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Samadi v. Federal Home Loan Mortgage Corp.

Court of Appeals of Georgia, First Division

December 14, 2017




         Proceeding pro se, Mike Samadi appeals the trial court's order granting the motion to open default filed by the Federal Home Loan Mortgage Corporation ("Freddie Mac") and the trial court's final order and judgment granting Freddie Mac's motion to dismiss based on the doctrines of res judicata and collateral estoppel. For the reasons discussed more fully below, we conclude that the trial court abused its discretion in determining that the present lawsuit was a "proper case" for opening default under OCGA § 9-11-55 (b) based solely on the fact that Freddie Mac ultimately raised meritorious defenses to Samadi's lawsuit; the trial court also was required to consider whether Freddie Mac had a reasonable explanation for its approximately 15-month delay in responding to Samadi's complaint. Accordingly, we vacate the trial court order opening the default and its final order and judgment dismissing Samadi's claims, and we remand for the trial court to apply the proper legal standard for determining whether the default should be opened.

         Factual Background.

         The record reflects that in June 2002, Samadi obtained a $281, 000 loan from Mortgage Portfolio Services to purchase certain real property located in Columbia County, Georgia (the "Property"). Samadi executed a promissory note in connection with the loan that was secured with a deed to secure debt on the Property. The note and security deed were assigned to SunTrust Mortgage, Inc. ("SunTrust").

         Samadi later defaulted on the note, and in November 2012, SunTrust foreclosed on the Property pursuant to the security deed. SunTrust was the highest bidder at the foreclosure sale and then conveyed the Property to Freddie Mac. In March 2013, Freddie Mac initiated dispossessory proceedings against Samadi in the Magistrate Court of Columbia County (the "Dispossessory Proceeding"). Later in March, the magistrate court granted a writ of possession to Freddie Mac in the Dispossessory Proceeding, and Freddie Mac proceeded with the eviction and with the removal of Samadi's personal belongings from the Property.

         The First Action.

         Since his default on the Note, Samadi has filed three separate lawsuits that have resulted in a complex procedural history. In January 2009, Samadi filed suit in the Superior Court of Columbia County against SunTrust for alleged deceptive trade practices relating to his mortgage loan (the "First Action"). The trial court entered summary judgment in favor of Suntrust on all of Samadi's claims, this Court affirmed without opinion, [1] and the Supreme Court of Georgia denied Samadi's petition for a writ of certiorari.

         The Second Action.

         In November 2012, Samadi filed a second suit in the Superior Court of Columbia County against SunTrust, alleging that the foreclosure proceedings on the Property were illegal and seeking a temporary restraining order ("TRO") and injunctive relief (the "Second Action"). Samadi later amended his complaint to add Freddie Mac as a defendant and to add a quiet title claim, but Samadi did not specifically assert any claims pertaining to the Dispossessory Proceeding or his eviction from the Property. The trial court initially granted a TRO and preliminary injunction prohibiting the foreclosure of the Property, but the trial court later dissolved the TRO and injunction nunc pro tunc and dismissed Samadi's claims against SunTrust and Freddie Mac with prejudice. Samadi sought appellate review from this Court, but the trial court dismissed his appeal for an unreasonable delay in filing the transcript, and this Court affirmed the dismissal without opinion.[2] Samadi filed a petition for writ of certiorari, which the Georgia Supreme Court denied.

         The Current Action.

         In April 2015, while the appeal of the Second Action remained pending, Samadi filed the current pro se action against Freddie Mac in the State Court of Cobb County, arguing that the Dispossessory Proceeding and removal of his personal belongings from the Property had been conducted in an illegal manner (the "Current Action"). The complaint alleged that Freddie Mac had never properly served Samadi with notice of the Dispossessory Proceeding, such that he had been unaware of the eviction and removal of his personal belongings when they occurred during the pendency of the Second Action. The complaint further alleged that Freddie Mac's eviction of Samadi and removal of his personal belongings had been illegal because they occurred while the TRO and preliminary injunction were still in force in the Second Action.

         In May 2015, Freddie Mac was served through its registered agent with the summons and complaint in the Current Action. Because Freddie Mac did not timely file an answer to the complaint, [3] the Current Action went into automatic default. See OCGA § 9-11-55 (a).[4] Nor did Freddie Mac open the default as a matter of right within 15 days of the automatic default. See id.

         In September 2015, Samadi filed a motion for entry of default judgment against Freddie Mac pursuant to OCGA § 9-11-55 (a). Freddie Mac did not respond to the motion, but in November 2015, the lawsuit was transferred to the Superior Court of Cobb County before the state court ruled on the motion because Samadi sought equitable relief in his complaint.[5] Following the transfer of the case, the superior court issued a rule nisi in ...

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