Nathaniel Garner v. US Bank National Association

• Court: Court of Appeals of Georgia
• Decided: September 18, 2014
• Docket: A14A1277
• Status: Published

Opinion

FOURTH DIVISION DOYLE, P. J., MILLER and DILLARD, JJ.

NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. http://www.gaappeals.us/rules/

September 18, 2014

In the Court of Appeals of Georgia A14A1277. GARNER v. US BANK NATIONAL ASSOCIATION et al.

MILLER, Judge.

Nathaniel Garner sued US National Bank Association, Wells Fargo Home

Mortgage, Inc., and McCalla Raymer, LLC (collectively “the Defendants”) for

wrongful foreclosure, fraud, intentional infliction of emotional distress, trespass to

real property, and defamation of title for actions arising out of foreclosure

proceedings and an ensuing dispossessory action. The Defendants moved to dismiss

Garner’s complaint, arguing, inter alia, that Garner’s claims were barred by collateral

estoppel because a prior federal lawsuit dismissed similar claims on the ground that

Garner lacked standing. Following a hearing, the trial court granted the Defendants’

motion, and this appeal ensued. On appeal, Garner contends that the trial court erred in granting the Defendants’ motion because it conducted a hearing on the motion

without providing prior notice, and the underlying issues were not previously

adjudicated on the merits. For the reasons that follow, we reverse.

As an initial matter, we consider the procedural posture of this case and the

applicable standard of review. OCGA § 9-11-12 (b) provides in pertinent part that

“[i]f, on a motion to dismiss for failure of the pleading to state a claim upon which

relief can be granted, matters outside the pleadings are presented to and not excluded

by the court, the motion shall be treated as one for summary judgment and disposed

of as provided in [OCGA §] 9-11-56[.]” As explained below, the trial court

considered matters outside the pleadings in this case. Therefore, we will treat the

appealed order as one granting summary judgment to the Defendants. Fernandez v.

WebSingularity, Inc., 299 Ga. App. 11, 13 (1) (681 SE2d 717) (2009). We review a

trial court’s grant of summary judgment de novo, construing the evidence and all

reasonable inferences in the light most favorable to the nonmoving party. Id.

So viewed, the record shows that on or about August 31, 2004, non-party

Marsha W. Meade executed a promissory note in the amount of $246,881 and a

security deed (the “Security Deed”) in favor of Secursource Mortgage, LLC, for the

purchase of a condominium located at 3338 Peachtree Road, N.E., #2804, in Atlanta

2 (the “Property”). In August 2007, Secursource assigned the Security Deed to Wells

Fargo Home Mortgage, Inc. (“Wells Fargo”).

In December 2008, Meade sold the Property to Garner and executed a warranty

deed. However, the warranty deed stated on its face that the transfer of the Property

was still subject to the Security Deed.1

On February 5, 2010, after Meade defaulted on the promissory note, McCalla

Raymer caused a notice of foreclosure under power of sale to be advertised by

publication, and the notice indicated that the foreclosure sale of the Property was to

occur on March 2, 2010. McCalla Raymer also mailed a letter to Garner notifying him

of the foreclosure sale. Prior to the foreclosure sale, Wells Fargo assigned the

Security Deed to US Bank National Association (“US Bank”).

One day before the foreclosure sale, Garner filed suit against Wells Fargo in

Fulton County Superior Court, alleging that Wells Fargo could not conduct the

foreclosure sale because it did not own the promissory note or Security Deed (the

“Wells Fargo suit”). In his complaint, as amended, Garner asserted claims for

1 The warranty deed also references another security deed executed by Meade in favor of Wells Fargo for the amount of $46,290 on August 31, 2004, the same day the Secursource Security Deed was executed.

3 wrongful foreclosure, breach of a duty to act in good faith, and fraud. On March 2,

2010, US Bank foreclosed on and bought the Property at the foreclosure sale.2

The Wells Fargo suit was removed to the federal district court and dismissed

on the ground that Garner lacked standing to challenge the foreclosure process. See

Garner v. Wells Fargo Home Mortgage, Inc., 505 Fed. Appx. 837 (11th Cir. 2013).

In affirming the dismissal of Garner’s suit against Wells Fargo, the United States

Court of Appeals for the Eleventh Circuit held that Garner lacked standing to

complain of defects in the foreclosure sale of the Property because Meade was the

sole mortgagor of the Property and the only person who might have been injured by

any alleged misconduct because Garner did not assume, guarantee, or become

obligated to pay the mortgage when he purchased the Property. Id. at 837.

In December 2012, Garner filed the instant lawsuit against the Defendants. The

Defendants filed their answer and moved to dismiss the complaint, contending that

Garner’s claims were barred by the doctrine of collateral estoppel because the Wells

Fargo suit decided the same issues adversely to Garner. In March 2013, the trial court

2 US Bank subsequently obtained a writ of possession to evict Garner from the Property. Garner sought discretionary review of the trial court’s order, and this Court denied his application.

4 issued a notice of hearing stating that it would conduct a status conference on April

15, 2013.

At the April 15, 2013 hearing, the state trial court advised the parties that it

would hear arguments on the Defendants’ motion to dismiss. Garner, who appeared

pro se, objected because the notice of hearing did not indicate that the Defendants’

motion to dismiss would be argued at the hearing and, as a result, he did not bring the

necessary materials. When asked whether he had timely filed a response to the

motion, Garner stated that the date of the hearing was the last day to respond, he had

the completed response with him, and he had planned to file it following the hearing.

As to the merits of the Defendants’ collateral estoppel argument, Garner asserted that

the federal district court case was a nullity because the district court lacked personal

jurisdiction over Wells Fargo since the company was never served with Garner’s

complaint. Garner also argued that collateral estoppel did not apply because there was

no identity of parties and the federal court case was not adjudicated on the merits.

At the conclusion of the hearing, the trial court granted the Defendants’ motion

to dismiss, concluding that the prior federal adjudication collaterally estopped Garner

from raising the claims in this case. This appeal followed.

5 1. Garner contends that the trial court erred in conducting a hearing on the

Defendants’ motion to dismiss and in converting the motion to dismiss into a motion

for summary judgment by considering evidence outside the pleadings, without giving

him prior notice. We agree.

When the trial court converts a motion to dismiss for failure to state a claim

into a motion for summary judgment based on consideration of matters outside the

pleadings,

the trial court has the burden of informing the party opposing the motion that the court will consider matters outside the pleadings and that, if the opposing party so desires, the party has no less than 30 days to submit evidence in response to the motion for summary judgment. The party opposing the motion may waive the right to the 30-day notice by acquiescing in the movant’s submission of evidence in support of the motion to dismiss.

(Citations and punctuation omitted.) Davis v. Phoebe Putney Health Sys., Inc., 280

Ga. App. 505, 507 (2) (634 SE2d 452) (2006).

In this case, the trial court’s notice of hearing stated that it was conducting a

status conference, and the notice made no mention of the Defendants’ motion to

dismiss, much less that the trial court would consider matters outside of the pleadings

in reviewing that motion. Over Garner’s objection, the trial court considered the

Defendants’ motion to dismiss, and in doing so, it considered matters outside of the

6 pleadings by reviewing the federal district court order dismissing Garner’s lawsuit

against Wells Fargo and the Eleventh Circuit Court of Appeals’ opinion affirming

that dismissal. Consequently, the trial court did not give Garner adequate notice that

the motion to dismiss would be treated as a motion for summary judgment.

This does not end the inquiry, however, because deficient notice is not

reversible error absent a showing of harm. See Smith v. Chemtura Corp., 297 Ga.

App. 287, 289 (1) (676 SE2d 756) (2009). Although Garner had the opportunity to

present his response to the Defendants’ motion and was able to challenge the use of

the federal court cases during the hearing, consideration of these cases was not

harmless error because, on this record, the Defendants were not entitled to dismissal

of Garner’s complaint based on collateral estoppel or res judicata. Notably, “[i]n order

to prove res judicata or collateral estoppel, a litigant must introduce those portions of

the prior proceeding, duly certified, which are necessary to prove the defense.”

(Citation and punctuation omitted.) Bradley v. British Fitting Group, PLC, 221 Ga.

App. 621, 622 (2) (472 SE2d 146) (1996). The hearing transcript shows that the

federal court decisions, while tendered to the trial court, were not actually admitted

into evidence, and there was no evidence of certified copies of the same. Moreover,

material relied upon in support of a motion for summary judgment must be on file at

7 least 30 days before the hearing in order to be considered for the movant. See Porter

Coatings v. Stein Steel and Supply Co., 247 Ga. 631, 631-632 (278 SE2d 377) (1981);

Gunter v. Hamilton Bank of Upper East Tennessee, 201 Ga. App. 379, 381 (411 SE2d

115) (1991).

The Defendants argue that the trial court was authorized to take judicial notice

of the federal court decisions in the Wells Fargo suit. Contrary to the Defendants’

argument, the federal opinions were not subject to judicial notice because they were

unpublished decisions. See OCGA § 24-2-220 (a trial court has a duty to take judicial

notice of a judicial opinion from a foreign jurisdiction if “published by authority”);

Swafford v. Globe American Cas. Co., 187 Ga. App. 730, 733-734 (1) (371 SE2d

180) (1988) (Tennessee appellate court slip

opinions are not published opinions and, therefore, not subject to judicial notice

under former OCGA § 24-1-43). Compare Kramer v. Yokely, 291 Ga. App. 375, 378-

379 (1) (662 SE2d 208) (2008) (trial court entitled to judicially recognize and rely

upon the federal district court’s order that was published in the Federal Supplement

Second Series).

3 OCGA § 24-2-220 contains language identical to former OCGA § 24-1-4, which was repealed by Ga. Laws 2011, p. 99, § 2.

8 Since the trial court was not authorized to take judicial notice of the judgment

in the Wells Fargo suit, it erred when it considered material not included in the actual

court record. See, e.g., In the Interest of D.W., 294 Ga. App. 89, 94 (3) (a) (668 SE2d

533) (2008); Scott v. State, 270 Ga. App. 292, 295 (2) (606 SE2d 312) (2004). The

error cannot be considered harmless because, without admitting into evidence the

duly certified copies of the prior judgment, the Defendants cannot establish that

collateral estoppel barred Garner’s lawsuit. See McMillian v. Rogers, 223 Ga. App.

699, 701-702 (1) (c) (479 SE2d 7) (1996) (collateral estoppel did not bar a subsequent

ruling on the same issue where the party asserting the defense failed to submit a duly

certified copy of the prior proceeding into evidence). Accordingly, the trial court

erred in granting the Defendants’ motion for summary judgment.

2. In light of our holding in Division 1, we need not address Garner’s other

enumeration of error.

Judgment reversed. Doyle, P. J., and Dillard, J., concur in the judgment only.