Old Stone Company I, LLC v. Hughes

• Decision Date: 07 July 2008
• Docket Number: No. S08A0491.,S08A0491.
• Citation: Old Stone Company I, LLC v. Hughes, 663 S.E.2d 687, 284 Ga. 259 (Ga. 2008)
• Parties: The OLD STONE COMPANY I, LLC, et al. v. HUGHES.
• Court: Georgia Supreme Court

663 S.E.2d 687

284 Ga. 259

The OLD STONE COMPANY I, LLC, et al. v.HUGHES.

No. S08A0491.

Supreme Court of Georgia.

July 7, 2008.

Reconsideration Denied July 25, 2008.

Ford & Barnhart, LLP, James L. Ford, Sr., Atlanta, for appellant.

Trenton Brown, III, P.C., Enis Trenton Brown III, Greensboro, Smith, Welch & Brittain, A.J. Welch, Jr., McDonough, Andrew James Gebhardt, Stockbridge, for appellee.

BENHAM, Justice.

In May 2004, K. Payne Hughes and Old Stone Company I, LLC("Old Stone") formed Morgan Fields, LLC for the purpose of purchasing property in Morgan County.Hughes loaned Morgan Fields approximately $2.1 million dollars to buy the land and they executed a promissory note and deed to secure the debt on June 2, 2004.The debt was scheduled to come due on May 2, 2007.Morgan Fields failed to repay the debt and the loan defaulted on May 3, 2007.Hughes moved to foreclose the property.

The foreclosure date was changed several times while the parties tried to work out their differences.The last scheduled foreclosure date was August 7, 2007.Prior to that date, Old Stone and Morgan Fields filed an action for a temporary restraining order seeking to stop the foreclosure sale, arguing the property was not properly conveyed and Hughes was violating his fiduciary duties to Morgan Fields.During the TRO hearing on August 6, 2007, Hughes presented a plan to resolve the dispute which involved withdrawing the foreclosure proceedings and extending the expiration of the promissory note to March 1, 2008, thereby allowing Old Stone and Morgan Fields time to sell the property¹ or refinance the debt with another lender.As a condition, Hughes insisted that appellants execute a quitclaim deeds for the property which would be held by the court.The deeds would be delivered to Hughes if the property was not sold or refinanced by March 1, 2008.

Upon hearing from counsel of both parties, the trial court issued an order on August 10, 2007, and ordered (1)appellee to withdraw the August 7, 2007 foreclosure proceedings, (2)the parties to execute an amendment to their note extending the loan repayment due date to March 2, 2008, (3) a modification of the deed to secure debt to reflect the existing debt, and (4)appellants to execute deeds conveying their rights, title, and interest in the property to appellee and to deliver the deeds to the clerk.The order further provided that if the property were sold or refinanced by March 1, 2008, the clerk would be required to return the deeds to the new landowner or appellants.If appellees refinanced or otherwise decided to pay off the debt, the clerk would retain the deeds.If a sale or refinancing did not take place by March 1st, the order required the clerk to turn the deeds over to Hughes.²Appellants now appeal the order insofar as it allows the deeds to be turned over to Hughes.We affirm.

1.On December 10, 2007, the trial court granted a supersedeas to appellants and ordered them to post a supersedeas bond by March 1, 2008.Hughes contends the appeal should be dismissed because appellants failed to post the bond.Failure to obtain a supersedeas will render an appeal moot and require dismissal where a party is seeking injunctive relief.Jackson v. Bibb County School District,271 Ga. 18, 19, 515 S.E.2d 151(1999);Brown v. Spann,271 Ga. 495, 520 S.E.2d 909(1999).The failure to post a supersedeas bond, however, does not require dismissal of an appeal.Ervin v. Turner,291 Ga.App. 719(6), 662 S.E.2d 721(2008);Ruskin v. AAF-McQuay, Inc.,284 Ga.App. 49, 53(2), 643 S.E.2d 333(2007).Since appellants obtained a supersedeas, their alleged failure to post the bond does not require dismissal of their appeal.Id.Accordingly, appellees' motions to dismiss are denied.

2.Appellants challenge the portion of the August 10, 2007 order which allowed the clerk to issue the deeds to Hughes in the event that a sale or refinancing of the property did not take place.They contend such action violates the Georgia Constitution and is outside the trial court's authority.The August 6, 2007 hearing transcript reveals that appellants never raised any issue of constitutionality and so the trial court never considered it.As such, appellants have failed to preserve that issue for review.Francis v. Francis,279 Ga. 248, 611 S.E.2d 45(2005)(party who objected to appointment of doctor on grounds that he did not want to incur expense of a psychological analysis could not later assert on appeal that appointment was erroneous on basis that doctor had previously treated one of the parties).

As for the trial court's authority to fashion the remedy, appellants contend they objected by questioning the trial judge regarding the execution of the deeds.Specifically, during the August 6th hearing, counsel for appellants questioned whether, once they signed the deeds, Hughes would hamper appellants' efforts to procure a sale.When the trial judge asked counsel what was wrong with the property reverting back to Hughes if there was no buyer for it, counsel responded that Hughes had never perfected the original security deed and that the result would "wipe out any possibility of a bidder coming in and bidding fair market value" and "wip[e] out any equity."The trial court and parties then had the following discussion:

[Trial Court]: I think the solution is this, to call off the foreclosure tomorrow, extend it to one day past the closing date of this purported contract.In the meanwhile [appellants] could market this property to anybody else [they] wanted to.

[Hughes]: Absolutely.

[Trial Court]: As long as it sold.Of course, if it does not, Mr. Hughes is in no different position than the bank would be.He's got almost two million dollars.Now, what's wrong with that?. ...

[Appellants]: As long as we get the deed into escrow and the Court's holding that deed, have no problem at all with that, Judge.

We have held that objections must be specific such that the objecting party must advise the trial court as to what action it wants taken.Plaza Properties, Ltd. v. Prime Business Investments, Inc.,273 Ga. 97, 538 S.E.2d 51(2000);Francis v. Francis,279 Ga. at 249, 611 S.E.2d 45("failure to make an objection which is both timely and specific is treated as a waiver");CSX Transportation, Inc. v. McCord,202 Ga.App. 365(1), 414 S.E.2d 508(1991)(party's statement to the court that certain records...