This suit arose from the sale of a home under power of sale and removal of personal property. Freedman and Halperin lent Moore $7,200 for home improvements on her residence and received a deed to secure debt on the house. The note called for monthly payments of $158.16, but Moore consistently paid at the rate of $200 per month for more than three years. Moore became ill, ceased
Brown, Moore’s elderly aunt and sole heir, lived across the street from Moore’s house and eventually received the letter. Through intermediaries, she attempted to determine what amount would be necessary to pay the note, but neither Freedman nor the attorney would state it, each saying the other would have to give the information. Sale proceeded without notice to Brown and on March 5, 1991, Freedman purchased the house at auction for $5,610. After removing personal property, he resold the house for $31,400 on April 11. Brown retained an attorney to pursue the matter, but he failed to do so, and she is represented by different counsel in this suit.
Count 1 of the complaint alleged Freedman and Halperin breached, as to the security deed, the duty of good faith and fair dealing in performance and enforcement that accompanies every contract. See
Bldg. Materials Wholesale v. Reeves,
In Case No. A96A0533, Brown appeals from the grant of summary judgment on the RICO claim. In Case No. A96A0534, Freedman appeals from the denial of summary judgment as to the first two counts of the complaint but not as to Count 3, conversion of personal property. The other defendants are not party to this appeal. In both appeals, the evidence and all inferences and conclusions arising therefrom must be construed most favorably toward Brown, the party opposing the motion.
Garmon v. Warehouse Groceries Food Center,
Case No. A96A0534
1. Taking Freedman’s appeal first, he contends he was entitled to summary judgment on Count 2, the OCGA § 23-2-114 claim for unfair exercise of the power of sale, because he sold the property as provided in the deed to secure debt and in the manner required by statute. The right of sale arises from a contract, but breach is a tort compensable at law.
Calhoun First Nat. Bank v. Dickens,
Brown asserts that the earlier payments in excess of $158.16 per month were not properly posted to the account because payments in
excess of the stated monthly charge were not
A claim for wrongful exercise of a power of sale can be asserted even though a debt is in default. “[W]hen a power of sale is exercised ‘ “[a]ll that is required of [the foreclosing party] is to advertise and sell the property according to the terms of the instrument, and that the sale be conducted in good faith.” [Cits.]’ [Cit.]”
Kennedy v. Gwinnett Commercial Bank,
Brown contends, in part, that Freedman’s purchase of the property at auction for less than one-fifth the amount he sold it for shortly thereafter is sufficient to conclude that he breached his duty to conduct the sale fairly. However, price alone is not sufficient; a claim for damages may lie “ ‘only when the price realized is grossly inadequate and the sale is accompanied by either fraud, mistake, misapprehension, surprise or other circumstances which might authorize a finding that such circumstances contributed to bringing about the inadequacy of price that’ the foreclosing party has breached his duty under the power of sale. [Cit.]” (Emphasis supplied.) Kennedy, supra at 331 (1). It is the “circumstances,” in con junction with the price, that can lead to a recovery.
The January 15, 1991, letter of Freedman’s attorney set forth a “Principal Balance Due” of $4,475.25, but also stated that tender of payment would have to be for that amount and “interest to the date of payment.” It also referred to “legal and other expenses . . . that must be paid by [debtor]” regardless of when the debt was paid. Although there is no evidence Brown made any “tender” that was rejected, there is evidence that she attempted through intermediaries to determine how much was owed so she could pay it, but neither Freedman nor his attorney would tell her, each saying the other would have to do so. A jury could conclude that Freedman knew that Brown, the person now responsible for the encumbrance, would pay the debt, but that Freedman deliberately kept that information from her. Evidence that Freedman took personal property from the house after the sale could also support a finding that Freedman’s primary interest in exercising the power of sale was not to protect his security but to gain as much as possible financially regardless of Brown’s equity of redemption or property rights. Such a fact, if found, coupled with Freedman’s purchase of the property at a price less than a fifth of what he received for it a month later, could support a finding that he exercised the power of sale unfairly.
2. Freedman also contends he should have been granted summary judgment on Count 1, the claim for breach of the duty of good faith and fair dealing in the performance and enforcement of obligations and rights in the deed to secure debt. This implied duty “requires both parties to a contract to perform their promises and provide such cooperation as is required for the other party’s performance. [Cit.]”
Ihesiaba v. Pelletier,
Case No. A96A0533
3. Brown contends the court erred in granting summary judgment to defendant Freedman on the RICO claim. A RICO violation, OCGA § 16-14-4, and any consequent recovery through OCGA § 16-14-6 (c), requires that Brown show an injury by a pattern of racketeering activity,
State of Ga. v. Shearson Lehman Bros.,
In her complaint, Brown does not expressly allege which of the acts she recites in her narrative of events constitute predicate criminal acts for RICO purposes. In her brief in this Court, and in her response to Freedman’s motion below, she alleges theft by conversion, OCGA § 16-8-4, theft by deception, OCGA § 16-8-3, and mail fraud, 18 USC § 1341, which constitute RICO predicate acts. See OCGA §§ 16-14-3 (9) (A) (ix); 16-14-3 (9) (A) (xxix). Although she does not specify all the acts which she alleges constitute these crimes, at this point she is not required to. Freedman may move for a more definite statement if one is necessary.
Maddox v. Southern Engineering Co.,
We need not address all potential predicate acts for the purposes of this appeal. Brown must show evidence only of two predicate acts. Id. at 7 (2). She alleges injuries from theft by conversion of her personal property inside the house. Summary judgment was denied Freedman on the complaint’s separate conversion count, he does not appeal that decision nor argue that conversion as a predicate act cannot be shown, and there is evidence of conversion of the belongings in the house.
She also argues Freedman’s actions in response to her attempts to find out how much money was owed on the property constituted theft by deception so as to deprive her of her property by preventing her “from acquiring information pertinent to the disposition of the property.” OCGA § 16-8-3 (b) (3). As discussed in Division 1, a jury could conclude that Freedman deliberately kept the correct amount of the debt from Brown. Freedman has not precluded a jury’s finding that his actions in this regard constituted the crime of theft by deception.
Freedman asserts that even if two predicate acts are shown, a single transaction does not constitute a pattern of racketeering activity, and the only transaction shown here is the sale at auction of the property.
Raines v. State,
Judgment reversed in Case No. A96A0533. Judgment affirmed in Case No. A96A0534.
Notes
Sears Mtg. Corp. refers to the action as one for wrongful foreclosure, but in that case, as here, the sale of the property was under the power of sale in a security deed, not the foreclosure of a mortgage. See OCGA §§ 44-14-49; 44-14-60. Both instruments are encompassed under OCGA § 23-2-114.