Duke Galish, LLC v. Southcrest Bank
314 Ga. App. 801
| Ga. Ct. App. | 2012Background
- Duke Galish, LLC and guarantors defaulted on a note secured by a security deed; Century Security Bank went into receivership and the FDIC assigned the security deed to SouthCrest, recorded June 7, 2010.
- SouthCrest began foreclosure before the assignment was recorded, purchased the May 4, 2010 sale, and filed for confirmation on May 25, 2010; it dismissed the confirmation on June 7, 2010 and conducted a second foreclosure on July 6, 2010, purchasing the property again.
- Duke Galish challenged the May 4, 2010 sale as invalid due to non-recordation of the assignment; the trial court denied summary judgment for Duke Galish and allowed the July 6 sale to proceed, denying confirmation for lack of proof of FMV.
- The trial court found SouthCrest acted in good faith, with two appraisals before sale, and permitted a resale; a supersedeas bond of $300,000 was ordered in connection with the appeal.
- Duke Galish argues that the May 2010 sale was void or voidable and that the court lacked authority to require a bond; this appeal contests the foreclosure process, the cure by re-foreclosure, and the bond ruling.
- The appellate court affirms, holding the May 2010 sale was cured by the July 2010 re-foreclosure, SouthCrest acted in good faith, and the supersedeas bond was authorized and properly set.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the May 2010 foreclosure sale was void or voidable and cured by re-foreclosure | Duke Galish argues failure to record assignment invalidates first sale | SouthCrest contends cure via second foreclosure allowed under Culver approach | Second foreclosure cured the defect; sale revalidated |
| Whether SouthCrest acted in good faith in the foreclosure and re-foreclosure | Duke Galish alleges bad faith for delaying remedy | SouthCrest acted in good faith, appraisals performed | SouthCrest acted in good faith; no reversible bad faith evidence |
| Whether the trial court had authority to order a supersedeas bond under OCGA § 5-6-46(a) | Bond not authorized where no monetary judgment or disposition of property for appeal | Disposition-of-property provision applies to foreclosures and related actions | Statute authorized bond due to disposition-of-property issue in foreclosure appeal |
| Whether the amount of the supersedeas bond was an abuse of discretion | Bond excessive | Bond reasonable to secure use, costs, interest, and delay damages | $300,000 bond within court’s discretion; no abuse of discretion |
Key Cases Cited
- Culver v. Lambert, 132 Ga. 296 (1909) (lender may treat void sale as void and resell properly to cure defect)
- Cary v. Guiragossian, 270 Ga. 192 (1998) (defect corrected by proper foreclosure after valid transfer of security deed)
- Burgess v. Simmons, 207 Ga. 291 (1950) (failure to record assignment not controlling in all contexts; context matters)
- Cloud v. Georgia Central Credit Union, 214 Ga.App. 594 (1994) (disposition-of-property under OCGA 5-6-46(a) permits supersedeas when foreclosure appeal involves property)