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Estate of Ellis v. American Advisors Group Inc.

United States District Court, S.D. Georgia, Brunswick Division

August 26, 2019

ESTATE OF DR. JOHN ELLIS, JR., and THE JDE TRUST BY MARK J. PODLIN, ATTORNEY AT LAW, P.C., AS EXECUTOR & TRUSTEE, Plaintiffs,
v.
AMERICAN ADVISORS GROUP (INC.), and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendants.

          ORDER

          HON. LISA GODBEY WOOD, JUDGE UNITED STATES DISTRICT COURT

         Before the Court is Defendants' Motion to Dismiss First Amended Complaint, dkt. no. 19. This Motion has been fully briefed and is ripe for review. Many of the Counts of the Amended Complaint are due to be dismiss because-despite the opportunity to correct pleading deficiencies-the certain counts of the Amended Complaint remain largely shotgun in nature. The Amended Complaint largely fails to link factual allegations to specific causes of action, contains multiple causes of action in single counts, fails to comply with Fed.R.Civ.P. 8(a) (2), and includes a forty-paragraph (the paragraphs are mis-numbered starting at the first paragraph 15) Affidavit of an individual occupying four roles: witness, Plaintiffs' sole attorney (at the time of filing), Executor of the Estate, and Trustee of the Trust. The affidavit conflicts with many of the allegations set forth in the Amended Complaint and leaves the reader to guess at which elements, counts, or contentions a given paragraph addresses. Some paragraphs seem rooted in the affiant's role as advocate, some as party representative, and some as purported factual witness. The Court has spent considerable time attempting to decipher and place the provisions of the affidavit into the causes of action enumerated in the Amended Complaint.

         Although the Court is not required to "sift through the facts presented and decide for [itself] which are material to the particular cause of action," Strategic Income Fund, L.L.C. v. Spear, Leeds & Kellogg Corp., 305 F.3d 1293, 1296 (11th Cir. 2002) (citation omitted) (alteration in original), it, nevertheless, has endeavored to "rummage through page after page of facts and conclusions to make independent determinations regarding what allegations, if any, fit with each claim, if any," Carvel v. Godley, 404 Fed.Appx. 359, 361-62 (11th Cir. 2010). After sifting and rummaging, and after the benefit of oral argument, the Motion to Dismiss is GRANTED in part and DENIED in part.

         BACKGROUND

         The facts stated herein are taken solely from Plaintiffs' Amended Complaint and are assumed to be true pursuant to Rule 12(b)(6). On October 1, 2014, Dr. John Ellis took out a Reverse Mortgage from Defendants for $259, 305.09 against his home on St. Simons Island, Georgia. Dkt. No. 18 ¶ 7. The home at the time had a Fair Market Value of $1, 499, 000. Id. In order to induce Dr. Ellis to take out the reverse mortgage, the Loan Originator for AAG, Sean O'Brien, told Dr. Ellis and his attorney Mark Podlin that the beneficiaries of his trust estate and his will would have one year from the date of Dr. Ellis' death to sell the house. Id. ¶ 9. More specifically, Sean O'Brien "said that the Estate and JDE Trust would need to notify [AAG] that Dr. Ellis had died within six months of the date of his death and then show them we had the house being actively marketed for sale in order to also get two additional 90-day extensions of time for selling the house." Dkt. No. 18 at 26 (¶ 13).[1] In addition, on August 13, 2014, Dr. Ellis and Podlin spoke with a Reverse Mortgage Advisor Counselor, Beth A. Sloan, who worked with a company called GreenPath Debt Solutions. Id. ¶ 10. Sloan told Dr. Ellis and Podlin that the Ellis Estate would have one year from Dr. Ellis's death to sell his home prior to it being sold via foreclosure. Id. ¶ 11.

         On June 26, 2015, Dr. Ellis died. Id. ¶ 8. Shortly after Dr. Ellis's death, Podlin spoke to an AAG representative who told him that if the Ellis Estate was actively working to improve and sell the home and the Ellis Estate notified AAG of these facts before December 26, 2015, then the Ellis Estate would have one year to sell Dr. Ellis's home. Id. ¶ 12. Shortly after this conversation and in order to prepare the house for sale, Podlin, the Executor and Trustee of the Ellis Estate, arranged to have the wood floors refinished, the carpet replaced, the house repainted, and certain repairs made. Id. ¶ 13. In early December 2015[2] and after the repairs were complete, Podlin spoke with an AAG representative and told her that the Ellis home had been fixed up for sale and was listed with a realtor at a price of $1, 499, 000. Id. ¶ 14. The AAG representative informed Podlin that the Ellis Estate would be given until at least June 26, 2016, to sell the house before AAG would begin foreclosure. Id. Podlin sent AAG a letter confirming this information. Id. The realtor listed the home for sale in the Multiple Listing Service of the Golden Isles Association of Realtors. Id. ¶ 15.

         On March 1, 2016, Defendants placed an advertisement in the Brunswick News that represented that the security deed executed as part of the reverse mortgage loan was in default. Id. ¶ 16. The notice also stated that Defendants were foreclosing on the Ellis home due to the default. Id. The advertisement chilled the market for the sale of the home: after it was published, virtually no real estate agents or brokers would consider recommending the home to potential buyers. Id. ¶ 17. More specifically, Podlin was in contact with two potential buyers, who were considering the offering price of $1, 499, 000. Id. ¶ 18. After the advertisement, however, the potential buyers aggressively negotiated for a much lower price. Id. On June 10, 2016, the house was sold to one of those potential buyers for $1, 145, 000. Id. ¶ 19.

         Several weeks after the advertisement was published, Defendants stopped the foreclosure process. Id. ¶ 20. Shortly after the process was stopped, an employee of AAG, Brandi O'Brien, called Podlin and explained why the foreclosure was begun and why it was stopped. Id. ¶ 21. The Amended Complaint alleges that in that call, O'Brien said:

I'm sorry. We just screwed up. We made a mistake. It's our fault. There was no default. You did everything you were supposed to do. The department that received your letter in December was partying over Christmas and with all the Christmas partying and festivities, they just never got the message to the foreclosure department that they had received the letter from you and that we shouldn't start foreclosure.

Id.

         Due to these events, Plaintiffs filed this action seeking damages under various state law causes of actions.

         LEGAL STANDARD

         Federal Rule of Civil Procedure 8(a) requires that a plaintiff s complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). When ruling on a motion to dismiss brought pursuant to Rule 12(b)(6), a district court must accept as true the facts set forth in the complaint and draw all reasonable inferences in the plaintiff's favor. Randall v. Scott, 610 F.3d 701, 705 (11th Cir. 2010). Although a complaint need not contain detailed factual allegations, it must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).

         "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court accepts the allegations in the complaint as true and draws all reasonable inferences in favor of the plaintiff. Ray v. Spirit Airlines, Inc., 836 F.3d 1340, 1347 (11th Cir. 2016). However, the Court does not accept as true threadbare recitations of the elements of the claim and disregards legal conclusions unsupported by factual allegations. Iqbal, 556 U.S. at 678-79. At a minimum, a complaint should "contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory." Fin. Sec. Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1282-83 (11th Cir. 2007) (per curiam) (quoting Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 683 (11th Cir. 2001)).

         DISCUSSION

         Plaintiffs' Amended Complaint states the following claims for relief: (1) Count I, Breach of Contract; (2) Count II, Wrongful Attempted Foreclosure; (3) Count III, Negligence by AAG for failing to notify its foreclosure department not to foreclose; (4) Count IV, Negligence by Defendants for wrongful attempted foreclosure; (5) Count V, Intentional or Negligent Breach of a Private Duty; (6) Count VI, Breach of Fiduciary Duty; (7) Count VII, Elder Abuse in Breach of a ...


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