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DIP Lending I, LLC v. Cleveland Avenue Properties, LLC

Court of Appeals of Georgia, Fifth Division

March 14, 2018

DIP LENDING I, LLC
v.
CLEVELAND AVENUE PROPERTIES, LLC; and vice versa.

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

          Bethel, Judge.

         These appeals arise from the trial court's partial grant and denial of cross motions for summary judgment in a wrongful foreclosure action between Cleveland Avenue Properties, LLC (hereinafter "Cleveland") and Dip Lending I, LLC (hereinafter "Dip Lending"). In Case No. A17A1410, Dip Lending contends the trial court erred by finding that Dip Lending (1) failed to comply with the statutory notice provisions of OCGA § 44-14-162.2, and (2) breached its duty to provide Cleveland notice of the foreclosure sale. Dip Lending further contends the trial court erred when applying the standard for the defense of equitable estoppel. In Case No. A17A1411, Cleveland argues the trial court erred by finding Cleveland was not entitled to the equitable remedy of setting aside the foreclosure sale of its two properties because it had not tendered the amounts due on the note. For the reasons explained, we affirm.

Summary judgments enjoy no presumption of correctness on appeal, and an appellate court must satisfy itself de novo that the requirements of OCGA § 9-11-56 (c) have been met. In our de novo review of the grant or denial of a motion for summary judgment, we must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant.

Essien v. CitiMortgage, Inc., 335 Ga.App. 727, 728 (781 S.E.2d 599) (2016) (citation and punctuation omitted).

         So viewed, the evidence shows that in 2010, ATA Properties, Inc. (hereinafter "ATA"), deeded two properties ("Properties") located in East Point, Georgia to Cleveland. At the time of the transfer, the Properties were subject to a lien held by Rockbridge Commercial Bank which was under the control of its receiver, the Federal Deposit Insurance Corporation ("FDIC"). In 2015, the FDIC assigned its interest in the Properties to Dip Lending. Dip Lending sold the Properties through a non-judicial foreclosure sale.[1]

          Cleveland filed an action for wrongful foreclosure alleging that Dip Lending failed to send it notice of the foreclosure and that Cleveland was entitled to have the foreclosure sale of the Properties set aside. Dip Lending answered and denied Cleveland's claim that it was never notified that the Properties were being foreclosed. Both parties moved for summary judgment. The trial court partially granted Cleveland's motion for summary judgment on the elements of legal duty and breach of legal duty on its claim for wrongful foreclosure based on its conclusion that Dip Lending failed to provide Cleveland notice pursuant to OCGA § 44-14-162.2. The trial court partially granted Dip Lending's motion for summary judgment on Cleveland's request for the equitable remedy of setting aside the foreclosure sale because Cleveland failed to tender the amounts due. These appeals followed.

         Case No. A17A1410

         1a. Dip Lending argues the trial court erred in finding that it failed to comply with the notice provisions of OCGA § 44-14-162.2 because the foreclosure sale notices were sent to the appropriate address and otherwise substantially complied with the statute's requirements. In support of its argument, Dip Lending contends that Cleveland had actual notice of the foreclosure sale and filed a subsequent petition to enjoin the sale because notice was provided. We disagree.

         OCGA § 44-14-162.2 (a) provides in part that

Notice of the initiation of [foreclosure] proceedings . . . shall be given to the debtor . . . shall be in writing, shall include the name, address, and telephone number of the individual or entity who shall have full authority to negotiate, amend, and modify all terms of the mortgage with the debtor, and shall be sent by registered or certified mail or statutory overnight delivery, return receipt requested, to the property address or to such other address as the debtor may designate by written notice to the secured creditor.

         OCGA § 44-14-162.1 defines the term "debtor" to mean the "grantor of the . . . lien contract." In the event the encumbered property has been transferred by the original debtor, the same statute provides that the "debtor" is "the current owner of the property encumbered by the debt."

         The record reflects that as of April 1, 2015, the registered address for Cleveland was 963 Cleveland Avenue, and the registered address for ATA was 1827 Warren Way. It is undisputed that Dip Lending sent notices of the initiation of foreclosure proceedings for the Properties to ATA, Cleveland's predecessor in interest, and ATA's registered agent, Tony White, at the 963 Cleveland Avenue address. When the notices were sent, Dip Lending knew Cleveland was the owner of record for the Properties, but it did not list Cleveland as a recipient on the notices as required by the statute. However, Dip Lending argues that the notice statute only required that the notices be sent to the proper address. Dip Lending's argument is without merit.

         OCGA § 44-14-162.2 not only requires that foreclosure notices be sent to the proper address, but also requires that notices be sent to the "current owner of the property encumbered by the debt." Nowhere does the plain language of the statute specify or even suggest that the foreclosure notice can be sent to anyone other than the debtor. See Farris v. First Fin. Bank, 313 Ga.App. 460, 464 (2) (722 S.E.2d 89) (2011) (concluding that the debtor is the only party required to receive notice of foreclosure sale). Contrary to Dip Lending's ...


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