Ramchandani v. State Bank & Trust Co.

• Citation: 324 Ga.App. 235,749 S.E.2d 797
• Decision Date: 10 October 2013
• Docket Number: No. A13A1530.,A13A1530.
• Parties: RAMCHANDANI et al. v. STATE BANK AND TRUST COMPANY.
• Court: United States Court of Appeals (Georgia)

324 Ga.App. 235

749 S.E.2d 797

RAMCHANDANI et al.

v.STATE BANK AND TRUST COMPANY.

No. A13A1530.

Court of Appeals of Georgia.

Oct. 10, 2013.

Deepak C. Ramchandani, pro se.

Chandan Seemani, pro se.

Quirk & Quirk, Joseph P. Quirk, Kevin Emmett Quirk, Atlanta, for Appellee.

ELLINGTON, Presiding Judge.

State Bank and Trust Company ("SB & T") sought a deficiency judgment in the Superior Court of Fulton County against Deepak Ramchandani, Chandan Seernani, and others, after SB & T conducted a nonjudicial foreclosure sale of certain Forsyth County property and successfully petitioned the Superior Court of Forsyth County for confirmation of the sale. Ramchandani and Seernani ("the appellants") appeal from the Fulton County court's grant of summary judgment to SB & T in the deficiency judgment action.

They contend that the court erred in concluding that it did not have jurisdiction to consider their collateral attacks on the Forsyth County foreclosure confirmation order and, as a result of that conclusion, in failing to consider their claims that they were not properly served with notice of the confirmation hearing. Finding no error, we affirm.

"Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. We review the grant of summary judgment de novo, construing the evidence in favor of the nonmovant." (Citations and punctuation omitted.) White v. Ga. Power Co., 265 Ga.App. 664, 664–665, 595 S.E.2d 353 (2004). So viewed, the record shows the following undisputed facts.

In October 2009, Forsyth Community Bank, the predecessor in interest to SB & T,¹ made a commercial loan of approximately $1.6 million to Nexgen Cumming, LLC; the loan was secured by, inter alia, real property located in Forsyth County and personal and unconditional guaranties executed by the appellants and others. After the loan went into default, SB & T conducted a foreclosure sale of the property securing the loan and submitted the winning bid of $1.17 million. Because the foreclosure sale did not bring the full amount of the secured debt, SB & T filed a confirmation action in Forsyth County, pursuant to OCGA § 44–14–161.² Following a hearing, the Superior Court of Forsyth County found that SB & T had satisfied its evidentiary burden under OCGA § 44–14–161, and issued an order confirming the sale.³ In its confirmation order, the court stated that "it appear [s] from the record that all Respondents were properly served" with notice of the confirmation proceeding. SB & T then filed the instant suit in the Superior Court of Fulton County against Nexgen, the appellants, and others, seeking a deficiency judgment,⁴ plus accrued interest, late charges, attorney fees, and other expenses.

In their answer, the appellants asserted that SB & T was barred from asserting a deficiency action against them because they had not been properly served with notice of the Forsyth County confirmation hearing, pursuant to OCGA § 44–14–161(c). During a hearing on the parties' cross-motions for summary judgment, the appellants argued that the Superior Court of Forsyth County lacked personal jurisdiction over them in the confirmation action because they had been served with notice of the hearing by publication in Forsyth County, instead of being personally served in Fulton County, where they resided. They contended that, as a result, the confirmation order was invalid as to them and could not be used against them in the deficiency action.

Following the hearing, the Fulton County court ruled that it lacked subject matter jurisdiction to consider the appellants' collateral attack against the Forsyth County confirmation order; that, in order to challenge the Forsyth County court's personal jurisdiction over them, the appellants were required to either file an appeal to this Court from the confirmation order or file a motion to set aside the confirmation order in Forsyth County, pursuant to OCGA § 9–11–60(d)⁵ ; and that, because they had failed to do so, they were bound by the confirmation order.⁶ The court then granted summary judgment to SB & T and awarded it a deficiency judgment in the principal amount of $460,081, plus interest and attorney fees.⁷

1. The appellants contend that the trial court erred in concluding that it lacked jurisdiction to consider their collateral attacks on the confirmation order. Specifically, they argue that the Civil Practice Act⁸ does not apply to confirmation proceedings and, therefore, they were not required to file a motion to set aside the confirmation order under OCGA § 9–11–60(d).

This Court has previously ruled, however, that, "[e]ven though an application to confirm a foreclosure sale is a special statutory proceeding and not a ‘civil suit’ in the ordinary meaning of that term, we reject the debtors' argument that the Civil Practice Act does not apply to applications for confirmation." (Citations omitted.) Small Bus. Admin. v. Desai, 193 Ga.App. 852, 853(1), 389 S.E.2d 372 (1989). In fact, OCGA § 9–11–81 specifically provides that the Civil Practice Act

shall apply to all special statutory proceedings except to the extent that specific rules of practice and procedure in conflict herewith are expressly prescribed by law; but, in any event, the provisions of this chapter governing the sufficiency of pleadings, defenses, amendments, counterclaims, cross-claims, third-party practice, joinder of parties and causes, making parties, discovery and depositions, interpleader, intervention, evidence, motions, summary judgment, relief from judgments, and the effect of judgments shall apply to all such proceedings.

(Emphasis supplied.) Thus, under the unambiguous language of OCGA § 9–11–81, the provisions of OCGA § 9–11–60 (which is entitled "Relief from judgments") apply to foreclosure confirmation proceedings. See Alliance Partners v. Harris Trust & Sav. Bank, 266 Ga. 514, 515(2), 467 S.E.2d 531 (1996) (holding that, under OCGA § 9–11–81, the discovery provisions of the Civil Practice Act apply to a confirmation proceeding following a nonjudicial foreclosure sale because it is a special statutory proceeding and no statute establishes a contrary rule of discovery); Small Bus. Admin. v. Desai, 193 Ga.App. at 853(1), 389 S.E.2d 372 (holding that, under OCGA § 9–11–81, the Civil Practice Act's provisions on relation back, OCGA § 9–11–15(c), and real party in interest, OCGA § 9–11–17(a), apply to foreclosure confirmation proceedings).⁹

Moreover, under OCGA § 9–11–54(a), the term "judgment," as used in the Civil Practice Act, "includes a decree and any order from which an appeal lies." A foreclosure confirmation order "is final and conclusive to the same extent as any other adjudication by a court of competent jurisdiction." (Citation omitted.) Whitaker v. Trust Co. of Columbus, 167 Ga.App. 360, 362(2), 306 S.E.2d 329 (1983).¹⁰ In addition, an order confirming a nonjudicial foreclosure is a final order that is directly appealable, pursuant to OCGA § 5–6–34(a)(1).¹¹

Finally, a party may attack a judgment by a motion to set aside under OCGA § 9–11–60(d) "only in the court of rendition. " (Emphasis supplied.) OCGA § 9–11–60(b). Consequently, the Superior Court of Fulton County was not authorized to set aside the confirmation order which the Superior Court of Forsyth County had issued. State Auto Mut. Ins. Co. v. Relocation, etc., 287 Ga.App. 575, 577–578(3), 651 S.E.2d 829 (2007) ("[A] trial court lacks jurisdiction over an action which attempts to collaterally attack a prior judgment (which was not void on its face) in a court other than the one in which it was rendered.") (citation omitted).¹²

The appellants rely upon two cases, Hill v. Moye, 221 Ga.App. 411, 471 S.E.2d 910 (1996), and First Nat. Bank & Trust Co. v. Kunes, 128 Ga.App. 565, 197 S.E.2d 446 (1973), for their argument that they were authorized to challenge the validity of the confirmation order during the deficiency action and were not required to file a motion to set aside the order in the Forsyth County court. The relevant facts of those cases, however, are distinguishable from the instant case. The creditors seeking confirmation orders in Hill and Kunes did not name the debtors as defendants in their confirmation petitions. Hill v. Moye, 221 Ga.App. at 411, 471 S.E.2d 910; First Nat. Bank & Trust Co. v. Kunes, 128 Ga.App. at 566(3), 197 S.E.2d 446. As a result, the debtors were authorized to defend themselves from any liability arising from a deficiency judgment by asserting that they were not bound by the underlying confirmation orders.¹³ Hill v. Moye, 221 Ga.App. at 412, 471 S.E.2d 910; First Nat. Bank & Trust Co. v. Kunes, 128 Ga.App. at 566(3), 569(6), 197 S.E.2d 446. The reason the debtors were allowed to assert such a defense in those deficiency actions is simple: because the debtors had not been named as parties in the confirmation action, they lacked standing to move to set aside the confirmation orders under OCGA § 9–11–60(d), or to appeal the orders.¹⁴ Because those avenues were unavailable to them, they were authorized to collaterally challenge the validity of the underlying confirmation orders as to them during the deficiency actions. Such unusual circumstances are not presented in the instant case.

Accordingly, we conclude that, in order to challenge the validity of the confirmation order in this case, the appellants were required to file a motion to set aside the judgment in the Superior Court of Forsyth County, pursuant to OCGA § 9–11–60(b) and (d). See Pine Grove Builders v. SunTrust Bank, 307 Ga.App. 764, 765–766(1), 706 S.E.2d 129 (2011)¹⁵ ; see also Rogers v. Fidelity Fed. Sav. & Loan Assn., 180 Ga.App. 330, 331, 349 S.E.2d 7 (1986) (The debtors successfully moved to set aside a confirmation order based on the creditor's failure to serve them with notice of the confirmation hearing as required by OCGA § 44–14–161(c).). It follows that the trial court did not err in concluding that it lacked jurisdiction...