Synovus Bank v. Kelley

• Decision Date: 24 August 2020
• Docket Number: S20Q0843
• Citation: 309 Ga. 654,847 S.E.2d 592
• Court: Georgia Supreme Court
• Parties: SYNOVUS BANK v. KELLEY.

309 Ga. 654

847 S.E.2d 592

SYNOVUS BANK

v.KELLEY.

S20Q0843

Supreme Court of Georgia.

Decided: August 24, 2020

Moore, Clarke, Duvall & Rodgers, David A. Garland, Stephan A. Ray, for appellant.

Kelley Lovett Blakey & Sanders, Walter W. Kelley, Thomas D. Lovett, Thomas D. Lovett III, for appellee.

McMillian, Justice.

The United States District Court for the Middle District of Georgia has certified two questions to this Court regarding the timing under Georgia law when a lien is created on the title of real property as between a judgment creditor and a judgment debtor – at the time the judgment is entered or at the time the writ of fieri facias on that judgment is recorded. This timing makes a difference under federal bankruptcy law because certain transfers of the bankrupt debtor's property may be avoided if they occur within 90 days of the filing of the bankruptcy petition. Asserting that there is no clear, controlling precedent from this Court on this issue, the district court has certified the following questions to this Court:

Whether as between a creditor, who obtains a judgment against a debtor's real property, and the judgment debtor, OCGA § 9-12-80 creates a lien on the debtor's real property or rather is a lien against the debtor's real property created at the time of recordation pursuant to OCGA § 9-12-86. If such lien is created at the time of recordation, whether the effective date of creation of that lien relates back to the date of the judgment for purposes of establishing the date a creditor obtained a lien against the judgment debtor's real property.

We conclude for the reasons stated below that under Georgia law, as between the judgment creditor and judgment debtor, a lien on the title to real property is not created until the judgment is recorded, that the date of that lien is the date of recording, and the date of the lien does not relate back to the date the judgment was entered.

The parties stipulated to the following facts. On December 7, 2016, Synovus obtained a judgment against Kenneth and Jan Brownlee in an action filed in the Superior Court of Tift County, which was styled "First Community Bank of Tifton, a division of Synovus Bank [hereinafter ‘Synovus’], Plaintiff v. Banner Grain and Peanut Company, Banner Hay Company, Inc., Kenneth Brownlee a/k/a Kenny Brownlee, and Jan Brownlee, Defendants." On December 22, 2016, the Tift County Superior Court issued a writ of fieri facias (the "Fi. Fa.") on that judgment,¹ and it was recorded on the court's General Execution Docket ("GED"). On January 3, 2017, the Fi. Fa. was re-recorded on the Tift County GED to correct the spelling of the Brownlees’ name by adding a handwritten "e" to the end of their respective last names. On January 25, 2017, the Fi. Fa. was recorded on the GED of the Superior Court of Worth County, where the Brownlees also owned real property. On March 21, 2017, Kenneth E. Brownlee and Janice J. Brownlee filed a voluntary petition for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Middle District of Georgia. On March 7, 2018, the Brownlees’ bankruptcy case was converted to a Chapter 7 proceeding.

The record shows that Walter W. Kelley was appointed as the interim trustee for the Chapter 7 proceeding (the "Trustee"). On July 6, 2018, the Trustee filed an adversary proceeding asserting that the recordings of the Fi. Fa. in Tift and Worth Counties "were transfers of an interest in property of the Debtors by creation of a judicial lien under 11 U.S.C. § 547" (" Section 547") and seeking to avoid those transfers under Section 547 (b) (4) because the transfers were made within 90 days of the Brownlees’ filing their bankruptcy proceeding. Section 547 (b) (4) (A) provides that, with certain exceptions, a bankruptcy trustee

may, based on reasonable due diligence in the circumstances of the case and taking into account a party's known or reasonably knowable affirmative defenses under subsection (c), avoid any transfer of an interest of the debtor in property – ... made ... on or within 90 days before the date of the filing of the [bankruptcy] petition[.]

11 USC § 547 (b) (4) (A).

The Trustee moved for partial summary judgment under this provision, and the same day, Synovus filed a motion for partial summary judgment as to the Brownlees’ Tift County real property (the "Property"), arguing that the transfer of interest in that Property could not be avoided because the judgment against the Brownlees, which the Trustee argued created the lien, was entered on December 7, 2016, outside the 90-day lookback period under Section 547 (b) (4). The bankruptcy court granted the Trustee's motion and denied Synovus’ motion, holding that "[u]nder Georgia law, only recording a judgment creates a judicial lien on real property" and thus the transfer of interest in the Brownlees’ real property occurred on the date the Fi. Fa. was recorded, not the date the judgment was entered. In re Brownlee , 593 B.R. 916, 923 (IV) (Bankr. M.D. Ga. 2018). Synovus appealed that ruling to the district court, leading to the certified questions posed here.

1. Turning to the district court's first question, we begin with Section 547, which allows a trustee to avoid transfers of property made on or within 90 days of the filing of the bankruptcy petition. Section 547 provides that, with one exception not applicable here, a transfer of an interest in real property is made "at the time such transfer takes effect between the transferor and the transferee, if such transfer is perfected at, or within 30 days after, such time[.]" 11 USC § 547 (e) (2) (A).² Here, the parties do not dispute that the judgment lien on the Property was perfected when the Fi. Fa. was recorded on the GED in Tift County on December 22, 2016,³ but they disagree on whether the transfer of interest in the real property was made as between the Brownlees and Synovus at the time the judgment was entered or at the time the Fi. Fa. was recorded.

To answer that question, we begin with the statute most closely on point. OCGA § 9-12-86 (b), provides that

[n]o judgment, decree, or order or any writ of fieri facias issued pursuant to any judgment, decree, or order of any superior court, city court, magistrate court, municipal court, or any federal court shall in any way affect or become a lien upon the title to real property until the judgment, decree, order, or writ of fieri facias is recorded in the office of the clerk of the superior court of the county in which the real property is located and is entered in the indexes to the applicable records in the office of the clerk. ...

Synovus acknowledges OCGA § 9-12-86 but argues that statute must be read in conjunction with OCGA § 9-12-80, which provides that "[a]ll judgments obtained in the superior courts, magistrate courts, or other courts of this state shall be of equal dignity and shall bind all the property of the defendant in judgment, both real and personal, from the date of such judgments except as otherwise provided in this Code." According to Synovus, under § 9-12-80, judgments have effect from the date of judgment and bind the property of the defendant from that time.

In considering these two statutes, we rely on the "well-settled rule of statutory construction that a statute must be construed in relation to other statutes, and all statutes dealing with the same subject matter are construed together and harmonized wherever possible so as to give effect to the legislative intent." Hastings v. Hastings , 291 Ga. 782, 784, 732 S.E.2d 272 (2012) (citation and punctuation omitted). See also Hartley v. Agnes Scott College , 295 Ga. 458, 462 (2) (b), 759 S.E.2d 857 (2014). Additionally, in reviewing the statutes,

we must presume that the General Assembly meant what it said and said what it meant. To that end, we must afford the statutory text its "plain and ordinary meaning," we must view the statutory text in the context in which it appears, and we must read the statutory text in its most natural and reasonable way, as an ordinary speaker of the English language would.

Bishop v. Goins , 305 Ga. 310, 311, 824 S.E.2d 369 (2019) (citation and punctuation omitted).

Applying these principles to the statutes at issue here, we conclude that although OCGA § 9-12-80 sets out the general principle that a judgment "bind[s]" all the judgment debtor's property, "both real and personal," from the date it is entered, that general principle is expressly limited by the phrase "except as otherwise provided in this Code." The statute itself does not explicate the manner in which a judgment "bind[s]" the judgment debtor's property, and the exception language contemplates that other Code provisions may also address the effect of a judgment on a debtor's property. OCGA § 9-12-86 (b) directly addresses the effect of a judgment on a judgment debtor's real property when the judgment or writ of fieri facias is properly recorded, thus creating an exception to § 9-12-80 ’s general rule.

The text of OCGA § 9-12-86 (b) could not be plainer in defining when a judgment lien is created on the title to real property, providing that "[n]o judgment ... of any superior court ... shall in any way affect or become a lien upon the title to real property until the judgment ... is recorded ... in ... the county in which the real property is located[.]" (Emphasis supplied.) The phrase "in any way" is broad enough to encompass not only the effect of a recorded lien as to third parties, but also as to the parties to the judgment underlying the lien. Accordingly, we hold that as between the judgment creditor and the judgment debtor, no lien is created on the title to the debtor's real property until "the judgment, decree, order, or writ of fieri facias" is properly recorded as required by OCGA § 9-12-86.

This reading applies the plain text of the statutes to give effect to both. As we explained in National Bank of Georgia v. Morris-Weathers Co. , 248 Ga. 798, 800, 286 S.E.2d 17 (1982), although...