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Karitanyi v. Seterus Inc.

United States District Court, N.D. Georgia, Atlanta Division

February 5, 2018

SETERUS INC., Defendant.


          JANET F. KING, JUDGE

         Plaintiff Yamina Karitanyi originally filed this action for damages in the Superior Court of Gwinnett County, Georgia, alleging a wrongful foreclosure sale of a residence. [Doc. 1-1 (“Complt.”)]. Defendant Seterus Inc. removed the case to federal court asserting diversity jurisdiction. [Doc. 1]. Defendant filed a motion to dismiss the original complaint pursuant to Fed.R.Civ.P. 12(b)(6) contending that the allegations in the complaint failed to state claims upon which relief could be granted. [Doc. 4]. While that motion was pending, Plaintiff filed an amended complaint that did not replace but supplemented her original complaint. [Doc. 11 (“Amd. Complt.”)]. When Defendant filed a second motion [Doc. 12] to dismiss incorporating most of the arguments raised in the first motion to dismiss[1] and adding arguments seeking dismissal of the new claims in the amended complaint, the court denied as moot the first motion to dismiss.[2] [Doc. ]. Now pending before the court is Defendant's second motion to dismiss the complaint pursuant to Rule 12(b)(6). [Doc. 12]. Plaintiff has responded to the motion. [Doc. 15]. Defendant has replied. [Doc. 16]. And the matter has been submitted to the undersigned for a report and recommendation to the District Court.

         I. Standard of Law

         The Federal Rules of Civil Procedure include no requirement that a plaintiff detail the facts upon which the plaintiff bases a claim. Rule 8(a)(2) requires a complaint to contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2) (as amended 2007). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, . . . 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[.]” Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007) (citations omitted); accord Financial Sec. Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1282-83 (11th Cir. 2007) (recognizing that “while notice pleading may not require that the pleader allege a specific fact to cover every element or allege with precision each element of a claim, it is still necessary that a complaint contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory”) (citations and internal quotation marks omitted).

         “Factual allegations must be enough to raise a right to relief above the speculative level, ” i.e., they must do more than merely create a “‘suspicion [of] a legally cognizable right of action, ' on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Twombly, 127 S.Ct. at 1965 (citations omitted) (emphasis omitted). “Stated differently, the factual allegations in a complaint must ‘possess enough heft' to set forth ‘a plausible entitlement to relief[.]'” Stephens, 500 F.3d at 1282 (quoting Twombly, 127 S.Ct. at 1966-67). A plaintiff's complaint will be dismissed if it does not contain “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citation omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.

         The court's inquiry at this stage of the proceedings focuses on whether the challenged pleadings “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Erickson v. Pardus, 127 S.Ct. 2197, 2200 (2007) (citations and internal quotation marks omitted). A court reviewing a motion to dismiss must keep in mind that a “motion to dismiss for failure to state a claim upon which relief can be granted merely tests the sufficiency of the complaint; it does not decide the merits of the case.” Wein v. American Huts, Inc., 313 F.Supp.2d 1356, 1359 (S.D. Fla. 2004) (citing Milburn v. United States, 734 F.2d 762, 765 (11th Cir. 1984)). “Regardless of the alleged facts, however, a court may dismiss a complaint on a dispositive issue of law.” Bernard v. Calejo, 17 F.Supp.2d 1311, 1314 (S.D. Fla. 1998) (citing Marshall County Bd. of Educ. v. Marshall County Gas Dist., 992 F.2d 1171, 1174 (11th Cir. 1993) (“[T]he court may dismiss a complaint . . . when, on the basis of a dispositive issue of law, no construction of the factual allegations will support the cause of action.”)); see also Glover v. Liggett Group, Inc., 459 F.3d 1304, 1308 (11th Cir. 2006) (same); Aque v. Home Depot U.S.A., Inc., 629 F.Supp.2d 1336, 1350 (N.D.Ga. 2009).

         The court will apply these standards in ruling on Defendant's motion [Doc. 12] to dismiss the complaint.

         II. Facts

         The factual allegations in a complaint are assumed true and construed in the light most favorable to the plaintiff on a motion to dismiss under Rule 12(b)(6). Hardy v. Regions Mortg., Inc., 449 F.3d 1357, 1359 (11th Cir. 2006); M.T.V. v. DeKalb County School Dist., 446 F.3d 1153, 1156 (11th Cir. 2006). “However, conclusory allegations, unwarranted deductions of facts or legal conclusions masquerading as facts will not prevent dismissal.” Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002) (citations omitted). With this in mind, the undersigned finds that Plaintiff Karitanyi's complaint and amended complaint contain the following factual allegations.[3]

         In 2003, Plaintiff purchased property located at 6144 Idlewood Manor, Lithonia, DeKalb County, Georgia (the “Property”), and, in May 2004, refinanced the loan on the Property securing the loan with a security deed entered with Mortgage Electronic Registration Systems, Inc. (“MERS”), on behalf of the lender, Webster Bank, N.A., and the lender's successors and assigns. [Complt. ¶¶ 4-8; Doc. 1-3 (“Security Deed”), recorded on May 26, 2004, DeKalb County Superior Court, Deed Book 16191, Page 277]. To pay the monthly loan payments, “Plaintiff contracted and agreed to the monthly withdrawal of the loan payment from her Bank of America account, ending in 9168.” [Complt. ¶ 9]. Plaintiff alleges that from 2004 until 2015, Chase, the original loan servicer, electronically debited the loan payment from her account as the parties contractually agreed but that, when Chase transferred loan servicing on August 1, 2015, to Defendant Seterus Inc., Defendant failed to debit the bank account as agreed. [Id. ¶¶ 10-11].

         Plaintiff contends that Defendant “was contractually liable to honor the agreements entered by” Chase and Plaintiff and that Defendant “breached its assigned contractual responsibility to Plaintiff causing the loan that secured the property to become delinquent.” [Id. ¶¶ 12-13]. Plaintiff further contends that Defendant wrongfully instituted foreclosure proceedings and foreclosed upon and sold the Property to a third party.[4] [Id. ¶¶ 14-15]. Plaintiff further contends that “Defendant had a duty to continue to debit Plaintiff's account for the monthly payment of the mortgage” as Chase had done and “had a duty to provide proper notice to the Plaintiff prior to instituting foreclosure proceedings” but breached the duties owed to Plaintiff. [Id. ¶¶ 16-18].

         In the amended complaint, Plaintiff alleges that Defendant's wrongful foreclosure caused Plaintiff to endure “extreme emotional distress” and that Defendant's “tortious acts of negligently and wrongfully foreclosing on Plaintiff's property without insuring that she was in fact delinquent on her loan payments is an actionable tort.” [Amd. Complt. ¶¶ 27-28]. These acts allegedly occurred because Defendant failed to debit Plaintiff's account “as contractually agreed upon at the inception of the loan in 2004 . . . .” [Id. ¶ 29]. Plaintiff also alleges that Defendant failed to comply with the notice requirements in O.C.G.A. § 44-14-162.2 before foreclosure and failed to tender the surplus from the foreclosure sale to Plaintiff as required by O.C.G.A. § 44-14-190. [Id. ¶¶ 30, 32].

         Additional facts will be noted as needed to address the merits of Defendant's motion to dismiss the complaint.

         III. Discussion

         a. Breach of Contract

         Although not contained in a specifically pled count in either the original or amended complaints, Plaintiff's allegations assert a claim for damages for Defendant Seterus Inc.'s purported breach of the parties' contract; a contract that Plaintiff claims was assigned by Chase, the original loan servicer, to Defendant when Defendant assumed loan servicer duties in August 2015. “‘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.'” Norton v. Budget Rent A Car Sys., Inc., 307 Ga.App. 501, 502, 705 S.E.2d 305, 306 (2010) (citation omitted); and see Dye v. United Services Automobile Assoc., 89 F.Supp.3d 1332, 1336 (S.D. Fla. 2015) (“‘To survive dismissal for breach of contract, a plaintiff must allege (1) the existence of a contract, (2) a breach of the contract, and (3) damages resulting from the breach.'”) (citation omitted). Although Defendant argues that Plaintiff cannot challenge any assignment between Defendant Seterus Inc. and Chase of the servicer duties on the mortgage loan [Doc. 12 at 8; Doc. 16 at 6-8], that is not the issue requiring dismissal of Plaintiff's breach of contract cause of action. Plaintiff, quite simply, has not identified any contract, neither attaching the contract to the complaint nor stating with specificity the contract language upon which she relies, that Chase entered with her in 2004 requiring that her monthly loan payments be debited from her Bank ...

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