Bac Home Loans Servicing, L.P. v. Wedereit

• Decision Date: 03 November 2014
• Docket Number: No. A14A0131.,A14A0131.
• Citation: 759 S.E.2d 867,328 Ga.App. 566
• Court: Georgia Court of Appeals
• Parties: BAC HOME LOANS SERVICING, L.P. f/k/a Countrywide Home Loans Servicing, L.P. v. WEDEREIT.

328 Ga.App. 566

759 S.E.2d 867

BAC HOME LOANS SERVICING, L.P. f/k/a Countrywide Home Loans Servicing, L.P.

v.WEDEREIT.

No. A14A0131.

Court of Appeals of Georgia.

July 8, 2014.

Reconsideration Denied July 29, 2014.

Certiorari Granted Nov. 3, 2014.

Monica K. Gilroy, Emily Hart Cobb, Tania Tuttle Trumble, Alpharetta, for Appellant.

Sam G. Nicholson, Augusta, for Appellee.

MILLER, Judge.

Brian Wedereit filed suit against BAC Home Loans Servicing, L.P. f/k/a Countrywide Home Loans Servicing, L.P. and Bank of America, N.A. (“BAC”) for breach of contract and wrongful foreclosure after BAC foreclosed on his home in Grovetown. BAC appeals from the trial court's partial grant of summary judgment to Wedereit on his claim for breach of contract based on BAC's failure to give notice prior to accelerating the loan and its denial of BAC's motion for summary judgment on Wedereit's claims for wrongful foreclosure, equitable relief, punitive damages and attorney fees, contending that (1) the trial court erred in sua sponte granting partial summary judgment to Wedereit; (2) the trial court erred in finding, as a matter of law, that there was no notice of the acceleration of the loan; and (3) the trial court erred in denying BAC summary judgment on Wedereit's claims for wrongful foreclosure, equitable relief, punitive damages and attorney fees. For the reasons that follow, we affirm the trial court's ruling.

On appeal from a grant or denial of summary judgment, we conduct a de novo review of the law and evidence. Rubin v. Cello Corp., 235 Ga.App. 250, 510 S.E.2d 541 (1998). In applying this standard of review, we view the evidence in the light most favorable to the nonmovant to determine whether a genuine issue of material fact exists and whether the moving party is entitled to judgment as a matter of law. Id.

So viewed, the evidence shows that on December 19, 2006, Wedereit purchased property located at 2011 Sylvan Lake Drive in Grovetown. Wedereit executed a note in the amount of $143,000 (“the Note”) in favor of SurePoint Lending, as well as a security deed (“the Deed”), pledging the property as collateral for the Note. Beginning May 2007, Wedereit was late in making his monthly mortgage payments, and starting in 2008, he began missing monthly payments. On January 5, 2009, the Note and Deed were transferred and assigned to Countrywide Home Loans Servicing, later renamed BAC. In May 2010, BAC referred the loan to a foreclosure firm, which sent Wedereit two letters giving notice that the loan was in default, the entire amount of the loan was due, and BAC intended to foreclose. On July 6, 2010, BAC purchased the property at a non-judicial foreclosure sale.

Wedereit filed suit against BAC for wrongful foreclosure, based on allegations that BAC did not own the note and had failed to give proper notice of the foreclosure sale under OCGA § 44–14–162.2, and breach of contract, based on BAC's failure to modify the terms of the mortgage under the federal Home Affordable Modification Program and failure to give pre-acceleration notice as required by the Deed. Wedereit sought damages, punitive damages, injunctive relief and attorney fees. As noted, the trial court sua sponte partially granted summary judgment to Wedereit on his claim for breach of contract based on BAC's failure to give notice prior to accelerating the loans, granted Wedereit leave to amend to state a claim for wrongful foreclosure based on the lack of pre-acceleration notice, and denied BAC's motion for summary judgment on Wedereit's claims for wrongful foreclosure, equitable relief, punitive damages and attorney fees. The trial court also partially granted summary judgment to BAC on Wedereit's claim for wrongful foreclosure based on BAC's ownership of the note and failure to give notice under the foreclosure statute, OCGA § 44–14–162.2, and on Wedereit's claim for breach of contract for failing to modify the loan. Wedereit does not appeal these rulings.

A dispossessory action was filed against Wedereit, but that action has been stayed pending the resolution of Wedereit's claims in this case. Wedereit is making payments on the property into the registry of the magistrate court as part of the dispossessory action.

1. BAC contends that the trial court erred in sua sponte granting partial summary judgment to Wedereit on the issue of pre-acceleration notice because Wedereit never raised the acceleration issue and therefore BAC had no opportunity to respond to this claim. We discern no error and therefore disagree.

The trial court has authority to sua sponte grant summary judgment and can grant summary judgment to the nonmoving party where the issues are the same as those involved in the movant's motion. Forsyth County v. Waterscape Svcs., LLC, 303 Ga.App. 623, 629(1), 694 S.E.2d 102 (2010). Such sua sponte grant of summary judgment, however, “must be proper in all other respects. This means that in addition to ensuring the record supports such a judgment, the trial court must ensure that the party against whom summary judgment is rendered is given full and fair notice and opportunity to respond prior to entry of summary judgment.” (Footnote omitted.) Tidwell v. Tidwell, 251 Ga.App. 863, 864, 554 S.E.2d 822 (2001).

Paragraph 22 of the Deed required BAC to give notice to Wedereit of the default, as well as the action required to cure the default, and give Wedereit at least 30 days to cure the default prior to accelerating the loan. Count II of Wedereit's Amended Complaint asserts breach of contract based on BAC's failure to comply with the requirements of paragraph 22 of the Deed. In its motion for summary judgment, BAC stated, “[i]n Count II of the Complaint, Plaintiff asserts a claim for breach of contract, this time defining the contract at issue as the Security Deed itself. Plaintiff alleges that Defendants, in initiating and completing the foreclosure, failed to comply with Paragraph 22 of the Security Deed—a provision that specifies the requirements for giving notice to the Borrower prior to the Lender's acceleration of the debt as the result of the Borrower's breach[.]”

BAC alleged in its statement of material facts in support of its motion for summary judgment that it advised Wedereit in June 2009 that any partial monthly payments would not be accepted, but BAC's accompanying affidavit made no mention of pre-acceleration notice. Moreover, in discovery, Wedereit requested “all notices” from BAC to Wedereit regarding the “right to cure default pursuant to paragraph 22 of the Security Deed.” BAC objected to this request as overly broad and unduly burdensome, but indicated that it would nonetheless provide to Wedereit's counsel any responsive documents.

At the hearing on BAC's motion for summary judgment, BAC argued—but presented no evidence—that in June 2009 Wedereit was given notice that the loan was in default and was being accelerated. At the same hearing, BAC argued that Wedereit alleged that BAC had breached the Deed by not giving proper notice.

As shown above, Wedereit clearly raised the issue of lack of notice of acceleration of the loan in his complaint. In moving for summary judgment, BAC responded to those allegations, although it failed to present any evidence on the issue, despite ample opportunity to do so. Thus, BAC was not deprived of the opportunity to be heard. See Builder Marts of America, Inc. v. Gilbert, 257 Ga.App. 763, 766(2), 572 S.E.2d 88 (2002) (no error in sua sponte granting summary judgment where party had ample opportunity to respond to claim and did so).¹

2. BAC also contends that the record establishes that it met the pre-acceleration notice requirements in the Deed because the letters sent in May 2010 by the foreclosure firm allowed Wedereit a period of over 30 days before the sale on July 6 to cure the default, and Wedereit made no attempt to cure his default. We disagree.

“The construction of a deed presents a question of law which this Court reviews de novo.” (Footnote omitted.) Second Refuge Church of Our Lord Jesus Christ, Inc. v. Lollar, 282 Ga. 721, 724(2), 653 S.E.2d 462 (2007).

Here, paragraph 22 of the Deed required BAC to give Wedereit notice specifying: “(a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any defense of Borrower to acceleration and sale.”

On May 28, 2010, the foreclosure firm sent a letter to Wedereit notifying him that the loan was in default (“the first letter”). The first letter advised Wedereit that the foreclosure firm had been retained to collect the debt, Wedereit owed $166,629.10, foreclosure proceedings against the property were possible, and Wedereit could dispute the debt. On the same day, the foreclosure firm sent a second letter to Wedereit (“the second letter”), notifying him that a failure to comply with the terms of the loan had created a default, the entire amount of the outstanding balance of the loan was due immediately, partial payment would not result in reinstatement or deceleration of the loan, and the property was to be sold at a non-judicial foreclosure sale on July 6, 2010. The second letter also included a copy of the published Notice of Sale.

The first and second letter gave Wedereit notice that he was in default, but the letters advised Wedereit that he owed the full accelerated amount of the loan, $166,629.10. Neither letter gave Wedereit notice of the action required to cure the default, the date by which to cure, that failure to cure would result in acceleration, or that Wedereit had a...