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CB Lending, LLC v. Strategic Property Consulting Group, LLC

Court of Appeals of Georgia, Fifth Division

October 21, 2019




         This is the second appearance of this real estate dispute before this Court. In an unpublished opinion pursuant to Court of Appeals Rule 36, we affirmed the trial court's grant of appellees Strategic Property Consulting Group, LLC ("SPCG") and RRK Investments, LLC ("RRK")'s motion for an injunction barring appellant CB Lending, Inc. from foreclosing on the Sandy Springs property in dispute. CB Lending, LLC v. Strategic Property Consulting Group, LLC et al., 345 Ga.App. XXII (Case No. A17A1921, decided March 6, 2018). After receiving a payoff of nearly $309, 000 on the $221, 000 loan it had given to SPCG, CB Lending brought this petition to quiet title. After a special master held hearings and made findings in the case, the trial court entered a final order holding that SPCG's payoff was a voluntary payment that fully extinguished its debt, that SPCG was entitled to attorney fees under OCGA § 44-14-3 (c) in the amount of $119, 456.00, and that RRK was entitled to attorney fees under OCGA § 9-15-14 (b) in the amount of $27, 043.93. On appeal from that judgment, CB Lending argues that the trial court's findings were in error because material facts remained as to the legal effect of SPCG's payment and because the evidence did not support the attorney fee awards, which were not properly made. We find no error and affirm.

         The appellate record[1] includes transcripts of the hearing before the special master, her detailed "Final Report and Recommendations," and the trial court's order adopting most, but not all, of that report. We therefore defer to the trial court's judgment on matters of fact to the extent that judgment is supported by any evidence before either it or the special master. See In re Morse, 265 Ga. 353, 353 (1) (456 S.E.2d 52) (1995) (an appellate court reviewed a review panel's findings of fact under the "any evidence" standard; "if the review panel has made no independent findings of fact or adopted the special master's findings, we review the evidence in the light most favorable to the special master's findings"). We review conclusions of law de novo. Morgan County Bd. of Tax Assessors v. Ward, 318 Ga.App. 186, 186 (733 S.E.2d 470) (2012).

         So viewed, the record shows that on July 13, 2015, CB Lending loaned $221, 100 to SPCG (pursuant to SPCG's promissory note for that amount) for the purpose of renovating a property at 6788 Brandon Mill Road, Sandy Springs. The loan was secured by a deed in CB Lending's favor executed on the same day. In October 2015, CB Lending declared the note in default and accelerated payment of the entire amount of the loan, but CB Lending accepted at least 10 partial and full payments between November 2015 and April 2016.[2] On April 11, 2016, however, CB Lending sent a second notice of default. On April 15, CB Lending delivered a payoff statement including more than $29, 000 in "default interest" and more than $40, 000 in "statutory legal fees" arising from both defaults, for a total of $310, 786.81.

         In the meantime, SPCG arranged to refinance the remaining debt through RKK. The parties to the original loan eventually agreed on a payoff amount of $308, 982.41, which was wired to CB Lending at a closing on the late afternoon of April 21, 2016. On the following day, however, SPCG's principal noted his "dispute and protest" of "the payoff for 6788 Brandon Mill Rd" and attempted to reserve "all legal rights in this matter."

         On July 21, 2016, SPCG's counsel emailed CB Lending a demand for cancellation of the security deed in accordance with OCGA § 41-14-3, as well as SPCG's reasonable attorney fees as authorized by subsection (c) of that statute. CB Lending did not return any of the funds given at closing or cancel the deed, however; rather, on August 29, 2016, it brought the instant petition to quiet title and for attorney fees under OCGA § 13-6-11 against parties including SPCG, RRK, and Groundfloor Properties GA, LLC ("Groundfloor"), SPCG's principal's place of employment. SPCG answered and counterclaimed for relief including attorney fees under OCGA § 13-6-11. Groundfloor moved to dismiss the suit, which motion the trial court granted on December 14, 2016. In November 2016, CB Lending's law firm, Price-Co Law Group, and its lawyer, Benjamin J. Cohen, were added as third-party defendants.

         The special master was appointed in April 2017. On August 7, 2017, after a hearing, the special master granted summary judgment to RRK and ordered CB Lending to cancel its security deed because CB Lending had received "payment in full of the amount demanded . . . in writing," "had retained those funds for over a year," and "still retained those funds." On August 17, 2017, the special master granted SPCG's motion to compel the production of documents; on September 12, 2017, the special master awarded SPCG attorney fees for Price-Co's failure to produce documents in response to the motion to compel. On October 2 and 3, 2017, the special master held a hearing on the merits, but reserved further rulings on attorney fees for a separate hearing, which was held on November 16, 2017. No transcript of this fee hearing appears in the appellate record.

         On January 26, 2018, the special master signed her report and recommendations, including the following:

- CB Lending was estopped from claiming that its October 2015 acceleration could enable it to claim attorney fees under OCGA § 13-1-11;
- CB Lending was obligated to refund the $40, 210.75 portion of SPCG's payment assessed as such fees;
- Because SPCG's payoff of April 2016 was an accord and satisfaction of its debt, CB Lending must cancel its security deed;
- SPCG was entitled to $17, 329 in OCGA § 13-6-11 attorney fees expended in pursuing its motion to compel, jointly and severally from CB Lending and its law firm Price-Co;
- CB Lending's suit against RRK was "made in bad faith, was stubbornly litigious, and unnecessarily expanded the scope of the[] proceedings" such that RRK was owed $27, 043.93 in ...

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