AMERIBANK, N.A. v. QUATTLEBAUM
S97G1945
Supreme Court of Georgia
SEPTEMBER 14, 1998
RECONSIDERATION DENIED OCTOBER 2, 1998
269 Ga. 857 | 505 SE2d 476
DECIDED OCTOBER 5, 1998
FLETCHER, Presiding Justice, concurring specially.
As I have stated before, a jury instruction that follows the language of
I am authorized to state that Justice Sears joins in this special concurrence.
DECIDED SEPTEMBER 14, 1998 —
RECONSIDERATION DENIED OCTOBER 2, 1998.
Edwin J. Wilson, for appellant.
Thomas J. Charron, District Attorney, Debra H. Bernes, Jack E. Mallard, Assistant District Attorneys, Thurbert E. Baker, Attorney General, Susan V. Boleyn, Senior Assistant Attorney General, Christopher L. Phillips, Assistant Attorney General, for appellee.
S97G1945. AMERIBANK, N.A. v. QUATTLEBAUM. (505 SE2d 476)
HINES, Justice.
We granted certiorari to the Court of Appeals in Quattlebaum v. Ameribank, N.A., 227 Ga. App. 517 (489 SE2d 319) (1997), to consider its determination that notice of the foreclosure hearing served upon the debtor by the foreclosing party was inadequate under
Appellant Ameribank, N.A. made a commercial loan to Robert B. Quattlebaum III and L. Robert Isaacson, who in turn gave Amer-
After a first confirmation hearing in 1994, the trial court confirmed the sale as to all parties. Thereafter, the court set aside that portion of the confirmation order finding that appellee Quattlebaum had been properly served, and instead found that Quattlebaum had not been personally served with notice of the confirmation hearing. The Court of Appeals affirmed that judgment in a previous interlocutory appeal. Ameribank, N.A. v. Quattlebaum, 220 Ga. App. 345 (469 SE2d 462) (1996).
After return of the case to the trial court, a confirmation hearing was scheduled for May 20, 1996. Ameribank personally served appellee Quattlebaum with a copy of its confirmation application and a document entitled, “Notice of Hearing,” which had been prepared by counsel for Ameribank. This document, while directed also to appellee, named only Isaacson and Quattlebaum III as defendants. It specified the time and place for the confirmation hearing but notified the foregoing individuals that, “You are invited, but not required, to attend the hearing.” After moving unsuccessfully to terminate the proceedings, Quattlebaum chose to attend the hearing and presented evidence.
Over Quattlebaum‘s objections, the trial court confirmed the foreclosure sale. The Court of Appeals reversed, holding that the proceeding was defective because Quattlebaum had not been named as a party on the application, and because the notice of hearing had not been directed by the court as is required by
The clear legislative purpose of
Ameribank urges that nowhere in
In First Nat. Bank v. Kunes, supra, this Court affirmed the decision of the Court of Appeals which upheld the dismissal of the bank‘s claims for a deficiency judgment against individual debtors because the debtors were not named as parties in the confirmation petition, and the court-issued notice of the hearing was not directed to them. See First Nat. Bank &c. Co. v. Kunes, 128 Ga. App. 565 (197 SE2d 446) (1973). Again in Henry v. Hiwassee Land Co., 246 Ga. 87 (269 SE2d 2) (1980), this Court made plain that the statutory notice is to be at the court‘s instance. While in that case, as in Kunes, a rule nisi was involved, the statute does not specify the necessity of a rule nisi, merely that the notice be at the court‘s direction and control.
The wisdom of these precedents is demonstrated by the present case. The notice from the creditor merely invited Quattlebaum to the confirmation hearing and expressly instructed him that he was not required to attend. Even though it did not do so in Quattlebaum‘s case, such a notice orchestrated by the creditor could easily dissuade a debtor, especially one unrepresented by counsel, from attending the hearing, and thus, effectively diminish the protection afforded by
We decline to sanction substantial compliance or to adopt a harmless error rationale in this case of procedural violation of the
Judgment affirmed. All the Justices concur, except Fletcher, P. J., Carley and Thompson, JJ., who dissent.
FLETCHER, Presiding Justice, dissenting.
I fully concur in Justice Thompson‘s dissent. Additionally, the Georgia Court of Appeals erroneously applied a maxim of statutory construction in this case, just as it has in other confirmation cases.3
In its opinion, the court of appeals construes the confirmation statute against the lender because “Georgia‘s confirmation statute is in derogation of the common law and must therefore be strictly construed.” This analysis is faulty. At common law, there was no confirmation requirement. If the purchase price paid pursuant to a valid foreclosure sale did not satisfy the secured indebtedness, the lender could maintain a direct action against the debtor for the deficiency.4 The legislature enacted the confirmation statute “to limit and abate deficiency judgments in suits and foreclosure proceedings.”5 Because this limitation is in derogation of the lender‘s rights at common law, the statute must be strictly construed against the debtor under the rule of statutory construction that the court of appeals cites.
Despite the court of appeals’ talismanic reference to strict construction in derogation of the common law, it is appropriate to construe the confirmation statute against the lender based on legislative intent. The confirmation statute was passed during the Depression to help individual debtors by precluding lenders from bringing deficiency actions.6 The act protected homeowners by requiring the trial court to approve a foreclosure sale only if the sale price reflected the true market value of the property. This protection has become less necessary as lenders now require private mortgage insurance to ensure that their loans are paid.
Instead, the statute is increasingly being used, as in this case, by commercial property owners who rely on technical arguments to overturn a confirmation in which they fully participated. Because I believe the confirmation proceeding in this case met both the statute‘s legislative purpose and procedural requirements, I dissent.
THOMPSON, Justice, dissenting.
Because I believe that appellee has been afforded all the protections contemplated by
As the majority notes, appellee was personally served with a copy of the confirmation application and notice of hearing. In fact, appellee, through counsel, responded to that notice, with two motions in the trial court, including a request for a continuance of the confirmation hearing date. In an order served on appellee‘s counsel, the trial court denied the requested relief, and ordered that the confirmation hearing proceed as scheduled. Obviously, the date and time assigned for the hearing was set at the court‘s direction, and appellee was personally served with notice well in advance of the statutory time requirements. Appellee appeared with counsel at the second hearing and presented evidence of value which contradicted evidence offered by the seller. And after ensuring that appellee had received personal service of the notice, the trial court confirmed the foreclosure sale.
Accordingly, I must conclude that notice of the foreclosure hearing served upon the guarantor by the foreclosing party was adequate to satisfy the requirements of
I respectfully dissent. I am authorized to state that Presiding Justice Fletcher and Justice Carley join in this dissent.
DECIDED OCTOBER 5, 1998.
Ellis, Painter, Ratterree & Bart, Paul W. Painter, Jr., J. Keith Berry, Jr., for appellant.
McCorkle, Pedigo & Johnson, David H. Johnson, Inglesby, Falligant, Horne, Courington & Nash, Kathleen Horne, McCallar & Associates, Mark Bulovic, for appellee.