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DOCO Credit Union v. Chambers

Court of Appeals of Georgia

February 10, 2015

DOCO CREDIT UNION
v.
CHAMBERS et al

Quiet title. Lee Superior Court. Before Judge Peagler.

Seyfarth Shaw, C. Walker Ingraham, Rebecca A. Davis, for appellant.

Watson Spence, Christopher S. Cohilas, Sarah F. Kjellin, for appellees.

OPINION

Page 809

Dillard, Judge.

DOCO Credit Union f/k/a DOCO Regional Federal Credit Union (" DOCO" ) filed a quiet-title action in the Superior Court of Lee County in order to establish that it had legal title to certain properties located in that county and upon which it had foreclosed pursuant to the powers of sale contained in several security deeds. Appellees Ida and Cheryl Chambers filed a motion to dismiss and plea in abatement, contending that DOCO's quiet-title action was barred by the Chambers' previously filed lawsuit pending in the Superior Court of Dougherty County, which involved some of the same properties. The Superior Court of Lee County summarily granted Ida and Cheryl Chambers's motion and dismissed DOCO's quiet-title action. On appeal, DOCO argues that the trial court erred by (1) finding that the Quiet Title Act was subject to abatement by the Dougherty County action; (2) failing to appoint a special master; (3) dismissing the case when Lee County was the only proper venue; and (4) ignoring the [330 Ga.App. 634] venue provisions set forth in the relevant security deeds. For the reasons set forth infra, we reverse.[1]

The facts pertinent to our consideration are undisputed. In 2009, William Chambers, Jr. (" Bill Chambers" ), son of Ida Chambers and husband of Cheryl Chambers, executed, for the benefit of Chambers Motors, Inc. (the family business), a series of promissory notes in favor of DOCO in exchange for loans totaling over $1.5 million. The promissory notes were secured by several pieces of real property located in both Crisp and Lee Counties (collectively, the " Properties" ). And depending on the ownership of the Properties, the security deeds were purportedly[2] executed by Ida Chambers, individually or as executrix of the Estate of William H. Chambers, Sr., or by Bill Chambers, individually or as the Trustee of the Ida W. Chambers Revocable Trust or the Testamentary Trust established under the Last Will & Testament of William H. Chambers, Sr. (collectively, the " Trusts" ).

Bill Chambers defaulted on the loans, and DOCO obtained a judgment against him for the outstanding balance. Thereafter, in September 2011, DOCO foreclosed on various properties, including six of the eight properties[3] located in Lee County (the " Lee County Properties" ), in accordance with the power of sale contained in the security deeds. DOCO was the highest bidder and purchased the Properties at the foreclosure sale. At no time did Ida or Cheryl Chambers object to the foreclosures, nor did any member of the Chambers family make any attempt to pay the outstanding debt in order to save the collateralized Properties.

[330 Ga.App. 635] Following the foreclosures, Bill Chambers filed for Chapter 7 bankruptcy protection. Then, in March 2012, more than six months

Page 810

after the foreclosures, DOCO received a letter from counsel for Cheryl Chambers and the Trusts, alleging that Bill Chambers's conveyance of certain Properties owned by the Trusts constituted a breach of his fiduciary duties, and that DOCO aided and assisted in that breach. The letter concluded that the use of that collateral was void and demanded a return transfer of those Properties and compensation for damages.

After receipt of counsel's correspondence, DOCO filed in the bankruptcy proceeding a motion for relief from stay in order to prosecute a quiet-title action to resolve the claims asserted in the letter. And while that motion was pending, in January 2013, Ida and Cheryl Chambers initiated a lawsuit in the Superior Court of Dougherty County (the " Dougherty County Lawsuit" ). In the complaint, Ida and Cheryl Chambers alleged that Bill Chambers and DOCO conspired to unlawfully convert the Properties and asserted against DOCO claims of conversion, aiding in breach of fiduciary duty, conspiracy, interference with business/contractual relations, wrongful foreclosure, civil RICO, and constructive trust. In addition, they sought monetary damages, attorney fees, injunctive relief, and an accounting.[4] Significantly, at no time did Ida or Cheryl Chambers move to set aside the foreclosures.[5] DOCO answered the complaint, denied the allegations, and filed a counterclaim to quiet title to the Properties.

In February 2013, after obtaining relief from the bankruptcy stay, DOCO commenced its quiet-title action in the Lee County Superior Court (the " Quiet Title Action" ) to remove clouds on the titles of the Lee County Properties so that it could market and sell same. In addition to their answer, Ida and Cheryl Chambers filed a motion to dismiss and plea in abatement, arguing that DOCO's Quiet Title Action was subject to abatement by the previously filed Dougherty County Lawsuit. Specifically, the motion asserted that the Dougherty County Lawsuit and the Quiet Title Action involved the [330 Ga.App. 636] same parties, represented the same cause of action, and that the Dougherty County court was the only venue with jurisdiction to hear all of the claims between the parties. Finally, the motion alleged that by filing the Quiet Title Action, DOCO sought nothing more than an improper declaratory judgment in an attempt to obtain " an advisory opinion as to the legitimacy of its foreclosures." DOCO opposed the motion, but the Lee County Superior Court, nonetheless, granted it in a summary order. This appeal follows.

1. DOCO first contends that the trial court erred in holding that the Dougherty County Lawsuit abated the ...


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