Court Opinion

ID: 2643204
Source: CourtListenerOpinion
Date Created: 2013-11-20 16:55:39.303479+00
Date Added: 2024-06-11T12:50:43.983946
License: Public Domain

Case: 13-11643    Date Filed: 11/20/2013   Page: 1 of 9

                                                      [DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT

                    ___________________________

                            No. 13-11643
                        Non-Argument Calendar
                    ___________________________

                  D. C. Docket No. 2:12-cv-00162-RWS

ZIAD ABDULLAHI,

                                                             Plaintiff-Appellant,

                                   versus

BANK OF AMERICA, NA,
BAC HOME LOANS, et al.

                                                         Defendants-Appellees.

                   ______________________________

               Appeal from the United States District Court
                  for the Northern District of Georgia
                 _______________________________

                            (November 20, 2013)

Before MARTIN, FAY, and EDMONDSON, Circuit Judges.
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PER CURIAM:

       Ziad Abdullahi appeals the district court’s dismissal of his suit for wrongful

foreclosure, promissory estoppel, and constructive fraud. 1 Abdullahi’s complaint

named as defendants Bank of America, NA (“BOA”), Federal Home Loan

Mortgage, Corp., a/k/a Freddie Mac, and Pendergast & Associates, P.C.

(“Defendants”).2 No reversible error has been shown; we affirm.

       This dispute arose out of the non-judicial foreclosure sale of Abdullahi’s

property in Cumming, Georgia (“Property”). In 2005, Abdullahi obtained a loan

which was secured by a Security Deed on the Property. The Security Deed granted

to Mortgage Electronic Registration Systems, Inc. (“MERS”), and to MERS’s

successors and assigns, the power of sale in the event of Abdullahi’s default under

the note. The Security Deed was later transferred and assigned to BAC Home

Loans Servicing, LLC. BOA then became the rightful holder of the Security Deed

when it merged with BAC. See O.C.G.A. § 14-2-1106(a)(2) (providing that the

1
 Because Abdullahi does not challenge the district court’s dismissal of his claims for quiet title,
violation of the Fair Debt Collection Practices Act, and for injunctive relief, these claims are
abandoned. See Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1330 (11th Cir. 2004).
For the same reason, Abdullahi has also abandoned his motion for leave to amend his first
amended complaint.
2
  Abdullahi’s complaint also named as a defendant BAC Home Loans Servicing, LP, which has
since merged with BOA.
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contract rights of each party to a merger are vested automatically in the surviving

corporation).

      After Abdullahi failed to make one or more payments required under the

2005 note, BOA -- through its lawyers at Pendergast -- began foreclosure

proceedings on the Property. While Abdullahi was in the process of applying for a

modification of his loan, the Property was foreclosed on. Ownership of the

Property was later transferred to Freddie Mac.

      Abdullahi filed suit against Defendants in state court, seeking monetary

damages and rescission of the foreclosure. The suit was removed to federal court.

The district court granted Defendants’ motions to dismiss the complaint for failure

to state a claim under Fed.R.Civ.P. 12(b)(6).

      We review de novo the district court’s dismissal of a case under Rule

12(b)(6), “accepting the allegations in the complaint as true and construing them in

the light most favorable to the plaintiff.” Hill v. White, 321 F.3d 1334, 1335 (11th

Cir. 2003). To survive dismissal for failure to state a claim, “a plaintiff’s

obligation to provide the grounds of his entitlement to relief requires more than

labels and conclusions, and a formulaic recitation of the elements of a cause of

action will not do.” Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1964-65 (2007)

(quotations omitted).

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Wrongful Foreclosure

       On appeal, Abdullahi challenges the district court’s dismissal of his claim

for wrongful foreclosure.3 In Georgia, “a plaintiff asserting a claim of wrongful

foreclosure [must] establish a legal duty owed to it by the foreclosing party, a

breach of that duty, a causal connection between the breach of that duty and the

injury it sustained, and damages.” Heritage Creek Dev. Corp. v. Colonial Bank,

601 S.E.2d 842, 844 (Ga. Ct. App. 2004).

       Because BOA was the only “foreclosing party” and because Abdullahi failed

to allege that either Freddie Mac or Pendergast owed him a specific legal duty, the

district court dismissed properly Abdullahi’s claim for wrongful foreclosure

against Freddie Mac and Pendergast.

       Abdullahi has also not alleged sufficiently that BOA breached a legal duty

or that such a breach caused his injuries. On the day of the foreclosure, BOA was

the rightful holder of the Security Deed. The Security Deed grants explicitly the

“successors and assigns of MERS” the power of sale and “the right to foreclose

and sell the Property” in the event of Abdullahi’s default. Because Abdullahi

3
  In support of his wrongful foreclosure claim, Abdullahi raises here two arguments that were not
raised in the district court: (1) that he filed for Chapter 13 bankruptcy on the day of the
foreclosure sale and, thus, the foreclosure sale was prohibited by an automatic stay; and (2) that
the foreclosure newspaper advertisements were defective. We do not review issues raised for the
first time on appeal. See Access Now, Inc., 385 F.3d at 1331.
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defaulted on the loan, BOA was entitled to foreclose on the Property. BOA

breached no duty to Abdullahi. And Abdullahi’s complained-of injuries were

caused proximately by Abdullahi’s own failure to make loan payments.

       On appeal, Abdullahi contends that the foreclosure notice letter 4 violated

O.C.G.A. § 44-14-162.2 because it failed to identify the secured creditor. This

argument differs from Abdullahi’s complaint, in which he alleged only that the

foreclosure notice letter failed to identify the owner of the loan. In any event, the

Georgia Supreme Court has concluded that section 44-14-162.2 does not

categorically require the foreclosure notice to name either the secured creditor or

the note holder. See You v. JP Morgan Chase Bank, N.A., 743 S.E.2d 428, 433-34

(Ga. 2013). Instead, the notice must name “the individual or entity who shall have

full authority to negotiate, amend, and modify all terms of the mortgage with the

debtor.” Because Abdullahi’s complaint alleged only that the foreclosure letter

failed to identify the owner of the loan -- and did not allege that the owner of the

loan was in fact the entity with full authority to negotiate, amend, and modify the

mortgage -- Abdullahi has not alleged sufficiently a violation of Georgia law. 5

4
  Abdullahi received three notice letters. Because he does not challenge expressly the district
court’s dismissal of his claims for attempted wrongful foreclosure based on the first two
foreclosure notices, he has abandoned that argument. See Access Now, Inc., 385 F.3d at 1330.
5
  Abdullahi also argues that the district court misconstrued his argument about the enforceability
of the promissory note. To preserve an issue for appeal, a party “must first clearly present it to
the district court . . . in such a way as to afford the district court an opportunity to recognize and
rule on it.” Juris v. Inamed Corp., 685 F.3d 1294, 1325 (11th Cir. 2012). Nowhere in his
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Promissory Estoppel

       Abdullahi argues that the district court erred in dismissing his claim for

promissory estoppel based on BOA’s alleged promise that the foreclosure sale had

been rescinded. To state a claim for promissory estoppel under Georgia law,

Abdullahi must allege “that (1) defendant made certain promises, (2) defendant

should have expected that plaintiffs would rely on such promises, (3) the plaintiffs

did in fact rely on such promises to their detriment, and (4) injustice can be

avoided only by enforcement of the promise.” Canterbury Forest Ass’n v. Collins,

532 S.E.2d 736, 739 (Ga. Ct. App. 2000). “Promissory estoppel cannot be applied

unless the promisee reasonably relied on the promise.” Gerdes v. Russell Rowe

Commc’ns, 502 S.E.2d 352, 354 (Ga. Ct. App. 1998).

       Abdullahi’s promissory estoppel claim is based on these statements made by

BOA employee Stephanie Beal: 6 (1) Beal was told that the Property had been sold,

but had been told that it was “possible” to have the foreclosure rescinded; (2) that

her supervisor and the underwriter had put in “escalated requests” to have the

foreclosure rescinded; (3) that she had been told that the foreclosure had been

complaint does Abdullahi raise clearly the issue he now asserts on appeal: that the promissory
note was unenforceable because it was not delivered properly to the lender. Because this
argument was presented for the first time on appeal, it is waived. See id.
6
 Because Abdullahi makes no allegations about promises made by Freddie Mac or by
Pendergast, he stated no claim for promissory estoppel against those defendants.
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rescinded; and (4) that BOA’s computer system still showed that the Property had

been foreclosed on and that it may take time for the system to be updated.

      Nothing in these statements constituted a promise by BOA to rescind the

foreclosure sale. Instead, Beal was merely relaying what she understood the status

of Abdullahi’s foreclosure proceedings to be.

      Even if Beal’s statements could be construed as a promise, Abdullahi has not

alleged sufficiently that his reliance on those statements was reasonable. First,

Beal -- a Home Servicing Specialist in BOA’s Loan Modification Department --

told Abdullahi expressly that she was “not in the foreclosure department” and had

no “updated status information” on foreclosures. Thus, Abdullahi had no good

reason to believe that Beal had authority to make promises about his foreclosure

proceedings.

      Second, the Security Deed provided expressly that “[e]xtension of the time

for payment or modification of amortization of the sums secured by this Security

Instrument . . . shall not operate to release the liability of Borrower . . . .” The

Security Deed also described the circumstances under which Abdullahi could

reinstate after acceleration of his loan payments and made clear that Abdullahi’s

failure to cure a default authorized BOA to invoke its power of sale. Based on the

Security Deed’s “clear and unambiguous” language, Abdullahi could not rely

reasonably on Beal’s representations about the possibility of a rescission. See

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Gerdes, 502 S.E.2d at 355 (rejecting a promissory estoppel claim when the “clear

and unambiguous provision [in an employment contract] served to place appellant

on due notice that he could not thereafter reasonably rely upon any words or other

course of dealing to his inducement, other than a modification agreement actually

reduced to writing.”).

Constructive Fraud

      To state a claim for constructive fraud under Georgia law, Abdullahi must

allege, among other things, the existence of a confidential relationship between

himself and Defendants. See Delta Diversified, Inc. v. Citizens & S. Nat’l Bank,

320 S.E.2d 767, 776 (Ga. Ct. App. 1984). A confidential relationship exists

“where one party is so situated as to exercise a controlling influence over the will,

conduct, and interest of another . . . .” First Union Nat’l Bank v. Gurley, 431
S.E.2d 379, 381 (Ga. Ct. App. 1993). “The mere fact that one reposes trust and

confidence in another does not create a confidential relationship.” Id. Abdullahi

has the burden of showing the existence of a confidential relationship. See Jerry

Dickerson Presents, Inc. v. Concert/Southern Chastain Promotions, 579 S.E.2d
761, 770 (Ga. Ct. App. 2003).

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      Abdullahi has failed to allege sufficiently the existence of a confidential

relationship with Defendants. Georgia courts have said that “no confidential

relationship [exists] between a bank and its customers borrowing funds.” Delta

Diversified, Inc., 320 S.E.2d at 776; see also Dixie Diners Atlanta v. Gwinnett Fed.

Bank FSB, 439 S.E.2d 53, 56 (Ga. Ct. App. 1993) (“There is, moreover,

particularly no confidential relationship between lender and borrower . . . for they

are creditor and debtor with clearly opposite interests . . . .”). And Abdullahi

cannot show that he had a confidential relationship with Pendergast, when

Pendergast was representing BOA in the foreclosure proceedings.

      AFFIRMED.

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