Bank of North Georgia v. Windermere Development, Inc.
316 Ga. App. 33
| Ga. Ct. App. | 2012Background
- BNG appeals two related reimbursement actions on letters of credit and personal guaranties after two developers and guarantors cross-appeal from summary-judgment denials.
- The loans funded residential subdivisions near Windermere Golf Club; several instruments include open-ended/dragnet clauses securing all indebtedness to Citizens, including letters of credit.
- Simon Road and Windermere incurred 2004/2006 debts for development; 2007 deed to secure debt covers both; cross-default provisions appear in each letter of credit.
- Vansant and Belans guaranteed Windermere and Simon Road obligations; they held key positions in both entities.
- Foreclosures occurred in 2009 on the secured lands; BNG foreclosed but did not obtain judicial confirmation; letters of credit were drawn and paid after default.
- The trial court denied BNG’s and cross-appellants’ motions for summary judgment; issue of deficiencies and confirmation doctrine is central.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether lack of foreclosure confirmation bars deficiency judgments | BNG contends it may pursue deficiency claims on intertwined debts | Cross-appellants argue confirmation is required under OCGA 44-14-161(a) | Yes; lack of confirmation bars deficiency claims and supports cross-appellants' summary-judgment |
| Whether the letters of credit and notes are inextricably intertwined | BNG asserts separate obligations but tied to same security and purpose | Cross-appellants contend they are intertwined with the notes and secured by same property | Yes; debts are for same purpose, secured by same property, thus intertwined |
| Whether BNG is entitled to summary judgment on the letters of credit claims | BNG seeks judgment on its reimbursement claims | Cross-appellants seek dismissal based on 44-14-161(a) and intertwined debts | No; court affirmed denial for BNG; cross-appellants granted summary judgment on intertwined/deemed deficiency issue |
| Whether the cross-appellants are entitled to summary judgment on the cross claims | BNG’s positions countered by cross-arguments | Cross-appellants prevail on intertwined-deficiency theory | Yes; cross-appellants’ motions granted on deficiency-bar theory |
Key Cases Cited
- Iwan Renovations v. North Atlanta Nat. Bank, 296 Ga. App. 125 (Ga. App. 2009) (intertwined debts prevent circumvention of confirmation statute)
- First Nat. Bank &c. v. Kunes, 230 Ga. 888 (Ga. 1973) (debtors include guarantors for confirmation purposes)
- Hill v. Moye, 221 Ga. App. 411 (Ga. App. 1996) (guarantors subject to confirmation provisions)
- Tufts v. Levin, 213 Ga. App. 35 (Ga. App. 1994) (intertwined debts doctrine applied to avoid avoidance of statute)
- Oakvale Road Assoc. v. Mortgage Recovery Fund &c., 231 Ga. App. 414 (Ga. App. 1998) (intertwined debts context; property securing multiple debts)
- McCain v. Galloway, 267 Ga. App. 505 (Ga. App. 2004) (confirmation requirements apply to related debts)
- Atlanta Empowerment Zone Corp. v. Light Energy Mgmt., 269 Ga. App. 728 (Ga. App. 2004) (application of confirmation statute to related obligations)