Court Opinion

ID: 2790398
Source: CourtListenerOpinion
Date Created: 2015-03-31 19:01:11.383734+00
Date Added: 2024-06-11T11:10:31.007778
License: Public Domain

Case: 14-14052    Date Filed: 03/31/2015    Page: 1 of 8

                                                              [DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT
                          ________________________

                                No. 14-14052
                            Non-Argument Calendar
                          ________________________

                      D.C. Docket No. 1:13-cv-03756-WCO

ANNIE PAULINE WARD,
                                                                 Plaintiff-Appellant,

                                       versus

AMS SERVICING, LLC,
                                                               Defendant-Appellee.

                          ________________________

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

                                 (March 31, 2015)

Before ROSENBAUM, KRAVITCH and ANDERSON, Circuit Judges.

PER CURIAM:

      Annie Ward appeals the district court’s dismissal of her civil suit against

AMS Servicing, LLC (AMS), alleging violations of the Fair Debt Collection
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Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. After a thorough review, we

affirm.

                                           I.

      The facts of this case are not in dispute. In June 2006, Ward entered into a

loan transaction to finance the purchase of residential property located in Atlanta,

Georgia. Resmae Mortgage Corporation (Resmae) originated the loan in the

principal amount of $221,000 (the Note). To secure payment on the Note, Ward

delivered a Security Deed to Mortgage Electronic Registration Systems (MERS),

as grantee/nominee for Resmae. On June 24, 2009, Ward and Specialized Loan

Servicing, LLC, the original servicer on Ward’s loan, entered into a Loan

Modification Agreement. Under the terms of that agreement, Ward agreed to pay

$1,182.89 per month. In 2010, MERS conveyed its interest in the Security Deed to

FCDB SNPWL Trust (FCDB). AMS acts as the servicer for FCDB.

      Ward stopped making monthly mortgage payments and subsequently filed a

petition for Chapter 13 bankruptcy. FCDB then filed a motion for relief in the

bankruptcy court from the automatic stay including, but not limited to, the right to

foreclose. See 11 U.S.C. § 362(a)(3) (providing that a filed petition operates as a

stay against, inter alia, “any act to obtain possession of property . . . or to exercise

control over property of the estate[.]”). On June 26, 2013, the parties entered into a

consent order that was signed by the bankruptcy court judge. The terms of the

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order provided that the parties “stipulate and consent” that the “post-petition

arrearage through May 20, 2013, totals $11,881.55, consisting of monthly

payments for the months of September 1, 2012 through May 1, 2013, each at

$1,319.50, and $826.00 in reasonable attorney’s fees and costs, less the suspense

balance of $819.95.” The order further provided that once the total post-petition

arrearage had been paid, the regular monthly mortgage payments would resume

and that the sums “shall be paid” to AMS. As a result of the consent order, the

bankruptcy court denied FCDB’s motion for relief from the automatic stay.

       In November 2013, Ward 1 filed suit in the district court, alleging that AMS

had violated the FDCPA by falsely representing the amount of her monthly

mortgage payments. In her amended complaint, Ward argued that her monthly

payment was supposed to be only $1,182.89, but that AMS had been charging her

$1,319.50 per month. AMS moved to dismiss the complaint asserting, among

other things, that Ward had stipulated to the amount of her monthly payments in

the bankruptcy proceeding.

       In her report and recommendation (R&R), the magistrate judge

recommended dismissing Ward’s suit as barred by judicial estoppel. Specifically,

the magistrate judge highlighted that Ward had agreed to monthly payments of

$1,319.50 until her mortgage was up-to-date when the parties resolved their

1
 Ward retained the same counsel in both the bankruptcy proceeding and in her suit before the
district court.
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dispute in bankruptcy court. As such, Ward was estopped from taking inconsistent

positions as to the amount of money owed on her mortgage in the bankruptcy

proceeding and the instant civil lawsuit. Overruling Ward’s objections, the district

court adopted the R&R and dismissed her suit.

      On appeal, Ward argues that the doctrine of judicial estoppel does not apply

because her prior statement in bankruptcy court, concerning the amount of her

monthly mortgage payments, was made in a consent decree and not “under oath.”

Ward further argues that there is no evidence that she “succeeded” in the

bankruptcy proceeding. She contends that it is “utterly speculative” that the

bankruptcy court, in approving the consent order between the parties, accepted all

the figures in the order.

                                          II.

      Generally, we review the district court’s grant of a motion to dismiss under

Fed.R.Civ.P. 12(b)(6) for failure to state a claim, “accepting the allegations in the

complaint as true and construing them in the light most favorable to the plaintiff.”

Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1288 (11th Cir. 2010) (citation

omitted). But we employ an abuse-of-discretion standard to review the district

court’s application of judicial estoppel. Robinson v. Tyson Foods, Inc., 595 F.3d

1269, 1273 (11th Cir. 2010). A review for abuse of discretion requires us to

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“affirm unless we find that the district court has made a clear error of judgment, or

has applied the wrong legal standard.” Id. (quotation omitted).

      The purpose of judicial estoppel is “to protect the integrity of the judicial

process by prohibiting parties from deliberately changing positions according to

the exigencies of the moment.” New Hampshire v. Maine, 532 U.S. 742, 749-50

(2001) (internal citations omitted). It is “an equitable doctrine invoked by a court

at its discretion.” Id. at 750 (internal citation and quotation marks omitted). The

Supreme Court has observed that, “the circumstances under which judicial estoppel

may appropriately be invoked are probably not reducible to any general

formulation of principle.” Id. (internal alteration omitted). Nevertheless, the Court

has enumerated several factors that inform a court’s decision concerning whether

to apply the doctrine in a particular case: (1) whether the present position is clearly

inconsistent with the earlier position; (2) whether the party succeeded in

persuading a court to accept the earlier position, so that judicial acceptance of the

inconsistent position in a later proceeding would create the perception that either

the first or second court was misled; and (3) whether the party advancing the

inconsistent position would derive an unfair advantage. Id. at 750-51.

      Prior to the New Hampshire decision, the Eleventh Circuit utilized a two-

factor test in the application of judicial estoppel: (1) that the allegedly inconsistent

position was made under oath in a prior proceeding; and (2) such inconsistencies

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must be shown to have been calculated to make a mockery of the judicial system.

See, e.g., Taylor v. Food World, Inc., 133 F.3d 1419, 1422 (11th Cir 1998). In

Burnes v. Pemco Aeroplex, Inc., we acknowledged the intervening decision in New

Hampshire, and explained that:

      the two factors applied in the Eleventh Circuit are consistent with the
      Supreme Court’s instructions . . . and provide courts with sufficient
      flexibility in determining the applicability of the doctrine of judicial
      estoppel based on the facts of a particular case. We recognize that
      these two enumerated factors are not inflexible or exhaustive; rather,
      courts must always give due consideration to all of the circumstances
      of a particular case when considering the applicability of this doctrine.

291 F.3d 1282, 1285-86 (11th Cir. 2002).

                                         III.

      Turning to the instant appeal, we conclude that the district court properly

dismissed Ward’s suit based on the doctrine of judicial estoppel. Ward does not

dispute that her position in bankruptcy court, in which she stipulated that she

would make monthly payments of $1,319.50 to AMS, is inconsistent with her

assertion in her instant suit that her monthly mortgage payment was supposed to be

only $1,182.89. She maintains that judicial estoppel does not apply because her

prior statement was not made under oath as it was contained in a consent decree

that both parties presented to the bankruptcy court for its approval. But Ward’s

prior statement did not necessarily have to be under oath in order for judicial

estoppel to apply. Although we have explained that this Circuit’s two-factor test

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with respect to judicial estoppel—including that a prior statement be made under

oath—is consistent with the Supreme Court’s decision in New Hampshire, we have

also highlighted that these two factors are not “inflexible or exhaustive” and that

“courts must always give due consideration to all of the circumstances of a

particular case when considering the applicability of this doctrine.” Burnes, 291

F.3d at 1286. Notably, in New Hampshire, the Supreme Court applied the doctrine

of judicial estoppel where a party’s earlier inconsistent representation was made in

a consent decree rather than in a pleading under oath. See New Hampshire, 532

U.S. at 751-55 (concluding that New Hampshire was barred by judicial estoppel

from challenging its “lateral marine boundary” with Maine based on the terms of a

1977 consent decree).

      Moreover, contrary to Ward’s assertion, the parties did not merely settle

their claims without any discussion of the basis upon which the agreement was

reached. Rather, both sides presented a detailed consent order for the bankruptcy

court’s approval, in which Ward stipulated that her monthly payment was

$1,319.50 and convinced the bankruptcy court to accept this position to avoid the

risk of foreclosure. As such, we find no merit to Ward’s assertion that she did not

succeed in her prior litigation in the bankruptcy court.

      Additionally, although our case law recognizes that there is no requirement

that the party invoking judicial estoppel show prejudice, see Burnes, 291 F.3d at

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1286, prejudice serves an important role in the applicability of the doctrine in this

context, for it is difficult to impute an intent “to make a mockery of the judicial

system” where the complaining party was aware of the inconsistency in sufficient

time and in a position to properly raise an objection in the original proceeding, id.

at 1285. Put another way, judicial estoppel is meant to prevent litigants from

deliberately changing positions after the fact to gain an unfair advantage. As noted

in the district court’s order, Ward would “gain an unfair advantage and AMS

would suffer an unfair detriment” if she was allowed to proceed with her instant

FDCPA suit because she convinced AMS not to foreclose on her home in return

for her express agreement to pay $1,319.50 per month until her mortgage was up-

to-date.

      For the reasons stated, we conclude that judicial estoppel bars Ward’s

challenge to the amount of her monthly mortgage payment. Accordingly, we

affirm the district court’s dismissal of Ward’s civil suit against AMS.

      AFFIRMED.

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