This is the case of Patterson v. CitiMorgan, Inc.

Question: include

the following;

Fact:

Judgment:

Issue:

Holding:

General Analysis

Applied Analysis:

Patterson v. CitiMortgage, Inc. 820 F.3d 1273 (11th Cir. 2016) In 2008, Toby Breedlove fell behind on his mortgage payments to CitiMortgage. Hoping to avoid foreclosure, he sought to sell his home to Victor Patterson through a short sale. (A short sale occurs when the mortgage company will not recoup all the money that it is owed by the mortgagor through a sale of the house but agrees to the sale nonetheless because it likely nets the mortgage company more than a foreclosure sale would. In a short sale, the mortgagor is released from his debt to the mortgage company.) Patterson communicated directly with CitiMortgage to negotiate the sale. During those negotiations, CitiMortgage empha sized that it would not agree to a deal unless the short sale would generate a net payout greater than the expected proceeds from a foreclosure sale. In pursuit of a deal, Patterson made a series of escalating offers to CitiMortgage over the course of several months. In succession, Patterson offered $371,000, $412,000, and $444,000. CitiMortgage rejected the first two offers outright, as the net payout for each would have been insufficient, namely, $350,000 and $391,940, respectively. As to the third offer, CitiMortgage decided to accept it on the condition that Patterson reduce certain fees associated with the sale so that the net payout would be $423,940. CitiMortgage intended to convey that counteroffer in a letter dated September 19, 2008, which it sent to Patterson. Due to a clerical error, however, the letter actually indicated that CitiMortgage sought a net payout amount of $1 13, 968.45. The letter set a closing deadline for October 24, 2008. CitiMortgage faxed the letter to Patterson with a subject line reading, "Toby Breedlove Shortsale approval." Patterson received the letter and immediately notified CitiMortgage that he wanted to move forward with the short sale. The parties, though, never explicitly discussed the payoff amount. Thereafter, Patterson scheduled a closing, revised the sale agree- ment to reflect a sale price that would produce a net payout amount to CitiMortgage of $113,968.45, and obtained a $130,000 loan to finance the purchase of Breedlove's house. On October 23, 2008-the date of the closing-the closing attorney sent the payout funds to CitiMortgage by wire transfer. Only then did CitiMortgage realize its mistake and immediately attempted to contact the closing attorney to let him know that it would be rejecting the funds. CitiMortgage left a voicemail message for the closing attorney and faxed a letter to him explaining that the net payout amount was based on a clerical error in the September 19 letter and that the "corrected" amount was $423,940. The next day CitiMortgage received a letter from Patterson demanding that it accept the $113,968.45 payment. He insisted that was the amount CitiMortgage had agreed to accept for the house and that they had a binding contract.Eventually, CitiMortgage commenced foreclosure proceedings on the Breedlove property, which prompted Patterson to le a complaint in state court against CitiMortgage for breach of contract. CitiMortgage removed the case to federal court based on diversity and filed a motion for summary judgment, based in part on the theory that the contract for the sale of Breedlove 's house to Patterson was voidable due to unilateral mistake. The district court granted the motion. Patterson appealed. Carnes, Chief Judge The dispositive issue is whether CitiMortgage's unilateral mis- take, the clerical error in its September 19, 2008 letter about the amount of the net payout it was seeking, prevented the parties from forming a valid contract. . . . [Patterson] argue[s] that, under Georgia law, a court may not rescind a contract based on a unilateral mistake. It is true that Georgia courts will often refuse to save con tracting parties from their own unilateral mistakes that could have been avoided through the exercise of due diligence. But it is equally true, if not more so, that Georgia courts will not per- Given the parties' negotiations and Patterson's series of esca- mit a party to take unfair advantage of an offer that contains an lating offers, CitiMortgage's mistake was obvious and Patterson obvious, unilateral mistake. As the Georgia Supreme Court ex- knew or should have known it was a mistake. Patterson made suc- plained more than a century ago, "There is no disposition in the cessive offers of $371,000 and $412,000, which would have gen- law to let one 'snap up' another, or take an advantage of mis- erated net payouts to CitiMortgage in the amounts of $350,000 takes." Singer v. Grand Rapids Match Co., 43 S.E. 755, 757 and $391,940, respectively. CitiMortgage rejected both of those (Ga. 1903). Georgia courts will rescind or refuse to enforce a con- offers without making a counteroffer. Then Patterson offered tract when "one of the parties has, without gross fault . . . on $444,000, which would have generated a net payout of $412,620. his part, made a mistake," the mistake "was known, or ought to In response to that highest offer from Patterson, CitiMortgage have been known, to the opposite party," and "the mistake can be sent the September 19 letter counteroffering for a net payout to it relieved against without injustice." Id. Under those circumstances, a of $113,968.45. No rational person would believe that was any- unilateral mistake "may be a ground for rescinding a contract, thing but a mistake because rational persons and mortgage com- or for refusing to enforce its specific performance." Werner v. panies do not counteroffer for less-in this case nearly $300,000 Rawson, 15 S.E. 813, 814 (Ga. 1892). less-than the latest and highest and still outstanding offer. If Patterson was unaware that CitiMortgage's September 19 Patterson . . . will not suffer an injustice under Georgia law offer was a mistake, then CitiMortgage should suffer the loss. because [he] will only be deprived of what Georgia law does "On the other hand if [CitiMortgage] inadvertently (though neg- not allow [him] to have-the opportunity to take advantage of ligently) made an obvious mistake and this mistake was apparent another's obvious unilateral mistake. . . . on the face of the offer and was known to [Patterson], then re- lief should [be] granted to [CitiMortgage]. . .." [Frazier Assocs. * * * Mfrs. Representatives, Inc. v. Dabbs & Stewart, 325 S.E.2d 914, 916 (Ga. 1985).] AFFIRMED