Wells Fargo Bank, N.A. v. Twenty Six Properties, LLC
325 Ga. App. 662
| Ga. Ct. App. | 2014Background
- Wells Fargo filed for a declaratory judgment in Fulton County claiming a first-priority lien on 6835 Matt Highway, Forsyth County, securing a 2006 deed to secure debt to AME Financial, later purchased by Wells Fargo.
- Forsberg obtained a $ judgment against Pefanis for sexual harassment and filed a writ of execution in Forsyth County in November 2009 to satisfy that judgment.
- The 2006 deed to secure debt was allegedly altered before recording in 2008, and the record showed the original deed not yet properly recorded when Forsberg sought priority.
- Pefanis had executed various transfers of the property (including a June 1, 2007 quitclaim to Eckland) and later conveyed interests back and forth through 2009, with related funding secured by multiple deeds.
- The trial court found Forsberg’s lien had priority over the allegedly fraudulent 2009 security deed and the unrecorded security deed, but the appellate court reversed, holding no valid lien attached to the property and thus Forsberg had no priority over Wells Fargo.
- As a corollary, the court noted state-law principles on attachment, recording, and the effect of prior unrecorded deeds on priority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Forsberg’s judgment lien attach to the property and outrank Wells Fargo’s lien? | Forsberg argues her lien attaches and is first in priority. | Wells Fargo contends Forsberg’s lien did not attach and thus cannot prevail on priority. | No; Forsberg’s lien did not attach as to the property as a matter of law. |
| Is Wells Fargo entitled to priority over Forsberg given the recorded status of the 2006 deed to secure debt? | Wells Fargo asserts its first-priority lien trumps Forsberg’s execution lien. | Forsberg contends the fraudulent/altered recording undermines Wells Fargo’s priority. | Wells Fargo’s priority was not established; court reversed summary judgment for Forsberg. |
| Did the trial court err in relying on the absence of a recorded authentic copy of the 2006 deed to secure debt to determine priority? | Wells Fargo emphasizes the unrecorded status should not defeat priority. | Forsberg relies on record to show lack of valid lien attachment. | Yes; the court held error in finding Forsberg’s priority based on purported fraud in filing. |
| Are Wells Fargo’s remaining arguments moot after division on priority? | moot or premature. | moot | Moot/premature; judgment reversed on main issue. |
Key Cases Cited
- Cowart v. Widener, 287 Ga. 622 (Ga. 2010) (summary judgment standards; de novo review on appeal)
- Morgan Enterprises v. Gordon Gillett Business Realty, 196 Ga. App. 112 (Ga. App. 1990) (cross-motions for summary judgment require no genuine issue of material fact)
- Board of Natural Resources v. Monroe County, 252 Ga. App. 555 (Ga. App. 2001) (declaratory judgments not based on possible contingencies)