MOORE v. BANK OF FITZGERALD

Citation Codes

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Docket Number

S95A2009, S95A2010

Attorney(S)

Anthony J. Solari III, for appellants. Mills Chasteen, Ben B. Mills, Jr., for appellees.

Judges

CARLEY, Justice.

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Smart Summary

Factual and Procedural Background

Appellants Pettice, Edna, and Sharon Moore executed security deeds to certain real property in favor of appellee Bank of Fitzgerald as security for loans. The Bank was granted a power of sale in the event of default. Upon appellants' default, the Bank foreclosed and executed deeds under its power of sale. The appellants then filed suit alleging the foreclosures were unlawful and sought damages or cancellation of the deeds under power. They also filed notices of lis pendens. The Bank moved to cancel these notices, and the trial court granted the Bank's motion. The appellants appealed from this collateral order.

Legal Issues Presented

Whether the trial court erred in granting the Bank's motion to cancel the appellants' notices of lis pendens under OCGA § 44-14-610.
Whether the Bank's estoppel argument was relevant to the motion to cancel the notices of lis pendens.

Arguments of the Parties

Appellants' Arguments

The notices of lis pendens were properly filed because the suit involved real property directly and sought equitable relief to cancel the Bank's deeds under power.
The foreclosure was unlawful, justifying the filing of the notices of lis pendens to protect their interests in the real property.

Appellee's Arguments

The Bank argued that the trial court's cancellation of the notices of lis pendens was correct based on an estoppel theory.
They contended that estoppel barred appellants from maintaining the notices, asserting it as a defense to the claims for cancellation of the deeds under power.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Scroggins v. Edmondson, 250 Ga. 430 (1982)	Defines when a notice of lis pendens is authorized under OCGA § 44-14-610; the property must be directly involved in the litigation.	Used to establish that the real property was involved in the litigation, making the lis pendens appropriate at this stage.
Kenner v. Fields, 217 Ga. 745 (1962)	Clarifies the meaning of "involved" realty in a suit for lis pendens purposes.	Supported the interpretation that only realty directly brought into litigation qualifies for lis pendens protection.
Jay Jenkins Co. v. Financial Planning Dynamics, 256 Ga. 39 (1986)	Provides example of suits involving real property where cancellation of prior conveyance is sought, justifying lis pendens.	Confirmed appellants' claims as classic examples involving real property and that the lis pendens should not have been canceled at this stage.
Curl v. First Fed. Sav. &c. Assn. of Gainesville, 243 Ga. 842 (1979)	Supports equitable relief in suits to cancel deeds under power.	Reinforced appellants' right to pursue cancellation of the deeds under power.
Hall v. Robinson, 165 Ga. App. 410 (1983)	Supports equitable relief in foreclosure-related disputes involving real property.	Used to affirm that appellants have standing to seek cancellation of the deeds under power.
Burgess v. Simmons, 207 Ga. 291 (1950)	Establishes that grantors of security deeds can seek equitable relief to cancel deeds executed under power.	Supported appellants' authority to seek cancellation of the Bank's deeds under power.

Court's Reasoning and Analysis

The court analyzed OCGA § 44-14-610, which authorizes a notice of lis pendens only when real property is "involved" in the litigation, meaning the property must be directly and actually brought into the suit with relief sought concerning it. The appellants' suit sought cancellation of the Bank's deeds under power, which is a classic example of litigation involving real property. Therefore, the notices of lis pendens were properly filed. The Bank's estoppel argument was deemed irrelevant to the motion to cancel the notices because estoppel is an affirmative defense related to the merits of the claim and not appropriate for resolving the lis pendens issue. The court emphasized that inquiries into the merits are reserved for summary judgment or trial. Thus, the trial court erred in granting the Bank's motion to cancel the notices of lis pendens because at this procedural stage, the real property was sufficiently involved in the litigation.

Holding and Implications

The judgments of the trial court granting the Bank's motion to cancel the appellants' notices of lis pendens are reversed.

The direct effect of this decision is to reinstate the appellants' notices of lis pendens, preserving their equitable interest in the real property pending resolution of the underlying claims. The court did not establish new precedent but clarified the proper application of OCGA § 44-14-610 and limited the use of estoppel arguments at the lis pendens cancellation stage.

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MOORE v. BANK OF FITZGERALD MOORE ET AL.

CARLEY, Justice.

In connection with loans from appellee Bank of Fitzgerald (Bank), appellants Pettice, Edna and Sharon Moore executed security deeds to certain real property. By these security deeds, the Bank, as grantee, was given the power of sale in the event of appellants' default. When appellants did default, the Bank foreclosed and executed deeds under its power of sale. Thereafter, appellants brought suit against the Bank and, alleging that the foreclosures were unlawful, they sought damages or, in the alternative, cancellation of the deeds under power. Appellants also filed notices of lis pendens which the Bank moved to cancel. After conducting a hearing, the trial court granted the Bank's motion to cancel appellants' notices of lis pendens and it is from that directly appealable collateral order that this appeal is taken. Scroggins v. Edmondson, 250 Ga. 430 (1) ( 297 S.E.2d 469) (1982).

Under OCGA § 44-14-610, a notice of lis pendens is authorized only as to a suit in which real property is "involved." This "refers only to the realty actually and directly brought into litigation by the pleadings in a pending suit and as to which some relief is sought respecting that particular property." Kenner v. Fields, 217 Ga. 745, 747 ( 125 S.E.2d 44) (1962), overruled on other grounds. Scroggins v. Edmondson, supra at 431, fn. 1.

"`A classic example of such a suit is one which seeks to have a prior conveyance of the property set aside or declared null and void. [Cit.]' [Cit.]" Jay Jenkins Co. v. Financial Planning Dynamics, 256 Ga. 39, 41 (1) ( 343 S.E.2d 487) (1986). Here, appellants do seek cancellation of the Bank's deeds under power. See Curl v. First Fed. Sav. c. Assn. of Gainesville, 243 Ga. 842, 843 (2) ( 257 S.E.2d 264) (1979); Hall v. Robinson, 165 Ga. App. 410 ( 300 S.E.2d 521) (1983). Appellants are authorized to pursue that form of equitable relief, since they are the grantors of the security deeds pursuant to which the Bank executed the deeds under power. Burgess v. Simmons, 207 Ga. 291 (3) ( 61 S.E.2d 410) (1950). Thus, appellants' wrongful foreclosure claims are "classic examples" of suits in which real property is "involved" within the meaning of OCGA § 44-14-610.

The Bank contends that the grant of its motion to cancel appellants' notices of lis pendens was correct under an estoppel theory. However, estoppel would be an affirmative defense to appellants' claims for cancellation of the Bank's deeds under power. OCGA § 9-11-8 (c). Thus, the Bank's estoppel theory relates to the merits of appellants' claim, an issue which has no relevancy to the Bank's motion to cancel appellants' notices of lis pendens. "[I]nquiries of that sort are reserved for a motion for summary judgment, a remedy [the Bank] remains free to pursue, [cit.]" Scroggins v. Edmondson, supra at 433 (2). See also Jay Jenkins Co. v. Financial Planning Dynamics, supra at 43 (5).

Although the Bank may ultimately prevail on the merits of appellants' claims to cancel the deeds under power, if it is appellants who ultimately prevail, then those deeds will be cancelled. It was error to grant the Bank's motion to cancel appellants' notices of lis pendens, since, "at this stage in the litigation, it cannot be said that the [realty conveyed by the Bank's deeds under power is] not `involved' in [this] litigation." Jay Jenkins Co. v. Financial Planning Dynamics, supra at 43 (4).

Judgments reversed. All the Justices concur.