Greg A. Becker Enters., Ltd. v. Summit Inv. Mgmt. Acquisitions I, LLC.

• Decision Date: 10 September 2012
• Docket Number: No. A11A1620.,A11A1620.
• Citation: Greg A. Becker Enters., Ltd. v. Summit Inv. Mgmt. Acquisitions I, LLC., 314 Ga.App. 721, 725 S.E.2d 841, 12 FCDR 1023 (Ga. App. 2012)
• Parties: GREG A. BECKER ENTERPRISES, LTD. et al. v. SUMMIT INVESTMENT MANAGEMENT ACQUISITIONS I, LLC.
• Court: Georgia Court of Appeals

314 Ga.App. 721

725 S.E.2d 841

12 FCDR 1023

GREG A. BECKER ENTERPRISES, LTD. et al.

v.SUMMIT INVESTMENT MANAGEMENT ACQUISITIONS I, LLC.

No. A11A1620.

Court of Appeals of Georgia.

March 12, 2012.

Certiorari Denied Sept. 10, 2012.

Thompson, O'Brien, Kemp & Nasuti, Aaron Marcus Kappler, Kevin Scott Kovalchik, Norcross, for appellants.

Schreeder, Wheeler & Flint, Debbie Ann Wilson, for appellee.

MILLER, Judge.

This case arises from an application for confirmation of a foreclosure sale filed by Summit Investment Management Acquisitions I, LLC(“Summit”) against Greg A. Becker Enterprises, Ltd.; Greg A. Becker; Granite Mountain Motor Sports, Inc.; LKB Enterprises, Inc.; and Stone Mountain Motor Sports, Inc.(collectively “Becker”).Following a confirmation hearing, the trial court denied the application to confirm the sale, but found good cause had been shown to order a resale of the property in accordance with OCGA § 44–14–161(c).Becker appeals, contending that the trial court(1) abused its discretion in ordering a resale, (2) applied an incorrect legal standard in reaching its decision, and (3) erred in denying the post-hearing motion to reopen the evidence.We discern no error and affirm.

“The trial court is the trier of fact in a confirmation proceeding, and an appellate court will not disturb its findings if there is any evidence to support them.Furthermore, we do not determine witness credibility or weigh the evidence and we view the evidence in the light most favorable to the trial court's judgment.”(Citations and punctuation omitted.)Statesboro Blues Dev. v. Farmers, etc. Bank,301 Ga.App. 851, 852, 690 S.E.2d 205(2010).

So viewed, the undisputed evidence shows that on December 20, 2006, Greg A. Becker Enterprises, Ltd. executed a “Deed to Secure Debt, Assignment of Rents and Security Agreement”(“Security Deed”) to secure repayment of two promissory notes in the total principal amount of $3,485,000.Pursuant to the Security Deed, the lender, Alpha Bank & Trust, acquired a security interest in Becker Enterprises's real property located at 2060 Ross Road in Gwinnett County.Greg A. Becker, Granite Mountain Motor Sports, Inc., LKB Enterprises, Inc., and Stone Mountain Motor Sports, Inc. executed guarantees covering the Promissory Notes.

In October 2008, the Federal Deposit Insurance Corporation(“FDIC”) was appointed Receiver of Alpha Bank.Thereafter, the FDIC assigned Becker's Security Deed to Summit.Becker defaulted on the Promissory Notes, and the balance owed on the debt was $3,403,964.92.Summit initiated a proceeding to foreclose upon Becker's real property in accordance with the power of sale authorized in the Security Deed.

The foreclosure sale occurred on August 3, 2010.There were no other bidders at the foreclosure sale, and the property was knocked down and sold to Summit for $1.1 million.Since the foreclosure sale did not bring the amount of the debt owed, on September 1, 2010, Summit timely filed an application for confirmation and reported the sale to the trial court judge pursuant to OCGA § 44–14–161(a).

At the confirmation hearing, the parties presented the testimony of their respective real estate appraisers, who gave opinions regarding the true market value of the property on the date of the sale.Summit's appraisers testified that using the cost and sales comparison valuation methods, they valued the property to be $1.1 million.Summit's appraisers conceded on cross-examination, however, that they had inspected only the exterior of the building, did not access and inspect the interior of the building, and did not take measurements to determine the accurate square footage of the building.Summit's appraised value was based upon an inaccurate estimate that the building was approximately 24,912 square feet.Summit's supervising appraiser agreed that more square footage would result in a higher appraised value.

Becker's appraiser testified that the income and sales comparison valuation methods were more applicable in rendering an accurate valuation.Applying those methods, he valued the property to be $1.425 million.Becker's appraiser stated that he had inspected and measured the interior of the building in gathering the information for his appraisal.He testified that the building measured a total of 27,323 square feet.

Following the hearing, the trial court entered a detailed final order with findings of fact and conclusions of law.The trial court specifically found that the testimony of Becker's appraiser was more reasonable and credible than that of Summit's appraiser.The trial court cited the failure of Summit's appraiser to gain access inside the property in the performance of their valuation, but further determined that the failure did not establish a lack of good faith.The trial court found that Summit's lack of access was caused by the contentious relationship between the parties.In light of the disparity between the appraisal valuations, and its determination that the $1.425 million valuation of Becker's appraisal was more credible, the trial court found that the property failed to sell for its true market value at the foreclosure sale.The trial court therefore denied confirmation of the foreclosure sale and concluded that good cause had been shown to order a resale of the property in accordance with OCGA § 44–14–161(c).

1.Contrary to Becker's contention of error, the trial court was authorized to order a resale of the property based upon the evidence and circumstances presented.

OCGA § 44–14–161(c) pertinently provides that the trial court“may order a resale of the property for good cause shown.”Under this statutory provision, the trial court is vested with “considerable discretion” in determining whether to order a resale.Resolution Trust Corp. v. Morrow Auto Center,216 Ga.App. 226, 227–228(2), 454 S.E.2d 138(1995).“[T]he statute does not define what constitutes ‘good cause’ ” and “does not ... require evidence of bad faith or negligence.”(Punctuation omitted.)Id. at 228(2), 454 S.E.2d 138.We have declined to establish restrictions on the trial court's discretion in determining whether the circumstances warrant a resale.Id.Under circumstances similar to those in the instant case, in which the appellee relied upon a fatally flawed appraisal and failed to prove that it sold the property for true market value, we held that a resale was authorized.SeeGutherie v. Ford Equip. Leasing Co.,206 Ga.App. 258, 261–262(2), 424 S.E.2d 889(1992).

Becker nevertheless argues that Summit had actual knowledge that its appraisal was fatally flawed, and thus, failed to show good cause for a resale.In support of its argument, Becker relies upon conflicting evidence that a prior appraisal indicated that the building was nearly 4,000 square feet larger than the estimate set forth in Summit's appraisal.However, there was no evidence showing that the Summit appraisers had reviewed the prior appraisal before they prepared their appraisal report....