Res-Ga Ljy, LLC v.

• Decision Date: 02 July 2013
• Docket Number: No. A13A0188.,A13A0188.
• Citation: Res-Ga Ljy, LLC v. , 322 Ga.App. 607, 745 S.E.2d 820 (Ga. App. 2013)
• Parties: RES–GA LJY, LLC v. Y.D.I., INC. a/k/a YDI, Inc., et al.
• Court: Georgia Court of Appeals

322 Ga.App. 607

745 S.E.2d 820

RES–GA LJY, LLC

v.Y.D.I., INC. a/k/a YDI, Inc., et al.

No. A13A0188.

Court of Appeals of Georgia.

July 2, 2013.

Irene Baker Vander Els, Atlanta, for Appellant.

Chelsea Lynne Dennis, Andrea Lynn Pawlak, Kevin L. Ward, Atlanta, William Thomas Cable Jr., Dallas, for Appellee.

McFADDEN, Judge.

RES–GA LJY, LLC(hereinafter, “RES–GA”) appeals from the trial court's order denying a resale of real property under OCGA § 44–14–161(c) after the trial court denied its petition to confirm a foreclosure sale on the property.Finding no abuse of discretion, we affirm.

RES–GA is an entity formed for the special purpose of taking title to specific property securing a loan that a related entity obtained in a bulk purchase of loans from the Federal Deposit Insurance Corporation.In that capacity, RES–GA was assigned a deed to secure debt executed by Y.D.I., Inc., a/k/a YDI, Inc.(hereinafter, “YDI”) that secured an indebtedness of $6,000,000.When YDI defaulted on the underlying debt, RES–GA foreclosed on the real property securing that debt and purchased the property at a foreclosure sale for $742,500.RES–GA then brought a complaint for confirmation of the sale against YDI and Jimmy York, who guarantied the debt.

The parties stipulated that the foreclosure sale was advertised and conducted properly.At the confirmation hearing, RES–GA presented testimony that, prior to the foreclosure sale, it had obtained an appraisal of the property's true market value at $600,000.The loan workout asset manager who made decisions about the foreclosure sale on RES–GA's behalf reviewed the appraisal, consulted with a team of former real estate developers and market specialists about it and, out of precaution, chose a bid price for the property that was higher than the appraisal.RES–GA presented evidence of a second appraisal of the property at $705,000 which it obtained after the foreclosure sale in preparation for the confirmation hearing.YDI presented evidence of two appraisals for the property—at $1,200,000 and $930,000—that it also obtained after the foreclosure sale in preparation for the confirmation hearing.

The trial court found that RES–GA did not show that the property brought its true market value at the foreclosure sale, and the court declined to confirm the sale.SeeOCGA § 44–14–161(b).In its order, the trial court identified problems in the appraisals submitted by RES–GA.Specifically regarding the $600,000 appraisal, the trial court found that it “ contained numerous errors” in its use of comparable sales.The trial court found that RES–GA

apparently relied upon the opinion contained in the $600,000.00 appraisal in determining its bid price.However, a cursory review of that appraisal would have alerted [RES–GA] to the numerous errors contained therein.Having found that [RES–GA] did not show that the subject property brought its true market value ..., [the court] finds that no good cause was shown by [RES–GA] to order a resale of the subject property.

SeeOCGA § 44–14–161(c).

RES–GA moved the trial court to reconsider its ruling regarding a resale.After a hearing on the motion, the trial court issued an order denying reconsideration.Therein, the trial court stated that it did not find either of RES–GA's appraisals to be credible and that it found the $930,000 appraisal submitted by YDI to be “the most credible of the four.”It further stated that its consideration regarding resale did not turn on whether RES–GA acted in bad faith or good faith, but it held that RES–GA did not “prove ‘good cause’ to the satisfaction of the [c]ourt” and expressly found “no good cause to grant a resale.”

On appeal, RES–GA disagrees with but does not challenge the trial court's determination that the property was not sold for its true market value at the foreclosure sale.See generallyStatesboro Blues Dev. v. Farmers & Merchants Bank,301 Ga.App. 851, 853, 690 S.E.2d 205(2010)(as trier of fact in confirmation proceeding, trial court is entitled to find one appraiser's testimony credible and to accept his opinion over that of another appraiser).It challenges only the ruling denying resale.OCGA § 44–14–161(c) provides that, if a trial court denies confirmation of a foreclosure sale, it “may order a resale of the property for good cause shown.”This confers upon the trial court broad legal discretion to grant or deny a resale.SeeAdams v. Gwinnett Commercial Bank,238 Ga. 722, 723, 235 S.E.2d 476(1977)(construing prior version of the Code section);Eagle GA I SPE v. Atreus Communities of Fairburn,319 Ga.App. 844, 848(2), 738 S.E.2d 675(2013);The Village at Lake Lanier v. State Bank & Trust Co.,314 Ga.App. 498, 499(1), 724 S.E.2d 806(2012);Resolution Trust Co. v. Morrow Auto Center,216 Ga.App. 226, 227(2), 454 S.E.2d 138(1995);Govt. Nat. Mtg. Assn. v. Belue,201 Ga.App. 661, 662(2), 411 S.E.2d 894(1991).On appeal, “we determine only whether that discretion was abused.Traditionally, where a trial court is vested by statute with broad discretion, appellate courts do not disturb that exercise of discretion unless it is clearly, patently, and manifestly abused.”The Village at Lake Lanier,314 Ga.App. at 500(1), 724 S.E.2d 806(citations and punctuation omitted).AccordMcDowell v. Regions Bank,311 Ga.App. 600, 600–601, 716 S.E.2d 638(2011).

Although reviewing for abuse of discretion “is a deferential standard of review, it is not toothless.”Jones v. Brown,299 Ga.App. 418, 419, 683 S.E.2d 76(2009)(citation & punctuation omitted).The abuse of discretion standard of review is “at least slightly less deferential than the ‘any evidence’ test.”Reed v. State,291 Ga. 10, 13(3), 727 S.E.2d 112(2012)(citations omitted).“An abuse of discretion occurs where a ruling is unsupported by any evidence of record or where that ruling misstates or misapplies the relevant law.”Lewis v. Lewis,316 Ga.App. 67, 68, 728 S.E.2d 741(2012)(citations and punctuation omitted).In this case, RES–GA argues that the trial court abused its discretion in denying a resale because the evidence showed that the foreclosure sale price was based on RES–GA's good faith reliance upon an appraisal.While we are sympathetic to this argument, RES–GA has not shown either that the trial court's ruling was unsupported by any evidence of record or that its ruling misstated or misapplied the relevant law, and for that reason we cannot find that the trial court clearly, patently and manifestly abused its discretion.

First, RES–GA has not shown that the trial court's ruling was unsupported by any evidence of record.“[T]o reverse a trial judge exercising his legal discretion [regarding a resale]we would have to find as a matter of law that ‘good cause’ was shown.”Fed. Deposit Ins. Corp. v. Ivey–Matherly Const. Co.,144 Ga.App. 313, 317(2), 241 S.E.2d 264(1977)(construing prior statute).OCGA § 44–14–161(c) does not define what constitutes “good cause.”The Village at Lake Lanier,314 Ga.App. at 500(1)(a), 724 S.E.2d 806;Resolution Trust Co.,216 Ga.App. at 228(2), 454 S.E.2d 138.RES–GA correctly asserts that its good faith reliance on an appraisal in buying the property for less than its true market value could have authorized the trial court to find good cause for resale.See, e.g., Adams,238 Ga. at 722–723, 235 S.E.2d 476(trial court did not err in finding that creditor's act, in good faith, of having property appraised before sale authorized resale);Greg A. Becker Enterprises v. Summit Investment Mgmt. Acquisitions I,314 Ga.App. 721, 723–724(1), 725 S.E.2d 841(2012)(trial court did not abuse its discretion in finding good cause for resale where there had been no showing that creditor lacked good faith in conducting foreclosure proceedings and evidence supported finding that creditor did not intentionally bid less than property's true market value at foreclosure sale);Gutherie v. Ford Equip. Leasing Co.,206 Ga.App. 258, 261(2), 424 S.E.2d 889(1992)(resale “would be authorized” under OCGA § 44–14–161(c) where creditor “did not prove that it sold the property for true market value but did obtain an appraisal (albeit a fatally flawed one) before the sale and did sell the property for an amount equal to that appraisal”)(citations omitted);Damil, Inc. v. First Nat. Bank of Dalton,165 Ga.App. 678, 302 S.E.2d 600(1983)(affirming trial court's order granting resale on ground that “a failure to sell for the true market value is good cause to order a resale”).

Nevertheless, facts that could authorize a finding of good cause for resale do not necessarily demand that the trial court make such a finding.Fed. Deposit Ins. Corp.,144 Ga.App. at 317(2), 241 S.E.2d 264.We discussed this distinction and the reasons for it at length in Resolution Trust Co. v. Morrow Auto Center,supra, 216...