from the United States District Court for the Middle District
of Georgia D.C. Docket No. 5:11-cv-00284-CAR
TJOFLAT, ROSENBAUM, and BRANCH, Circuit Judges.
BRANCH, CIRCUIT JUDGE:
Home Mortgage Servicing, now known as Homeward, appeals the
denial of a new trial concerning an award of punitive damages
arising from a wrongful foreclosure. Jane McGinnis, the owner
of several rental properties, brought suit against Homeward,
the servicer of seven of her residential properties'
mortgages, alleging wrongful foreclosure, conversion,
interference with property, and intentional infliction of
emotional distress. The jury found against Homeward on all
claims and awarded McGinnis $3, 506, 000 in damages ($6, 000
for economic injury, $500, 000 for emotional distress, and
$3, 000, 000 in punitive damages). Homeward appeals the
district court's denial of a motion for a new trial,
arguing (1) that the punitive damages award was
unconstitutionally excessive under the Due Process Clause of
the Fourteenth Amendment and (2) that the punitive damages
award unlawfully exceeded Georgia's $250, 000 cap on
punitive damages under O.C.G.A. § 51-12-5.1(f),
Because we conclude that the award violates neither the U.S.
Constitution nor Georgia law, we affirm the judgment of the
owns numerous residential rental properties in Georgia that
served as her nest egg. McGinnis entrusted her son, Adam,
with managing the properties. McGinnis refinanced seven of
her properties with Taylor, Bean & Whitaker
("TB&W"), granting security deeds and
promissory notes to TB&W. Her monthly payment to TB&W
for one such rental property, located at 172 Hilton Street,
was $605.58, including $490.13 for principal and interest and
$115.45 for the escrow deposit. On October 17, 2009, Homeward
obtained the rights to service McGinnis's seven loans.
Homeward sent McGinnis a welcome letter that said
McGinnis's payment on 172 Hilton Street for November 2009
was $843.58 without explaining the basis for the increase.
McGinnis disputed the increase and paid $605.58 for November.
In December 2009, Homeward sent McGinnis an escrow analysis
showing a present payment of $843.58, including $490.13 for
principal and interest and $353.45 for the escrow deposit. No
explanation was given for the high percentage increase in the
escrow deposit portion of the payment. The statement
described McGinnis's new monthly payment beginning
February 1, 2010 as $680.08. McGinnis sent a fax to Homeward
asserting that the escrow amounts were incorrect and
continued paying $605.58.
January 15, 2010, Homeward sent McGinnis a letter explaining
that the escrow analysis on her loan could have reflected an
escrow error and directing her to disregard the December
analysis and continue making payments at the previous amount.
On February 20, 2010, Homeward sent a second escrow statement
that described McGinnis's present payment as $843.59
through March 2010 and her new payment, effective April 1,
2010, as $638.32. Homeward treated the past payments of
$605.58 as partial, and held the funds in a suspense account
until there were enough funds to pay off the oldest past-due
monthly payment. The interest and late fees continued to
mount and Homeward frequently contacted Adam and Jane by
phone and mail demanding payment. On May 19, 2010, McGinnis
sent Homeward a fax explaining that the correct payment for
November 2009 through March 2010 should have been $605.58 and
providing her own escrow analysis, which was identical to
Homeward's analysis with respect to payments after April
2010. The only difference was the $843.58 that McGinnis
refused to pay for November 2009 through March 2010 and
associated late fees. Homeward failed to explain or retract
the $843.48 amount and the issues persisted throughout 2010.
McGinnis continued to pay $605.58 until January 2011 when she
began paying the $638.32.
February through May 2011, Homeward returned McGinnis's
payments. On March 22, 2011, Homeward sent a formal notice of
foreclosure on 172 Hilton Street and finally foreclosed on
July 7, 2011. At trial McGinnis testified that the
experience traumatized her. Her clinical psychologist, Dr.
Andrew Sappington, also testified that the events leading up
to the foreclosure were a "major cause of . . .
depression" for McGinnis as well as of physical symptoms
that included projectile vomiting. McGinnis, who is retired
and relies on her rental properties as her income, described
the effect of the foreclosure: "I am too old to start
over. They have taken my life away from me." McGinnis
also presented at trial a letter that Adam had sent a fax to
Homeward on December 17, 2009 describing the "und[ue]
stress" Homeward's constant demands had caused him
and his mother. At trial, McGinnis also presented recordings
of phone conversations with Homeward in which Adam mentioned
his and his mother's frustration with Homeward's
repeated demands for payment and refusal to explain the
increase. Homeward's only witness, a default case manager
at Homeward, insisted that McGinnis was obligated to pay any
amount Homeward demanded whether reasonable or in error.
filed suit against Homeward in the United States District
Court for the Middle District of Georgia asserting claims of
(1) wrongful foreclosure, (2) violation of the Real Estate
Settlement Procedures Act ("RESPA"), (3)
intentional infliction of emotional distress
("IIED"), (4) conversion, (5) tortious interference
with property rights, (6) defamation, and (7) violation of
Georgia's Racketeer Influenced and Corrupt Organizations
("RICO") Act. McGinnis sought attorney's fees
and punitive damages. After discovery, Homeward moved for
summary judgment. The district court granted summary judgment
for Homeward on the RESPA, defamation, and Georgia RICO Act
case then proceeded to trial, which was bifurcated into two
phases: one phase on liability and the other on punitive
damages and attorney's fees. At the end of McGinnis's
case on liability, Homeward moved for judgment as a matter of
law pursuant to Federal Rule of Civil Procedure 50(a), which
the district court denied.
special verdict, the jury found for McGinnis on all of her
remaining claims-conversion, wrongful foreclosure,
interference with property rights, and IIED. The jury awarded
McGinnis $6, 000 in economic damages and $500, 000 in
emotional distress damages. In the second phase of the trial,
McGinnis withdrew her claim for attorney's fees, and the
jury found that Homeward acted with the specific intent to
cause McGinnis harm and awarded $3, 000, 000 in punitive
trial, Homeward filed a renewed motion for judgment as a
matter of law pursuant to Federal Rule of Civil Procedure
50(b), and in the alternative, for a new trial on the issue
of punitive damages. The district court granted in part the
renewed judgment as a matter of law and reduced the punitive
damages award to the statutory cap of $250, 000 pursuant to
O.C.G.A. § 51-12-5.1(g), finding that there was
insufficient evidence Homeward acted with specific intent to
cause harm. On appeal regarding Homeward's
post-trial motions, we determined that Homeward did not
properly preserve the issue of specific intent with regard to
punitive damages in its Rule 50(a) motion, and was therefore
precluded from raising the argument in its Rule 50(b) motion.
McGinnis, 817 F.3d at 1261-64. Accordingly, we
reversed the district court's ruling that Homeward had
preserved the issue of specific intent and vacated the
judgment that had reduced the jury's award to $250, 000.
Id. We remanded and instructed the district court to
rule on the motion for a new trial on the issue of punitive
damages. Id. at 1264.
remand, the district court denied Homeward's motion for a
new trial, concluding that the punitive damages award was not
unconstitutionally excessive and that the jury's finding
of specific intent-a prerequisite to an award in excess of
Georgia's $250, 000 statutory cap-was not against the
clear weight of the evidence. Homeward filed the present
STANDARDS OF REVIEW
district court's "decision that the punitive damages
award does not run afoul of the federal Constitution . . . is
subject to de novo review, though we 'defer to
the District Court's findings of fact unless they are
clearly erroneous.'" Action Marine, Inc. v.
Cont'l Carbon Inc., 481 F.3d 1302, 1309 (11th Cir.