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Republic Title Company, LLC v. Freeport Title and Guaranty, Inc.

Court of Appeals of Georgia, Third Division

May 29, 2019

REPUBLIC TITLE COMPANY, LLC
v.
FREEPORT TITLE AND GUARANTY, INC., AS TRUSTEE OF THE NEW STOKES AVENUE LAND TRUST.

          DILLARD, C. J., GOBEIL and HODGES, JJ.

          Hodges, Judge.

         This dispute concerns entitlement to excess funds remaining following a tax sale pursuant to OCGA § 48-3-3. Freeport Title and Guaranty, Inc., as Trustee of the New Stokes Avenue Land Trust ("Freeport"), owner of the subject property at the time of the tax sale, petitioned for the excess funds. Republic Title Company, LLC ("Republic"), which held a security deed for the property, also claimed entitlement to the funds. Freeport amended its petition to request that the trial court also quiet title to the property, alleging that Republic's security deed reverted before the tax sale and acted as a cloud on Freeport's title. The trial court appointed a special master and adopted his findings awarding the excess funds to Freeport and vesting title to the property with Freeport free and clear of Republic's adverse claims. Republic appeals the trial court's order, arguing that the trial court erred (1) in adopting the portion of the special master's report which found Freeport was entitled to the excess funds, as such a finding was beyond the special master's jurisdiction; and (2) in granting Freeport's petition to quiet title because Freeport did not have standing to make such a request. For the following reasons, we affirm.

         "[O]nce the trial court adopts the special master's findings and enters judgment, the court's decision is upheld by the appellate court unless clearly erroneous. . . .[b]ut conclusions of law are reviewed de novo." (Citations omitted.) McGregor v. River Pond Farm, 312 Ga.App. 652, 653 (1) (719 S.E.2d 546) (2011).

         So viewed, the record shows that on November 7, 2017, the Fulton County Sheriff conducted a tax sale of property located at 1502 Stokes Avenue in Atlanta, Georgia.[1] This sale generated funds in excess of the tax obligation and, pursuant to OCGA § 15-13-3, [2] Freeport, the owner of the property at the time of the sale, filed a money rule petition against the Sheriff seeking to recover the excess funds.[3] Republic intervened in the action, claiming that it was entitled to the excess funds by virtue of its security deed to the property. Freeport amended its petition and asked the trial court to also quiet title to the property pursuant to OCGA § 23-3-40 et seq. by removing the cloud of Republic's security deed. Freeport alleged that Republic's security deed matured on July 1, 2007, and thus title reverted to the grantor of the deed in 2014 pursuant to OCGA § 44-14-80.[4]

         Following Freeport's motion requesting a special master, the trial court appointed one to "make a determination and/or Findings of Fact on the issues presented in the Petition[.]" The Special Master held a hearing at which both Freeport and Republic were represented by counsel.[5] In addition to contesting Freeport's entitlement to the excess funds, Republic also argued that, following the tax sale, Freeport lacked a sufficient interest in the property to have standing to request the trial court to quiet title.

         After allowing additional briefing by the parties, the Special Master issued his report. The Special Master determined that Republic's security deed contained a fixed maturity date in 2007, and thus title reverted to the grantor before the tax sale. He also noted that Republic presented no evidence as to how much, if anything, was still owed on the note secured by the deed. Lastly, the Special Master found that Freeport had standing to seek to quiet title. Consequently, the Special Master concluded that Freeport was entitled to an order awarding it the excess funds and establishing Freeport as the owner of the property free and clear of Republic's reverted security deed. On August 6, 2018, the trial court adopted the Special Master's report, and Republic appealed.

         1. Republic argues that the trial court erred in adopting the portion of the Special Master's report which found Freeport was entitled to the excess funds because such a finding was beyond the scope of the Special Master's jurisdiction. We find no reversible error.

         "At the option of the complainant as prayed for in the complaint, the [trial] court, upon receipt of the complaint, shall submit the same to a special master as provided for in Code Sections 23-3-63 through 23-3-68[.]" OCGA § 23-3-43.

[T]he special master shall have complete jurisdiction within the scope of the pleadings to ascertain and determine the validity, nature, or extent of petitioner's title and all other interests in the land, or any part thereof, which may be adverse to the title claimed by the petitioner, or to remove any particular cloud or clouds upon the title to the land and to make a report of his findings to the judge of the court . . .

OCGA § 23-3-66.

         "Although a trial court is not required to hear exceptions to a special master's report, the trial court must independently evaluate the correctness of the report before adopting it as the judgment of the court." (Citation omitted.) Steinichen v. Stancil, 281 Ga. 75, 76 (2) (635 S.E.2d 158) (2006). In other words, regardless of what was contained in the Special Master's report, the trial court, not the Special Master, ordered disbursement of the excess funds to Freeport upon evaluation of the report. See Eardley v. McGreevy, 279 Ga. 562, 564-565 (2) (615 S.E.2d 744) (2005) ("[I]n submitting a quiet title case to a special master, the trial court does not cede jurisdiction to render a final decision, and the trial court is not obligated to accept a special master's erroneous legal conclusion.") (citation omitted). Notably, Republic enumerates no error with the merits of the conclusion of both the Special Master and the trial court that the reversion of the security deed entitled Freeport to receive the excess funds. In light of all of the foregoing, pretermitting whether it was error for the Special Master to opine as to disbursement of the excess funds, Republic can demonstrate no harm. See, e.g., Hertz Corp. v. McCray, 198 Ga.App. 484, 486 (2) (402 S.E.2d 298) (1991) ("Appellant is required to show harm as well as error to prevail on appeal[.]") (citation omitted).

         2. Republic next argues that the trial court erred in issuing a final decree vesting title with Freeport free and clear of Republic's adverse claim because Freeport lacked standing to petition for such relief. We disagree.

         Georgia law provides two procedures for quieting title to land. Under OCGA § 23-3-40, known as ...


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