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Y. C. Development Inc. v. Norton

Court of Appeals of Georgia, Fourth Division

November 1, 2017

Y. C. DEVELOPMENT INC.
v.
NORTON.

          DILLARD, C. J., RAY, P. J., and SELF, J.

          Dillard, Chief Judge.

         Y. C. Development Inc. ("YCD") appeals from the trial court's grant of summary judgment to Chandra Norton on her claims against YCD for wrongful foreclosure. YCD argues that the trial court erred by (1) erroneously construing the terms of the parties' purchase money note and security deed and (2) finding that YCD failed to comply with the terms of those documents before exercising its power of sale and foreclosing on Norton's property. Because we agree that the trial court erred in its interpretation of the terms contained in the purchase money note and security deed, we reverse.

         Viewed in the light most favorable to YCD (i.e., the nonmoving party), [1] the undisputed facts show that on October 21, 2010, Norton executed a purchase money note in favor of YCD in the amount of $258, 000, which was secured by the Cherokee County property at issue. In the event of default, the note provided specific remedies, as follows:

If [Norton] fails to pay when due any amount payable under this note or if [Norton] shall be in default under the Security Deed and such failure or default continues for ten (10) days after [Norton's] receipt of [YCD's] written notice thereof, in the case of failure to pay any amount payable under this note, or for thirty (30) days after [Norton's] receipt of [YCD's] written notice thereof, in the case of any other defaults, then [Norton] shall be in default under this note. In the event [Norton] shall be in default under this note, at the option of [YCD] and without further demand or notice, the entire unpaid principal balance of this note may be declared and thereupon immediately shall become due and payable, and the principal portion of such sum shall bear interest at the rate of ten percent (10%) per annum from the date of default until paid, and [YCD], at the option of [YCD] and without demand or notice of any kind, may exercise any and all rights and remedies provided for or allowed by the Security Deed, or provided for or allowed or in equity[.]

         The note also included definitions for certain terms, but it did not define the use of the word "receipt." The note did, however, specify that "[a]ll notices, requests, demands and other communications under this note shall be in writing and shall be deemed to have been duly given if given in accordance with the provisions of the Security Deed."[2]

         The security deed, which was executed the same day as the note, provided as follows in terms of giving "notice" to the grantor (Norton):

All notices, requests, demands and other communications under this Security Deed or the Note shall be in writing and shall be deemed to have been duly given: (i) to [Norton] when personally delivered to any office of [Norton], . . . or (iii) two (2) days after deposited in the United States Mail, certified mail with return receipt requested and with all postage prepaid, addressed as follows:
(a) To [Norton]: [address left blank]
(b) To [YCD]: [address provided]

         On September 30, 2015, YCD sent a notice of default to both Norton's primary residence address and to the Cherokee County address. Then, after Norton's loan matured and became due in full, YCD sent out a second notice of default on February 3, 2016, by sending a letter via certified mail to Norton's primary residence address, the Cherokee County property, and to a business address listed in Norton's email signature.[3] The certified letters sent to Norton's primary residence and the business address were returned as undeliverable. And according to the postal carrier assigned to the Cherokee County property's route, mail accumulated in the box at that address, he had been unable to deliver certified mail, and he personally signed for the certified mail delivery of the February 3, 2016 letter on February 18, 2016, because he mistakenly believed that the recipient had requested re-delivery after an initial failed attempt.

         On February 26, 2016, YCD sent a letter by certified mail to notify Norton of its intent to foreclose upon the Cherokee County property. This letter was again mailed to Norton's primary residence address, the subject property itself, and to the business address; and each was returned to YCD as undeliverable. Thereafter, YCD initiated non-judicial foreclosure proceedings, eventually purchasing the property as the highest bidder at the sale. YCD then began disposessory proceedings, and Norton filed suit against YCD in April 2016, asserting that YCD had wrongfully foreclosed upon her property and was in breach of contract, as well as seeking to set aside the deed. Norton contended that YCD failed to comply with the notice provisions in the note and security deed because she never received notice. In its answer, YCD denied that it failed to comply with the notice provisions or that it had wrongfully foreclosed upon the Cherokee County property.

         Norton filed a motion for summary judgment, arguing that the terms of the note and security deed required actual receipt of notice of default and that, because she never actually received such notice, YCD failed to comply with those terms and wrongfully foreclosed upon the property. Norton averred that she purchased the Cherokee County property as a second home and designated her primary residence as the location for notice. But as previously noted, the face of the security deed shows that Norton's address for purposes of notice via certified mail was left blank. Nevertheless, in her "statement of material facts as to which there is [sic] no genuine issues to be tried, " she relied upon her affidavit to assert that it was undisputed that she had designated her primary residence as the location for notice. And in response to that filing, YCD explicitly stated that, for purposes of summary judgment, it did not dispute this assertion.

         YCD opposed Norton's motion for summary judgment, arguing that it had complied with the terms of the parties' agreement; that Norton was supplying a term not required by the agreements, which specified provision of "notice" and not "actual notice"; and that Norton had in fact refused to accept the notice sent by certified mail. YCD also moved for summary judgment on the basis that it had complied with the notice requirements.

         Norton thereafter filed an amended complaint. In addition to amending her claims for wrongful foreclosure and breach of contract, and adding new claims and requests for relief, [4] the second complaint also amended Paragraph 6, which originally read as follows: "The subject premises was primarily used by Plaintiff as a 'weekend home' and was never utilized as a full time residence. As such, the home remained vacant for much of the year with no one living on the property to accept mail deliveries, especially during the week." In the amended complaint, Norton added the following sentence to Paragraph 6: "Plaintiff designated her primary home as the location for notice."

         Following a hearing, the trial court issued an order on February 2, 2017, ruling on the parties' cross motions for summary judgment. The court granted summary judgment in Norton's favor after concluding that the text of the security deed was unambiguous and required that Norton actually receive notice of default before YCD could initiate the default remedy of power of sale. The court rejected YCD's arguments as to "constructive receipt" of the certified mail or (alternatively) that the letter dated February 26, 2016, satisfied the notice requirements.

         YCD now appeals from the trial court's grant of summary judgment in favor of Norton and the denial of summary judgment in its favor. Summary judgment is, of course, proper when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law[.]"[5] And we review a grant or denial of summary judgment de novo, construing "the evidence in the light most favorable to the nonmovant."[6] With these guiding principles in mind, we will now address YCD's contentions in turn.

         1. First, YCD argues that the trial court erred in its interpretation of the notice requirements contained in the note and security deed. We agree.

         In Georgia, "a security deed which includes a power of sale is a contract and its provisions are controlling as to the rights of the parties thereto and their privies."[7]And the construction of an unambiguous deed, like the construction of any other contract, is "a question for determination by the court."[8] The cardinal rule of construction is, of course, to "ascertain the intention of the parties, as set out in the language of the contract."[9] In this regard, contract disputes are "particularly well suited for ...


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