United States District Court, N.D. Georgia, Gainesville Division
RICHARD W. STORY, District Judge.
Plaintiffs William Bobby Brown, Ronald Mayhew, and Connie Mayhew, proceeding pro se, initiated this action by filing the Complaint on January 14, 2014, against Defendants SunTrust Bank and SunTrust Mortgage. The action is now before the Court on Defendant SunTrust Mortgage, Inc.'s Motion to Dismiss  and SunTrust Bank's Motion to Dismiss . For the reasons discussed below, the Defendants' Motions to Dismiss  are GRANTED and Plaintiffs' Complaint is DISMISSED. In sum, the Court concludes that some of Plaintiffs' claims are barred by res judicata, and must be dismissed on that ground, and that Plaintiffs have otherwise failed to state a claim for relief against Defendants.
On January 14, 2014, Plaintiffs filed the Complaint , naming SunTrust Bank ("STB") and SunTrust Mortgage ("STM") as Defendants. This case arises out of the purchase and foreclosure of Plaintiff William Bobby Brown's property (the "Property"), situated on Lot 12 of Ivyshaw Landing Subdivision ("Subdivision") and located at 9140 Ivyshaw Landing, Gainesville, Georgia. See Compl.  at ¶¶ 11-12.
This is the second case filed by Plaintiffs in this Court regarding the subject Property. On May 24, 2012, Plaintiffs filed an action in the Northern District of Georgia, Gainesville Division, Civil Action No. 2:12-CV-0120-RWS (the "First Action"), which contained largely the same allegations as the Complaint filed in this action. The original Complaint filed in the First Action named only STM as a Defendant and sought a declaratory judgment voiding the final plat for the Subdivision, as well as an injunction against foreclosure. See Complaint , filed in the First Action. Plaintiffs later filed a First Amended Complaint, adding Ivey Shaw, LLC ("Ivey Shaw"), the Forsyth County Board of Commissioners, and the Forsyth County Environmental Health Department as Defendants, as well as adding claims for a violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), intentional infliction of emotional distress, negligence, and fraudulent inducement. See First Amended Complaint , filed in the First Action. Plaintiffs also sought actual, punitive, and exemplary damages. Id.
On July 13, 2012, Defendant STM filed a Motion to Dismiss in the First Action, and on December 18, 2012, the undersigned entered an Order in the First Action granting the Motion to Dismiss and dismissing all claims against STM. See Motion to Dismiss  filed July 13, 2012; Order  dated December 18, 2012 ("December 18 Order"), in the First Action. Specifically, the undersigned held that Plaintiffs had failed to state a claim against STM under Civil RICO, 18 U.S.C. §§ 1961-68: "Plaintiffs join multiple Defendants in their RICO claim and allege fraud as the predicate offense. Therefore, Rule 9(b) requires Plaintiffs to allege how each Defendant participated in the alleged fraud. Plaintiffs have not set forth sufficient allegations here." December 18 Order at 11-12. Similarly, the undersigned also held that Plaintiffs had failed to state a claim against STM for fraudulent inducement: "[T]o the extent Plaintiffs do attempt to raise a claim against SunTrust Mortgage for fraudulent inducement, they have stated no facts to satisfy Rule 8(a) or Rule 9(b)." Id. at 14-15.
The undersigned further held that Plaintiffs had failed to state a claim against STM for intentional infliction of emotional distress: "The Court agrees that Plaintiffs fail to state a claim for intentional infliction of emotional distress." Id. at 12. The undersigned also held that Plaintiffs had failed to state a claim against STM for negligence: "The Court agrees that Plaintiffs fail to state a claim against SunTrust Mortgage for negligence. The Complaints allege no facts indicating that SunTrust acted negligently toward Plaintiffs or that its conduct has caused Plaintiffs harm." Id. at 13-14. Finally, the undersigned found that Plaintiffs had failed to establish that they were entitled to the relief of a declaratory judgment that "the final plat for Ivyshaw Landing Subdivision is void, " or an injunction barring STM from foreclosing on the subject Property. Id. at 15-16.
Further, as the Court found in its earlier Order, "Plaintiffs do not allege that they are current on their loan payments, nor do they allege that SunTrust does not have the authority to foreclose." (Order, Dkt.  at 3.) Thus, because Plaintiffs fail to state a claim against SunTrust upon which relief may be granted, and because SunTrust may rightfully foreclose, SunTrust's Motion to Dismiss Counts I and II (declaratory and injunctive relief) is GRANTED.
Id. at 15-16. Thereafter, on January 11, 2013, the Clerk entered a final Judgment and dismissed the First Action in its entirety. See Judgment  dated January 11, 2013, in the First Action.
Just over one year later, on January 14, 2014, Plaintiffs filed the Complaint initiating this action, naming both STB and STM as the only Defendants. Compl.  at 1. The allegations set forth below are taken from the Plaintiffs' Complaint . According to the Complaint, Plaintiff Brown applied for a residential mortgage loan from "SunTrust, " which was secured by a deed to secure debt on the subject Property. Compl.  at ¶ 11. Plaintiffs allege that the Property was the primary residence of Brown, and that Plaintiff Ronald F. Mayhew has been designated as his Power of Attorney. Id. at ¶ 13.
Plaintiffs further allege that "SunTrust hired and dictated the closing attorney for this loan, " and certain "negligent acts" were done at the time of the closing. Id. at ¶ 14. Plaintiffs claim that the development and sale of Lot 12 was shrouded in fraud. Id. at ¶¶ 14-46. Plaintiffs allege that the Subdivision was developed by Ivey Shaw, and approved by the County Commissioners on July 24, 2000. Id. at ¶¶ 36, 45. Plaintiffs allege that Ivey Shaw falsified the engineering plans for the Subdivision, including septic system and hydrology plans, and that the septic system was faulty. Id. at ¶ 14. Plaintiffs allege that Ivey Shaw induced them to purchase Lot 12 through false representations, including concealing a bedroom limitation on the Property and representing that the Property would be connected to a public sewer. Id. at ¶¶ 20-22. Plaintiffs further allege that Forsyth County facilitated the falsification of the Subdivision and septic system designs. Id. at ¶¶ 35-39.
Plaintiffs allege that SunTrust was aware of this type of fraudulent activity in Georgia, but failed to offer Plaintiffs insurance against this conduct. Id. at ¶ 14(d). Plaintiffs state that, although they notified SunTrust of the falsifications, SunTrust foreclosed to "enjoy the profits of selling the property to another unsuspecting member of the public." Id. at ¶ 14(e). Plaintiffs also allege that SunTrust "made itself party to the racketeering scheme of fraud for profit that is exposed [in the allegations of the Complaint]." Id. at ¶ 14(e).
The Security Deed attached to the Complaint indicates that Brown executed a Security Deed on June 27, 2006, in favor of Mortgage Electronic Registration Systems, Inc. ("MERS"), as the "nominee for Lender and Lender's successors and assigns, " and that SunTrust Mortgage, Inc., was the "Lender." Security Deed, Compl., Ex. A; see also Adjustable Rate Note, Mot. to Dismiss , Ex. B. MERS subsequently assigned its interest in the Security Deed to STM on November 3, 2011, and STM assigned its interest to STB on June 6, 2012. See Assignments, Mot. to Dismiss , Ex. D; see also Compl.  at ¶ 48.
Defendants contend that Brown subsequently defaulted on the debt and STB accelerated the debt and retained the law firm of Johnson & Freedman, LLC to institute non-judicial foreclosure proceedings, which Plaintiffs do not appear to dispute. Plaintiffs admit that Defendant STB notified Brown in writing of the intent to sell the Property through a non-judicial foreclosure, and the foreclosure sale of the Property took place on August 7, 2012. Compl.  at ¶ 49. STB then initiated an eviction proceeding against Brown in the Magistrate Court of Forsyth County. Id. at ¶ 50. According to Plaintiffs, a hearing was conducted on October 2, 2012, and a consent judgment was entered in which Plaintiffs agreed to vacate the premises by midnight of October 31, 2012. Id. at ¶ 50, Ex. Z.
Although the Plaintiffs consented to vacate the Property by October 31, 2012, Defendants contend that Plaintiffs did not abide by that agreement. See Compl. at ¶ 50, Ex. Y. Plaintiffs allege in the Complaint that neither Defendant STM, nor Defendant STB, "ever demanded actual possession of the premises following the passing of the midnight October 31, 2012 date." Compl. at ¶ 50. Defendants contend that the Forsyth County Magistrate Court has found that such consent orders are self-executing and do not require a separate order or writ of possession. See Magistrate Order, attached as Ex. E  to Mot. to Dismiss. On January 16, 2013, the Forsyth County Sheriff's Office performed an eviction at the Property. Compl. at ¶ 51, Ex. ZA. Plaintiffs allege that the police were "dressed out in tactical gear with automatic weapons to forcibly remove Plaintiffs from the premises on January 16, 2013." Id. at ¶ 51.
The Plaintiffs have asserted several claims against Defendants STM and STB in the Complaint. In the First Cause of Action, they assert a claim for wrongful foreclosure. Id. at ¶¶ 67-71. In the Second Cause of Action, they assert a claim for negligent misrepresentation. Id. at ¶¶ 72-75. In the Third Cause of Action, they assert a claim for wrongful eviction. Id. at ¶¶ 76-80. In the Fourth Cause of Action, they assert a claim for intentional or negligent infliction of emotional distress. Id. at ¶¶ 81-85. In the Fifth Cause of Action, they assert a claim for wrongful conversion. Id. at ¶¶ 86-93. In the Sixth Cause of Action, they assert a claim for criminal trespass. Id. at ¶¶ 94-98. In the Seventh Cause of Action, they assert a claim under the Racketeer Influenced and corrupt Organizations Act ("RICO"). Id. at ¶¶ 99-107. In the Eighth Cause of Action, they assert a claim for intentional infliction of emotional distress. Id. at ¶¶ 108-16. In the Ninth Cause of Action, they assert a claim for negligence. Id. at ¶¶ 117-23. Finally, in the Tenth Cause of Action, they assert a claim for violations of the Fair Debt Collections Practices Act ("FDCPA"). Id. at ¶¶ 124-29.
Defendants STM and STB have filed Motions to Dismiss, arguing that all the claims asserted against them in the Complaint must be dismissed under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim.
A. Standard on a Motion to Dismiss
Defendants have moved to dismiss Plaintiffs' claims under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim for relief. When evaluating a motion to dismiss under Rule 12(b)(6), the Court cannot consider matters outside of the pleadings, and must accept the allegations of the non-movant's pleadings as true, but "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Moreover, "a plaintiff's obligation to provide the grounds' of his entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citations omitted).
Iqbal went on to instruct that, while a court must accept all factual allegations in a complaint as true, it need not accept as true legal conclusions recited in a complaint. Repeating that "only a complaint that states a plausible claim for relief survives a motion to dismiss" the Supreme Court advised that "[d]etermining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown'-that the pleader is entitled to relief.'" Iqbal, 556 U.S. at 679 ( quoting FED. R. CIV. P. 8(a)(2)) (other citations omitted).
Although the Supreme Court requires a plaintiff to allege sufficient facts to state a plausible claim for relief, because Plaintiffs are proceeding pro se in this case, the Complaint must be "liberally construed." Erickson v. Pardus, 551 U.S. 89, 94 (2007) (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)). "[A] pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers." Id.; see also Fed.R.Civ.P. 8(e) ("Pleadings must be construed so as to do justice"). Even though a pro se complaint is held to less stringent standards than formal pleadings drafted by attorneys, "the Court need not accept as true legal conclusions or unwarranted factual inferences." Montgomery v. Huntington Bank, 346 F.3d 693, 698 (6th Cir. 2006). Nothing in the leniency accorded a pro se filing excuses a plaintiff from compliance with threshold requirements of the Federal Rules of Civil Procedure. See Trawinski v. United Technologies, 313 F.3d 1295, 1297 (11th Cir. 2002).
As noted above, a court ordinarily cannot consider matters outside the pleadings when evaluating a motion to dismiss under Rule 12(b)(6), but when a plaintiff has referred to documents in the complaint and such documents are central to the plaintiff's claims, a court may consider those documents as part of the pleadings in the case and may consider them in resolving a Motion to Dismiss. See Brooks v. Blue Cross and Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997) ("where the plaintiff refers to certain documents in the complaint and those documents are central to the plaintiff's claim, then the court may consider the documents part of the pleadings for the purposes of Rule 12(b)(6) dismissal").
Moreover, the Eleventh Circuit has made it clear that when a plaintiff attaches exhibits to a complaint and the exhibits contradict the allegations of the complaint, the exhibits control. See Griffin Indus., Inc. v. Irvin, 496 F.3d 1189, 1205-06 (11th Cir. 2007).
Our duty to accept the facts in the complaint as true does not require us to ignore specific factual details of the pleading in favor of general or conclusory allegations. Indeed, when the exhibits contradict the general and conclusory allegations of the pleading, the exhibits govern.
Id. ; see also Associated Builders, Inc. v. Ala. Power Co., 505 F.2d 97, 100 (5th Cir. 1974) ("Conclusory allegations and unwarranted deductions of fact are not admitted as true, especially when such conclusions are contradicted by facts disclosed by a document appended to the complaint. If the appended document, to be treated as part of the complaint for all purposes under Rule 10(c), Fed.R.Civ.P., reveals facts which foreclose recovery as a matter of law, dismissal is appropriate." (citation omitted)); Simmons v. Peavy-Welsh Lumber Co., 113 F.2d 812, 813 (5th Cir. 1940) ("Where there is a conflict between allegations in a pleading and exhibits thereto, it is well settled that the exhibits control.").
In this case, Plaintiffs have referred to various documents in the Complaint, including the Security Deed. See Compl., Ex. A-ZB. Because Plaintiff attached those documents to the Complaint, they are considered part of the Complaint for all purposes. FED. R. CIV. P. 10(c). In addition, Defendants have also submitted exhibits in connection with their Motions to Dismiss, including the Promissory Note executed by Plaintiff Brown, and the Assignments of the Security Deed. See Mot. to Dismiss Exhibits . When a court is considering a motion to dismiss under Rule 12(b)(6), documents attached to the motion to dismiss may be considered if the document is both central to the plaintiff's claim and undisputed. Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002); see also Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005) ("[A] document need not be physically attached to a pleading to be incorporated by reference into it; if the document's contents are alleged in a complaint and no party questions those contents, we may consider such a document provided it meets the centrality requirement imposed in Horsley. "). "Undisputed' means that the authenticity of the document is not challenged." Day, 400 F.3d at 1276. Because the documents ...