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Federal National Mortgage Association v. Harris

Court of Appeals of Georgia, Fifth Division

October 24, 2017


          MCFADDEN, P. J., BRANCH and BETHEL, JJ.

          Branch, Judge.

         After buying a residential property from a lender who had obtained that property at a foreclosure sale, the Federal National Mortgage Association ("Fannie Mae") obtained a writ of possession from a magistrate court. The occupant and former owner of the property, Rickey Harris, appealed to Chatham County State Court, which concluded after a bench trial that Fannie Mae was not entitled to the writ. We granted Fannie Mae's application for review of the state court's judgment. On appeal, Fannie Mae argues that the state court erred in failing to consider the documents proving its right of possession and in failing to issue the writ. We agree with the first of these contentions and order a new trial.

         "We apply a de novo standard of review to questions of law" raised in a dispossessory proceeding, "and factual findings made by the trial court shall not be set aside unless clearly erroneous." Mackey v. Fed. Nat. Mtg. Assn., 294 Ga.App. 495, 496 (669 S.E.2d 397) (2008) (footnote omitted).

         So viewed, the undisputed facts[1] show that in December 2006, Harris executed a security deed transferring title to his Savannah home to Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for SunTrust Mortgage in exchange for a $215, 000 loan. This security deed was recorded the following week. On January 21, 2009, MERS assigned the security deed to Litton Loan Servicing, LLP. In April 2011, Harris recorded documents which purported to rescind the loan on grounds including that Harris's note was obtained by fraud. On July 8, 2011, MERS mistakenly executed a cancellation of the security deed. On September 20, 2011, the successor to MERS assigned the security deed to Green Tree Servicing, LLC.

         On May 4, 2012, Green Tree sued Harris in Chatham County Superior Court for a declaration that MERS's cancellation of the security deed was void and that the deed remained in effect. Green Tree also filed a notice of lis pendens. Harris was served but did not file an answer. In February 2013, and noting the absence of any evidence to show that Harris had repaid "any of the funds received pursuant to the note, " the superior court granted Green Tree's motion for default judgment, finding that the security deed had been cancelled "by mistake, " that the cancellation was "void, " that the security deed "remain[ed] in full force and effect, " and that Harris "remain[ed] obligated to pay all sums secured by" that deed. There is no indication in the record that Harris appealed this judgment.

         On February 2, 2016, after Harris had defaulted on the note, Green Tree, now known as Ditech Financial, LLC, conducted a foreclosure sale, bought the property for $122, 300, and executed a deed under power of sale. On March 15, 2016, Ditech executed a limited warranty deed transferring the property to Fannie Mae.[2]

         On March 24, 2016, Fannie Mae brought this dispossessory action in Chatham County Magistrate Court and included a notarized affidavit stating that Fannie Mae was the owner of the property and that Harris remained in possession as a tenant at sufferance or at will.[3] Harris answered that he was "not indebted to [Fannie Mae] in any amount" and counterclaimed for $43, 000, 000 on the ground that the property had been "released from debt/mortgage" in June 2011. On April 8, 2016, after a hearing, the magistrate court granted a writ of possession to Fannie Mae, denied Harris's counterclaim, and required Harris to pay $1200 per month "until [any] appeal is finally determined." On April 15, Harris appealed to Chatham County State Court.[4]

On June 22, 2016, the matter came up for de novo review in the state court, with Fannie Mae represented by counsel and Harris representing himself. Harris argued that he had not received proper notice of the superior court's proceedings, but admitted that he had not appealed that court's decision. Fannie Mae offered recorded copies of the deed under power and limited warranty deed, submitted a file-stamped copy of the superior court order restoring the original security deed, and argued that these documents proved its ownership and thus its right to possession of the property. The trial court then asked Harris to take the stand, from which Harris introduced various documents including the cancellation of the original security deed. Fannie Mae cross-examined Harris as to the superior court's order voiding the cancellation, during which Harris admitted that he did not have any evidence that the debt had been reduced or eliminated after the date of the superior court's judgment. When Fannie Mae asked whether "the only defense" Harris was asserting was "that the security deed should [ ] have been cancelled" such that he "should own the property, " Harris replied, "Yes."

         After a series of questions from the bench as to the purported cancellation of the debt and Harris's notice of the superior court action, the trial court noted that Harris would have to take up the issue of ownership in the superior court. The trial court also stated that as to the instant case involving possession, its "only real question [was] whether any of the documents" introduced by Fannie Mae were admissible, being "not certified" and "hearsay, " with some of them coming from "a state not Georgia."[5] When Fannie Mae observed that Harris had not objected to the introduction of these documents, the trial court responded, "I'm objecting to it, " and that "if it's not admissible, it's not coming in here." The proceedings ended shortly afterward.

         In a judgment filed on September 29, 2016, the trial court noted that as to the document "purporting to be" the deed under power, it was neither "an original document" nor a "certified copy" and that "no witnesses" had been called "to testify at trial to authenticate or otherwise attest to the validity" of the document. As to the purported limited warranty deed, the court noted that the document was "neither the original nor a certified copy." As to the superior court's 2013 judgment, the court noted that the document, which had voided the cancellation of the original security deed, was neither "an original document nor a certified copy, " and merely "purport[ed]" to be from the superior court. After summarizing the documents offered into evidence by Harris, the court concluded that Fannie Mae "had failed to carry it[s] burden of proving that it [was] entitled to possession" of the property "by a preponderance of the evidence" and entered judgment in favor of Harris. We granted Fannie Mae's application for discretionary review.[6]

         1. Fannie Mae first argues that the trial court erred when it excluded the superior court judgment, the deed under power, and the limited warranty deed as unauthenticated and inadmissible.

         We review a trial court's decision regarding the admission or exclusion of evidence only "for an abuse of discretion." Koules v. SP5 Atlanta Retail Ventures, 330 Ga.App. 282, 285 (2) (767 S.E.2d 40) (2014) (citation and punctuation omitted).

         The new Evidence Code, which became effective on January 1, 2013, provides that official documents are self-authenticating if they "bear[ ] a seal purporting to be that of . . . . any state . . . or of a political subdivision, department, officer, or agency thereof, " or if they "bear the signature in an official capacity of an officer or employee" of such state or political subdivision. OCGA § 24-9-902 (1), (2); see also OCGA § 24-9-920 (providing for authentication by "[t]he certificate or attestation of any public officer either of this state or any county thereof"). As the state court correctly noted, none of the records at issue here was thus sealed or certified. See United States v. Jimenez-Lopez, 873 F.2d 769, 771 (5th Cir. 1989) (a conviction of illegal entry was not ...

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