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Mashburn Construction, L.P. v. Charterbank

Court of Appeals of Georgia, First Division

March 9, 2017

MASHBURN CONSTRUCTION, L.P. et al.
v.
CHARTERBANK.

          ANDREWS, J. RAY and REESE, JJ.

          Reese, Judge.

         In this action seeking a deficiency judgment on a note following a foreclosure sale, the trial court granted summary judgment to CharterBank and against Mashburn Construction, L.P., and two guarantors of the note, Ray Mashburn and Philip Denney. On appeal, Mashburn Construction and the guarantors (collectively, "Appellants") contend that the trial court's evidentiary rulings constituted error and that jury issues existed as to whether CharterBank ("Appellee") was entitled to a deficiency judgment and, if so, the amount to which it was entitled. For the reasons set forth, infra, we affirm in part and reverse in part, and remand this case for further proceedings.

         Viewed in the light most favorable to Appellants, as the parties opposing summary judgment, [1] the record shows the following facts. In June 2007, Mashburn Construction borrowed $958, 690 from McIntosh Commercial Bank ("MCB"). Mashburn and Denney executed unconditional personal guarantees of the note. In addition, the note was secured by real property in Fulton County.

         Mashburn Construction defaulted on the note, and Appellee, as MCB's successor-in-interest, instituted foreclosure proceedings.[2] On September 7, 2010, the property was sold at a foreclosure sale for $725, 000. Appellee filed a petition to confirm the sale in the Fulton County Superior Court, pursuant to OCGA § 44-14-161 (a).[3] The Fulton County court conducted a hearing on the petition and confirmed the sale, [4] finding, inter alia, that the sales price was at least equal to the true market value of the property at the time of the sale.

         Appellee then filed the instant action, seeking a deficiency judgment against Appellants for the difference between the amount they owed on the note and the proceeds from the foreclosure sale. After Appellants answered the complaint and denied any further liability on the note, Appellee filed a motion for summary judgment. Appellee supported its motion with the affidavit of its manager, James Chandler. Attached to Chandler's affidavit were several documents, including one (hereinafter, "Exhibit G") generated from MCB's computerized account record for the note that showed the payment history for the note since its inception. Also attached to the affidavit was a daily interest calculation on a spreadsheet ("Exhibit H") that was produced by Appellee and showed the principal and interest due and payable on the note, as well as the variable interest rate that applied each day during the term of the note.

         In opposition to the motion for summary judgment, Appellants asserted, among other things, that Appellee had failed to present competent evidence of the amount due on the note because Exhibit H contained errors and constituted inadmissible hearsay. In response, Appellee submitted a second affidavit by Chandler in which he admitted that there were incorrect calculations in Exhibit H, explaining that the proceeds of the foreclosure sale should have been applied to interest charges first. According to this second affidavit, Chandler had corrected the "typo" in Exhibit H and had created a revised spreadsheet, which was attached to the affidavit ("Exhibit O"). In addition, Chandler attached to the affidavit a new document ("Exhibit P") showing the loan transaction history with all interest rate changes since the note's inception.

         After conducting a motion hearing, [5] the trial court granted summary judgment to Appellee, awarding it $581, 420 in principal and interest, plus accrued interest, late charges, and attorney fees. This appeal followed.

In order to prevail on a motion for summary judgment under OCGA § 9-11-56, the moving party must show that there exists no genuine issue of material fact, and that the undisputed facts, viewed in the light most favorable to the nonmoving party, demand judgment as a matter of law. Moreover, 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 the light most favorable to the nonmoving party, warrant judgment as a matter of law.[6]

         With these guiding principles in mind, we turn now to Appellants' specific claims of error.

         1. Appellants contend that the trial court erred when it disregarded evidence that, prior to the foreclosure sale, Appellee breached an agreement to accept the proceeds of a "short sale" of the property to a third party and to forgive the balance of the note. They argue that they presented evidence during the summary judgment hearing to show that the agreement provided that, after Appellee accepted the proceeds of the short sale, it would release its mortgage on the property and release Appellants from any further obligations that existed under the note and guarantees, including any potential deficiency. Appellants claim that they also showed that Appellee breached the agreement and improperly proceeded with the September 2010 foreclosure sale. Appellants argue that, because they presented evidence of Appellee's breach during the summary judgment hearing, a jury issue existed as to whether Appellee was estopped from seeking a deficiency judgment for the balance due on the note.

         Appellants cannot prevail on this argument, however, because they have failed to include a transcript of the summary judgment hearing in the record on appeal. "Without a transcript, we must assume the trial court had an adequate basis for its findings, as we cannot assume from a nonexistent transcript that the trial court failed to consider any relevant evidence or arguments."[7] Consequently, this alleged error presents no basis for reversing the trial court's order.

         2. Citing OCGA § 24-8-803 (6), the business records exception to the hearsay rule, Appellants contend that the trial court erred in considering Exhibit O, the calculation of damages attached to Chandler's second affidavit, because it constituted inadmissible hearsay. Appellants have failed, however, to show by the record that they raised this hearsay objection in the court below. The record contains no motion challenging the admissibility of Chandler's second affidavit or Exhibit O, and, without a transcript, Appellants are unable to show that they raised the issue during the summary judgment hearing.[8] Moreover, the trial court's order does not include a ruling on the admissibility of "Exhibit O."[9]

         "There is no more fundamental principle of appellate review than that preventing consideration of evidentiary objections not raised before the trial court and contained in the record on appeal."[10]

A party alleging error carries the burden of showing it affirmatively by the record, and when that burden is not met, the judgment is assumed to be correct and will be affirmed. It cannot be presumed from a silent or non-existent transcript of a hearing below that a proper objection was interposed[.][11]

         Consequently, if a party fails to show that it properly preserved its hearsay objection, the objection shall be deemed waived, and the evidence shall be considered legal and admissible.[12]

         In this case, Appellants have failed to show that they raised a hearsay objection to Exhibit O under OCGA § 24-8-803 (6), and that it was overruled by the trial court. Consequently, this issue is deemed waived for the purposes of the instant appeal.

         3. Appellants contend that the trial court erred in granting summary judgment to Appellee, arguing that it failed to ...


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