Austin v. Bank of America, N.A.
293 Ga. 42
| Ga. | 2013Background
- Borrower executed a promissory note and security deed in favor of Lender for $1.62 million to finance a home purchase in 2008.
- Borrower defaulted on multiple payments starting November 2010, and Lender advanced funds to satisfy tax liens.
- Borrower transferred title to the property to a third party by warranty deed without Lender's consent, constituting a default.
- Lender sent a series of notice letters (April, May, June 2011) purporting to cure defaults and notifying about attorney fees under OCGA § 13-1-11 and acceleration.
- After cure periods lapsed, Lender accelerated the debt and filed suit; trial court granted summary judgment for Lender for principal, interest, tax advances, and attorney fees.
- Court affirmed, upholding notices under the deed to secure debt and the statutory attorney-fee scheme, and rejected constitutional challenges to OCGA § 13-1-11.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether notices were legally sufficient to support acceleration and suit | Austin contends notices failed to properly cure and accelerate. | Austin argues notices did not meet Section 22 requirements (and 30-day cure) for all defaults. | Notices satisfied contract and statutory requirements; summary judgment affirmed on damages. |
| Whether attorney fees under OCGA § 13-1-11 are constitutional and proper here | Austin claims fee award is punitive and exceeds actual fees incurred. | Lender argues statute provides an option to avoid penalties and that fees may be recovered when statutory prerequisites are met. | Statutory mechanism is constitutional and applicable; fees properly awarded. |
Key Cases Cited
- Salahat v. FDIC, 298 Ga. App. 624 (Ga. App. 2009) (notice and cure provisions suffice even if liens identification is imperfect)
- MPP Investments, Inc. v. Cherokee Bank, N.A., 288 Ga. 558 (Ga. 2011) (acceleration timing tied to deed terms; 60-day notice issue on subsequent remedy)
- Radioshack Corp. v. Cascade Crossing II, LLC, 282 Ga. 841 (Ga. 2007) (OCGA § 13-1-11 purpose is to avoid penalties, not cap fees at actual costs)
- General Electric Credit Corp. v. Brooks, 242 Ga. 109 (Ga. 1978) (statutory notice requirement to allow debtor to meet obligation)
- Williams General Corp. v. Stone, 279 Ga. 428 (Ga. 2005) (treble damages vs. punitive damages distinct; RICO act context)
- Strickland v. Williams, 215 Ga. 175 (Ga. 1959) ( OCGA § 13-1-11 compliance fixes penalties in contract context)