The United States Court of Appeals for the Eleventh Circuit affirmed in part and vacated in part the lower court's dismissal for failure to state a claim of a putative class action seeking recovery of notary fees in excess of the statutory maximum set by OCGA 45-17-11(b), the Georgia notary fee statute.
The opinion is available online at: http://www.ca11.uscourts.gov/opinions/ops/200815983op2.pdf.
The Eleventh Circuit certified four questions concerning Georgia law to the Georgia Supreme Court. The Georgia court replied as follows: (1) there is no private civil cause of action, express or implied, under OCGA section 45-17-11; (2) under the facts of the present case, the "voluntary payment doctrine cannot bar a breach of contract claim;" (3) the statute of limitations was "not tolled" for the plaintiff's fraud and "money had and received" claims; (4) a corporation , while not "directly or vicariously liable" for violations of OCGA, can become liable "if it participates in or procures the notary's violations."
Applying the Georgia Supreme Court's rulings, the Eleventh Circuit held that OCGA section 45-17-11 does not create a private civil cause of action to recover notary fees, had been properly dismissed by the district court.
The plaintiffs also asserted that the district court had erred when it had dismissed their "fraud and "money had and received"" claim on statute of limitations grounds. The Eleventh Circuit noted that more than five years had passed since the plaintiffs had signed the relevant loan agreement. Moreover, the Court was unconvinced by the plaintiffs' contention that "equitable tolling" should apply because lender had supposedly committed fraud when they contracted for "reasonable and necessary" notary fees, and then charged "fees far exceeding the statutory maximum" and failed to inform the plaintiffs of the statutory maximum. The Georgia Supreme Court held that equitable tolling did not apply because the plaintiffs "could have discovered the discrepancy" between the statutory fee and the actual fee by "simple reference" to the statute. Therefore, the Eleventh Circuit held the district court had not erred in dismissing the plaintiffs' second claim.
The plaintiffs also asserted that the district court had erred when it had dismissed their "fraud and "money had and received"" claim on statute of limitations grounds. The Eleventh Circuit noted that more than five years had passed since the plaintiffs had signed the relevant loan agreement. Moreover, the Court was unconvinced by the plaintiffs' contention that "equitable tolling" should apply because lender had supposedly committed fraud when they contracted for "reasonable and necessary" notary fees, and then charged "fees far exceeding the statutory maximum" and failed to inform the plaintiffs of the statutory maximum. The Georgia Supreme Court held that equitable tolling did not apply because the plaintiffs "could have discovered the discrepancy" between the statutory fee and the actual fee by "simple reference" to the statute. Therefore, the Eleventh Circuit held the district court had not erred in dismissing the plaintiffs' second claim.
Plaintiffs' third claim that the lender had breached the loan agreement provision which stated that notary fees would be "reasonable and necessary" was dismissed by the district court under Georgia's "voluntary payment statute." However, the Eleventh Circuit vacated the dismissal. The Georgia Supreme Court held that the statutory limit under OCGA was $4, and that the lender had not only charged the plaintiffs $350, but had not informed them of the statutory limit and had in fact "expressly and affirmatively misrepresented" that their notary fee was "reasonably necessary." Given these circumstances, the Georgia Supreme Court found that Plaintiffs "alleged sufficient "artifice, deception, or fraudulent practices" to qualify under the exception to the Georgia voluntary payment statute. The Eleventh Circuit noted that the plaintiffs' breach of contract claim would fall within the six year statute of limitations for written contracts in Georgia.
Finally, the Eleventh Circuit held that, although the Georgia Supreme Court found that under Georgia law a corporation "employing notaries public" was "neither directly nor vicariously subject to section 45-17-11," the corporation could be liable for a notary's violation of the statue "if [the corporation] participates in or procures the notary's violations." The Eleventh Circuit held that it was a question for the district court whether the lender had so procured its notary's statutory violations.
Let me know if you have any questions. Thanks.
Ralph T. Wutscher
Kahrl Wutscher LLP
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