Oconee Fed. Sav. & Loan Ass'n v. Brown

• Decision Date: 17 July 2019
• Docket Number: A19A0040
• Citation: 351 Ga.App. 561,831 S.E.2d 222
• Parties: OCONEE FEDERAL SAVINGS AND LOAN ASSOCIATION v. BROWN et al.
• Court: Georgia Court of Appeals

351 Ga.App. 561

831 S.E.2d 222

OCONEE FEDERAL SAVINGS AND LOAN ASSOCIATION

v.BROWN et al.

A19A0040

Court of Appeals of Georgia.

July 17, 2019

Certiorari Dismissed March 13, 2020

Nelson Mullins Riley & Scarborough, S. Wade Malone, Gregory Michael Taube, for Appellant.

Smith Welch Webb & White, John Philip Webb, Orion Gregory Webb, Miranda Noel Hanley, for Appellees.

McMillian, Presiding Judge.

Kenneth A. Brown and April M. Brown sued Oconee Federal Financial Corporation and Oconee Federal Savings and Loan Association (collectively, "Oconee Federal"), Brian C. Ranck, and Sanders, Ranck & Skilling P.C. (collectively "the Ranck defendants") alleging numerous causes of actions arising from the couple's failed attempt to modify certain loans and Oconee Federal's attempted foreclosure sale.¹ In a related appeal, Oconee Federal Savings and Loan Assn . v. Brown , 349 Ga. App. 54, 825 S.E.2d 456 (2019) (" Oconee I " ), this Court reversed the grant of an interlocutory injunction enjoining the foreclosure sale of the subject property owned by the Browns, upon finding that the Browns had not tendered to Oconee Federal the amount due under a home equity line of credit ("HELOC") agreement. Id. at 65, 825 S.E.2d 456.

Oconee Federal also filed a motion for summary judgment on its counterclaim for payment of the monies due under the loans and on the Browns’ substantive claims, the trial court's denial of which provides the basis for the present appeal. The trial court issued a certificate for immediate review, and Oconee Federal filed an application for an interlocutory appeal, which this Court granted. On appeal, Oconee Federal contends that the trial court's order erred in denying its motion for summary judgment on its counterclaim for payment of the balances on the underlying loans and in denying its motion for summary judgment as to the Browns’ claims.

Summary judgment is proper if the pleadings and evidence "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law[.]" OCGA § 9-11-56 (c). Following a trial court's grant or denial of summary judgment, we conduct a de novo review, construing all reasonable inferences in the light most favorable to the nonmoving party. Cochran v. Kendrick , 297 Ga. 655, 658 (2), 778 S.E.2d 1 (2015). "We do not resolve disputed facts, reconcile the issues, weigh the evidence, or determine its credibility, as those matters must be submitted to a jury for resolution." Tookes v. Murray , 297 Ga. App. 765, 766, 678 S.E.2d 209 (2009). Following our review and for the reasons set out below, we reverse.²

The Browns obtained a home loan for $136,000 from Oconee Federal in 2003 (the "2003 Loan") and a $40,000 HELOC from Oconee Federal in 2007.³ Both loans were secured by their residential property. In 2015, the Browns submitted loan modification applications for the 2003 Loan and the HELOC.⁴ The Browns alleged that during this period, Oconee Federal promised them that their loans would be modified and that they were instructed not to make loan payments while their loans were being considered for the modifications. The Browns made their last loan payments on the mortgage loan and HELOC in April 2015. Oconee Federal subsequently denied the loan modification applications in September 2015.

On December 17, 2015, the Browns sent a qualified written request ("QWR") letter to Oconee Federal's counsel, the Ranck firm, under the federal Real Estate Settlement Procedures Act, 12 USC § 2601 et seq. ("RESPA"), seeking certain information and documents related to the HELOC. On January 15, 2016, Oconee Federal, through counsel, responded to the request and advised the Browns that its internal investigation had not identified any inaccuracies in the credits and debits attributed to the Browns’ loans. The letter noted a "possible discrepancy" in how two payments were applied in October 2011 but explained that Oconee Federal would seek clarification from the Browns about how they intended the payments to be applied.

On January 29, 2016, after Oconee Federal initiated foreclosure proceedings under the HELOC and security deed, the Browns filed the first of three amended complaints, "seeking injunctive relief to enjoin the foreclosure and raising claims of wrongful foreclosure, breach of contract, and fraud." Oconee I , 349 Ga. App. at 57-58, 825 S.E.2d 456. Oconee Federal then cancelled the scheduled foreclosure, but resumed the foreclosure proceedings on March 2, 2018 because the Browns had failed to "repay their debt under the HELOC agreement in full by the maturity date of May 15, 2017." Id. at 58-59, 825 S.E.2d 456. The trial court, however, granted the Browns injunctive relief to stop the foreclosure sale upon the Browns’ tender of $2,700 into the trial court's registry.⁵

In their subsequent third amended complaint, the Browns alleged causes of action for: (1) breach of contract; (2) anticipatory repudiation; (3) breach of the duty of good faith and fair dealing; (4) violations of the Georgia Fair Lending Act ("GFLA"), OCGA § 7-6A-1 et seq. ; (5) fraud; (6) negligence; (7) violations of RESPA; (8) injunctive and declaratory relief; and (9) punitive damages and attorney fees. Oconee Federal filed a motion for summary judgment, which the trial court denied, stating only that "[t]his Defendant having filed a [m]otion for [s]ummary [j]udgment and after having considered all matters of record and oral argument by counsel, the Court hereby determines that there are genuine issues of material facts, and that the [m]otion should be DENIED." It is from that order that Oconee Federal appeals.

1. Oconee Federal first contends that the trial court erred in denying summary judgment as to its counterclaims for payment of the 2003 Loan and 2007 HELOC because Oconee Federal met its burden of establishing a prima facie case for payment on both loans, and the Browns failed to establish any defenses in response.⁶ The Browns maintain that Oconee Federal is estopped from collecting on the notes because the bank made it impossible to pay through its unequitable acts, including blocking online payments, refusing payments, and prematurely reporting the couple in default. The Browns characterize Oconee Federal's alleged actions and inactions as creating an equitable extension of the time required for payment of the loans. The Browns further assert that the subject loans are neither due nor enforceable and that questions remain regarding the amounts due.

It is undisputed that the Browns obtained a home loan from Oconee Federal in 2003 and a HELOC from Oconee Federal in 2007, and that both loans were secured by their residential property.⁷ The 2003 Loan provided that failure to make monthly payments would constitute a default and, that upon written notice and failure to cure within 30 days, Oconee Federal had the right to accelerate the loan. The HELOC also provided that failure to pay would constitute default and that the balance of the loan was due at the expiration of the 120 month draw period on May 10, 2017. It is further undisputed that the Browns had not made payments on either loan since May 2015.

"In a suit on a note, when signatures are admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defense." (Citation and punctuation omitted.) Heath v. Boston Capital Corp. Tax Credit Fund VIII , 253 Ga. App. 537, 538 (1), 559 S.E.2d 743 (2002). See also Braswell v. Bank of Early , 229 Ga. App. 445, 447, 494 S.E.2d 277 (1997. Upon review of the record, and construing the evidence in favor of the Browns, we find that Oconee Federal made the required prima facie showing to recover under the notes.

The Browns raise various defenses, including that Oconee Federal rejected tender, that the amount owed under the loans is disputed, and equitable estoppel, in that they had relied on Oconee Federal's promise to modify their HELOC loan. But in Oconee I , we found that those defenses were without merit in the context of considering whether the Browns were excused from the requirement that they tender payment on the HELOC. Oconee I , 349 Ga. App. at 65, 825 S.E.2d 456. Specifically, we found that "the Browns’ claim that the amount owed is in dispute does not excuse them from the requirement that they tender payment to Oconee Federal"; that the "tender must be continuous, and the Browns have not shown that they have tendered any payment to Oconee Federal after the HELOC debt matured or that Oconee Federal would have refused any such tender;" that "the Browns [are not] excused from the tender requirement based on their claims that Oconee Federal prevented them from paying their debt by denying their application to modify the HELOC and in reporting them as delinquent to credit agencies;" and that "[s]imilarly unavailing is the Browns’ related claim that Oconee Federal is estopped from collecting on the HELOC debt due to its purported promises regarding the application to modify the debt." (Citation and punctuation omitted.) Id. at 63-64, 825 S.E.2d 456.

Pursuant to OCGA § 9-11-60 (h), "[a]ny ruling by the Supreme Court or the Court of Appeals in a case shall be binding in all subsequent proceedings in that case in the lower court and in the Supreme Court or the Court of Appeals as the case may be." See Fulton-DeKalb Hosp. Auth. v. Walker , 216 Ga. App. 786, 788 (1), 456 S.E.2d 97 (1995). See also Hicks v. McGee , 289 Ga. 573, 577-578 (2), 713 S.E.2d 841 (2011) ("[A] ruling by the Supreme Court or the Court of Appeals in a case shall be binding in all subsequent proceedings in that case in the lower court and in the Supreme Court or the Court of Appeals, as the case may be. Georgia's appellate courts are required to adhere to the law of the case rule in all matters which they consider. ... [A]ppellate rulings remain binding as between parties to a case, so long as the evidentiary posture of the case remains unchanged[....