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Community & Southern Bank v. DCB Invs., LLC

Court of Appeals of Georgia

July 11, 2014

COMMUNITY & SOUTHERN BANK
v.
DCB INVESTMENTS, LLC et al

Reconsideration denied July 29, 2014 -- Cert. applied for.

Foreclosure. Fulton Superior Court. Before Judge Russell.

Busch Slipakoff & Schuh, Bryan E. Busch, Tawana B. Johnson, Christopher M. Porterfield, Shane P. Stogner, for appellant.

Hobgood & Rutherford, T. Tucker Hobgood, D. Scott Bass, for appellees.

DILLARD, Judge. Doyle, P. J., and Miller, J., concur.

OPINION

Page 211

Dillard, Judge.

Community Southern Bank (" CSB" ) brought this action against DCB Investments, LLC, David Belke, Glenn Couey, and Julie Couey (the latter three collectively " defendants" ), seeking a deficiency judgment pursuant to three simultaneously executed promissory notes and guaranties. Following the denial of its motion for summary judgment and the grant of summary judgment in favor of the defendants, CSB appeals, arguing that the trial court erred in finding that CSB is barred from seeking a deficiency judgment because it failed to obtain judicial confirmation of an earlier foreclosure and in finding that this same failure also bars it from recovering on the guaranties. For the reasons set forth infra, we affirm the trial court's ruling that CSB cannot seek a deficiency judgment against the borrowers because it failed to comply with the judicial-confirmation requirements. However, we reverse the ruling that CSB is barred from recovering on the guaranties, and, thus, we reverse the denial of summary judgment to CSB on this issue.

At the outset, we note that summary judgment is only warranted if the " pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." [1] If summary judgment is granted by a trial court, it enjoys no presumption of correctness on appeal, " and an appellate court must satisfy itself de novo that the requirements of OCGA § 9-11-56 (c) have been met." [2] And in our de novo review of a trial court's grant of a motion for summary judgment, we are charged with " viewing the evidence, and all reasonable [328 Ga.App. 606] conclusions and inferences drawn from the evidence in the light most favorable to the nonmovant." [3]

So viewed, the record shows that on February 13, 2009, Belke, Glenn Couey, Julie Couey, and DCB Investments, LLC (an entity controlled by Belke), executed three separate promissory notes with First Commerce Community Bank (" FCCB" ) for the purpose of developing real estate in Douglas and Carroll Counties. The first note (Loan No. 4000287300, " Note 1" ) named DCB as the borrower of a principal sum of $616,961, and indicated that its purpose was for renewal and the development of commercial real

Page 212

estate. Note 1 also indicated that it was secured by certain property in Douglas County and stated that it was " CROSSED WITH LOAN #'S 4000310300 & 400194800" (" Notes 2 and 3," respectively). Accordingly, DCB executed a security deed, pledging the Douglas County property as security for Note 1.[4]

In a form identical to that of Note 1, Note 2 named Belke and both of the Coueys as borrowers of a principal sum of $1,012,708.93, and indicated that its purpose was similarly for renewal and the development of commercial land. Additionally, Note 2 stated that it was secured by certain property in Carroll County and that it was " CROSS DEFAULTED WITH [Notes 1 and 3]." And pursuant to Note 2, Belke and the Coueys executed a security deed, pledging the Carroll County property as security.

In a form identical to the previous two, Note 3 designated Belke and both of the Coueys as borrowers of a principal sum of $1,600,543.92. Note 3 indicated that its purpose was for renewal and additional money for the development loan. It too was secured by the Carroll County property, via a security deed, which specifically noted that it was inferior to the deed pledging the same property as collateral for Note 2. Note 3 similarly indicated that it was cross defaulted with Notes 1 and 2.

On the same day that the three promissory notes were executed, Belke, Glenn Couey, and Julie Couey executed three separate guaranties of the notes. And finally, also on that same day, the parties executed two modification agreements, which pertained to the Carroll and Douglas County properties, respectively. The purpose of [328 Ga.App. 607] these agreements was to further ensure that all three notes were subject to cross-default and cross-collateralized, i.e., that all three notes were secured by both the Carroll and Douglas County properties. Toward that end, for instance, the Douglas modification, in part, provides: " Lender has required as a condition to the extension of credit evidenced by [Note 2] and [Note 3], that [Note 2] and [Note 3] also be secured by the [Douglas] Security Deed." In a similar fashion, the Carroll modification, in part, provides: " In addition to all other indebtedness described therein, the First [Carroll] Security Deed and the ...


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