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Stearns Bank, N.A. v. Dozetos

Court of Appeals of Georgia

July 10, 2014


Quiet title, etc. Walton Superior Court. Before Judge Benton.

Tisinger Vance, Avery S. Jackson, William E. Underwood, Mann Wooldridge Kneidel, Robert B. Wooldridge, for appellant.

Leonard L. Franco, Beloin, Brown & Blum, James P. Blum, Jr., for appellees.

DOYLE, Presiding Judge. Miller and Dillard, JJ., concur.


Page 521

Doyle, Presiding Judge.

This case arises from a 2008 action to quiet title as to approximately 14 acres of land known as 2441 Branch Road, Monroe County, Georgia, filed by Keith and Lori Dozetos. Specifically named in the action were, inter alia, Keith's mother, Bea Nickelson; Earl C. Mitchell, Jr., d/b/a BBS Construction Company; and E-Bank, the predecessor in interest to the current appellant, Stearns Bank, N.A. (" Stearns" ). In addition to the petition to quiet title, the Dozetoses alleged fraud, breach of contract, and unjust enrichment against Nickelson.[1]

In response to the Dozetoses' action, Nickelson filed an answer, cross-claims, and counterclaims against the Dozetoses and E-Bank, alleging that she held legal title to the property. E-Bank filed an answer, and after E-Bank was taken into receivership by the Federal Deposit Insurance Corporation and its assets assigned to Stearns, Stearns asserted various counterclaims and cross-claims against Nickelson and the Dozetoses based on its purported security interest in the property for the payment of construction funds totaling $144,000 provided by Stearns to Mitchell to build a home on the property for the Dozetoses. Stearns appeals the trial court's sua sponte grant of summary judgment in favor of Nickelson, which awarded her title to the property and cancelled all encumbrances on the property.[2] For the reasons that follow, we reverse and remand for further proceedings.

On appeal from the denial or grant of summary judgment the appellate court is to conduct a de novo review of the evidence to determine whether there exists a genuine issue of material fact, and whether the undisputed facts, viewed in [328 Ga.App. 107] the light most favorable to the nonmoving party, warrant judgment as a matter of law.[3]

The record reveals that in 1998, Keith Dozetos bought the approximately 14-acre property, but in February 2002, he used the property as collateral to borrow at least $8,000 from his mother, Nickelson.[4] Pursuant to their verbal agreement, Dozetos issued a quitclaim deed to Nickelson, but the deed did not memorialize the full agreement and appeared on its face to be a conveyance of absolute title. Nickelson admitted that the quitclaim deed issued to her on the property was meant to constitute a security interest

Page 522

for repayment of the loan. Keith contended that within one-and-a-half years of the February 2002 conveyance he repaid the $8,000, which he maintained was the only loan secured by the deed, but Nickelson refused to deed the property back to him as she had agreed to do. Nickelson, on the other hand, contends that several other amounts totaling $38,000 were also included in the agreement, and the loan was never fully repaid. She also admitted that the Dozetoses maintained a trailer on the property from as early as 2002 and that many of the sums she advanced the Dozetoses were intended for them to develop the property for building their home.

Because Nickelson refused to re-deed the property to him, Keith forged a quitclaim deed purportedly from Nickelson to his wife, Lori, in 2006.[5] In early February 2007, Lori contracted with Carter Mitchell for construction of a home on the property whereby Lori transferred the property to Mitchell via a quitclaim deed, which title Mitchell used to secure a construction loan to build the home. In early March 2007, Mitchell obtained a $100,000 construction loan from E-Bank for which Mitchell executed a deed to secure debt against the property. Construction on the home began, and later that year, in June 2007, the loan was modified to $125,000; it was modified again in August 2007 to $140,000.

Nickelson learned of the forged quitclaim deed in June 2007 -- approximately two months after the document was recorded and two months before completion of the house.[6] In February 2008, the [328 Ga.App. 108] Dozetoses filed the instant quia timet action. The trial court determined that because Keith had forged the quitclaim deed, Nickelson was the title holder of the property and Stearns' lien could not be asserted against the property ...

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