On April 30, 1998, Old Roswell Investments, LLC executed a promissory note and a security deed encumbering property in Roswell, Georgia in favor of Etowah Bank. On October 29, 1998, Old Roswell signed a promissory note in favor of J. Douglas Howe and executed a security deed naming Howe as grantee on the same property. The maturity date in Howe’s security deed was September 28, 2001. Etowah Bank subsequently merged with Regions Bank, *559 and in June 1999, Old Roswell executed a modification agreement replacing Etowah Bank with Regions Bank as the lender on the April 30, 1998 promissory note and security deed. At this time, Howe signed a subordination agreement providing that his security deed was subject to and inferior to the security deed held by Regions Bank. In December 2006, Old Roswell executed a security deed on the same property in favor of Cherokee Bank, N.A., to secure a note evidencing a new loan, the proceeds of which were used to satisfy the promissory note held by Regions Bank.
In early September 2008, Howe began the process to effect a sale under power pursuant to his security deed. On November 24, 2008, Cherokee Bank filed a petition to quiet title on the subject property, claiming that it possessed the first priority secured interest in the property. Cherokee Bank also recorded a notice of lis pendens. Cherokee Bank then filed an action seeking injunctive relief against Howe’s foreclosure proceedings. A hearing was held on November 25, 2008, and a temporary restraining order was consented to by all of the parties to reschedule the foreclosure sale for January 6, 2009 in order to allow the parties time to try to settle the case. A special master was appointed by the trial court on December 30, 2008. On January 6, 2009, Howe foreclosed on his security deed and executed a deed under power to MPP Investments, Inc., the highest bidder for value.
A hearing was held before the special master on July 30, 2009. The primary issue argued at the hearing was whether title under Howe’s security deed had reverted to Old Roswell prior to Howe’s initiation of the sale under power pursuant to OCGA § 44-14-80 (a) (1), which provides that title under a security deed will automatically revert to the grantor seven years after the maturity date of the underlying secured indebtedness. After the hearing, the special master requested additional briefing on the issue of whether the failure by Howe to provide 60-days notice to Old Roswell to cure default before initiating foreclosure proceedings, as stipulated in Howe’s security deed, voids the foreclosure sale. The notice provision in Howe’s security deed states, in relevant part:
[I]n case the debt hereby secured shall not be paid when it becomes due by maturity in due course, or by reason of default as above provided, [Howe] agrees to (a) notify [Old Roswell] in writing of such default, specifying the nature thereof and the actions necessary to cure said default; and (b) permit [Old Roswell] to cure such default within sixty (60) days from the date of such notice. ... If, after receipt of notice and the opportunity to cure specified above, [Old Roswell] is unable to cure said default, [Howe] . . . may sell *560 the said property at auction ... to the highest bidder for cash.. . .
On October 8, 2009, the special master filed her report, concluding that Howe failed to follow the proper procedure required by the security deed by not providing 60-days notice to Old Roswell, that the sale under power to MPP Investments was therefore void, that the title of the property reverted to Old Roswell pursuant to OCGA § 44-14-80 (a) (1), and that Cherokee Bank holds a first priority security deed on the property. The trial court adopted the special master’s report, and Howe and MPP Investments (Appellants) filed separate notices of appeal. The two cases are hereby consolidated for disposition in this single opinion.
1. Appellants first contend that the issue of whether Howe properly served notice to cure to Old Roswell 60 days prior to initiating foreclosure proceedings, as stipulated in Howe’s security deed, was waived since the issue was neither raised at the hearing on November 25, 2008 nor specifically included in the pre-trial order. However, the record shows that the hearing on November 25, 2008 related solely to a request filed by Cherokee Bank for a temporary restraining order and, thus, was a preliminary hearing on an issue separate from the underlying quiet title claim. Moreover, at the time of the initial pleadings in this case, the only issue related to determination of the competing interests arising from the security deeds held by Howe and Cherokee Bank. No foreclosure sale had taken place. However, once the foreclosure sale conducted by Howe was completed, Cherokee Bank properly amended its petition to include the issue of whether the foreclosure sale was validly conducted.
Appellants’ argument that the 60-day notice issue was not included in the pre-trial order is also without merit. “[A] pretrial order ‘should be liberally construed to allow the consideration of all questions fairly within the ambit of the contested issues.’ [Cits.]”
Parks v. Breedlove,
Finally, OCGA § 23-3-66 gives the special master “complete jurisdiction within the scope of the pleadings to . .. determine the validity . . . [of] all .. . interests in the land....” An amended pleading properly filed by Cherokee Bank included the claims that the foreclosure sale was improper and that title under Howe’s security deed had reverted to Old Roswell pursuant to OCGA § 44-14-80 (a) (1). The pre-trial order contained the issues of the validity of the foreclosure sale and reversion of Howe’s security deed. A copy of Howe’s security deed with the 60-day notice provision was filed with the court. Therefore, the special master, in accordance with her “complete jurisdiction,” was entitled to review the pleadings as well as any evidence to determine the valid interests in the property. This inquiry would necessarily include whether the foreclosure sale was invalid because Howe failed to provide 60-days notice to Old Roswell.
2. Appellants also contend that Cherokee Bank is estopped from asserting that title reverted to Old Roswell under Howe’s security deed because this specific issue was not raised prior to the foreclosure sale. However, in order to have a valid claim of estoppel, “the one who purchased. . . the property [must have been] unaware of the true nature of the title and . . . [must have] relied upon the silence of the true title owner. [Cit.]”
Clarence L. Martin, P.C. v. Chatham County Tax Commissioner,
3. Appellants next contend that Howe was not required to give Old Roswell 60-days notice before exercising his power of sale, because the promissory note executed by the parties states that “in
*562
case [of a] default[,] ... all unpaid principal and all interest. . . shall . . . become due and payable,
without demand or notice. . .
.” (Emphasis supplied.) Appellants argue that this provision in the promissory note that requires no notice directly conflicts with the provision in the security deed that requires 60-days notice. Therefore, according to Appellants, Howe only needed to satisfy the no-notice provision in the promissory note because “ ‘ “if the note and [security deed] contain conflicting provisions, the note will govern, as being the principal obligation.’” [Cits.]”
Finlay v. Oxford Constr. Co.,
In the present case, the special master concluded that the notice provisions in the promissory note and the security deed do not conflict and thus both are valid. The special master reasoned that the notice provision in the promissory note applies when the underlying debt is to be accelerated, and the notice provision in the security deed applies when the holder elects to exercise his right to conduct a non-judicial foreclosure sale pursuant to the power of sale contained in that instrument. “The construction of a contract is a question of law for the court.” OCGA § 13-2-1. Where the language of a contract “is undisputed, but the meaning of that language is in dispute[,] . . . ‘it remains the duty of the . . . court to look to the language of the contract with a view to effectuating the intent of the parties.’ [Cit.]”
Sewell v. Hull/Storey Development,
As the special master noted, the notice provisions in the note and the security deed contain differing language. The note refers to a default in any of the payments on the debt evidenced by the note and specifies that Howe may, if there has been a default, demand that “all unpaid principal and all interest then accrued on principal or interest... [be] due and payable.” In short, this clause provides the procedure for the acceleration of the underlying debt. However, the language in the security deed refers to when the underlying debt “becomes due by maturity in due course, or by reason of default as above provided” and then states that if, “after receipt of [60-days] notice and the opportunity to cure .. ., [Old Roswell] is unable to cure. . ., [Howe] . .. may sell the said property at auction....” Therefore, this language gives Howe power of sale authority and provides the procedure for exercising that authority. The note does not provide Howe with a power of sale, and the security deed does not give Howe the right to accelerate the underlying debt. Therefore, as the special master concluded, the separate notice provisions “are dealing with different points in the life cycle of the note and security deed” and thus do not conflict. Since the provisions do not conflict, both are enforceable.
Duncan v. Lagunas,
4. Appellants next contend that, if 60-days notice was required, then the letter sent by Howe to Old Roswell on September 4, 2008, constituted sufficient notice of default. Although this letter provided all of the information required by the notice provision in the security deed, it also stated that the property was being advertised for a foreclosure sale scheduled to take place on October 7, 2008. Furthermore, foreclosure notices were published in the Fulton County Daily Report on September 8, 15, 22, and 29, 2008. Therefore, this notice letter was,not sent 60 days before Howe initiated his right to foreclose on the property. Compare
Salahat v. Federal Deposit Ins. Corp.,
5. MPP Investments contends that, even if the foreclosure proceedings were not properly commenced by Howe, the title to the property purchased by MPP Investments at the foreclosure sale is still valid because MPP Investments qualifies as a bona fide purchaser for value pursuant to OCGA § 23-1-20. They cite
Ellis v. Ellis,
Moreover, OCGA § 23-1-20 protects only those purchasers who are “without notice of an equity.” As stated above, MPP Investments admitted that it had actual knowledge of the quiet title action filed by Cherokee Bank as well as the recorded lis pendens before purchasing the subject property at the foreclosure sale. Moreover, it is undisputed that Howe’s security deed was recorded with the maturity date clearly set forth, and, thus, MPP Investments was on constructive notice that the date of the reversion of the title interest, pursuant to OCGA § 44-14-80 (a) (1), had occurred before the foreclosure sale. In fact, MPP Investments admitted that it had constructive notice of this fact at the hearing before the special master. Finally, the purpose of the bona fide purchaser doctrine is to protect the innocent purchaser from the true title owner “ ‘who stands silently by and permits such purchaser to act to his own injury, or who is guilty of laches in not sooner asserting a mere secret equity.’ ”
Mathis v. Blanks,
6. MPP Investments next contends that the trial court erred by failing to grant its motion for an oral hearing on its exceptions to the special master’s report. However, OCGA § 23-3-67 “does not require a trial court ... to conduct a hearing before adopting the special master’s report. . . [and does not require] a trial court... to hear exceptions to a special master’s report. ...”
Steinichen v. Stancil,
Judgment affirmed.