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Elrod v. Reliance Development Company, LLC

Court of Appeals of Georgia, First Division

May 8, 2019

ELROD
v.
RELIANCE DEVELOPMENT COMPANY, LLC.

          BARNES, P. J., MERCIER and BROWN, JJ.

          Brown, Judge.

         Reliance Development Company, LLC filed an action to quiet title against James T. Elrod, Jr. and Bank of America. Elrod appeals the trial court's entry of default judgment against him, arguing that (1) service by publication was not proper in this case; (2) the trial court erred in permitting Bank of America and Reliance to enter a consent judgment which entered final judgment against him; and (3) the trial court erred in granting Elrod's appeal in forma pauperis, but stipulating that his appeal was limited to the appeal of the default judgment entered against him. For the reasons explained below, we vacate both the default judgment and the consent judgment, and remand the case.

         The instant appeal stems from the sale of certain real property at 1175 Windsor Parkway NE, Atlanta, Georgia, 30319 ("the Property"), and the subsequent dispute over title to the Property. The record shows that Elrod bought the Property in 2005. In 2008, Elrod refinanced the loan he had obtained to finance his purchase of the Property, [1] by obtaining another loan from Primary Capital Advisors LC ("PCA"). To secure repayment of the second loan, Elrod conveyed the Property to Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee for PCA via a security deed. MERS transferred the security deed to BAC Home Loans Servicing, LP FKA Countrywide Home Loans Servicing LP ("BAC") via an assignment in 2011. Elrod defaulted under the terms of the security deed, and on July 7, 2015, Bank of America, as successor by merger to BAC, conducted a non-judicial foreclosure sale of the Property at which Bank of America was the highest bidder. Bank of America then executed a deed under power, conveying the Property to itself.

         Elrod has since filed multiple lawsuits related to the security deed and subsequent foreclosure.[2] Elrod also filed a 78-page "Affidavit Regarding Claim of Lien Equitable Notice and Affidavit" in the real estate records related to the Property on April 6, 2016. On May 4, 2016, Reliance purchased the Property from Bank of America via limited warranty deed. On June 9, 2016, the day before the warranty deed was recorded, a "Corrective Warranty Deed" purporting to convey the Property from Bank of America to Elrod was recorded in the Fulton County Deed Book. The Corrective Warranty Deed stated that it was given in exchange for no consideration.

         On April 11, 2017, Reliance filed its "Complaint for Declaratory Judgment, Petition to Remove Cloud from Title, Equitable Relief, Breach of Warranty of Title, and Attorneys' Fees" in Fulton County Superior Court against Bank of America and Elrod. Reliance sought a declaration that it is the owner of the Property in fee simple and that Elrod has no right of title or possession to the Property. Reliance alleged that the corrective warranty deed filed was fraudulent and that Elrod had forged the signatures.

         On May 2, 2017, a sheriff from Fulton County unsuccessfully attempted to serve Elrod at the address of record he had provided during the pendency of the federal action he filed in 2017. The entry of service states that a "diligent search [was] made and defendant Elrod James T., Jr. [was] not to be found in the jurisdiction of this Court. Address in DeKalb Co." On July 5, 2017, a sheriff from DeKalb County unsuccessfully attempted to serve Elrod at the same address. The entry of service states that a "[d]iligent search [was] made and defendant [was] not to be found in the jurisdiction of this Court. [U]nable to make contact after several attempts."

         On August 11, 2017, Reliance filed a motion to serve Elrod by publication pursuant to OCGA § 9-11-4 (f) (1) (B). In its motion, Reliance alleged that it had conducted Internet searches in an attempt to locate Elrod. Additionally, Reliance alleged that in its extensive correspondence with Elrod, he had only given one address, which was not a physical address, but a Post Office box, and that this same address was listed as his address of record during the 2017 federal action. Reliance attached an affidavit of its attorney who averred that he had "caused to be requested the Sheriff of Fulton County to locate and serve James T. Elrod, Jr. at the Property [1175 Windsor Parkway NE, Atlanta, Fulton County, Georgia, 30319] to no avail." No entry of service was attached to the motion showing that the sheriff had attempted service on Elrod at the Property. The trial court granted Reliance's motion for service by publication on August 18, 2017.

         On October 16, 2017, Elrod filed a "Special Appearance Motion to Dismiss," in which he alleged that he learned of Reliance's action "while doing background work on an unrelated case." He further alleged the following: that Reliance had not attempted to serve him; that he could have been served "at the UPS Store, where [his] mail is delivered, much like a Post Office Box"; that service was not attempted at his known residence, the Property listed in Reliance's complaint; and that if Reliance had made a diligent search, it would have properly served him at the address for the Property. Elrod attached a copy of his Georgia driver's license, showing his address as the Property address.

         In its response to Elrod's motion, Reliance alleged that there was a delay in obtaining the Notice of Service by Publication from the clerk of court and having it run in the legal organ in accordance with Georgia law.[3] As a result, Reliance had withdrawn the prior affidavit of its attorney and filed a new affidavit, along with the affidavit of a private process server retained to attempt service on Elrod at the Property. In his affidavit attached to Reliance's response, the process server averred that the following occurred on November 16, 2017:

Upon arrival I knocked on the door and observed a white male inside the location getting up from a seated position and pe[e]king at me from across the room then slowly walking across the room to the right of the front door. It appeared that the unidentified male was trying to move slowly so that I would not see him through the glass door. I then knocked on the door again and rang the doorbell. A moment or two later I observed the same male subject peeking out from the right side of the room and looking at me. I then walked to the right side of the residence, which is almost entirely made of windows, hoping to see the subject and get his attention but observed no one. I then returned to the front door and again knocked and rang the doorbell but did not receive a response. I continued to knock and ring the doorbell over the next ten minutes or so but never observed the male or anyone else.

         The process server also averred that he attempted service again on November 17, 2017, but no one answered the door. Reliance then filed a renewed and amended motion for service by publication, which the trial court granted on December 5, 2017. Service by publication was subsequently effected.[4]

         On February 2, 2018, Elrod filed a notice of special appearance in which he objected to service by publication.[5] He also pointed out that the trial court had yet to rule on his prior Motion to Dismiss, filed October 16, 2017. Elrod alleged that Reliance had never attempted to personally serve him, but that he had learned that the trial court granted Reliance's amended motion for service by publication while "in the Fulton County Courthouse for an unrelated matter." He also alleged that the process server's affidavit was "less than truthful," and implied that the notary's signature on the affidavit was forged based on hearsay.

         Reliance filed a motion for default judgment as to Elrod on February 22, 2018, alleging that Elrod had failed to file or serve an answer to the complaint within 60 days of the date of the order granting service by publication and that 15 days had passed since the date of default. Elrod filed a response in opposition to Reliance's motion for default and requested that the trial court set aside any default. On May 25, 2018, the trial court entered a "Consent Judgment and Final Order as to Bank of America, N.A.," in which the court ...


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