          Case: 12-10426   Date Filed: 12/11/2012         Page: 1 of 10

                                                                [DO NOT PUBLISH]



            IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________

                            No. 12-10426
                      ________________________

                  D.C. Docket No. 3:11-cv-00061-TCB

STEVE D. MCGOWAN,
TERESA L. MCGOWAN,

                            llllllllllllllllllllllllllllllllllllllllPlaintiffs - Appellants,

THE MCGOWAN COMPANY, LLC,

                                            lllllllllllllllllllllllllllllllllllllllllPlaintiff,

                                   versus

HOMEWARD RESIDENTIAL, INC.,
f.k.a. American Home Mortgage Servicing, Inc.,
FEDERAL NATIONAL MORTGAGE ASSOCIATION,
a.k.a. Fannie Mae,

                           llllllllllllllllllllllllllllllllllllllllDefendants - Appellees.


                      ________________________

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

                           (December 11, 2012)
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Before DUBINA, Chief Judge, CARNES and ANDERSON, Circuit Judges.

PER CURIAM:

       This dispute arises out of Homeward Residential, Inc.’s attempts to foreclose

on real estate that Steve and Teresa McGowan owned.1 The McGowans contend

that they made all the required monthly payments to Homeward and it had no right

to try to foreclose on their properties.

                                               I.

       The McGowans owned seven rental properties in Carroll County, Georgia

with mortgages serviced by Homeward. In December 2009, they asked Homeward

to reduce the monthly payments they were required to make on three of those

properties so that they in turn could reduce the rent they charged, making the

properties more attractive to renters. In response, Homeward sent the McGowans

three “forbearance plan letters,” one for each of the properties. Those letters

allowed the McGowans to make lower monthly payments on the mortgages for

those properties during a four-month period beginning in April 2010. In the letters,

Homeward agreed to “forbear from continuing with foreclosure proceedings,” and




       1
        At the time the events leading up to this lawsuit occurred, Homeward Residential, Inc.
was doing business as American Home Mortgage Servicing, Inc. We refer to it by its present
name.

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promised to consider a loan modification at the end of the forbearance period if the

McGowans made all the specified monthly payments. 2

       The McGowans agreed to those terms and began making the monthly

payments specified in the forbearance agreements. Shortly thereafter, they began

receiving phone calls from debt collectors and threats of foreclosure on the three

mortgages for which they were making reduced payments. They continued to

make the specified payments and at the end of the forbearance period contacted

Homeward about obtaining a permanent loan modification. Homeward then

advised the McGowans that “there were no forbearance plans in place.” In

response, the McGowans began paying their regular monthly payments, but

Homeward returned their checks and began “instituting foreclosure proceedings”

on two of the properties and threatened to foreclose on the third one.

       Homeward also ran in the local newspaper foreclosure advertisements for

two of the McGowans’ properties and reported to the three major consumer

reporting agencies that four of the McGowans’ properties had been foreclosed on.

Because of Homeward’s actions the McGowans “were forced to short sale [sic] all

seven (7) properties during the spring of 2011.”




       2
         Although the letters promised that Homeward would forbear from continuing with
foreclosure proceedings, the McGowans were current with their payments at the time Homeward
sent those letters, so they were not subject to foreclosure at that time.

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                                             II.

       The McGowans sued Homeward in Georgia state court alleging breach of

contract, attempted wrongful foreclosure, and fraud by misrepresentation. The first

amended complaint added a negligence claim and the second amended complaint

added a plaintiff and a defendant.3 Homeward removed the case to federal district

court and moved to dismiss the second amended complaint for failure to state a

claim. The district court granted that motion and gave the McGowans leave to

amend their complaint but only for purposes of asserting a libel claim. The

McGowans then filed a third amended complaint alleging libel on the grounds that

Homeward: (1) falsely reported four foreclosures to the three major CRAs; and (2)

ran false advertisements of foreclosure in the local newspaper. Homeward moved

to dismiss for failure to state a claim, and the district court granted that motion.

This is the McGowans’ appeal of the dismissals of their second and third amended

complaints.

                                            III.

       We review de novo the dismissal of a complaint 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[s].” Am. Dental Ass’n v. Cigna Corp., 605 F.3d

       3
         The additional plaintiff was The McGowan Company, LLC, which is not a party to this
appeal. The additional defendant was the Federal National Mortgage Association. That
defendant and Homeward jointly filed a single brief in this Court, so we will refer to them
collectively as Homeward.

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1283, 1288 (11th Cir 2010). To avoid dismissal, plaintiffs “must plead a claim to

relief that is plausible on its face.” Butler v. Sheriff of Palm Beach Cnty., 685 F.3d

1261, 1265 (11th Cir. 2012) (quotation marks omitted). Because a motion to

dismiss for failure to state a claim tests the sufficiency of the pleadings, we look

only to the McGowans’ second and third amended complaints and determine

whether each one standing on its own states any plausible claim for relief. See

Am. Dental Ass’n, 605 F.3d at 1288–90.

                                          IV.

                                          A.

      The McGowans’ second amended complaint alleges four claims: (1) breach

of contract; (2) attempted wrongful foreclosure; (3) fraud/misrepresentation; and

(4) negligence. As to the breach of contract claim, the McGowans allege that

Homeward breached the forbearance agreements by initiating foreclosure even

though it had promised to “forbear from continuing with foreclosure proceedings.”

That claim fails because the forbearance agreements are unenforceable for lack of

consideration under the pre-existing duty rule, which provides that “[a]n agreement

on the part of one to do what he is already legally bound to do is not a sufficient

consideration for the promise of another.” Citizens Trust Bank v. White, 618

S.E.2d 9, 11–12 (Ga. Ct. App. 2005). At the time the McGowans entered into the

forbearance agreements, they were already obligated to make monthly payments to


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Homeward. Although Homeward’s promise to forbear from foreclosure was

consideration, the McGowans’ promise to pay a debt they already owed was not.

See id. at 11.

      The McGowans contend that even if the forbearance agreements are not

binding contracts, they have stated a claim under the doctrine of promissory

estoppel. That contention also fails. The actual forbearance agreement, which was

attached to the second amended complaint, stated only that if the McGowans

strictly complied with the agreement Homeward “shall forbear from continuing

with foreclosure proceedings” and would “consider a modification of [the

McGowans’] loan.” The first part of that promise does not make sense because

there were then no pending foreclosure proceedings “to forbear from continuing.”

And a promise to consider doing something is illusory. Those types of promises

cannot support a claim for promissory estoppel under Georgia law. See Ga.

Investments Int’l, Inc. v. Branch Banking and Trust Co., 700 S.E.2d 662, 664 (Ga.

Ct. App. 2010) (“Promissory estoppel does not . . . apply to vague or indefinite

promises, or promises of uncertain duration.”).

      As to the attempted wrongful foreclosure claim in the second amended

complaint, Georgia law recognizes such a claim when a foreclosure action was

commenced but not completed but only if the plaintiffs also show that the

defendant knowingly published an untrue and derogatory statement concerning


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their financial conditions and the plaintiffs sustained damages as a direct result of

that statement. Aetna Fin. Co. v. Culpepper, 320 S.E.2d 228, 232 (Ga. Ct. App.

1984) (“Those decisions upon which [the plaintiff] relies to support her contention

that she could recover damages for a wrongful attempted foreclosure require a

knowing and intentional publication of untrue and derogatory information

concerning the debtor's financial condition, and that damages were sustained as a

direct result of this publication.” (emphasis removed)). The second amended

complaint does not allege that Homeward published any false statements.

Accordingly, the second amended complaint does not state a claim for attempted

wrongful foreclosure under Georgia law.

      The remaining claims of the second amended complaint similarly allege

only that Homeward breached the forbearance agreements. The

fraud/misrepresentation claim alleges that Homeward attempted to foreclose even

though the forbearance agreements had promised to forbear from foreclosure.

Similarly, the negligence claim alleges only that Homeward breached a duty by

attempting to foreclose even though the forbearance agreements prohibited them

from doing so. Because we have concluded that the forbearance agreements are

not binding, we affirm the dismissal of those claims.




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                                            B.

      The McGowans’ third amended complaint alleges libel on the grounds that

Homeward: (1) falsely reported four foreclosures to the three major CRAs; and (2)

ran false advertisements of foreclosure in the local newspaper. To state a claim for

libel under Georgia law, the McGowans must plead a false statement that either:

(1) is libel per se; or (2) caused them to suffer special damages. Webster v.

Wilkins, 456 S.E.2d 699, 701 (Ga. Ct. App. 1995). Libel per se is a false statement

“that one is guilty of a crime, dishonesty or immorality . . . [or] that tend[s] to

injure one in his trade or business.” Zarach v. Atlanta Claims Ass’n, 500 S.E.2d 1,

5 (Ga. Ct. App. 1998). The false reports to the CRAs and the false newspaper

advertisements of foreclosure do not meet that standard. Mell v. Edge, 22 S.E.2d

738, 739 (Ga. Ct. App. 1942) (“[A] writing containing the mere statement that a

person . . . owes a debt and refuses to pay, or owes a debt which is long past due, is

not libelous per se and does not render the author . . . liable without proof of

special damages.”); see also Sumner v. First Union Nat’l Bank of Ga., 409 S.E.2d

212, 213–14 (Ga. Ct. App. 1991) (“An allegation that one owes a delinquent debt

does not impute that he has committed a crime.”); Floyd v. Atlanta Newspapers,

Inc., 117 S.E.2d 906, 909 (Ga. Ct. App. 1960) (“[M]erely to charge one as a

delinquent debtor is, as a matter of law, not libelous per se. . . .”).




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      The only remaining way that the McGowans’ libel claims can stand is if

special damages have been properly pleaded. Although the Federal Rules of Civil

Procedure generally require only “a short and plain statement . . . showing that the

pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), there is a heightened pleading

standard for special damages. Rule 9(g) states, “If an item of special damage is

claimed, it must be specifically stated.” Fed. R. Civ. P. 9(g).

      The McGowans’ third amended complaint fails to satisfy that heightened

pleading standard. Four of the five libel counts allege only that the McGowans

“suffered injury.” The fifth one alleges that Mr. McGowan was denied 0%

financing on the purchase of a new car because his credit report showed

foreclosures. It does not, however, allege that he financed the purchase of a car on

less favorable terms, or was unable to obtain financing at all, or otherwise suffered

a monetary loss. Because the third amended complaint has not specifically stated

special damages as required by Rule 9(g), it fails to state a claim. See Zarach, 500

S.E.2d at 5 (stating that special damages “must be the loss of money, or of some

other material temporal advantage capable of being assessed in monetary value”);

Hicks v. McLain’s Bldg. Materials, Inc., 433 S.E.2d 114, 116 (Ga. Ct. App. 1993)

(“[T]he generalized allegations of appellant and her husband that they might have




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been hindered in obtaining credit . . . are insufficient to establish special

damage.”). 4

       AFFIRMED.




       4
         Because the third amended complaint does not state a claim for libel for the reasons we
have discussed, we do not address Homeward’s argument that the Fair Credit Reporting Act
preempts that claim.

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