Lindsey Jones v. CitiMortgage, Inc.

666 F. App'x 766
CourtCourt of Appeals for the Eleventh Circuit
DecidedNovember 9, 2016
Docket15-14853 Non-Argument Calendar
StatusUnpublished
Cited by14 cases

This text of 666 F. App'x 766 (Lindsey Jones v. CitiMortgage, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lindsey Jones v. CitiMortgage, Inc., 666 F. App'x 766 (11th Cir. 2016).

Opinion

PER CURIAM:

Plaintiff-Appellant Lindsey Jones, proceeding pro se, appeals the district court’s dismissal of his lawsuit challenging the scheduled foreclosure of his home by Defendants-Appellees CitiMortgage, Inc. (“CitiMortgage”), and the law firm of Phelan Hallinan Diamond & Jones, PLLC (the “Phelan firm”). The scheduled foreclosure sale in April 2015 followed Jones’s discharge from bankruptcy in 2006, an earlier foreclosure in August 2010, and Jones’s state-court lawsuit challenging the 2010 foreclosure, which ended in an adverse ruling by Defendant-Appellee Fulton County Superior Court Judge Todd Markle (“Judge Markle”).

In his current complaint filed in federal district court, Jones primarily alleges that CitiMortgage, acting through foreclosure counsel (the Phelan firm), lacked authority *769 to foreclose a second time and violated the 2006 bankruptcy discharge injunction. Jones also alleges that the defendants, over the course of several years, violated his constitutional rights and various state and federal statutes.

The district court dismissed Jones’s complaint, concluding, among other things, that Jones could not enjoin the second foreclosure because the loan connected with the property was in default, that Citi-Mortgage and the Phelan firm did not violate the bankruptcy-discharge injunction, and that Judge Markle was entitled to judicial immunity. Jones contends that the court erred in dismissing his complaint and should have given him leave to amend before dismissing the action altogether.

After careful review, we affirm the dismissal with prejudice of Jones’s complaint in- nearly all respects, though, for some claims, on different grounds than those offered by the district court. We vacate the dismissal with prejudice of Jones’s claim alleging violations of the bankruptcy-discharge injunction, and we remand this claim to the district court with instructions, as detailed below. Finally, we conclude that Jones was not entitled to leave to amend his complaint because amendment would have been futile.

I. BACKGROUND

A. Factual Background 1

In June 2002, Jones financed the purchase of his home (the “Property”) in Lithonia, Georgia, with a loan insured by the Federal Housing Administration. In connection with the loan, Jones executed a promissory note and a deed to secure the debt. The note was endorsed immediately to CitiMortgage, and the security deed was transferred to CitiMortgage in April 2010. 2 The security deed included a nonjudicial power-of-sale provision. See You v. JP Morgan Chase Bank, 293 Ga. 67, 743 S.E.2d 428, 430 (2013) (“Georgia law clearly authorizes the use of ‘nonjudicial power of sale foreclosure’ as a means of enforcing a debtor’s obligation to repay a loan secured by real property.”).

Although he was current on his mortgage loan, Jones filed for bankruptcy in 2006 and received a discharge of his debts, including the mortgage loan debt, in January 2006. In general, when going through bankruptcy, the debtor must indicate what he plans to do with the collateral, including real property, for his debts. Taylor v. AGE Fed. Credit Union (In re Taylor), 3 F.3d 1512, 1514-15 (11th Cir. 1993); see also Failla v. Citibank, N.A. (In re Failla), 838 F.3d 1170, 1174-75 (11th Cir. 2016). If the collateral is not exempt, the debtor must surrender the collateral, redeem the collateral, or reaffirm the debt. In re Taylor, 3 F.3d at 1514 & n.2. While CitiMortgage suggests that Jones initially may have intended to reaffirm the debt, Jones does not allege that a reaffirmation agreement *770 was ever reached. So, consistent with his allegations, Jones never assumed personal liability for the mortgage after his bankruptcy. Without reaffirming the debt or redeeming the collateral, the debtor has no right to retain the collateral, id. at 1516, though the debtor can continue to maintain mortgage payments on a principal residence after discharge without reaffirming the debt, and a creditor can take such payments rather than-pursue an in rem foreclosure, see 11 U.S.C. § 524(j).

It appears that, after his 2006 bankruptcy discharge, Jones continued to make mortgage payments until some point in 2010. Thereafter, CitiMortgage retained the law firm of McCurdy & Candler, LLC, to initiate a non-judicial foreclosure action. McCurdy & Candler sent Jones letters in June 2010 indicating that the loan was in default, that a foreclosure sale would occur on August 3, 2010, and that title to the Property would likely be transferred to the Secretary of Housing and Urban Development (“HUD”) after foreclosure. One letter claimed that Jones owed around $130,000.00, but it also noted that he was not personally liable if he had received a bankruptcy discharge.

On August 3, 2010, CitiMortgage foreclosed the mortgage on the Property, 3 Jones alleges that, as a result of the August 2010 foreclosure and based on statements in the June 2010 letters from McCurdy & Candler, HUD is the current owner of the note and security deed, while CitiMortgage is the servicer.

Jones and CitiMortgage unsuccessfully attempted settlement both before and after the August 2010 foreclosure. Jones offered to purchase the property for $50,000, and the parties later discussed a proposal to purchase it for $25,000. CitiMortgage eventually rejected both proposals.

After the foreclosure, Jones moved most of his belongings to a warehouse and waited for a demand of the Property, but it never came. Instead, in December 2010, he received another notice from McCurdy & Candler stating that the mortgage for the Property was about to be foreclosed.

Fed up with CitiMortgage’s confusing actions, Jones challenged the August 2010 foreclosure in the Superior Court of Fulton County, naming as defendants Citi-Mortgage, MERS, and counsel for Citi-Mortgage. 4 He alleged assorted federal claims and state-law claims of wrongful foreclosure, fraud, conspiracy, and theft by deception/“crimen falsi.” The defendants removed the complaint to federal district court, which, on May 25, 2011, dismissed with , prejudice the federal claims and remanded the remainder of the lawsuit to the Superior Court of Fulton County.

For reasons unknown, the federal court’s remand order was not filed in state court until August 22, 2011, despite Jones’s efforts to have the case reinstated earlier. According to Jones, the only explanation for the delay in restatement is a conspira *771

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Bluebook (online)
666 F. App'x 766, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lindsey-jones-v-citimortgage-inc-ca11-2016.