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Roberts v. JP Morgan Chase Bank, National Association

Court of Appeals of Georgia, Third Division

June 27, 2017



          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. Northrup, 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). "[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 ...

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