Gordon v. South Cent. Farm Credit, ACA

• Decision Date: 22 June 1994
• Docket Number: No. A94A1622,A94A1622
• Citation: 446 S.E.2d 514,213 Ga.App. 816
• Parties: GORDON v. SOUTH CENTRAL FARM CREDIT, ACA.
• Court: Georgia Court of Appeals

Page 514

446 S.E.2d 514

213 Ga.App. 816

GORDON v. SOUTH CENTRAL FARM CREDIT, ACA.

No. A94A1622.

Court of Appeals of Georgia.

June 22, 1994.

Reconsideration Denied July 12, 1994.

Certiorari Denied Oct. 17, 1994.

William R. McCracken, Augusta, for appellant.

Brown & Livingston, Charles H. Brown, Statesboro, for appellee.

BLACKBURN, Judge.

The appellant, Annie Mae Gordon, filed the instant action sounding in tort against the appellee, South Central Farm Credit, ACA (South Central), based upon South Central's alleged wrongful foreclosure of approximately 137 ¹ acres of property located in Burke County pledged as collateral on a promissory note executed by Gordon and her two sons in favor of South Central's predecessor in interest.

Following the commencement of discovery, South Central moved for summary judgment, asserting that the foreclosure sale was conducted in accordance with the applicable law and the documents executed by the parties, and that the alleged inadequacy of the price received at the foreclosure sale affords Gordon no valid basis for relief. The trial court granted the motion, finding that Gordon defaulted under the terms of the promissory note, and South Central rightfully foreclosed upon the property pursuant to the terms of the deed to secure debt and the applicable statutory authority. This appeal followed.

In her sole enumeration of error, Gordon asserts that the trial court erred in granting the motion for summary judgment because material issues of fact remain for jury resolution on whether the value of the collateral greatly exceeded the outstanding indebtedness, whether the price realized on foreclosure was grossly inadequate, whether the loan was undersecured, and whether South Central acted arbitrarily in foreclosing upon the real property.

The record viewed in the light most favorable to Gordon, the nonmovant, shows that on or about May 4, 1982, Gordon executed a deed to secure $10,000 in debt in favor of the Federal Land Bank of Columbia, South Carolina. Federal Land Bank subsequently assigned its interest in the promissory note to South Central in 1991. Paragraph 6 of the security deed specifically provided that if Gordon failed to abide by the terms of the promissory note or the terms of the deed, South Central could "[d]eclare all amounts secured by this instrument immediately due and payable without notice[,] [and] [s]ell at public outcry to the highest bidder for cash, at the courthouse of the county wherein said land or any part thereof lies, all or any part of said land, after advertising ... in the newspaper...." Gordon admitted in her deposition that she understood the terms of the power of sale contained in the deed.

It is undisputed that Gordon has been delinquent on her obligation to make timely payments under the promissory note and pay the annual property taxes on the property since the execution of the note in 1982 although the loan was reamortized in 1983 to provide for monthly payments instead of annual installments. As recently as November 1991, Gordon's property was scheduled for foreclosure for her failure to make monthly payments for several months but Gordon cured her default on the loan on the day prior to the scheduled sale. It is further undisputed that Gordon failed to make any monthly payments as they became due under the terms of the reamortized promissory note following her partial payment in July 1992. By certified letter of September 15, 1992, Gordon was notified of South Central's acceleration of the payments due and its intention to foreclose upon the property if Gordon did not cure the default. By certified letter of October 9, 1992, South Central further provided Gordon with copies of the legal advertisement of the scheduled foreclosure sale. The property was subsequently sold at the foreclosure sale in December 1992, to the highest bidder for $26,000, and South Central forwarded the excess proceeds to Gordon but Gordon returned the check to South Central. The excess proceeds have been paid by South Central into the court's registry. Gordon does not challenge the manner in which the sale was conducted or the sufficiency of the newspaper advertisements.

Under Georgia law, "[i]t is clear that a security deed which includes a power of sale is a contract and its provisions are controlling as to the rights of the parties thereto and their privies." (Citations and punctuation omitted.) Druid Assoc. v. Nat. Income Realty Trust, 210 Ga.App. 684, 685, 436 S.E.2d 721 (1993). See also Giordano v. Stubbs, 228 Ga. 75, 77, 184 S.E.2d 165 (1971). The record in this case shows and Gordon concedes in her deposition that South Central complied with the terms of the security deed by properly advertising the foreclosure sale and further concedes that the property was auctioned off from the courthouse steps to the highest bidder. See id. Gordon also admits that she was notified of the foreclosure sale pursuant to OCGA § 44-14-162 et seq.

While Gordon primarily maintains that the foreclosure sale did not realize an adequate sales price for the property, "[i]...