You v. JP Morgan Chase Bank, N.A.
293 Ga. 67
| Ga. | 2013Background
- Appellants Yi You and Bak purchased a home in Georgia in 2003 and executed both a promissory note and a deed to secure debt in favor of Excel Home Loans.
- The security deed granted Excel and successors a power of sale upon default; the note was later transferred to an unidentified entity and the deed was assigned to Chase Manhattan Mortgage Corporation, later JP Morgan Chase Bank, with the assignment giving Chase the rights under the security deed.
- After default, Chase initiated non-judicial foreclosure in June 2011; the property was sold at auction on August 2, 2011, to Chase, which then quitclaimed to Fannie Mae.
- Fannie Mae filed a dispossessory action; a Gwinnett County magistrate court issued a writ of possession in November 2011, and the case was later removed to federal court.
- The federal district court certified three questions regarding (1) whether a deed holder can foreclose without holding the note, (2) whether OCGA 44-14-162.2(a) requires identifying the secured creditor in the notice, and (3) if yes, whether substantial compliance suffices; the Georgia Supreme Court answered the first yes and the second no.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can a deed holder foreclose without holding the note? | You argued the foreclosing party must also hold the note to exercise the power. | Chase contends the deed holder may exercise the power of sale independent of note ownership. | Yes; a deed holder may foreclose without the note. |
| Must the secured creditor be identified in the notice under OCGA 44-14-162.2(a)? | You contended the notice must name the secured creditor (note or deed holder). | Chase argued notice sufficiency is not limited to naming a single entity; the statute is flexible. | No; the notice must identify the individual or entity with full authority, not exclusively the secured creditor. |
Key Cases Cited
- Decatur Fed. Sav. & Loan Ass'n v. Gibson, 268 Ga. 362 (Ga. 1997) (security deed stands alone; deed holder can enforce rights independent of note)
- Brinson v. McMillan, 263 Ga. 802 (Ga. 1994) (security deed controls rights despite note status)
- White v. First Nat. Bank of Claxton, 174 Ga. 281 (Ga. 1932) (grantee in security deed holds title for debtor's benefit)
- Shumate v. McLendon, 120 Ga. 396 (Ga. 1904) (deed may be transferred without transferring debt)
- Weems v. Coker, 70 Ga. 746 (Ga. 1883) (earlier recognition of mortgage enforcement concepts)