Tait v. Nationstar Mortg. LLC

PHYLLIS TAIT and TIFFANY MINOTT, Plaintiffs, v. NATIONSTAR MORTGAGE LLC,BNY MELLON, NATIONAL ASSOCIATION,and DEFENDANT DOE, Defendants.

CIVIL ACTION NO. 1:14-CV-2885-CC-LTW

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION

August 19, 2015

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

This case is presently before the Court on Defendants Nationstar Mortgage LLC and BNY Mellon, National Association's Partial Motion to Dismiss. (Doc. 3). For the reasons outlined below, this Court RECOMMENDS that Defendants' Partial Motion to Dismiss be GRANTED. (Doc. 3).

DEFENDANTS' MOTION TO DISMISS

I. Background

Plaintiffs Phyllis Tait and Tiffany Minott ("Plaintiffs") filed this lawsuit on August 4, 2014, in the Superior Court of Fulton County. (Doc. 1-1). Defendants Nationstar Mortgage LLC ("Nationstar") and BNY Mellon National Association ("BNY") (collectively "Defendants") removed it to this Court on September 8, 2014. Plaintiffs' lawsuit includes claims arising out of Defendants' foreclosure proceedingson Plaintiffs' second home ("the Property"), located in Fulton County, Georgia. (Compl. ¶ 15, 57). Plaintiffs originally obtained their loan for the acquisition of the Property through First Horizon Home Loan Corporation (hereinafter "First Horizon") as their original lender. (Compl. ¶ 12). Plaintiffs executed a Security Deed benefitting Mortgage Electronic Registration Systems, Inc. (hereinafter, "MERS"), acting as nominee for the lender and its successor and assigns. (Compl. ¶¶ 11-12, 15, Ex. B). On or about April 15, 2009, MERS assigned its interests in the Security Deed to First Horizon. (Compl. ¶ 13). Around June 2, 2014, First Horizon assigned its interests in the Security Deed to The Bank of New York Mellon, as Trustee for the Holders of the First Horizon Mortgage Pass-Through Certificates, Series FHAMS 2006-FA8. (Compl. ¶ 14).

Plaintiff Tait became unemployed in June 2009; as a result, from 2009 through 2011, Plaintiffs applied for multiple loan modifications in order to preserve their ownership interests in the Property. (Compl. ¶¶ 17-18). Plaintiffs claim that they received conflicting and misleading information regarding the identity of the investor and the servicer of their loan on the Property. For instance, around May 2011, McCalla Raymer, LLC (hereinafter "McCalla") sent a foreclosure notice, dated May 31, 2011, informing Plaintiffs that MetLife Home Loans ("MetLife") had the full authority to modify, amend, and negotiate the mortgage loan terms of the Property. (Compl. ¶¶ 21-22). Plaintiffs state that on June 28, 2011, they applied for a modification with FirstHorizon/MetLife and submitted all requested documents to do so. (Compl. ¶ 23). Plaintiffs state, however, that First Horizon/MetLife repeatedly asked Plaintiffs to resubmit documents and never acted on Plaintiffs' requested modification, but did not foreclose on Plaintiffs' home. (Compl. ¶¶ 24-25).

Plaintiffs state that sometime between September or October 2011, Defendant Nationstar contacted Georgia Power, the utility company, and removed Plaintiff Tait's name from the utility account without her authorization. (Compl. ¶ 46). Further, Plaintiffs contend that around October 13, 2011, Defendant Nationstar unlawfully entered Plaintiffs' Property and changed the locks. (Compl. ¶¶ 47).

Around November 28, 2011, Plaintiffs received a letter from McCalla notifying them that their debt was owed to Defendant Nationstar, but that Nationstar might not be the recorded holder of the deed. (Compl. ¶ 26). Plaintiffs state they received several foreclosure notices, dated November 29, 2011, December 27, 2011, and March 12, 2012. (Compl. ¶¶ 27-29). Each of these notices identified Defendant Nationstar as the entity with the full authority to modify, amend, and negotiate the loan terms for the mortgage on the Property. (Id.). Plaintiffs state that the November 28, 2011 and March 12, 2012 notices of foreclosure listed Defendant BNY as the secured investor(s) of the loan on the Property. (Compl. ¶¶ 27, 29). The March 12, 2012 letter informed Plaintiffs that a foreclosure sale was scheduled on the Property for the first Tuesday in May 2012. (Compl. at Ex. L).

Around March 15, 2012, a Nationstar employee, Olivia Davis, offered Plaintiffsanother opportunity to apply for a loan modification. (Compl. ¶ 30). Plaintiffs state they sent documents required to assess the modification in March 2012 and April 2012. (Compl. ¶¶ 30-31). Nevertheless, Plaintiffs state that on April 27, 2012, they received another letter from McCalla, indicating that a foreclosure sale was scheduled for May 1, 2012, and indicating that MetLife had the full authority to modify, amend, and negotiate the loan terms for the mortgage on the Property. (Compl. ¶ 22, Ex. M). Around May 1, 2012, Plaintiffs state that they received another letter, dated April 27, 2012 (the "April Acknowledgment Letter"), from Nationstar, in which Nationstar acknowledged receipt of Plaintiffs' modification request and all supporting documents. (Compl. ¶ 33). This letter also stated the evaluation period for the modification request would be twenty to sixty days, but the Property would not be sold at a foreclosure sale during this period. (Id.). Plaintiffs aver that around June 22, 2012, they received a similar letter from Nationstar (hereinafter, the "June Acknowledgment Letter") acknowledging that Nationstar received Plaintiffs' modification request, explaining that the evaluation period for the modification would be twenty to sixty days, and assuring Plaintiffs that the Property would not be sold at a foreclosure sale during this period. (Compl. ¶ 38, Ex. P). Plaintiffs state they received another letter, dated June 26, 2012 (the "June Request Letter"), from Defendant Nationstar which notified Plaintiffs that Nationstar still needed additional documents to complete Plaintiffs' modification request with a deadline for July 27, 2012, and failure to comply would result in denial of the modification. (Compl. ¶¶ 41-42).

Despite Nationstar's assurances that the Property would not be sold at a foreclosure sale during the evaluation period, a foreclosure sale occurred on May 1, 2012. (Compl. ¶ 35). Plaintiffs state that on May 8, 2012, they sent a letter to Defendant Nationstar and McCalla through their counsel disputing the foreclosure. (Compl. ¶ 37, Ex. P). Nationstar responded in writing on June 28, 2012. (Compl. ¶ 44, Ex. R). Therein, Nationstar apologized for miscommunication to Plaintiff Tait and indicated that the foreclosure sale scheduled for May 1, 2012, had been rescinded. (Compl. ¶ 44, Ex. R). Nationstar's letter further advised that Plaintiffs could re-apply for a loan modification and indicated documents needed. (Id.).

Plaintiffs argue in Count I of their Complaint that Defendant Nationstar and Defendant BNY wrongfully foreclosed on Plaintiffs' property during the period in which they were evaluating Plaintiffs' application for a loan modification. (Compl. ¶ 57). In support, Plaintiffs contend that despite Nationstar's written assurances that it would not foreclose on the Property during the period in which the loan modifications were being considered, Defendant Nationstar and Defendant BNY proceeded with and completed the foreclosure sale of the Property on May 1, 2012. (Compl. ¶¶ 52-53, 56).

Plaintiffs allege in Count II of their Complaint that Defendants breached their contractual duties when Defendants foreclosed on the Property contrary to Nationstar's assurances within the April Acknowledgment Letter that they would not foreclose during the period in which Plaintiffs' modification request was being considered. (Compl. ¶¶ 61-63). Plaintiffs further contend that Defendants' actions in this regardbreached the Security Deed by failing to exercise the power to foreclose fairly. (Compl. ¶ 61). In Count III, Plaintiffs allege that Defendants breached their duties of good faith and fair dealing when Nationstar falsely communicated to Plaintiffs in the April Acknowledgment Letter that it would not proceed with the foreclosure sale of the Property, but continued with and completed the foreclosure sale on May 1, 2012. (Compl. ¶¶ 77-78).

In Counts IV and V, Plaintiffs allege that Nationstar's April Acknowledgment Letter, June Acknowledgment Letter, and June Request Letter fraudulently misrepresented that a foreclosure sale of the Property would not occur until after the modification evaluation period concluded. (Compl. ¶¶ 81, 87, 93). Plaintiffs state that they relied on Nationstar's statements to their detriment because they could have petitioned for bankruptcy if they had known that Defendants would not forebear foreclosing on their property. (Compl. ¶ 86). In Count VI of Plaintiffs' Complaint, Plaintiffs allege that Defendant Nationstar negligently misrepresented that no foreclosure sale would occur during the period in which the modification was considered. (Compl. ¶¶ 96-98).

In Count VII, Plaintiffs request that this Court declare (1) Defendants have misrepresented the true identity of the secured creditor and investor of Plaintiffs' loan; (2) the true identity of the secured creditor and investor of Plaintiffs' loan; (3) the identity of the party who has full authority to modify Plaintiffs' loan; and (4) that the foreclosure was wrongful under Georgia law. (Compl. ¶ 100-01).

Count VIII of the Plaintiffs' Complaint alleges that Defendants Nationstar and BNY trespassed on Plaintiffs' Property when they notified Georgia Power that the Property was vacant, had Plaintiff Tait's name removed from the utility account, and unlawfully entered the Property to change the locks. (Compl. ¶¶ 105-08). In Count IX of Plaintiffs' Complaint, they contend that under the doctrine of promissory estoppel, Defendant Nationstar's promise not to foreclose until after Nationstar evaluated Plaintiffs' modification requests should be enforced. (Compl. ¶ 112). Plaintiffs allege in Count X of their Complaint that they...