Oconee Fed. Sav. & Loan Ass'n v. Brown
| Decision Date | 04 March 2019 |
| Docket Number | A18A1963 |
| Citation | 349 Ga.App. 54,825 S.E.2d 456 |
| Parties | OCONEE FEDERAL SAVINGS AND LOAN ASSOCIATION v. BROWN et al. |
| Court | Georgia Court of Appeals |
Nelson Mullins Riley & Scarborough, S. Wade Malone, Gregory M. Taube, for appellant.
Smith Welch Webb & White, John P. Webb, Orion G. Webb, Miranda N. Hanley, for appellees.
Oconee Federal Savings and Loan Association ("Oconee Federal") appeals from the trial court's order granting an injunction enjoining the scheduled foreclosure sale of the house of Kenneth and April Brown. Because the Browns have not tendered to Oconee Federal payment of their debt that has become due and is secured by their house, we reverse.
Under OCGA § 9-5-8, "[W]e will not reverse the decision to grant an interlocutory injunction unless the trial court made an error of law that contributed to the decision, there was no evidence on an element essential to relief, or the court manifestly abused its discretion." (Citation and punctuation omitted.) Nissan North America, Inc. v. Walker-Jones Nissan, LLC , 345 Ga. App. 447, 450, 812 S.E.2d 130 (2018). Further, "where there is no conflict in the evidence, the judge's discretion in granting or denying the interlocutory injunction becomes circumscribed by the applicable rules of law." (Citation and punctuation omitted.) Shiva Management, LLC v. Walker , 283 Ga. 338, 340, 658 S.E.2d 762 (2008).
On May 10, 2007, the Browns entered into a home equity agreement and disclosure statement (also known as a home equity line of credit, or "HELOC") with Oconee Federal's predecessor, Stephens Federal Bank.1 Under the HELOC agreement, the Browns could obtain advances totaling $ 40,000 over the course of a 120-month draw period ending with a maturity date of May 15, 2017. During the draw period, the Browns were required to make minimum monthly payments, which consisted of the accrued interest as of the closing date of each billing statement, and late fees would be assessed if they missed their minimum monthly payment. The agreement provided that the minimum monthly payments would not reduce the outstanding principal balance, and upon expiration of the draw period the Browns were required to pay the entire unpaid balance in one balloon payment. The agreement also provided that if the Browns defaulted by failing to make payments, the bank could, "after any required notices and to the extent permitted by law, terminate [the] Account and declare the entire balance of [the] Account immediately due and payable."
The Browns’ indebtedness under the HELOC agreement was secured by their house pursuant to a security deed. The security deed provided that the Browns had the right to reinstate and cure any default by paying all sums due. Regarding this right to cure a default, the security deed provided that the Browns were entitled to the following notice of their right to cure before the bank accelerated the entire debt:
The Browns took $ 40,000 in advances under the HELOC agreement. The Browns made several minimum monthly payments on the debt, generally paying only the minimum payment to cover interest, and these monthly payments averaged approximately $ 260 or $ 270. The Browns’ last monthly payment was in May 2015. Around this time, the Browns submitted an application to modify their HELOC agreement and/or consolidate the debt with their 2003 loan. On September 18, 2015, Oconee Federal notified the Browns that their application to modify the HELOC agreement and/or consolidate the debt with the 2003 loan had been denied, and reminded them of the need to make payments and bring the HELOC debt current in order to avoid foreclosure.
The Browns claim that: in phone conversations Oconee Federal employees told them their application would be approved and instructed them not to make payments while the application was pending; from approximately May 2015 to September 2015 Oconee Federal refused any payment whatsoever and returned several payment checks; and subsequently Oconee Federal improperly refused payment unless it was payment in full and included late fees and penalties. Oconee Federal employees deny telling the Browns not to make payments, and the record shows that while the Browns’ application was pending and thereafter, Oconee Federal sent the Browns both monthly account statements detailing the payments due and late charges assessed, as well as numerous emails urging the Browns to make their payments.
On October 2, 2015, Oconee Federal's counsel notified the Browns that all communications concerning the debt should be directed to counsel. On November 20, 2015, counsel sent the Browns a letter stating that "[p]ursuant to the terms of the HELOC Oconee Federal is hereby exercising its right to accelerate the debt and hereby demands payment in full" of $ 42,034.96. Counsel stated in the letter that Oconee Federal would not accept any payment for less than the entire debt owed. Apparently, this was the Browns’ first notice of acceleration on the HELOC, and at the time Oconee Federal mistakenly believed that the HELOC agreement and security deed did not require Oconee Federal to provide the Browns notice of a right to cure their default before accelerating the entire debt. The Browns claim that around this time Oconee Federal would not accept any payment without them signing a release of liability, while Oconee Federal claims that it only insisted upon a release of liability if the Browns wanted an alteration of the HELOC agreement before making payments.
Although the Browns dispute the amount they owe Oconee Federal under the HELOC agreement and whether the amount should include late fees, penalties, and interest, they acknowledge that they owe some amount under the agreement and that Oconee Federal could foreclose pursuant to the security deed if the debt was not repaid. In the trial court, the Browns admitted that they have not tendered any payments to Oconee Federal since at least October 2015.
On January 29, 2016, Oconee Federal initiated foreclosure proceedings under the HELOC agreement and security deed, stating in a letter to the Browns that in the absence of payment in full of the amount due under the agreement, which it asserted was $ 42,683.11, it would foreclose on the Browns’ house on March 1, 2016. In February 2016, the Browns filed this action against Oconee Federal and other defendants, seeking injunctive relief to enjoin the foreclosure and raising claims of wrongful foreclosure, breach of contract, and fraud. Subsequently, Oconee Federal cancelled the scheduled foreclosure, but reserved the right to reinitiate foreclosure proceedings.
In June 2016, the Browns filed a motion for an order directing funds to be deposited in the registry of the trial court. In the motion, the Browns alleged that they had been unable to make their regular monthly payments to Oconee Federal since May 2015 because Oconee Federal improperly refused to accept any tender of payment that did not include the total amount due under the HELOC agreement or late fees, penalties, and attorney fees. While the Browns disputed the exact amount owed under the HELOC agreement, they acknowledged they had financial obligations to Oconee Federal. The Browns requested that the trial court allow them to tender into the trial court registry the total amount owed under the agreement from May 2015 until May 2016, which they asserted was approximately $ 2,970, and authorize them to deposit all future monthly payments into the registry until final judgment was entered.2
Oconee Federal opposed the motion, arguing that the Browns were required to tender payment of the HELOC debt to it, not the trial court registry. Oconee Federal requested that the Browns pay the amount owed under the HELOC agreement to bring the debt current and then continue to make monthly payments until it was paid off.
Following a hearing, the trial court granted the Browns’ motion in September 2016, directing the trial court clerk to deposit a tendered check for $ 2,970 on the HELOC debt into the registry and to deposit future payments as they were made. The trial court ruled that the funds deposited would be held in the registry until there was an agreement among the parties or an order directing disbursement.3 The trial court did not instruct the Browns on whether they should deposit payments or...
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