Najarian Capital, LLC v. Federal National Mortgage Association ( 2020 )

SECOND DIVISION
MILLER, P. J.,
RICKMAN and REESE, 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
March 6, 2020
In the Court of Appeals of Georgia
A19A2417, A19A2473. NAJARIAN CAPITAL, LLC v. FEDERAL
NATIONAL MORTGAGE ASSOCIATION (two cases).
REESE, Judge.
Najarian Capital, LLC (“the Appellant”) appeals from orders of the Superior
Court of Fulton County, which, in two separate but related actions for, inter alia,
specific performance, granted motions to dismiss filed by the Federal National
Mortgage Association (“the Appellee”). Because these appeals involve essentially the
same facts and questions of law, we consider them together. For the reasons that
follow, we affirm.
The facts are undisputed. Viewed in the light most favorable to the non-
movant,1 in 2018, according to the Appellant’s complaints, the Appellee conducted
1
See Atlanta Dev. Auth. v. Ansley Walk Condo. Assn., 350 Ga. App. 584, 586
(829 SE2d 858) (2019).
non-judicial foreclosure sales on two residential properties, one located on Gwendale
Drive (“Property I”) and the other property located on Hobgood Road (“Property II”).
The Appellant was the highest bidder on both Property I and Property II at separate
foreclosure sales that took place in 2018. Within the 30-day time periods for each of
the sales, and before the deeds were delivered to the Appellant, the Appellee
rescinded the sales of Property I and Property II2 pursuant to OCGA § 9-13-172.1 (d).
After each of the rescissions, the Appellant contacted the Appellee and
requested documentation that OCGA § 9-13-172.1 (d) applied. The Appellant filed
two separate lawsuits against the Appellee alleging, inter alia, breach of contract, and
sought specific performance and declaratory judgments of due process violations. The
Appellee filed motions to dismiss in each case. After a consolidated motions hearing,
the trial court dismissed the Appellant’s complaints in separate orders. These appeals
followed.
2
According to the Appellant, the reasons given by the Appellee for the
rescissions were that “the borrower reinstated the loan[ ]” for Property I and that “the
current owner was not notified of the sale[ ]” for Property II.
2
“We note that our standard of review of a trial court’s ruling on a motion to
dismiss is de novo.”3 Further, [w]e construe the pleadings in the light most favorable
to the nonmoving party with any doubts resolved in that party’s favor.”4 OCGA § 9-
13-172.1 provides, as follows:
(a) As used in this Code section, “eligible sale” means a judicial or
nonjudicial sale that was conducted in the usual manner of a sheriff’s
sale and that was rescinded by the seller within 30 days after the sale but
before the deed or deed under power has been delivered to the
purchaser.
(b) Upon recision of an eligible sale, the seller shall return to the
purchaser, within five days of the recision, all bid funds paid by the
purchaser.
(c) Where the eligible sale was rescinded due to an automatic stay
pursuant to the filing of bankruptcy by a person with an interest in the
property, the damages that may be awarded to the purchaser in any civil
action shall be limited to the amount of the bid funds tendered at the
sale.
(d) Where the eligible sale was rescinded due to:
(1) The statutory requirements for the sale not being fulfilled;
(2) The default leading to the sale being cured prior to the sale; or
3
Schwab v. Jackson, 348 Ga. App. 457, 463 (823 SE2d 546) (2019) (citation
omitted).
4
Bobick v. Community & Southern Bank, 321 Ga. App. 855, 856 (743 SE2d
518) (2013) (citation and punctuation omitted).
3
(3) The plaintiff in execution and the defendant in execution having
agreed prior to the sale to cancel the sale based upon an enforceable
promise by the defendant to cure the default, the damages that may be
awarded to the purchaser in any civil action shall be limited solely to the
amount of the bid funds tendered at the sale plus interest on the funds at
the rate of 18 percent annually, calculated daily. Notwithstanding any
other provision of law, specific performance shall not be a remedy
available under this Code section.
With these guiding principles in mind, we now turn to the Appellant’s specific claims
of error.
A19A2417
In several enumerated errors, the Appellant argues that the trial court
misapplied the burden of proof and production to its claims and utilized the incorrect
standard in granting the Appellee’s motion to dismiss regarding the foreclosure sale
of Property I.
1. The Appellant argues that the trial court’s dismissal of its motion for
declaratory judgment as to Property I violated the Due Process Clause of the Georgia
Constitution. The Appellant also argues that the trial court erred in granting the
Appellee’s motion to dismiss by “misplac[ing the] burden of proof and production[,]”
4
as to its claims, finding that OCGA § 9-13-172.1 did not require evidence that a
qualifying rescission occurred.
As an initial matter, the trial court properly determined the statutory question
before considering the related constitutional issue.5 It its order, the trial court clearly
determined that statutorily, OCGA § 9-13-172.1 did not require any “‘documentary
proof’ or any type of “reasonable evidence” that a rescission qualifying under the
statute had occurred. Because we also resolve this case on statutory grounds, we need
not address the Appellant’s constitutional arguments.6
It is well settled that
[w]hen we consider the meaning of a statute, we must presume that the
General Assembly meant what it said and said what it meant. To that
end, we must afford the statutory text its “plain and ordinary meaning,”
we must view the statutory text in the context in which it appears, and
we must read the statutory text in its most natural and reasonable way,
as an ordinary speaker of the English language would. [I]f the statutory
5
See Deal v. Coleman, 294 Ga. 170, 172 (1), n. 7 (751 SE2d 337) (2013)
(noting that, when presented with statutory and constitutional questions, courts
should first try to resolve the matter on statutory grounds).
6
See id.5
text is “clear and unambiguous,” we attribute to the statute its plain
meaning, and our search for statutory meaning is at an end.7
Our interpretation of a statute must conform with common sense and sound
reasoning.8 “In this sense, a statute should be read according to its natural and most
obvious import of the language without resorting to subtle and forced constructions
for the purpose of either limiting or extending its operation.”9
The legislature’s intent in enacting OCGA § 9-13-172.1 was “to create a
mechanism to give homeowners every opportunity to cure a default and avoid the
harmful and disturbing effects of foreclosure.”10 In interpreting the damages portion
of OCGA § 9-13-172.1 (d), the Georgia Supreme Court stated that according to the
statute’s preamble, the statute was enacted “to address the limitation of damages in
civil actions by purchasers for property sold in certain judicial and certain nonjudical
sales that are later rescinded[, and] to provide for related matters; to repeal conflicting
7
Deal, 294 Ga. at 172-173 (1) (a) (citations and punctuation omitted).
8
See Muscogee County Bd. of Tax Assessors v. Pace Indus., 307 Ga. App. 532,
535 (705 SE2d 678) (2011).
9
Id. (punctuation and footnote omitted).
10
JIG Real Estate v. Countrywide Home Loans, 289 Ga. 488, 492 (2) (b) (712
SE2d 820) (2011).
6
laws; and for other purposes.”11 The General Assembly did not choose to require
either party to provide documentary proof of a rescission under OCGA § 9-13-172.1
to the other party, although it possessed the power to do so.12 Despite the Appellant’s
arguments to the contrary, this does not prevent a party alleging a violation of this
statute from introducing evidence that a party violated the statute. For example, if the
Appellant had obtained information from sources other than the Appellee that the
rescission of Property I did not occur under OCGA § 9-13-172.1, it would have been
within its right to bring an action for damages.13
11
Id. at 492 (2) (d) (citation and punctuation omitted); see Holcomb v. Long,
329 Ga. App. 515, 518 (1), n. 15 (765 SE2d 687) (2014) (“As a part of an act passed
by the General Assembly and approved by the governor, the preamble of a statute
may properly be considered by our courts to the extent that it sheds light on the
meaning of the substantive terms contained in the statute.”) (citation omitted).
12
See Sears v. State of Ga., 232 Ga. 547, 554 (3) (208 SE2d 93) (1974) (“The
General Assembly is “absolutely unrestricted in its power to legislate, so long as it
does not undertake to enact measures prohibited by the State or Federal
Constitution.”) (citations omitted).
13
See Stowers v. Branch Banking & Trust Co., 317 Ga. App. 893, 893-894
(731 SE2d 367) (2012) (failure to comply with the statutory requirements of OCGA
§ 9-13-172.1 may result in an award of damages).
7
Based on the foregoing, the trial court properly found that OCGA § 9-13-172.1
did not require the seller to provide the buyer with reasonable documentary proof
evidencing that a qualifying event under subsection (d) of the statute occurred.14
2. The Appellant argues that the trial court erred in dismissing its claim for
specific performance under OCGA § 9-13-172.1 (d). As explained fully in Division
1, supra, the trial court properly dismissed the Appellant’s claim for declaratory
judgment, thus this enumeration of error is moot.
A19A2473
3. Mirroring the argument addressed in Division 1, supra, the Appellant
contends that the trial court misapplied the burden of proof and production regarding
its claims and utilized the incorrect standard in granting the Appellee’s motion to
dismiss as to the foreclosure sale of Property II. For the reasons fully explained in
Divisions 1 and 2, supra, the trial court did not err in dismissing the Appellant’s
motion for declaratory judgment regarding Property II.
Judgments affirmed. Miller, P. J., and Rickman, J., concur.
14
See Stowers, 317 Ga. App. at 893-894.
8