HWA Properties, Inc. v. Community & Southern Bank
322 Ga. App. 877
| Ga. Ct. App. | 2013Background
- HWA Properties, Inc. and Harry Albright appeal a summary judgment in favor of Community & Southern Bank (CSB) on a note and a guaranty.
- Note originated June 2008 for ~$4 million secured by 188 acres in Fannin County; Albright gave an unconditional personal guaranty.
- Note renewed February 2010 to ~$2.7 million; default occurred by October 2009; CSB later substituted as plaintiff via FDIC assets transfer.
- CSB foreclosed nonjudicially on the security in November 2011, obtaining $1.59 million; confirmation order issued March 2012 and later reversed on appeal.
- Fulton County court awarded CSB a deficiency judgment over the shortfall after applying foreclosure proceeds to the note; on appeal, the Court partially reversed.
- Court held CSB was real party in interest and had standing to enforce the note and guaranty, but reversed the deficiency judgment against HWA due to reversal of foreclosure confirmation; affirmed against Albright on guaranty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CSB had standing to enforce the note and guaranty | CSB is the real party in interest as successor to FDIC for Appalachian Bank. | CSB failed to prove it was holder/nonholder in possession; challenged admission of unsworn documents. | CSB had standing; substituted as real party in interest; documents properly admitted |
| Whether a deficiency judgment against HWA was proper after reversal of foreclosure confirmation | CSB entitled to the difference between note and foreclosure proceeds. | Foreclosure confirmation reversal voids entitlement to deficiency under OCGA 44-14-161. | Reversal of confirmation requires reversal of deficiency for HWA |
| Whether Albright's liability on the guaranty was correctly imposed | Guaranty unconditionally obligates Albright to pay balance, regardless of borrower defenses. | Waivers and guaranty terms are contested but not pressed on appeal for Albright. | Summary judgment sustained against Albright on guaranty |
| Whether admission of FDIC purchase/assumption materials and related documents was proper | Affidavits and business-records foundation support admissibility. | Documents unsworn or hearsay; insufficient authentication raised in trial court. | Affidavit and business-records exception properly admitted; arguments regarding admissibility waived |
Key Cases Cited
- Vaughan v. Moore, 202 Ga. App. 592 (1992) (foreclosure/remedies interplay; need to comply with confirmation for deficiency)
- Baby Days v. Bank of Adairsville, 218 Ga. App. 752 (1995) (waiver of defenses by guarantor and non-reduction of liability upon collateral application)
- Gen. Motors Acceptance Corp. v. Newton, 213 Ga. App. 405 (1994) (nonconfirmed foreclosure does not bar enforcement of contractual rights to other security)
- Worth v. First Nat. Bank, 175 Ga. App. 297 (1985) (deficiency actions after nonconfirmed sale; related to defense against deficiency judgment)
- West v. State, 300 Ga. App. 583 (2009) (issues not raised below waived on appeal)
- Davis v. Phoebe Putney Health System, 280 Ga. App. 505 (2006) (waiver and procedural forfeiture principles for appellate review)
- Goodyear v. Trust Co. Bank, 248 Ga. 407 (1981) (standing to pursue claims after transfer of interest)