DelPiano v. JPMorgan Chase Bank

• Decision Date: 04 May 2023
• Docket Number: A23A0564
• Parties: DELPIANO v. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION.
• Court: United States Court of Appeals (Georgia)

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DELPIANO v. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION.

No. A23A0564

Court of Appeals of Georgia, Third Division

May 4, 2023

DOYLE P. J., GOBEIL, J., and SENIOR APPELLATE JUDGE PHIPPS

PHIPPS, Senior Appellate Judge.

This case involving reformation of a security deed is before us for a fourth time. In 2021, the trial court entered final judgment reforming the deed and declaring that JPMorgan Chase Bank, N. A., has a superior interest in the subject property. Daniel David DelPiano, the purported property owner, appealed to this Court. JPMorgan moved to dismiss the appeal, claiming that DelPiano lacked standing because he did not own the property. We remanded the case for the trial court to resolve the standing issue, which it has now done adversely to DelPiano. He appeals again, but we agree with the trial court that he lacked standing, and we therefore affirm.

The relevant background facts are detailed in our opinion resolving the second appeal in this case, JPMorgan Chase Bank, N. A. v. DelPiano, 356 Ga.App. 354 (847 S.E.2d 369) (2020) ("DelPiano II"):

[I]n 2004, DelPiano and his wife Pamela decided to buy a home in Alpharetta . . . for $3.3 million. The property was purchased in Pamela's name, and she took out a $2.64 million loan from Washington Mutual Bank ("WaMu") to finance the transaction.

At the closing in March 2005, Pamela executed the necessary loan documents, including an adjustable rate note, through which she promised to repay the loan, and a security deed granting WaMu a security interest in the property. Pamela's signature on the security deed was notarized by the closing attorney. Signature lines for an "unofficial" witness, however, were inadvertently left blank during the transaction. . . . Despite the missing signature, the closing attorney recorded the security deed in the Fulton County deed records on April 1, 2005. Pamela began making monthly payments on the WaMu loan, but she stopped paying in March 2006, and the loan went into default.

DelPiano and Pamela divorced in May 2008. Pursuant to the parties' divorce settlement, DelPiano assumed sole responsibility for the outstanding balance of the loan, and Pamela quitclaimed her interest in the property to DelPiano in 2010. DelPiano, however, made no payments on the loan following the divorce.

WaMu owned the adjustable rate promissory note and related security deed until 2008, when WaMu was acquired by the Federal Deposit Insurance Company ("FDIC"). On September 25, 2008, the FDIC sold WaMu's assets including the note and security deed, to JPMorgan. According to JPMorgan, it discovered the missing signature on the security deed in 2011, through discussions with the bank's foreclosure counsel.

In 2015, a document assigning the FDIC's interest in the security deed to JPMorgan was recorded in the Fulton County deed records. Approximately one year later, on May 17, 2016 JPMorgan filed the instant action, seeking "to correct the inadvertent attestation omission" in the security deed and to obtain a declaration that the security deed "is valid, enforceable, and occupies a first priority security interest and lien position on the [p]roperty[.]" JPMorgan named several defendants including DelPiano (the property owner) and the United States of America (on behalf of the Department of Justice), which had filed restitution liens on the property relating to criminal proceedings against DelPiano.

Id. at 355-356.^[1] Pamela DelPiano was also named as a defendant.

The trial court granted judgment on the pleadings to JPMorgan and ordered that the security deed be reformed. DelPiano appealed,^[2] and we reversed, holding that Pamela's admissions by default could not bind him. DelPiano v. JPMorgan Chase Bank, N. A., 345 Ga.App. 151, 154-155 (812 S.E.2d 506) (2018) ("DelPiano I"). The trial court subsequently denied JPMorgan's motions for summary judgment and granted motions for summary judgment filed by DelPiano and the United States, ruling that JPMorgan's complaint was barred by the applicable statute of limitation. JPMorgan appealed, and we again reversed the trial court. DelPiano II, 356 Ga.App. 354. We ruled that JPMorgan's suit was not time-barred, id. at 356-358 (1), and we vacated the trial court's denial of JPMorgan's summary judgment motions and remanded for consideration of the arguments presented in those motions, id. at 359360 (3).

Following remittitur, JPMorgan filed a renewed motion for summary judgment. The trial court granted the motion and entered a final judgment reforming the security deed and declaring that JPMorgan has a superior interest in the subject property. DelPiano appealed. JPMorgan moved to dismiss the appeal, claiming that it had recently learned that DelPiano did not own the subject property and therefore lacked standing to appeal. Because the question of DelPiano's standing involved facts not in the record and required the submission of new evidence, we remanded the case to the trial court to make appropriate findings of fact and conclusions of law on that issue. DelPiano v. JPMorgan Chase Bank, N. A., Case No. A22A0373 (remanded Jan. 31, 2022) ("DelPiano III").

After the remittitur issued in DelPiano III, the trial court entered an order barring JPMorgan from foreclosing on the property during the pendency of the litigation. The parties then submitted evidence on the standing issue showing the following undisputed facts: Pamela acquired the subject property by warranty deed in 2005 and quitclaimed it to DelPiano in 2010. In 2016, JPMorgan filed this lawsuit, naming DelPiano as a defendant because he was the current owner of the property. On September 12, 2017, DelPiano quitclaimed the property to the Love Family Trust, LLC ("LFT"), a "single member Florida limited liability company" of which DelPiano was "the sole managing member." DelPiano claims that his attorney advised him to make this conveyance to protect himself from personal liability, as tenants at the subject property "were throwing pool/lake parties and [DelPiano] was concerned with someone getting drunk and either getting hurt or drowning in the pool or the lake." However, DelPiano did not file or record the deed until more than four years later, on November 2, 2021.

Nevertheless, in a 2019 deposition in this case, DelPiano testified that he owned the property free and clear of any mortgage lien. DelPiano further testified that it was "possible" that the property may at one time have been "owned by the trust," but "[i]f it was deeded over to the trust, it would have been recorded and there would be a record of it," which contradicted the records discussed above. Regardless, DelPiano denied that he, himself, had transferred the property to a trust, and he confirmed that he was then the current owner pursuant to Pamela's 2010 quitclaim deed.

JPMorgan later advertised a nonjudicial foreclosure of the property scheduled for November 2, 2021. On October 20, 2021, the attorney who was then representing DelPiano in this action wrote to counsel for JPMorgan that the planned foreclosure was improper because it "violate[d] the supersedeas triggered by [DelPiano] having filed a notice of appeal" - i.e., DelPiano III - from the trial court's final order. This letter did not mention DelPiano's 2017 transfer of the property to LFT.

On November 1, 2021, the day before the scheduled sale, JPMorgan's counsel received an e-mail from an attorney representing LFT. The e-mail advised that LFT owned the property and had filed a bankruptcy petition to stop the foreclosure. This petition was signed by DelPiano on behalf of LFT. The foreclosure did not proceed.

After receiving the property pursuant to the 2017 quitclaim deed, LFT executed two further deeds to the property. On October 28, 2021, "DANIEL DELPIANO, of THE LOVE FAMILY TRUST, LLC . . . (the "Grantor")," purported to convey the property to "THE LOVE FAMILY TRUST, [LL]C . . . (the "Grantee")." Then, on January 7, 2022, LFT executed a "Corrective Quitclaim Deed" purporting to correct the October 28, 2021 deed to show that LFT actually had conveyed 50 percent to DelPiano and 50 percent to LFT. This latest deed recited that its purpose was "to correct the state of incorporation of the grantor, and add the second grantee erroneously omitted on [the October 28, 2021 quitclaim deed]."^[3]

Following briefing, the trial court held an evidentiary hearing on the standing issue at which DelPiano called an "expert in the area of title examinations" to show that DelPiano owned the property from 2010 to 2021, during the pendency of this litigation. The expert initially testified that the 2017 deed from DelPiano to LFT was "not effective" until it was recorded on November 2, 2021. According to the expert, the property was solely owned by LFT from that date until the "corrective" deed was recorded in January 2022 granting 50 percent of the property to DelPiano. On crossexamination, however, the expert conceded that "[a]s far as the parties were concerned," LFT became the owner of the property as of the date of the 2017 quitclaim deed.

After the hearing, the trial court entered an order finding that DelPiano "has lacked standing to litigate this case." The court found that DelPiano had concealed from the court and JPMorgan his 2017 conveyance of the property to LFT until the day before the scheduled foreclosure. As a result of that conveyance, the court ruled, DelPiano did not own the property between the date of the 2017 conveyance and the court's June 2021 final judgment and therefore lacked standing to litigate any issues in the case, including any defenses to JPMorgan's claim to reform the security deed. Accordingly, the court vacated its earlier order preventing foreclosure. DelPiano appeals.

1. DelPiano does not quibble with...