999); Celotex Corp., 477 U.S. at 323. Th e movan t bears the in itial burden of showin g that there is n o gen uin e issue of material fact. Celotex Corp., 477 U.S. at 323. The m ovan t can m eet this burden by presen tin g eviden ce sh owin g th ere is n o dispute of m aterial fact, or by sh owin g or poin tin g out to th e court th at the n on m oving party h as failed to presen t eviden ce in support of som e elem en t of its case on wh ich it bears th e ultim ate burden of proof. Id. at 322-24. On ce th e m ovant has m et its burden , the nonm oving party is required “to go beyon d th e pleadin gs” an d iden tify “specific facts showin g that there is a genuin e issue for trial.” Id. at 324. To avoid sum m ary judgm en t, th e n on m ovin g party m ust do m ore than summarily den y the allegation s or “show th at there is some metaphysical doubt as to the material facts.” Matsushita Elec. In dus. Co. v . Zen ith Radio Corp., 475 U.S. 574, 586 (1986). Rather, the n on m ovin g party must provide “en ough of a showin g th at the [trier of fact] could reason ably find for that party.” W alker v. Darby , 911 F.2d 1573, 1577 (11th Cir. 1990 ) (citin g Liberty Lobby , 477 U.S. at 251). “[M]ere con clusion s an d un supported factual allegation s are legally in sufficien t to defeat a summary judgmen t m otion .” Ellis v. England, 432 F.3d 1321, 1326 (11th Cir. 20 0 5). On a motion for summary judgmen t, th e Court must view all the eviden ce an d all factual in feren ces drawn th erefrom in th e ligh t most favorable to th e n on m ovin g party, an d determ in e wheth er that eviden ce could reason ably sustain a jury verdict. Celotex Corp., 477 U.S. at 322- 23; Allen, 121 F.3d at 646. “In feren ces from th e n on m ovin g party’s ‘specific facts’ as to other material facts, h owever, may be drawn on ly if they are reason able in view of other undisputed background or con textual facts an d on ly if such in feren ces are perm issible un der th e govern in g substan tive law.” Mize v. Jefferson City 4 Bd. of Educ., 93 F.3d 739, 743 (11th Cir. 1996). The Court must gran t summary judgmen t if it fin ds th ere is n o gen uin e issue of material fact an d th e movan t is en titled to judgm en t as a m atter of law. FED. R. CIV. P. 56(c). Federal Rule of Civil Procedure 56(c) man dates “th e en try of summary judgmen t, after adequate time for discovery an d upon motion , again st a party who fails to make a sh owin g sufficien t to establish th e existen ce of an elemen t essen tial to th at party’s case, an d on which that party will bear the burden of proof at trial.” Celotex Corp. 477 U.S. at 322. Sum m ary judgm ent is not appropriate “until th e party opposing the m otion has h ad an adequate opportun ity for discovery.” Sn ook v. Trust Co. of Ga. Ban k of Savann ah, N.A., 8 59 F.2d 8 65, 8 70 (11th Cir. 198 8 ) (citation s omitted). If th e discovery sough t by the opposin g party would gran t it access to materials n eeded to sufficien tly oppose th e m otion , the m otion for sum m ary judgm en t sh ould be denied as pre-m ature. See id. (citin g Cow an v. J.C. Pen n ey Co., In c., 790 F.2d 1529, 1532 (11th Cir. 1986)). Because the Court finds th at Defen dan t h as not met its burden to en title it to summary judgmen t, th e Court will con strue Defen dan t’s Motion to Dism iss as a motion for sum m ary judgm en t. B. An alys is Ga. Code § 44-14-3(b)(1) provides that, with in 60 days of full paym en t of an in debtedn ess secured by an y in strumen t, the gran tee or holder of th e in strumen t must “cause to be furn ish ed to th e clerk of the superior court of the coun ty or coun ties in wh ich th e in strumen t is recorded a legally sufficien t satisfaction or can cellation to auth orize an d direct the clerk or clerks to can cel the in strumen t of record.” If the gran tee or holder of th e instrumen t fails to do so, th e gran tor is en titled to $ 50 0 .0 0 as liquidated damages “if the gran tor m akes a written deman d for liquidated damages to 5 th e gran tee or h older of the in strumen t before tran sm ittal, but n ot less than 61 days after th e in strumen t is paid in full, an d prior to filin g a civil action .” GA. CODE ANN . § 44-14-3(c)(1). Th e parties only dispute whether Hom Eq “cause[d] to be furnish ed” th e can cellation n otice to th e Clerk of th e Muscogee Coun ty Superior Court (“Muscogee Coun ty Clerk”) with in the applicable time period.1 (See Doc. 11 at ¶ 5.) Georgia case law does n ot explain what is required by the phrase “cause to be furn ish ed.” At a min imum, that phrase could require (1) Defen dan t to have properly mailed a “legally sufficien t” cancellation n otice to the Muscogee Coun ty Clerk within the applicable time period, or (2) the Muscogee Coun ty Clerk to h ave actually received such n otice with in th e applicable time period. Defen dan t does n ot claim that th e Muscogee Coun ty Clerk actually received the n otice on or about October 17, 20 0 6, an d Plain tiffs presen t eviden ce that such n otice was n ot received. (See Doc. 19-2 at 5.) Defen dan t alleges that it is en titled to summary judgmen t because HomEq “prepared an d sen t the Cancellation an d Recordin g Fee Check to th e Clerk of the Muscogee Coun ty Superior Court on October 17, 20 0 6, within th e sixty days permitted by [Ga. Code] § 44-14-3(b).” (Doc. 9 at 7-8.) Defen dan t argues that all that was required by th e statute was th at HomEq sen t th e can cellation in a timely man n er; whether it was properly recorded is a m atter for the clerk’s office. (Id. at 8-9.) Defen dan t subm itted an affidavit from J uan ita J en n ette, the former Vice Presiden t of HomEq, who alleged that she prepared an d sen t a check to th e Muscogee Coun ty Clerk on October 17, 20 0 6. (Doc. 11 at ¶¶ 2, 10 .) Ms. J en n ette claim ed that on ce it cam e to h er atten tion that the Muscogee Coun ty Clerk did n ot properly process the cancellation , HomEq asserts that Plaintiffs, through their counsel, requested Hom eEq to process a cancellation upon the full paym ent of Plaintiffs’ loan on August 25, 20 0 6. (Docs. 9 at 2-3; 11 at ¶ 5.) Plaintiffs subm itted a copy of the written request dated August 25, 20 0 6. (Doc. 44-2.) 1 6 a can cellation was re-requested. (Id. at ¶ 17.) Defen dan t also subm itted a copy of the ch eck th at was sen t to th e Muscogee County Clerk, an d HomEq’s in tern al records reflectin g th at the can cellation was requested. (See Docs. 11-2, 11-3, 11-4, 11-5.) In its respon se, Plain tiffs argue that Defen dant has n ot met its burden to en title it to summary judgmen t. (Doc. 19 at 8.) Plain tiffs attach an affidavit from M. Lin da Pierce, Clerk of Superior, State, an d J uven ile Courts of Muscogee Coun ty, Georgia. (Doc. 19-2.) Th erein , Ms. Pierce claim ed that h er office has n o record of receivin g a Can cellation of Deed to Secure Debt from Hom eEq on or about October 17, 20 0 6. (Id. at 5.) In stead, sh e claims th at the first can cellation n otice received by her office was received on April 10 , 20 0 7. (Id.) Th e Court fin ds that Defen dan t h as n ot met its burden of demon stratin g th at it is en titled to sum m ary judgm en t. Ga. Code § 44-14-3(b)(2) must, at a m in im um , require Defen dan t to properly mail th e can cellation notice, i.e. properly stamp and address th e n otice, an d the required check made payable to the Clerk of the Muscogee Coun ty Superior Court. Ms. J en n ette’s affidavit asserts th at th is was accomplish ed. (Doc. 11 at ¶ 10 .) Th e exh ibits Defen dan t subm itted, however, do n ot con clusively support th is assertion . In stead, the exhibits merely demon strate that (1) a Cancellation of Deed to Secure Debt was prepared an d dated October 13, 20 0 6 (Doc. 11-2), (2) a check was drawn for $ 10 .0 0 an d made payable to th e Muscogee Coun ty Clerk of th e Superior Court (Doc. 11-3), an d (3) an en try was recorded on Hom Eq’s Com munication History program th at reflected th at a “lien release [was] sen t to coun ty” on October 17, 20 0 6. (Doc. 11-4.) Th is eviden ce does n ot con clusively demon strate th at th e n otice and ch eck were actually sen t, or th at th e en try on HomEq’s program was accurate. 7 Ms. Pierce explain ed th at her office did n ot receive a cancellation n otice from HomEq in relation to Plain tiffs un til April 10 , 20 0 7. (Doc. 19-2 at 4-5.) From that assertion , a jury could reason ably in fer th at, although HomeEq may have properly prepared th e necessary docum ents, it did not properly m ail th e documen ts to th e Clerk of Muscogee Coun ty Superior Court. Furth erm ore, Defen dan t did n ot subm it eviden ce that th e check dated October 17, 20 0 6 was n egotiated. 2 As such , a genuin e issue of material fact exists as to whether Defen dan t “cause[d] to be furn ish ed to [th e Muscogee Coun ty Clerk] a legally sufficien t satisfaction or can cellation to auth orize an d direct th e clerk … to can cel the in strumen t of record” within th e applicable time period. See GA. CODE ANN . § 44-14-3(b)(2). Accordin gly, Defen dan t’s Motion to Dism iss, which the Court has construed as a Motion for Summary J udgmen t, is D EN IED . II. Mo tio n to D is m is s Cla s s Alle ga tio n s a n d Cla s s Cla im s In Defendan t’s Motion to Dism iss Class Allegation s an d Class Claim s, it argues that Plain tiffs’ Complain t should be dism issed because it failed to allege that each of th e un n am ed m em bers of th e proposed class m ade th e statutorily required, pre-suit dem an d on Hom eEq. (Doc. 43-2 at 2.) In its Motion , Defen dan t relied prim arily on SunTrust Bank v. Hightow er, 660 S.E.2d 745 (Ga. Ct. App. 20 0 8). (See gen erally Doc. 43.) Th at case held that a plain tiff representin g a putative class must make a written dem an d on th e gran tee before suit m ay be filed. Hightow er, 660 S.E.2d at 749. On Septem ber 30 , 20 0 9, th is case was stayed pen din g th e outcom e of Schorr v. Coun try w ide Hom e Loan s, In c., 697 S.E.2d 827 (Ga. 20 10 ). (Doc. 51.) Th at case in volved a question certified from th is Court askin g “[w]hether n amed plain tiffs in a class may, pursuan t to OCGA § 44-14-3, satisfy th e pre-suit written deman d Plaintiffs allege that the check was never cashed but do not present evidence to support that contention. (See Doc. 19 at 10 .) 2 8 requiremen t for liquidated damages on behalf of putative class action members by th e n amed plain tiffs’ satisfaction of the written deman d requiremen t.” Schorr, 697 S.E.2d at 571. The Georgia Supreme Court an swered in the affirm ative. Id. at 573. In oth er words, “the nam ed plaintiffs in a class action [m ay] satisfy precon dition s for suit on behalf of th e en tire class.” Id. Because Schorr directly refutes 3 Defendan t’s sole ground in support of its Motion to Dismiss Class Allegation s an d Class Claim s (Doc. 43), th at m otion is D EN IED . For the foregoin g reason s, Defen dan t’s Motion to Dism iss (Doc. 8) and Motion to Dism iss Class Allegation s an d Class Claim s (Doc. 43) are D EN IED . SO ORD ERED , th is 26 th day of Septem ber, 20 13. / s/ W. Louis Sands_ _ _ _ TH E H ON ORABLE W . LOU IS SAN D S, U N ITED STATES D ISTRICT COU RT The parties do not dispute that Plaintiffs, the representatives of the putative class action m embers in this suit, requested Hom Eq to cancel the security deed. (Docs. 11 at ¶ 5; 44-2.) 3 9
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