Las Colinas Apartments, LLC v. Fannie Mae
| Decision Date | 12 October 2022 |
| Docket Number | A22A0912 |
| Citation | 365 Ga.App. 584,879 S.E.2d 686 |
| Parties | LAS COLINAS APARTMENTS, LLC et al. v. FANNIE MAE. |
| Court | Georgia Court of Appeals |
David Christopher Hanson, Weathington, Atlanta, Curtis E. Anderson, Downey & Cleveland, for Appellant.
Kimberly Ann Rizzotti, Jennifer J. Pierce, Aldridge Pite, for Appellee.
This case is a deficiency action, subsequent to the confirmation of a foreclosure. The case is now before us a second time.
In the earlier appeal we reversed a summary judgment granted to the debtors, Las Colinas Apartments, LLC, the borrower, and Allen Gross, a guarantor. Fannie Mae v. Las Colinas Apts. , 346 Ga. App. 867, 815 S.E.2d 334 (2018). We held that the debtors had defaulted and that they are both personally liable for the deficiency. Id. at 869 (1), 815 S.E.2d 334. We went on to hold, "According to the undisputed evidence, in the form of an affidavit of Roy Miller, a senior asset manager for Fannie Mae, the deficiency amount was $9,863,458.55." Id. at 873 (2), 815 S.E.2d 334. We "remand[ed] this case for the trial court to enter summary judgment in favor of Fannie Mae on liability" and for that court "to determine damages, including any interest and attorney fees." Id. at 873-874 (2), 815 S.E.2d 334. On remand, the trial court entered a final judgment in the amount of $10,224,348.24.
The debtors now argue that the trial court erred by entering summary judgment sua sponte. We do not agree with the debtors’ characterization of those proceedings. The proceedings below on remand reflect an unexceptionable exercise of the trial court's discretion to execute our direction "to determine damages, including any interest and attorney fees." Fannie Mae , 346 Ga. App. at 874 (2), 815 S.E.2d 334.
The debtors also argue that the trial court should have stricken the Miller affidavit, which we had cited in our earlier opinion. They contend that it was based on hearsay and failed to attach the records it referenced. But they did not timely raise those arguments, so they are waived. Moreover they are without merit.
Finally they argue that the evidence regarding the amount of damages was disputed and thus did not support the judgment. That argument rests in part on their attacks on the Miller affidavit. The debtors also point to a loss-sharing agreement between Fannie Mae and the original lender; but under the terms of the debtors’ security deed, the loss-sharing agreement does not reduce their indebtedness. Finally, the debtors contend that a prepayment penalty is precluded by the terms of the loan documents; but this argument is foreclosed by our prior opinion.
So we affirm.
The record shows that the debtors borrowed $12.5 million from HSBC Realty Credit Corporation. HSBC assigned the loan to Fannie Mae. The debtors defaulted on the loan, and Fannie Mae foreclosed on the property securing it.
In 2015, Fannie Mae sued the debtors for a deficiency judgment after confirmation of the foreclosure sale. In 2017, Fannie Mae moved for summary judgment. It argued that it was entitled to damages of $9,863,458.55, the amount due on the loan, plus $230,778.77, the costs and attorney fees incurred to the date of the filing of the motion.
The debtors filed a cross-motion for summary judgment. They also filed a response to Fannie Mae's motion for summary judgment. In their response, the debtors argued that Fannie Mae was not entitled to summary judgment on liability; that Fannie Mae had misrepresented the amount of damages; and that Fannie Mae was not entitled to attorney fees.
The trial court conducted a hearing on the summary judgment motions. Fannie Mae argued the amount of damages to which it was entitled, pointed to its evidence of the damages incurred, addressed the debtors’ argument for a reduction of damages, stated that it had incurred an additional $43,581.09 in fees, and presented its invoices. The debtors argued that particular documents showed that Fannie Mae's damages should be reduced for various reasons.
The trial court denied Fannie Mae's motion and granted the debtors’ motion. Fannie Mae appealed.
In Fannie Mae v. Las Colinas Apts. , 346 Ga. App. at 867, 815 S.E.2d 334, "we reverse[d] the order of the trial court and remand[ed] the case for proceedings consistent with [that] opinion." Id. at 867-868, 815 S.E.2d 334. As detailed above, we directed the trial court to enter summary judgment in favor of Fannie Mae on liability and to determine damages. Id. at 873-874 (2), 815 S.E.2d 334. We held that Fannie Mae had "met its burden of proof of showing the amount of loss in a manner in which the trial judge could calculate the amount of the loss with a reasonable degree of certainty[,]" id. at 873 (2), 815 S.E.2d 334 (citation and punctuation omitted), and that "[a]ccording to the undisputed evidence ... the deficiency amount was $9,863,458.55." Id.
On April 16, 2019, after the remittitur had been filed in the trial court, Fannie Mae filed a proposed final order and judgment. This document is not included in the appellate record, but the parties and the trial court refer to the proposed final order several times and the debtors filed a "Response Brief in Opposition to Plaintiff's Final Order and Judgment." The trial court entered a notice of hearing, stating that the court would conduct a hearing "concerning Plaintiff's Proposed Final Order and Judgment, and the Defendant[s’] Response Brief in Opposition to Plaintiff's Final Order and Judgment."
At that hearing, the trial court pondered whether, pursuant to our opinion directing the trial court "to determine damages," he could simply enter judgment for Fannie Mae or whether the debtors were entitled to a trial or hearing. Ultimately, the court did not decide the issue and instead ordered 60 days of additional discovery to "give [the debtors] some discovery if there's an issue or fact that [the court] had to look at."
Not much happened in the case for almost two years. Eventually, a new judge was assigned to the case, and in September 2021, he entered an order clarifying that discovery had ended. He also denied the debtors’ motion to strike the affidavit of Roy Miller, which Fannie Mae had submitted in 2017 on the issue of damages in support of its motion for summary judgment and which, in our prior opinion, we referred to as undisputed evidence of the deficiency amount. 346 Ga. App. at 873 (2), 815 S.E.2d 334. The court concluded that he was "in a position to ‘determine damages’ as was directed by the Court of Appeals." He noted that Fannie Mae had "argued that the [c]ourt should rule on the pleadings" while the debtors had "argued that more is required." The court stated that "[w]hile [he was] inclined to rule on the motion for summary judgment as to damages based upon the existing record, [he was] choosing to honor the promise to reconvene that [the previous judge had] made on July 23, 2019." So the court directed the parties to appear "for a hearing on the issue of whether or not [d]efendants have a right to a full damages hearing, jury trial, or bench trial." The court stated that "[s]ubsequent to the hearing, the [c]ourt will either issue a ruling on summary judgment as to damages, or schedule additional proceedings as urged by [d]efendants."
At that hearing, the debtors argued that they were entitled to a jury trial, a bench trial, or a hearing on the issue of damages. They argued that issues of fact remained regarding the calculation of damages. They relied on a loss-sharing agreement Fannie Mae had with HSBC, the original lender that had assigned the security deed to Fannie Mae. And they challenged a prepayment penalty in the parties’ contract. Their attorney stated that their arguments were set out in two briefs: their brief in opposition to Fannie Mae's proposed final judgment and their brief supporting their motion to strike the Miller affidavit.
Counsel for Fannie Mae responded that the debtors had not "confronted Fannie Mae's prima facie evidence in the record with evidence of their own." She relied on the facts that the loss-sharing agreement between Fannie Mae and HSBC was not in the record and that the security deed expressly stated that the debtors were not to receive the benefits of any loss-sharing agreement. Counsel for Fannie Mae listed the affidavits on which it relied to show that the evidence of its damages was undisputed.
The trial court concluded that he would issue an order on damages. He observed that our earlier opinion foreclosed some of the debtors’ arguments and that Fannie Mae's damages were "just a matter of doing the math based upon the contract." Ten days later, the trial court entered the final order awarding Fannie Mae $10,224,348.24, consisting of a judgment of $9,863,458.55, the amount we had found in the earlier appeal to be undisputed, plus $360,889.69 in attorney fees pursuant to the terms of the loan documents. The debtors filed this appeal.
The debtors argue that the trial court erred by sua sponte granting summary judgment to Fannie Mae after remand. We disagree.
At the outset, we reject the debtors’ characterization of the trial court's order as the sua sponte grant of summary judgment. Instead, we hold that the trial court's order was an unexceptionable exercise of his discretion to execute our direction "to determine damages, including any interest and attorney fees." Fannie Mae , 346 Ga. App. at 874 (2), 815 S.E.2d 334. See OCGA § 5-6-10 ( ).
"Absent any other directive by this [c]ourt, when this [c]ourt vacates and remands a case ‘for proceedings’ or ‘for further proceedings’ on an issue, [as we did here,] the trial court is obligated to hold a hearing or, at the very least, allow the parties to submit...
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