BRIDGES Et Al. v. COLLINS-HOOTEN Et Al.
339 Ga. App. 756
| Ga. Ct. App. | 2016Background
- Dougherty County held a nonjudicial tax sale in 2001 on 3111 Winterwood Ave.; Heartwood purchased the property and the sale produced $45,274.54 in excess funds.
- Fairbanks Capital Corporation (FCC) redeemed the property in 2002; FCC later was acquired by Select Portfolio Servicing, Inc. (SPS).
- In 2014 the county Tax Director filed an interpleader, deposited the excess funds with the court, and named potential claimants including Eric Bridges (administrator of the original owner’s estate), SPS, and the Georgia Department of Revenue.
- The trial court initially awarded the funds to Eric, then set that order aside, found SPS had priority, but ultimately disbursed the funds to the Georgia Department of Revenue after awarding the Tax Director $8,183.57 in attorney fees.
- On appeal the court reviewed (1) whether SPS (the redeeming creditor) had a priority claim to the excess funds and (2) whether the Tax Director could recover attorney fees from the fund given her asserted involvement/claims.
Issues
| Issue | Plaintiff's Argument (Bridges) | Defendant's Argument (Tax Director / SPS) | Held |
|---|---|---|---|
| Whether the redeeming creditor (SPS) had priority to the excess tax-sale funds | Eric: SPS has no current priority because any security deed was satisfied of record; excess funds belong to estate | Tax Director/SPS: Redeeming creditor obtains a super-lien and priority for redemption costs and thus is entitled to the funds | Court: Reversed trial court’s reliance on Wester; redeeming creditor does not automatically take excess funds—SPS had no priority because its security deed was satisfied; funds should go to Eric (per order) |
| Whether Wester precedent gave redeeming creditor entitlement to excess proceeds | Bridges: Wester was wrongly applied and later overruled | Tax Director: Relied on Wester to support SPS priority | Court: Wester incorrectly expanded Nat. Tax Funding; DLT List clarified redeeming creditor gets a lien (right to redeem), not automatic claim to sale surplus; Wester was overruled by DLT List |
| Whether the Tax Director’s assertion of tax claims or advocacy made her an improper/interested stakeholder and barred recovery of fees | Bridges: Tax Director claimed ad valorem taxes and advocated for SPS, so she was not disinterested and cannot recover attorney fees | Tax Director: Statute authorizes filing interpleader and recovery of reasonable fees from the fund | Court: Although Tax Director improperly asserted a direct tax claim, that did not void the interpleader; award of fees permitted under OCGA § 48-4-5(b) because evidence supported reasonableness |
| Whether the attorney-fee award was excessive or procedurally improper | Bridges: Portions of the fees related to work beyond a disinterested stakeholder’s role and some entries were not objected to below | Tax Director: Continued litigation justified increased fees; submitted evidence of reasonableness | Court: Affirmed fee award because statute mandates cost payment and record contained evidence supporting reasonableness; specific objections waived for failure to preserve below (concurring judge would have limited fees) |
Key Cases Cited
- Nat. Tax Funding, L.P. v. Harpagon Co., LLC, 277 Ga. 41 (explains redeeming creditor obtains a first-priority lien by statutory redemption but does not automatically claim sale surplus)
- DLT List, LLC v. M7VEN Supportive Housing & Dev. Group, 335 Ga. App. 318 (clarifies Wester was wrongly extending Nat. Tax Funding; redeeming creditor must choose redemption lien enforcement or claim against sale proceeds)
- Wester v. United Capital Financial of Atlanta, LLC, 282 Ga. App. 392 (earlier appellate decision holding redeeming creditor took priority over other claims; subsequently disapproved by DLT List)
- OCGA § 48-4-5 case law reference: Grapefields, Inc. v. Kosby, 309 Ga. App. 588 (statute permits fee awards from excess funds and will be affirmed if any evidence supports reasonableness)
- LN West Paces Ferry Assoc., LLC v. McDonald, 306 Ga. App. 641 (evidentiary showing can support substantial attorney-fee awards)
- Almand v. Reese, 209 Ga. 138 (interpleader prerequisite that stakeholder not claim interest in subject matter)