Amirfazli v. Vatacs Group, Inc.
311 Ga. App. 471
| Ga. Ct. App. | 2011Background
- In 1992, the debtor purchased Gwinnett County land secured by a deed to secure debt with First Capital Bank; a 1997 refinance issued a promissory note secured by the original deed, guaranteed by the debtor's partner.
- The debtor defaulted in 1997; after notices in April and May 1997, the bank accelerated the loan and announced a foreclosure sale with notices identifying the bank as foreclosing party.
- The indebtedness was assigned to VATACS Group, Inc. on May 19, 1997 and a corresponding assignment was recorded May 30, 1997; the foreclosure sale occurred June 3, 1997 with VATACS purchasing for $61,100.
- The debtor sued to set aside the sale alleging lack of good faith, fraud, and unjust enrichment; the trial court set aside the sale on summary judgment due to two post-assignment advertisements naming the bank as foreclosing party.
- A bench trial addressed the note amounts, resulting in a $63,096.32 judgment in favor of VATACS; on appeal, the court reversed in part and remanded, vacating the money judgment because the sale validity remained unresolved.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment was proper to set aside the foreclosure sale based on misadvertising | Debtor argues misadvertising chilled bidding and invalidated the sale. | VATACS contends the sale was fair and not legally defective as a matter of law. | Questions of fact remain; summary judgment improper to set aside the sale. |
| Whether the money judgment on the promissory note can stand given reversal on foreclosure | Debtor contends the money judgment should be vacated because the foreclosure sale issues were unresolved. | VATACS asserts the note judgment stands independent of the sale validity. | Money judgment vacated due to reversal on foreclosure; merits of the note remain for remand. |
| Whether the fraud claim could be considered given pleading status and pretrial order | Debtor should be allowed to amend fraud claim under OCGA § 9-11-15(a) since no valid pretrial order existed. | Defense argues amendment should be restricted because of the pretrial order issues. | Debtor may amend; case remanded for new proceedings to address forecosure and note issues. |
Key Cases Cited
- Williams v. South Central Farm Credit, 215 Ga.App. 740 (1994) (foreclosure advert. defects require chilling the bid to set aside sale)
- Aikens v. Wagner, 231 Ga.App. 178 (1998) (fact questions remain on whether foreclosure should be set aside)
- Leeds Bldg. Products v. Sears Mortg. Corp., 267 Ga. 300 (1996) (constructive notice when deed recorded and valid; notice to world)
- Bassett v. Jasper Banking Co., 278 Ga.App. 698 (2006) (vacatur of judgments dependent on reversed findings)
- 112 F.3d 1172, 112 F.3d 1172 (11th Cir. 1997) (affirms addressing misadvertising in foreclosure under power)