WHITE Et Al. v. GENS. , 348 Ga. App. 145 ( 2018 )

FIFTH DIVISION
MCFADDEN, P. J.,
RAY and RICKMAN, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
October 24, 2018
In the Court of Appeals of Georgia
A18A0992. WHITE et al. v. GENS.
RAY, Judge.
Nicholle Jeanette Gens, as Administrator of the Estate of April Gens, brought
this quiet title action against John Keith White and others (hereinafter collectively
referred to as “White”) asserting a claim of ownership regarding a certain residential
lot located in Forsyth County. In response to the petition, White counterclaimed for
reformation of the deeds in the chain of title to the property. After the trial court
found that Gens was equitably estopped from asserting an ownership interest in the
property, the trial court granted summary judgment to White and quieted title in his
favor. However, in Gens v. White, 299 Ga. 637 (791 SE2d 48) (2016), our Supreme
Court reversed the judgment of the trial court, holding that Gens was not equitably
estopped from asserting title to the property because she took no affirmative action
to mislead White into believing that he was entitled to the property. The Supreme
Court then remanded the case with direction that the trial court address the merits of
White’s reformation counterclaim. Id. at 638-639. Thereafter, on the parties’ cross-
motions for summary judgment with regard to reformation, the trial court denied
White’s motion for summary judgment and granted summary judgment to Gens. This
subsequent appeal ensued. For the reasons that follow, we reverse and remand with
direction.
1. White contends that the trial court erred in denying his motion for summary
judgment, and in granting summary judgment to Gens, on his counterclaim for
reformation of the deeds in the chain of title. Specifically, he argues that the trial
court erred in concluding that his failure to provide evidence as to “how or why the
alleged mistake occurred” was fatal to his counterclaim for reformation. We agree.
On appeal from the grant of summary judgment, the appellate court
conducts a de novo review of the evidence to determine whether there
is a genuine issue of material fact and whether the undisputed facts,
viewed in the light most favorable to the nonmoving party, warrant
judgment as a matter of law.
(Citation and punctuation omitted.) Bank of America v. Cuneo, 332 Ga. App. 73, 74
(770 SE2d 48) (2015). “On cross-motions for summary judgment, each party must
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show there is no genuine issue of material fact and that each, respectively, is entitled
to summary judgment as a matter of law; either party, to prevail by summary
judgment, must bear its burden of proof. (Citations and punctuation omitted.) Heiskell
v. Roberts, 342 Ga. App. 109, 112 (2) (a) (802 SE2d 385) (2017).
The evidence shows that April Gens obtained a loan from the Bank in 1999
which was secured by a security deed (the “1999 Security Deed”) which encumbered
4.3 acres of land, including all of what was later designated as Lot 7. April Gens later
obtained a second loan from the Bank in 2001 which was secured by another security
deed (the “2001 Security Deed”) which encumbered certain residential lots, including
Lot 7, that had been divided out of the original 4.3 acre tract of land. However, the
legal description for Lot 7 that was attached to the 2001 Security Deed mistakenly
provided a description for only part of Lot 7, which consisted of a 150-square foot
access strip used for boat-docking privileges.
April Gens later filed for bankruptcy and listed properties that were secured by
the 1999 and 2001 Security Deeds as property to be surrendered to the Bank, thereby
surrendering all of her ownership interest in Lot 7 to her creditor in the bankruptcy
proceedings. Additionally, April Gens specifically listed only her vehicle and her
personal residence located on another property not involved in this case as the
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“property to be retained” under her bankruptcy plan. After the bankruptcy court
specifically found that April Gens had no equity in Lot 7, it lifted the bankruptcy stay
with regard to the property and permitted the Bank to foreclose on it.
Following the foreclosure sale, however, the Bank recorded a cancellation of
the 1999 Security Deed, which had encumbered all of Lot 7, and conveyed Lot 7 to
White’s predecessor in title by a general warranty deed which incorporated the same
erroneous legal description of Lot 7 that was mistakenly provided in the 2001
Security Deed.
Under Georgia law, “[i]f the form of conveyance is, by accident or mistake,
contrary to the intention of the parties in their contract, equity shall interfere to make
it conform thereto.” OCGA § 23-2-25. “This statute applies when the form of
conveyance is a security deed.” (Citation and punctuation omitted.) Vibert v. Bank of
America, N.A., 327 Ga. App. 782, 783 (761 SE2d 162) (2014). “Where reformation
is sought on the ground of mutual mistake, it must, of course, be proved to be the
mistake of both parties.” (Citation and punctuation omitted.) Bank of America, supra
at 78 (2).
On motion for summary judgment, White presented the scriveners affidavit of
John D. Feagan, the attorney who had represented the Bank during April Gens’s 1999
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and 2001 loan closings. In his affidavit, Feagan attested that he was the one who had
prepared the 2001 Security Deed, that the 2001 Security Deed contained a scriveners
error in the legal description of Lot 7, and that both the Bank and April Gens intended
to secure the 2001 loan with all of Lot 7, not just the part of Lot 7 that was described
in the 2001 Security Deed. Thus, White has satisfied his burden on summary
judgment of establishing the existence and the mutuality of the mistake in the legal
description of Lot 7 that was provided in the 2001 Security Deed.
Conversely, Gens presented no evidence to rebut Feagan’s affidavit. In fact,
Feagan’s attestation as to the existence and the mutuality of the error in the 2001
Security Deed is actually supported by the deposition testimony of Nicholle Gens,
who testified that April Gens believed that all of her interest in Lot 7 had been lost
as a result of the bankruptcy and foreclosure proceedings. Furthermore, the mutuality
of the mistake is also supported by the evidence that White’s predecessor in title
purchased Lot 7 from the Bank and constructed a house on it for $360,000, a sum
which is only consistent with the Bank’s intended conveyance of the entirety of Lot
7; it is wholly inconsistent with a conveyance of “part of Lot 7” consisting of
approximately 150 square feet. White purchased Lot 7 and the house thereon from his
predecessor in title for $585,000, and White and his family have been continuously
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occupying the property for six and half years. April Gen’s conduct during this time
further supports the mutuality of the mistake in the 2001 Security Deed because she
took no action for years to stop the sale of the land, the construction of the house, and
White’s occupation of the property. In sum, the undisputed evidence in the record
leads to only one conclusion — that there was a mutual mistake in the legal
description of Lot 7 in the 2001 Security Deed that was foreclosed on by the Bank,
which created errors in the chain of title.
In denying White’s motion for summary judgment, and in granting summary
judgment to Gens, the trial court concluded that the lack of evidence as to how or why
the mistake was made in the 2001 Security Deed was fatal to White’s counterclaim
for reformation. This conclusion is incorrect. In reformation cases where the
mutuality of the mistake was sufficient or was undisputed by the evidence, we have
consistently held that the cause of the mistake is immaterial so long as the mistake is
common to both parties to the transaction and the non-complaining party will not be
prejudiced by the reformation. See Bank of America, supra at 78-80 (2) (sufficient
evidence established the mutuality of the mistake); DeGolyer v. Green Tree
Servicing, LLC, 291 Ga. App. 444, 447 (1) (662 SE2d 141) (2008) (affirming grant
of equitable reformation of security deed when evidence undisputed that both
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borrower and lender intended to secure loan with property). Accord Zaimis v. Sharis,
275 Ga. 532, 533 (1) (570 SE2d 313) (2002). Here, although Gens now contends that
the mistake in the 2001 Security Deed was not mutual, she has pointed to no evidence
to support her assertion. April Gens’s alleged expression of a previous desire to retain
Lot 7 for herself has no bearing on her subsequent decision to encumber the property
in exchange for the loans from the Bank. Had she not defaulted on the loans and
surrendered the property to her creditor in her bankruptcy proceedings, she might
have been able to retain Lot 7. Furthermore, we fail to see how Gens could be
prejudiced by the reformation of the deeds in the chain of title to the very property
that she voluntarily surrendered to her creditors during the bankruptcy years ago.
As Feagin’s undisputed scrivener’s affidavit, along with the other undisputed
evidence set forth above, establishes that there was a mutual mistake in the legal
description of Lot 7 in the 2001 Security Deed and that the true intention of the
parties was for the Bank to loan funds to April Gens and to take a security interest in
the entirety of Lot 7, the cause of the mutual mistake is immaterial.
Thus, the trial court erred in granting summary judgment to Gens and in
denying White’s motion for summary judgment on White’s reformation counterclaim.
Therefore, we reverse the judgment of the trial court and remand the case with
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direction that the trial court enter summary judgment in favor of White on his
counterclaim for reformation of the deeds in the chain of title.
2. Based on our holding in Division 1, we need not address White’s remaining
arguments.
Judgment reversed and case remanded with direction. McFadden, P. J., and
Rickman, J., concur.
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