Cross v. Wilmington Trust, Nat'l Ass'n

• Citation: 860 S.E.2d 212,360 Ga.App. 747
• Decision Date: 01 July 2021
• Docket Number: A21A0545
• Court: Georgia Court of Appeals
• Parties: CROSS et al. v. WILMINGTON TRUST, NATIONAL ASSOCIATION.

360 Ga.App. 747

860 S.E.2d 212

CROSS et al.

v.WILMINGTON TRUST, NATIONAL ASSOCIATION.

A21A0545

Court of Appeals of Georgia.

July 1, 2021

Reconsideration Denied July 15, 2021

James David Key, Atlanta, for Appellant.

McLain & Merritt, Tania Rachel Tuttle, Alpharetta, Sarah C. Monico, for Appellee.

Pipkin, Judge.

Wilmington Trust, National Association, Solely as Trustee for MFRA Trust 2014-2 ("Wilmington" or "Appellee"), sued Carlton Cross and Rhonda Cross (collectively "the Crosses" or "Appellants") – who own a piece of property as joint tenants – seeking to reform a security deed on the grounds of mutual mistake, declaratory judgment, equitable relief and equitable subrogation.¹ Wilmington moved for partial summary judgment on the declaratory judgment and equity claims; which the trial court granted on the declaratory judgment claim only, concluding that Wilmington was entitled to a declaration that its purchase money security deed is a first priority lien against the entirety of the property at issue, including the interest of Carlton Cross. On appeal, the Crosses argue that the trial court erred in granting summary judgment because (1) there are material facts in dispute; (2) the affidavits Appellee submitted in support of summary judgment fail to comply with OCGA § 9-11-56 (e) ; and (3) laches precludes relief.² For the reasons set forth below, we reverse.

A trial court may grant summary judgment when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. We review a grant or denial of summary judgment de novo and construe the evidence in the light most favorable to the nonmovant.

(Citations and punctuation omitted.) GMAC Mtg., LLC v. Pharis , 328 Ga. App. 56, 57, 761 S.E.2d 480 (2014).

Construing the evidence and all inferences and conclusions therefrom most favorably to the Crosses as the non-moving party, the record shows that Carlton and Rhonda Cross purchased the property at issue, 2304 Malloy Circle, Conyers, Georgia (the "Property") on October 19, 2007, from VFS Residential Properties, Inc. Rhonda Cross secured a loan ("Purchase Money Loan") for $494,000 for the purchase of the Property through Bayrock Mortgage. Rhonda Cross was the sole applicant and borrower on the loan; on October 19, 2007, she executed a security deed in favor of Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee for Bayrock ("Security Deed"). The Security Deed was prepared by Bayrock and recorded on October 24, 2007.³ While the warranty deed conveyed title to the Crosses jointly, Carlton Cross was not a party to the Security Deed, ostensibly leaving Appellee with a security interest in only Rhonda Cross's half of the Property.

1. Appellants argue that the affidavits in support of Wilmington's motion for summary judgment were not based on personal knowledge as required by OCGA § 9-11-56 (e).

OCGA § 9-11-56 (e) governs the use of affidavits on summary judgment and provides in relevant part, "[s]upporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in the evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." In support of its motion for summary judgment, Wilmington submitted affidavits of Ed Downs, the closing agent for the Purchase Money Loan, and Naomi Booker, a foreclosure specialist.

a. Downs’ affidavit affirmatively states that it is made upon personal knowledge. This statement is generally sufficient to meet the requirements of OCGA § 9-11-56 (e). Langley v. National Labor Group, Inc. , 262 Ga. App. 749, 751 (1), 586 S.E.2d 418 (2003). Additionally, Downs avers that he acted as the closing agent for the closing of the Purchase Money Loan and several exhibits attached bear the name of his law firm and/or Downs’ signature. Accordingly, we find no error in the admission of the Downs affidavit.

b. We look next to the Booker affidavit. Unlike the Downs affidavit, Booker's affidavit does not state that it is based on personal knowledge. Quite the opposite, it avers that it is made upon "knowledge gained from review of the Complaint and all of its incorporated exhibits, as well as the loan history" of Wilmington for the loan at issue, and that she is employed as a "foreclosure specialist" for Fay Servicing. The affidavit does not include her job description or otherwise indicate that she is familiar with the lending practices of Bayrock, nor does it explain how Fay Servicing is connected to this legal action.⁴ Yet, along with several other conclusions, Booker avers that "[t]he Purchase Money Loan was advanced by Bayrock with the understanding that Bayrock would be obtaining a valid first priority lien on the entirety of the Property, including the interest of Mr. Cross"; that "[t]he Purchase Money Loan would not have been advanced without being provided, in exchange, a valid first priority purchase money security interest on the entirety of the Property"; and that "[b]ut for the Purchase Money Loan, Mr. and Ms. Cross would not hold title to the Property."

"Although an affidavit need not expressly state that it is based on personal knowledge, it must at least reflect that its contents are rooted in the affiant's personal knowledge and observation." Shepard v. Winn Dixie Stores , 241 Ga. App. 746, 748 (1), 527 S.E.2d 36 (1999).

[I]f it appears that any portion of the affidavit was not made upon the affiant's personal knowledge, or if it does not affirmatively appear that it was so made, that portion is to be disregarded in considering the affidavit in connection with the motion for summary judgment. Affidavits which simply repeat hearsay are not based on personal knowledge and have no probative value. As such, they are inadmissible in summary judgment proceedings.

(Citations and punctuation omitted.) Langley , 262 Ga. App. at 751-752 (1), 586 S.E.2d 418.

Booker's affidavit is clearly a recitation of the allegations and conclusions contained in the complaint, and nothing about the contents of the affidavit indicates that Booker has personal knowledge of the statements contained therein. While business records are generally an exception to the hearsay rule, see D'Agnese v. Wells Fargo Bank , 335 Ga. App. 659, 662, 782 S.E.2d 714 (2016), nothing in the Booker affidavit reflects that the documents attached are business records or that she is a records custodian or otherwise familiar with the record-keeping practices of Bayrock, Wilmington, or Fay Servicing. Accordingly, we find that Booker's affidavit does not meet the personal knowledge requirement of OCGA § 9-11-56 (e) and is not competent evidence to support Wilmington's summary judgment motion. See JPMorgan Chase Bank v. Cronan , 355 Ga. App. 556, 560-561 (1) (b), 845 S.E.2d 298 (2020) (affidavit based on review of documents without explanation of job description to establish knowledge of business practices was properly excluded); Aquanaut Diving & Eng., Inc. v. Guitar Center Stores, Inc. , 324 Ga. App. 570, 574 (2), 751 S.E.2d 175 (2013) ("[W]here an affidavit contains conclusions which would not be admissible in evidence, the conclusions are to be disregarded in considering the affidavit in connection with the motion for summary judgment.").

While the trial court does not expressly state that it relied on the Booker affidavit, this affidavit necessarily underpins the trial court's grant of summary judgment. Wilmington, as movant, had "the burden of establishing the absence or non-existence of any defense raised by the defendant." (Citation and punctuation omitted.) Greenstein v. Bank of the Ozarks , 326 Ga. App. 648, 649 (1), 757 S.E.2d 254 (2014). In response to Wilmington's motion for partial summary judgment, Appellants argued, inter alia, there was "a disputed material fact as to whether Wilmington Trust owns [Purchase Money Loan] or has standing to maintain this suit and as to whether [Penny Mac] could have even brought this suit."⁵

"Every action shall be prosecuted in the name of the real party in interest." OCGA § 9-11-17 (a). Wilmington maintains that it has standing to bring this action as the assignee of Bayrock. It is true that promissory notes are negotiable instruments that can be transferred, and an assignee assumes all the rights of the assignor to enforce the instrument. Cumberland Contractors, Inc. v. State Bank & Trust Co. , 327 Ga. App. 121, 123-124 (1), 755 S.E.2d 511 (2014). But it is only through the Booker affidavit and its exhibits, that Wilmington attempts to establish its successive relationship to Bayrock.⁶ Wilmington has presented no competent evidence that it is a successor to Bayrock which is necessary to prove an actual controversy that would justify declaratory relief. The Downs affidavit does not contain these or similar averments, and Wilmington has presented no competent evidence that it is a successor to Bayrock which is necessary to prove an actual controversy that would justify declaratory relief. See Erickson v. Bank of America , 345 Ga. App. 254, 257 (1), 812 S.E.2d 578 (2018) (declaratory judgment "is limited to those who are either parties to the original deed or are in privity with such original parties") (citation and punctuation omitted); see also Hutto v. CACV of Colorado, LLC , 308 Ga. App. 469, 707 S.E.2d 872 (2011) (summary judgment reversed where creditor presented insufficient evidence of an assignment); Greenstein, 326 Ga. App. at 652-653 (2), 757 S.E.2d 254 (summary judgment reversed where bank did not demonstrate that it became successor-in-interest to lender). Accordingly, the trial court erred in considering the Booker affidavit to establish Wilmington's status as a successor-in-interest to Bayrock.

2. The Crosses argue that there are material issues of fact in dispute which bars summary judgment. We agree.

As amended, Wilmington's complaint alleged that

[d]ue to mistake, Mr. Cross was not a party to the Security Deed, which was

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