NAVY FEDERAL CREDIT UNION v. McCREA
337 Ga. App. 103
Ga. Ct. App.2016Background
- McCrea purchased property in Jan 2007 and executed a warranty deed conveying it to Gary and Vickie Fox the same day; the Foxes later took a mortgage from Navy Federal Credit Union (NFCU).
- McCrea sued the Foxes in 2011 (the "Foxes Case") alleging fraud, undue influence, and breach of contract, and obtained a jury award of monetary damages.
- McCrea filed a lis pendens in the Foxes Case and later executed a quitclaim deed transferring any interest to a third party during that litigation.
- NFCU foreclosed on the Foxes' mortgage and purchased the property at a 2012 foreclosure sale; NFCU was not a party to the Foxes Case at trial.
- McCrea later sued NFCU, asserting claims and seeking to cloud NFCU’s title; NFCU sought declaratory relief that it owned the property free of McCrea’s claims and moved for summary judgment.
- The trial court denied summary judgment to both parties; NFCU appealed the denial of reconsideration of that order (interlocutory appeal).
Issues
| Issue | McCrea's Argument | NFCU's Argument | Held |
|---|---|---|---|
| Whether NFCU owns the property free of McCrea’s claimed interest | The Foxes Case voided the warranty deed to the Foxes, so McCrea retained title; NFCU had notice via lis pendens and should not be a bona fide purchaser | The Foxes Case awarded only monetary damages and did not void the deed; NFCU purchased at foreclosure and holds title free of McCrea’s claims | NFCU entitled to declaratory relief: no evidence deed was void and lis pendens did not create a legal encumbrance on NFCU’s title |
| Whether NFCU had notice that would defeat its title (actual or constructive) | NFCU had notice of McCrea’s lis pendens and jury outcome and thus could not take title free of her interest | Even if NFCU had notice, the Foxes Case did not create a judgment that affected the deeds; lis pendens binds only to the litigation’s actual results | Court held any notice of the Foxes Case did not affect NFCU’s title because the final judgment did not void the conveyance |
| Whether McCrea’s counterclaims against NFCU had evidentiary support | Counterclaims (emotional distress, unjust enrichment, stubborn litigiousness, voiding foreclosure) derive from her asserted retained title or foreclosure impropriety | Counterclaims lack evidence: deed was not voided; unjust enrichment fails because McCrea was not a party to the foreclosure sale | Court held counterclaims lacked evidentiary support and granted summary judgment to NFCU on them |
| Whether summary judgment was properly denied by trial court | (implicit) The trial court should recognize the Foxes Case outcome supported McCrea’s title claim | NFCU argued trial court erred; record shows final Foxes judgment did not void deed and NFCU submitted intervening order reinstating original judgment | Appellate court reversed denial and instructed entry of judgment for NFCU on declaratory relief and all counterclaims |
Key Cases Cited
- Mayor & Aldermen of City of Savannah v. Norman J. Bass Constr. Co., 264 Ga. 16 (interlocutory appeal from denial of motion for reconsideration is proper)
- Rollins v. Communications v. Henderson, Few & Co., 140 Ga. App. 504 (procedural precedent on interlocutory review)
- Vratsinas Const. Co. v. Chitwood, 314 Ga. App. 357 (summary judgment standard and de novo review)
- Cowart v. Widener, 287 Ga. 622 (nonmovant must point to admissible evidence beyond speculation)
- Erdmier v. Eunice, 143 Ga. App. 505 (trial court cannot alter jury verdict by declaring matters beyond jury award)
- Tuvim v. United Jewish Communities, Inc., 285 Ga. 632 (elements of unjust enrichment)