Farris v. Nationsbanc Mortgage Corp.Farris v. Nationsbanc Mortgage Corp.
Harold Farris and his wife Pauline Farris appeal the grant of Victor Warren Properties, Incorporated’s (‘VWP”) motion tо dismiss VWP from the Farrises’ suit. The case arises from the sale of real estate pursuant to a deed to secure debt.
In 1975, thе Farrises gave a deed to secure debt on their residence, and the deed was eventually transferred to Standаrd Federal Bank and serviced by Nationsbanc Mortgage Corporation. In a deed filed January 20, 1993, Harold Farris quitclaimed any interest he had in the property to Pauline Farris. Harold Farris filed a Chapter 13 bankruptcy petition in Decembеr 1995, without listing Standard Federal or Nationsbanc as a creditor. Nationsbanc began proceedings to foreclоse on the property on April 1,- 1996. Harold Farris subsequently added Nationsbanc to the list of creditors in his bankruptcy petition, and informed Nationsbanc that he had an interest in the property based upon an unrecorded 1994 deed by which Pauline Farris conveyed the property to both him and herself. On May 6, 1996, the bankruptcy court dismissed Harold Farris’ bankruptcy petition with prejudice, and the property was sold at auction the next day to VWP for $80,400. 1
VWP brought a dispossessory action agаinst the Farrises. The Farrises filed a complaint in superior court against Nationsbanc, the law firm that performed the fоreclosure sale for Nationsbanc, the Internal Revenue Service, and VWP, seeking an injunction against the dispossеssion, ejectment of VWP, cancellation of the foreclosure sale, and damages for wrongful foreclosurе, asserting that the foreclosure sale and associated
On October 10, 1996, the bankruptcy court issued an order pursuant to Standard Federal’s motion to reopen Harold Farris’ bankruptcy case to address the еffect of the stay. The court found there was no notice of any bankruptcy implications respecting the foreclosure until April 30, 1996, and that all foreclosure actions but the sale had already been performed by that date. Thе court ruled that the May 7 foreclosure sale did not violate the automatic stay because the bankruptcy was dismissed on May 6, and therefore did not take place during the pendency of the bankruptcy. To the extent the stay was violated by the sale, the bankruptcy court declared the stay retroactively annulled ab initio. 2 See Albany Partners, Ltd. v. Westbrook, 749 F2d 670 (11th Cir. 1984).
On October 22, 1996, VWP amended its motion to dismiss, arguing that the bankruptcy court’s order, which it attached to its motion, removed any claim the Farrises had against VWP because such claims were based on the allegation that the sale violated the automatic stаy. The superior court acted on the motion to dismiss on November 26, 1996, “having considered the full record and all submissions.” The court granted the motion and dismissed VWP, noting that the foreclosure sale did not violate the bankruptcy automatic stay, аnd ruling that VWP was a bona fide purchaser for value without notice of any interest Harold Farris may have held. See
1. The Fаrrises first contend the court could not, on a motion to dismiss, rule that VWP was a bona fide purchaser. A motion to dismiss is converted to a motion for summary judgment if matters outside the pleadings are presented to the court and not excluded by it.
2. A bona fide purchaser for value is protected against outstanding interests in land of which the purchaser has no notice. See
It is uncontested that any examination of deeds of record prior to the foreclosure would reveal that only Pauline Farris had any interest in thе property. The Farrises, however, argue that notice of Harold Farris’ interest was nonetheless given by his possession of the residence, and that having notice, VWP had a duty to inquire which, had it been fulfilled, would have revealed the pendеncy of Harold Farris’ bankruptcy. See
The Farrises also contend actual notice of Harold Farris’ interest was given to Nationsbanc prior to the sale. There is, however, no evidence that any such notice was communicated to VWP and any аlleged wrongful conduct
As the only evidence shows VWP was a bona fide purchaser for value, the court did not err in so ruling. This is disрositive of the Far-rises’ assertion that the court erred in denying injunctive relief, and the court was not required to make findings of fact and conclusions of law in ruling on the injunction as none were requested.
Judgment affirmed.
Notes
There is no suggestion that this amount рroduced a deficiency. See
This decision was affirmed by the District Court for the Northern District of Georgia.
The Farrises also argue the sale was void because it violated the bankruptcy stay, but this too is precluded by the ruling that the stay was void ab initio.