The Anthonys took out a home loan from American General Financial Services Inc. and paid notary fees in connection with the signing of the loan that exceeded the $4 per service maximum imposed by section 45-17-11(b) of the Official Code of Georgia Annotated (OCGA). On their own behalf and a class of similarly situated consumers, the Anthonys sued American General, asserting three separate causes of action:
- that section 45-17-11(b) created a private cause of action, empowering consumers to recover the fees paid in excess of the statutory maximum;
- that by charging a fee beyond the statutory maximum, American General breached its Loan Agreement with the Anthonys and other borrowers, in that the fee was not "reasonable and necessary"; and
- that American General was liable for fraud and "money had and received," by virtue of charging these illegal fees.
At the trial court level, the Anthonys’ case was dismissed entirely, but they appealed to the U.S. Court of Appeals for the Eleventh Circuit. The appellate court was uncertain whether Georgia law allowed for a private cause of action to arise out of a violation of section 45-17-11(b), so it certified that question to the Georgia Supreme Court. The highest court of the state replied that no private cause of action could be implied as a remedy for excessive notary fees under Georgia state law, as "there is absolutely ‘nothing in the provisions of’ § 45-17-11 that shows that the Legislature meant to authorize such civil actions."
Accordingly, when the case returned to the Eleventh Circuit from the Georgia Supreme Court, the Eleventh Circuit upheld the lower court’s dismissal of the Anthonys’ claim, which was based on American General’s violation of section 45-17-11.
The Anthonys’ fraud and "money had and received" claims had been dismissed by the lower court on grounds that the four-year statute of limitations that applies in Georgia to both these types of claims had expired (the Anthonys’ case was filed more than five years after they paid the excessive notary fees).
The Eleventh Circuit also affirmed this dismissal, rejecting the Anthonys’ argument that the statute of limitations should have been frozen, or tolled, by American General’s fraud and failure to disclose the statutory maximum.
In upholding this dismissal, the Eleventh Circuit again cited the Georgia Supreme Court, which had ruled that the Anthonys "could have discovered the discrepancy between the notary fee statute and the actual fee charged at any time by ‘simple reference’ to the notary fee statute."
Finally, the Eleventh Circuit reversed the lower court’s dismissal of the Anthony’s claim, which was based on the Loan Agreement contract. The lower court ruled that Georgia’s voluntary payment statute, which provides that payments made voluntarily and/or with full knowledge of all the facts are not subject to being recovered, rendered the Anthonys’ payment exempt from being recovered from American General.
The Georgia Supreme Court disagreed, however, pointing out that not only did American General fail to disclose the statutory maximum fee, as required by law, they also expressly (mis)represented that the $350 notary fee actually charged was "reasonable and necessary." This "artifice" was sufficient to prevent the voluntary payment statute from barring the Anthonys’ claim at this point, so the Eleventh Circuit reversed the lower court’s dismissal.
The Eleventh Circuit specified that the issue of whether American General could be liable for a notary employee’s violation of the maximum fee statute, according to the Georgia Supreme Court, would hinge on whether the company had participated in or procured the excessive fee.
The Eleventh Circuit affirmed the lower court’s dismissal of the statutory, fraud and money had and received claims, reversed the dismissal of the contract claim and remanded the case back to the lower court for a determination of whether American General had participated in or procured the excessive fee, as part of determining whether the Anthony’s contract claim could proceed.