Potter's Properties, LLC v. Vns Corp.
306 Ga. App. 621
Ga. Ct. App.2010Background
- Potter's Properties, LLC owns land encumbered by a security deed held by Altamaha Bank; Vidalia Federal Savings Bank provided new financing in 2007 using the property as collateral and issued a new deed in its favor, signed by Jay in his individual capacity rather than as sole member of Potter's Properties.
- A corrective security deed was filed on April 29, 2009 to reflect Jay signing in a representative capacity; Potter's sought equitable relief to reform the deed on July 22, 2009, asserting a scrivener's error; Vidalia indicated it would stipulate to the facts.
- Before reform, VNS Corporation moved to intervene claiming a priority interest to satisfy its 2008 default judgment and Potter's Properties objected; the trial court granted intervention as a right.
- OCGA § 9-11-24(a)(2) permits timely intervention for a party with a protectable interest that may be impaired, but strangers normally cannot intervene; exceptions require a direct and immediate interest created by the claim in suit.
- Equity allows reformation of a security deed where a scrivener's mistake does not prejudice the other party; reform may occur even after foreclosure and may affect lien priority; the court held VNS has no direct interest and no adequate remedy that requires intervention, so intervention was improper; judgment reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether VNS may intervene as of right | VNS asserts a priority interest may be affected by reformation | Potter's argues no direct interest and other remedies exist for VNS | No; intervention as of right inappropriate |
| Whether VNS has a direct interest in the property | VNS relies on its judgment creditor status | Reformation does not create a direct interest for VNS | No direct interest shown |
| Whether reformation of the deed is permissible and may affect lien priority | Reformation could alter VNS’s priority as a lienholder | Reformation allowed regardless of potential priority impact | Reformation permissible; however, VNS not entitled to intervene |
Key Cases Cited
- Sampson v. Vann, 203 Ga. 612 (1948) (intervention generally barred for strangers absent direct interest)
- Todd v. Conner, 220 Ga. 173 (1964) (intervention only when necessary to protect rights; otherwise not allowed)
- Gregory v. Tench, 138 Ga.App. 219 (1976) (intervention denied where independent remedies remain)
- Beauchamp v. Knight, 261 Ga. 608 (1991) (routine equitable relief not guaranteed; focus on underlying issues)
- Curry v. Curry, 267 Ga. 66 (1996) (reformation considerations when writing does not reflect contract)
- Zinser v. Tormenta, 213 Ga.App. 824 (1994) (intervention適ability and standard for discretion)
- DeGolyer v. Green Tree Servicing, 291 Ga.App. 444 (2008) (reformation relates back and affects priority)
- Aames Funding Corp. v. Henderson, 275 Ga.App. 323 (2005) (foreclosure does not bar equitable reformation; lien priority may change)