DOCO Credit Union v. Chambers

• Citation: 768 S.E.2d 808,330 Ga.App. 633
• Decision Date: 10 February 2015
• Docket Number: No. A13A2465.,A13A2465.
• Parties: DOCO CREDIT UNION f/k/a Doco Regional Federal Credit Union v. CHAMBERS et al.
• Court: Georgia Court of Appeals

330 Ga.App. 633

768 S.E.2d 808

DOCO CREDIT UNION f/k/a Doco Regional Federal Credit Union

v.CHAMBERS et al.

No. A13A2465.

Court of Appeals of Georgia.

Feb. 10, 2015.

Rebecca Allison Davis, Seyfarth Shaw, Charles Walker Ingraham, Atlanta, for Appellant.

Watson Spence, Christopher Stephen Cohilas, Sarah Finney Kjellin, Albany, for Appellees.

Opinion

DILLARD, Judge.

DOCO Credit Union f/k/a DOCO Regional Federal Credit Union (“DOCO”) filed a quiet-title action in the Superior Court of Lee County in order to establish that it had legal title to certain properties located in that county and upon which it had foreclosed pursuant to the powers of sale contained in several security deeds. Appellees Ida and Cheryl Chambers filed a motion to dismiss and plea in abatement, contending that DOCO's quiet-title action was barred by the Chambers' previously filed lawsuit pending in the Superior Court of Dougherty County, which involved some of the same properties. The Superior Court of Lee County summarily granted Ida and Cheryl Chambers's motion and dismissed DOCO's quiet-title action. On appeal, DOCO argues that the trial court erred by (1) finding that the Quiet Title Act was subject to abatement by the Dougherty County action; (2) failing to appoint a special master; (3) dismissing the case when Lee County was the only proper venue; and (4) ignoring the venue provisions set forth in the relevant security deeds. For the reasons set forth infra, we reverse.¹

The facts pertinent to our consideration are undisputed. In 2009, William Chambers, Jr. (“Bill Chambers”), son of Ida Chambers and husband of Cheryl Chambers, executed, for the benefit of Chambers Motors, Inc. (the family business), a series of promissory notes in favor of DOCO in exchange for loans totaling over $1.5 million. The promissory notes were secured by several pieces of real property located in both Crisp and Lee Counties (collectively, the “Properties”). And depending on the ownership of the Properties, the security deeds were purportedly² executed by Ida Chambers, individually or as executrix of the Estate of William H. Chambers, Sr., or by Bill Chambers, individually or as the Trustee of the Ida W. Chambers Revocable Trust (the “Revocable Trust”) or the Testamentary Trust (the “Testamentary Trust”) established under the Last Will & Testament of William H. Chambers, Sr. (collectively, the “Trusts”).

Bill Chambers defaulted on the loans, and DOCO obtained a judgment against him for the outstanding balance. Thereafter, in September 2011, DOCO foreclosed on various properties, including six of the eight properties³ located in Lee County (the “Lee County Properties”), in accordance with the power of sale contained in the security deeds. DOCO was the highest bidder and purchased the Properties at the foreclosure sale. At no time did Ida or Cheryl Chambers object to the foreclosures, nor did any member of the Chambers family make any attempt to pay the outstanding debt in order to save the collateralized Properties.

Following the foreclosures, Bill Chambers filed for Chapter 7 bankruptcy protection. Then, in March 2012, more than six months after the foreclosures, DOCO received a letter from counsel for Cheryl Chambers and the Trusts, alleging that Bill Chambers's conveyance of certain Properties owned by the Trusts constituted a breach of his fiduciary duties, and that DOCO aided and assisted in that breach. The letter concluded that the use of that collateral was void and demanded a return transfer of those Properties and compensation for damages.

After receipt of counsel's correspondence, DOCO filed in the bankruptcy proceeding a motion for relief from stay in order to prosecute a quiet-title action to resolve the claims asserted in the letter. And while that motion was pending, in January 2013, Ida and Cheryl Chambers initiated a lawsuit in the Superior Court of Dougherty County (the “Dougherty County Lawsuit”). In the complaint, Ida and Cheryl Chambers alleged that Bill Chambers and DOCO conspired to unlawfully convert the Properties and asserted against DOCO claims of conversation, aiding in breach of fiduciary duty, conspiracy, interference with business/contractual relations, wrongful foreclosure, civil RICO, and constructive trust. In addition, they sought monetary damages, attorney fees, injunctive relief, and an accounting.⁴ Significantly, at no time did Ida or Cheryl Chambers move to set aside the foreclosures.⁵ DOCO answered the complaint, denied the allegations, and filed a counterclaim to quiet title to the Properties.

In February 2013, after obtaining relief from the bankruptcy stay, DOCO commenced its quiet-title action in the Lee County Superior Court (the “Quiet Title Action”) to remove clouds on the titles of the Lee County Properties so that it could market and sell same. In addition to their answer, Ida and Cheryl Chambers filed a motion to dismiss and plea in abatement, arguing that DOCO's Quiet Title Action was subject to abatement by the previously filed Dougherty County Lawsuit. Specifically, the motion asserted that the Dougherty County Lawsuit and the Quiet Title Action involved the same parties, represented the same cause of action, and that the Dougherty County court was the only venue with jurisdiction to hear all of the claims between the parties. Finally, the motion alleged that by filing the Quiet Title Action, DOCO sought nothing more than an improper declaratory judgment in an attempt to obtain “an advisory opinion as to the legitimacy of its foreclosures.” DOCO opposed the motion, but the Lee County Superior Court, nonetheless, granted it in a summary order. This appeal follows.

1. DOCO first contends that the trial court erred in holding that the Dougherty County Lawsuit abated the Quiet Title Action. We agree.

We begin by acknowledging the long-standing rule that “when two civil actions involving the same cause of action and the same parties remain pending but are filed at different times, the later-filed action is abated and must be dismissed.”⁶ This ancient and well-established principle is rooted in recognition of the fact that “no one should be twice harassed, if it appear[s] to the Court that it is for one and the same cause. ”⁷ And even if two causes of action are not identical but, technically speaking, are “legally disparate and rest in opposite parties,”⁸ the second suit will still be abated if those actions “arise out of the same transaction and if the second suit would resolve the same issues as the first pending suit.”⁹

It is against this jurisprudential backdrop that we examine the two causes of action involved in the case sub judice. Ida and Cheryl Chambers's first-filed action is based in tort; they seek monetary and punitive damages for the allegedly wrongful foreclosures that resulted from DOCO's fraudulent conduct in conspiring with their son and husband, respectively, to unlawfully use the Properties owned by the Trusts as collateral for loans to the family business. And by electing to pursue monetary damages, Ida and Cheryl Chambers necessarily do not seek a return of title to the Properties, because an “injured party may not both set aside or cancel the foreclosure and also recover damages for the value of the property.”¹⁰

DOCO, on the other hand, by way of the Quiet Title Action, is seeking to “readily and conclusively establish[ ]” that it is the owner and title holder of the Lee County Properties.¹¹ Indeed, an action to quiet title, which must be brought in the county in which the land is situated,¹² is a “special statutory proceeding designed for [that] specific purpose.”¹³ And by adopting the Quiet Title Act of 1966,¹⁴ the General Assembly intended to establish “an efficient, speedy and effective means of adjudicating disputed title claims,”¹⁵ so as to “eliminate the possibility that land in this state could not be sold due to any uncertainty about the ownership of any interest in the property.”¹⁶ Thus, as the present title holder to the Lee County Properties, a quiet-title action is both an available and appropriate vehicle through which DOCO can establish its right to same.¹⁷

It follows, then, that the two causes of action at issue in this case are neither identical nor do they resolve the same issues.¹⁸

The Quiet Title Action seeks to establish DOCO as the legal title holder of the Lee County Properties, while the Dougherty County Lawsuit seeks to hold DOCO monetarily responsible for the allegedly unlawful acquiring of the titles to those and other Properties. And because the Quiet Title Action to the Lee County Properties was required to be brought in that county, the Superior Court of Dougherty County lacked jurisdiction to consider the petition.¹⁹ Consequently, we reverse the court's erroneous dismissal of DOCO's Quiet Title Action.

2. DOCO next argues that the trial court erred by failing to appoint a special master. Again, we agree.

In Georgia, our Quiet Title Act requires “a trial court to appoint a special master”²⁰ and for that special master to “make a report of the special master's findings to the trial court.”²¹ And while the quiet title statutory scheme provides that

the special master, once appointed, shall have complete jurisdiction within the scope of the pleadings to ascertain and determine the validity, nature, or extent of petitioner's title and all other interests in the land ... or to remove any particular cloud or clouds upon the title to the land and to make a report of his findings to the judge of the court, the trial court is not divested of its overall jurisdiction of the case and its sole authority under OCGA § 23–3–67 to issue the final decree.²²

Thus, in this action to quiet title, the trial court should have appointed a special master to submit a report of its findings. And because we reverse the trial court's dismissal of the Quiet Title Action, we remand the case with direction for the trial court to appoint a special master.²³

3. Given our holdings in Divisions 1 and 2 supra,...