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Georgia Home Appraisers, Inc. v. Trintec Portfolio Services, LLC

Court of Appeals of Georgia, Third Division

March 12, 2019

GEORGIA HOME APPRAISERS, INC.
v.
TRINTEC PORTFOLIO SERVICES, LLC.

          GOBEIL, COOMER and HODGES, JJ.

          GOBEIL, JUDGE.

         Georgia Home Appraisers, Inc. ("GHA") appeals from two separate orders of the Cherokee County Superior Court, both of which concern a piece of real property ("the Property") on which Trintec Portfolio Services, LLC ("Trintec") held a first priority lien. GHA contends that the trial court erred in finding that all interested parties had not been provided with notice of the first judicial foreclosure sale of the Property (at which GHA was the high bidder) and in relying on that finding to deny confirmation of the first foreclosure sale. Additionally, GHA argues that the trial court erred in denying GHA's motion to confirm or set aside the second foreclosure sale of the Property, based on the court's finding that GHA lacked standing to bring such a motion. For reasons explained more fully below, we find no error and affirm. The facts relevant to this appeal are undisputed and show that the Property is located in Cherokee County, in a residential subdivision known as The Villas at Claremore Lake. In or about May 2011, the Property's then-owner executed a quitclaim deed transferring the property to Bank of America, N. A. ("BOA").[1] On June 2, 2015, the Property was sold at a tax sale to Bay Point Capital Partners, LP. After purchasing the lien held on the Property by The Villas at Claremore Lake Homeowners Association ("the HOA"), Trintec redeemed the property by paying $390, 000 to Bay Point and receiving a quitclaim deed of redemption that granted Trintec a first priority lien (also known as a super lien) on the Property.[2] See OCGA § 48-4-43. Trintec then filed a complaint for judicial foreclosure in the Cherokee County Superior Court (the "foreclosure action"), seeking to foreclose on its lien in equity.

         In the foreclosure action, Trintec served process on all entities with an interest in the property, including HSBC Bank USA, N. A., FIA Card Services, N. A., BOA, the HOA, and Nationstar Mortgage, LLC. Neither HSBC Bank nor FIA Card Services filed an answer and therefore went into irrevocable default. BOA and the HOA each signed a consent order stating that it had no objection to the foreclosure sale of the Property. The consent order as to BOA dismissed BOA from the litigation and relieved it from filing any further pleadings or making any further appearances. The trial court thereafter entered a final consent order, agreed to by Trintec and Nationstar Mortgage, that established a first priority lien in favor of Trintec in the amount of $390, 000, plus prejudgment interest from June 25, 2015; ordered the Cherokee County Tax Commissioner to pay Trintec $316, 052.79; and stated that Trintec was entitled to foreclose on the balance of the lien "by conducting a public sale of the Property on the Cherokee County Courthouse steps during the legal hours of sale, after providing notice as [provided for in the order], and auctioning the Property to the highest bidder." With respect to notice, the order provided that "[p]rior to conducting the foreclosure sale, [Trintec] must advertise notice of the foreclosure sale in The Cherokee Tribune once per week for four weeks preceding the foreclosure sale."

         Trintec advertised the sale as required by the final consent order, but otherwise did not provide notice of the sale to any other party with an interest in the Property. At the first sale, which took place on January 5, 2016, GHA purchased the Property with a high bid of $73, 948. At the time of the first sale, GHA provided Trintec with two cashier's checks totaling $75, 000.[3]

         On February 17, 2016, Trintec filed a report of defective sale in the foreclosure action and sought an order setting aside the first sale and allowing Trintec to resell the property. In support of Trintec's motion for resale, its attorney submitted an affidavit in which he stated that as a result of an inadvertent error, no notice of the sale was given to the owner of the Property (BOA) or any other entity with an interest in the Property. The attorney further averred that because Trintec believed such notice was required by law, [4] Trintec had rescinded the first sale on January 12, 2016, pursuant to OCGA § 9-13-172.1.[5]

         Before the trial court ruled on Trintec's motion for resale in the foreclosure action, GHA filed the current action against Trintec seeking to quiet title to the Property (the "quiet title action"). GHA sought specific performance of the first sale and also asserted claims for lost profits, punitive damages, and attorney fees and costs. The trial court entered a consent order in the quiet title action, pursuant to which the parties agreed that: (1) the court would hold an evidentiary hearing on the confirmation of the first sale; (2) after that hearing, the court would either confirm the sale and issue an order conveying title to GHA or deny confirmation and order Trintec to conduct a resale; and (3) the parties would waive any remaining claims they had in the quiet title action

         After a hearing at which the parties stipulated to the facts, the trial court denied GHA's petition to quiet title and entered an order authorizing Trintec to conduct a second sale of the Property. In that order, the court found that no notice of the first sale had been provided to the owner or any other entity with an interest in the Property. Accordingly, exercising its authority under OCGA § 23-4-35, the trial court ordered that the property be resold at a second foreclosure sale. With respect to notice, the order stated: "Prior to conducting the foreclosure sale, Trintec must cause notice of the sale to be advertised in The Cherokee Tribune once per week for four weeks preceding the foreclosure sale. Trintec shall also give all parties 30 days prior written notice of such sale." Additionally, the order provided that the trial court "shall retain jurisdiction over this matter to direct the disbursal of any cash proceeds generated from the foreclosure over and above the amounts necessary to satisfy the sums owed Trintec." The court certified its order for immediate review, and GHA filed an application for an interlocutory appeal, which this Court denied.

          A second judicial foreclosure sale occurred on October 3, 2017, with the property selling to a third party for approximately $275, 000.[6] After learning from Trintec's attorney that Trintec did not intend to seek a judicial confirmation of the second sale, GHA filed a motion in the quiet title action to set aside or confirm the second sale. GHA argued that because the resale was ordered pursuant to OCGA § 23-4-35, and because the trial court had retained jurisdiction over the case to direct the disbursement of the sale proceeds, confirmation of the sale was required. Following a hearing, the trial court denied GHA's motion, finding that GHA did not have standing to seek the relief in question. This appeal followed.[7]

         1. In its first enumeration of error, GHA asserts that the trial court erred in finding that the first sale should be set aside based upon a lack of notice to all interested parties. We disagree.

         Unlike non-judicial foreclosure sales, judicial sales of property are usually instituted by a party having the right to foreclose who seeks an order allowing or requiring the sale of the property - i.e., a party who seeks equitable relief. See OCGA § 23-4-20 ("every person who is remediless elsewhere may claim the protection and assistance of equity to enforce any right recognized by the law"). After such an order is obtained, the sale of the property is governed primarily by the judicial sales statute, OCGA § 9-13-140, et seq. And under both that statute and the statute dealing with claims in equity (OCGA § 23-1-1, et seq.), a trial court is afforded broad discretion either to confirm, deny confirmation of, or set aside a judicial sale of property. Specifically, the equity statute provides that judicial sales "shall not be consummated until confirmed" by the trial court, which "has a large discretion vested in [it] in reference thereto." OCGA § 23-4-35. Moreover, the judicial sales statute vests courts with "full power over their officers making execution sales." OCGA § 9-13-172. And whenever a "court is satisfied that a sale made under process is infected with fraud, irregularity, or error to the injury of either party, the court shall set aside the sale." Id.

         With respect to notice, the judicial sales statute provides:

The sheriff, coroner, or other officer shall publish weekly for four weeks in the legal organ for the county, or if there is no newspaper designated as such, then in the nearest newspaper having the largest general circulation in such county, notice of all sales of land and other property executed by the officer. In the advertisement the officer shall give a full and complete description of the property to be sold, making known the names of the plaintiff, the defendant, and any person who may be in the possession of the property. In the case of real property, such advertisement shall include the legal description of such real property and may include the street address of such real ...

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