290 Ga. 724
Ga.2012Background
- BB&T and predecessors made 16 residential development loans 2005–2008 to Borrowers, with Guarantors guaranteeing the notes; all borrowers, guarantors, and controlling individuals are interrelated.
- BB&T foreclosed on nine notes after default and advertised sales; BB&T later rescinded the foreclosure notices and sale consummation.
- BB&T filed suit June 22, 2009 for over $19 million, including fraudulent transfer claims, and sought to enforce notes and guaranties.
- Trial court held that nine notes’ claims were improper deficiency actions due to unconfirmed foreclosure sales under OCGA § 44-14-161(a), but that 2008 guaranties could render Guarantors liable on pre-2008 notes.
- Court of Appeals reversed on the nine notes issue but affirmed on the guaranty-Statute of Frauds issue; Georgia Supreme Court granted certiorari to address the foreclosures and Statute of Frauds questions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there was a valid foreclosure sale under power. | BB&T did not consummate a sale; sale proceeds not transferred. | Sale contract formed; purchaser and creditor identical; no confirmation required yet. | Foreclosure sale not consummated; no valid sale requiring confirmation. |
| Whether 2008 guaranties sufficiently identify pre-2008 notes under the Statute of Frauds. | Guaranties identified debt broadly and extended to pre-2008 notes. | Guaranties insufficiently identify specific pre-2008 debts. | 2008 guaranties satisfy Statute of Frauds; part performance not used to defeat it. |
| Whether BB&T’s extension of credit pursuant to 2008 notes constitutes part performance to remove Statute of Frauds barrier. | Part performance can remove the Statute of Frauds barrier. | Extension of credit is not part performance to identify debts/debtors. | Part performance does not remove the Statute of Frauds barrier; remand appropriate for 2005 notes. |
Key Cases Cited
- Cummings v. Johnson, 218 Ga. 559, 129 S.E.2d 762 (Ga. 1963) (sale under power divests title; redemption rights; Statute of Frauds relevance)
- Carrington v. Citizens' Bank of Waynesboro, 144 Ga. 52, 85 S.E. 1027 (Ga. 1915) (grantor becomes tenant at sufferance when creditor bids in; redemption rights)
- McKinney v. South Boston Sav. Bank, 156 Ga.App. 114, 274 S.E.2d 34 (Ga. App. 1980) (foreclosure context; sale not consummated; confusion about title transfer)
- SRB Investment Services v. Branch Banking & Trust Co., 289 Ga. 1, 709 S.E.2d 267 (Ga. 2011) (precedent on remedies and status quo after foreclosure)