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Black v. Nationstar Mortgage LLC

Court of Appeals of Georgia, First Division

January 10, 2018

BLACK et al.


          Barnes, Presiding Judge.

         The trial court granted appellees', Nationstar Mortgage LLC and Federal Home Loan Mortgage Corporation, motion for summary judgment on their complaint for declaratory judgment and equitable reformation, in which they had sought to reverse a foreclosure, void the related deed under power and special warranty deed, and reinstate the modified security deed to a first priority position. The appellants, Lee Angel Black, formerly known as, Lee Angel White, and Stacy M. Black appeal from that order. Following our review, and discerning no reversible error, we affirm the trial court's judgment.

         On May 23, 2007, the appellants obtained a loan from Advanced Financial Services, Inc. ("Advanced") in the amount of $17l, 000. On the same date, they executed and delivered a security deed conveying certain property to Mortgage Electronic Registration Systems, Inc. ("MERS") as nominee for Advanced to secure repayment of the loan. The subject property is commonly known as 3284 Price Mill Road, Bishop, Georgia 30621. The property consists of two parcels: Parcel 04A/3284 ("Parcel l"), valued at $187, 230, and Parcel 04B ("Parcel II"), valued at $12, 000. Parcel 1 is a four-acre lot with a house, and Parcel II is an adjacent, undeveloped one-acre lot.

         The security deed was recorded on July 2, 2007, and referenced that the property conveyed was 3284 Price Mill Road, but the legal description of the property attached to the deed only referenced Parcel II, the undeveloped one-acre lot. In December of 2012, MERS, assigned the security deed to Nationstar. Appellants and Nationstar executed a modification of the security deed to include both Parcel I and Parcel II in the legal description, which was filed with the clerk of superior court on May 15, 2013. The modification, in pertinent part, provided, that "the legal description of the real property attached an incorporated in the Security Deed at the time of its execution. . . does not describe the entire Five Acre Tract as intended by the [appellants]." And that:

by executing and delivering to [Nationstar] this Modification, [appellants] wish to establish, state, clarify, and restate their intention to grant and convey the Five Acre Tract to [Nationstar] as security for the Loan and to provide that the Five Acre Tract is encumbered by, made part of, and incorporated into the Security Deed for all purposes set forth therein, as fully as if the description of the Five Acre Tract were attached to the Security Deed as and when the Security Deed was executed by [appellants], delivered to [MERS], and recorded in the . . . real property records.

         Appellants subsequently defaulted on the loan, and after they failed to cure the default payments on the loan, Nationstar conducted a non-judicial foreclosure sale of the subject property on November 5, 2013, and purchased the property for $100, 000. However, the foreclosure notice described only Parcel II of the property. On November 5, 2013, Nationstar, as attorney-in-fact of appellants, prepared, executed, and delivered a "Deed Under Power" to Nationstar. The Deed Under Power specifically cross-indexed to the security deed and was recorded on December 5, 2013. Nationstar also prepared a "Special Warranty Deed" The legal description of the subject property set forth in both the Deed Under Power and the Special Warranty Deed referred only to Parcel II rather than the entirety of the property. Neither Nationstar nor Federal Home reported the sale within thirty days of the foreclosure sale to the superior court for confirmation and approval pursuant to OCGA § 44-14-161 (a).[1]

         Thereafter, on September 4, 2015, the appellees filed a Complaint For Declaratory Judgment and Equitable Reformation seeking to (1) reverse the foreclosure, (2) void the Deed Under Power and Special Warranty Deed, and (3) reinstate the modified security deed to the first priority position that it occupied before the foreclosure.

         Following cross motions for summary judgment, the trial court entered an order granting appellees' motion and denying appellants' motion, finding that:

[appellees] intended to take a security interest in the entirety of the property comprised of both Parcel I and Parcel II. Indeed, after discovering the mistaken legal description in the original Security Deed, Plaintiff Nationstar and both Defendants executed the Modification to amend the description to include both Parcels, as intended by the parties. Only after foreclosure did [appellees] realize that the mistaken property description had carried over to the Deed Under Power and the Special Warranty Deed. The evidence conclusively establishes a mutual mistake relievable in equity.... OCGA § 23-2-21 (a). The evidence further shows that omission of Parcel II from the description in the Deed Under Power and the Special Warranty Deed was contrary to the parties' intention.

         The trial court further found that appellants had not demonstrated that they would be prejudiced by the reformation of the security deed, and that the reformation related back to date of the security's deed execution and thus the deed was reinstated to first priority lien position.

         Summary judgment is proper if the pleadings and evidence "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." OCGA § 9-11-56 (c). On appeal from the grant of summary judgment, we "conduct a de novo review, construing all reasonable inferences in the light most favorable to the nonmoving party." Bank of North Ga. v. Windermere Dev., 316 Ga.App. 33, 34 (728 S.E.2d 714) (2012).

         Appellants contend on appeal that the appellees were not entitled to equitable reformation and thus the trial court erred in its grant of summary judgment. We do not agree.

Equity may intervene and reform a conveyance when the instrument fails to express accurately the intention of the parties. A petition for reformation of a written contract will lie where by mistake of the scrivener and by oversight of the parties, the writing does not embody or fully express the real contract of the parties. The cause of the defect is immaterial so long as the mistake is common to both parties to the transaction. And the negligence ...

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