Deutsche Bank Nat'l Trust Co. v. Bank

• Court: Georgia Court of Appeals
• Writing for the Court: BARNES, Presiding Judge.
• Citation: Deutsche Bank Nat'l Trust Co. v. Bank, 307 Ga.App. 307, 704 S.E.2d 823 (Ga. App. 2011)
• Decision Date: 26 April 2011
• Docket Number: No. A10A1509.,A10A1509.
• Parties: DEUTSCHE BANK NATIONAL TRUST COMPANYv.JP MORGAN CHASE BANK, N.A.

307 Ga.App. 307

704 S.E.2d 823

10 FCDR 3864

DEUTSCHE BANK NATIONAL TRUST COMPANY

v.JP MORGAN CHASE BANK, N.A.

No. A10A1509.

Court of Appeals of Georgia.

Nov. 19, 2010.Reconsideration Denied Dec. 6, 2010.Certiorari Denied April 26, 2011.

Lefkoff, Duncan, Grimes, Miller & McSwain, John R. Grimes, Atlanta, for appellant.Smith, Gambrell & Russell, Edward D. Burch Jr., Atlanta, for appellee.BARNES, Presiding Judge.

JP Morgan Chase Bank, N.A. commenced this action against Deutsche Bank National Trust Company f/k/a Banker's Trust Company after the two banks conducted competing foreclosure sales of certain real property in DeKalb County. JP Morgan's claim of title to the property was predicated on a 2004 security deed, while Deutsche Bank's claim of title was predicated on a 2001 security deed. The case turned on the legal effect of a notarized warranty deed recorded in 2003 and on whether JP Morgan was a bona fide purchaser for value based upon the warranty deed. The trial court granted summary judgment to JP Morgan, concluding that JP Morgan's interest in the property was superior to and not subject to any interest held by Deutsche Bank. We conclude that the uncontroverted evidence shows that the 2003 warranty deed was not a forgery, but was signed by someone fraudulently assuming authority, and that JP Morgan was a bona fide purchaser for value entitled to take the property free of any outstanding security interest held by Deutsche Bank. Thus, we affirm.

To prevail on a motion for summary judgment, the moving party must demonstrate that there is no genuine issue of material fact, and that the undisputed facts, viewed in a light most favorable to the party opposing the motion, warrant judgment as a matter of law. Our review of a grant of summary judgment is de novo, and we view the evidence and all reasonable inferences drawn from it in the light most favorable to the nonmovant.

(Citations and punctuation omitted.) Consumer Solutions Financial Svcs. v. Heritage Bank, 300 Ga.App. 272, 684 S.E.2d 682 (2009). See OCGA § 9–11–56(c); Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991). Guided by these principles, we turn to the record in the present case.

This case involves a dispute over the tract of real property located at 275 Haas Avenue, Atlanta, Georgia 30316 in DeKalb County (the “Property”). The Property was conveyed to Rebecca Diaz by warranty deed recorded in September 2001. On the same date, Diaz executed and recorded a security deed encumbering the Property in favor of People's Choice Home Loan, Inc. (the “2001 Security Deed”). IndyMac Bank, F.S.B. acquired the 2001 Security Deed by assignment.

In July 2003, a notarized warranty deed from “Indy Mac Bank, F.S.B.” to Diaz was recorded which purported to reconvey the Property to Diaz in fee simple (the “Warranty Deed”). The Warranty Deed was executed by an individual named Pamela Whales, who identified herself as an assistant vice president of IndyMac. The Warranty Deed was attested by two witnesses, one of whom was a notary public.

The Property subsequently was deeded to various parties but ultimately to an owner who, in April 2004, executed and recorded a security deed encumbering the Property in favor of OneWorld Mortgage Corporation (the “2004 Security Deed”). Washington Mutual Bank F.A. acquired the 2004 Security Deed by assignment.

In June 2004, IndyMac assigned the 2001 Security Deed to Deutsche Bank. That same month, Deutsche Bank foreclosed upon the Property pursuant to the power of sale provision contained in the 2001 Security Deed. Deutsche Bank was the highest bidder at the foreclosure sale.

In December 2005, Washington Mutual also foreclosed upon the Property pursuant to the power of sale provision contained in the 2004 Security Deed. Washington Mutual was the highest bidder at the foreclosure sale. Thereafter, Washington Mutual was closed by the federal Office of Thrift Supervision, and JP Morgan succeeded to Washington Mutual's interest in the Property under the terms of a purchase and assumption agreement.

Following the competing foreclosure sales, JP Morgan brought this action against Deutsche Bank for declaratory relief and attorney fees, alleging that its interest in the Property was superior to and not subject to any interest held by Deutsche Bank. Deutsche Bank answered and counterclaimed for a declaratory judgment that its interest in the Property was superior to and not subject to any interest held by JP Morgan.

The parties cross-moved for summary judgment on their declaratory judgment claims. JP Morgan argued that the 2001 Security Deed upon which Deutsche Bank predicated its interest in the Property had been canceled by the Warranty Deed as a matter of law. Alternatively, JP Morgan argued that the uncontroverted evidence showed that it qualified as a bona fide purchaser for value such that it was protected against any outstanding security interest in the Property held by Deutsche Bank. Deutsche Bank strongly disputed these arguments, contending that the Warranty Deed was facially irregular, had been forged, and failed to satisfy the statutory requirements for cancellation of a security deed. The trial court granted summary judgment to JP Morgan and denied it to Deutsche Bank. Deutsche Bank now appeals the trial court's grant of JP Morgan's motion for summary judgment.¹

1. We affirm the trial court's grant of summary judgment in favor of JP Morgan because the uncontroverted evidence shows that JP Morgan was afforded the protection of a bona fide purchaser for value, not subject to any outstanding security interest in the Property held by Deutsche Bank.

“To qualify as a bona fide purchaser for value without notice, a party must have neither actual nor constructive notice of the matter at issue.” (Citation and punctuation omitted.) Rolan v. Glass, 305 Ga.App. 217, 218(1), 699 S.E.2d 428 (2010). “Notice sufficient to excite attention and put a party on inquiry shall be notice of everything to which it is afterwards found that such inquiry might have led.” (Citation and footnote omitted.) Whiten v. Murray, 267 Ga.App. 417, 421(2), 599 S.E.2d 346 (2004). “A purchaser of land is charged with constructive notice of the contents of a recorded instrument within its chain of title.” (Citation, punctuation and footnote omitted.) VATACS Group v. HomeSide Lending, 276 Ga.App. 386, 391(2), 623 S.E.2d 534 (2005). Furthermore, the grantee of a security interest in land and subsequent purchasers are entitled to rely upon a warranty deed that is regular on its face and duly recorded in ascertaining the chain of title. See Mabra v. Deutsche Bank, etc., 277 Ga.App. 764, 767(2), 627 S.E.2d 849 (2006), overruled in part on other grounds by Brock v. Yale Mtg. Corp., 287 Ga. 849, 852(2), 700 S.E.2d 583 (2010).

On motion for summary judgment, JP Morgan argued that it was entitled to protection as a good faith purchaser because the notarized, recorded Warranty Deed purported to transfer the Property back to Diaz, thereby extinguishing the 2001 Security Deed, and there was no reason to suspect a defect in the Warranty Deed calling into question the chain of title. In contrast, Deutsche Bank argued that JP Morgan was not entitled to such protection because the Warranty Deed was facially irregular in that it misidentified the grantor and failed to comply with OCGA § 14–5–7(b).

We agree with JP Morgan and reject the arguments raised by Deutsche Bank. The Warranty Deed was regular on its face and duly recorded. See OCGA § 44–5–30 (“A deed to lands must be in writing, signed by the maker, and attested by at least two witnesses.”). See also OCGA § 44–2–21(a)(4), (b) (one of two required attesting witnesses may be a notary public). Also, the Warranty Deed on its face was executed in a manner that conformed with OCGA § 14–5–7(b), which provides:

Instruments executed by a corporation releasing a security agreement, when signed by one officer of the corporation or by an individual designated by the officers of the corporation by proper resolution, without the necessity of the corporation's seal being attached, shall be conclusive evidence that said officer signing is duly authorized to execute and deliver the same.

The Warranty Deed appeared to be executed by an assistant vice president of IndyMac, and thus by an “officer of the corporation.” Moreover, the only interest that IndyMac held in the Property prior to execution of the Warranty Deed was its security interest arising from the 2001 Security Deed, and reconveyance of the Property by way of a warranty deed was a proper way to release that security interest. See Clements v. Weaver, 301 Ga.App. 430, 434(2), 687 S.E.2d 602 (2009) (grantor of quitclaim deed estopped from asserting any interest in property conveyed); Southeast Timberlands v. Haiseal Timber, 224 Ga.App. 98, 102, 479 S.E.2d 443 (1996) (physical precedent only). The Warranty Deed, therefore, facially complied with OCGA § 14–5–7(b) and would appear to anyone searching the county records to serve as “conclusive evidence” that execution of the deed had been authorized by IndyMac.

[6] (a) In opposing summary judgment, Deutsche Bank argued that the Warranty Deed was facially irregular because it improperly identified the grantor as “Indy Mac Bank, F.S.B.” rather than “IndyMac Bank, F.S.B.” But “a mere misnomer of a corporation in a written instrument ... is not material or vital in its consequences, if the identity of the corporation intended is clear or can be ascertained by proof.” (Citation, punctuation and emphasis omitted.) Hawkins v. Turner, 166 Ga.App. 50, 51–52(1), 303 S.E.2d 164 (1983). It cannot be said that the mere placement of an additional space in the corporate name (i.e., “Indy Mac” versus “IndyMac”) made the identity of the corporation unclear. As such, the misnomer did not render the Warranty Deed irregular on its face.

(b) Deutsche Bank also argued that the Warranty Deed failed to comply with OCGA § 14–5–7(b)...