Titan Constr. Co. v. CBC Nat'l Bank
| Decision Date | 15 March 2013 |
| Docket Number | CASE NO. CV411-224 |
| Parties | TITAN CONSTRUCTION COMPANY, LLC, Plaintiff, v. CBC NATIONAL BANK, Defendant. |
| Court | U.S. District Court — Southern District of Georgia |
Before the Court is Plaintiff Titan Construction Company, LLC's ("Titan Construction") Motion for Summary Judgment (Doc. 22) and Defendant CBC National Bank's ("CBC") Motion for Summary Judgment (Doc. 29). For the reasons outlined below, Defendant's motion (Doc. 29) is GRANTED and Plaintiff's motion (Doc. 22) is DISMISSED AS MOOT. The Clerk of Court is DIRECTED to close this case.
The following undisputed facts form the basis of this action.1 Turner's Cove was a planned residential community located on Wilmington Island, Georgia consisting of severallots. Plaintiff is a developer and construction company that obtained financing from First National Bank of Nassau County to develop the Turner's Cove subdivision. First National Bank of Nassau County is a division of Defendant CBC. In June 2005, Plaintiff executed a Deed to Secure Debt, Assignment of Rents and Security Agreement to Defendant in return for a construction loan guaranty of $1,600,000.00.2(Doc. 29-1 ¶ 1.) In December 2005, Plaintiff again executed a Deed to Secure Debt, Assignment of Rents and Security Agreement in return for a construction loan guaranty of $2,800,000.00.3 (Id. ¶ 2.) The June 2005 and December 2005 loans were renewed, modified and expanded through additional development and acquisition loans. (Id. ¶ 3.)
In September 2006, Defendant made a series of loans to Plaintiff for construction of specific residential units inPhase V of Turner's Cove subdivision, taking a separate Deed to Secure Debt on each particular lot. (Doc. 29, Exs. 3, 4, 5, 6, 7.) In May 2007, Plaintiff executed another Deed to Secure Debt, Assignment of Rents and Security Agreement to Defendant in return for a construction loan guaranty of $1,603,000.00. (Doc. 29-1 ¶ 6.) This guaranty conveyed to Defendant fee simply title to Lots 1 through 7 of Phase V of Turner's Cove subdivision. (Id.)
By the fall of 2008, Plaintiff defaulted on its obligations owed to Defendant. (Id. ¶ 7.) On June 4, 2009, Defendant's counsel sent Plaintiff and its guarantors a Notice of Maturity, Foreclosure and Attorney's Fees for the loans on subdivision Lots 2, 3, 5, 6, 7, and 24—the Lots still owned by Plaintiff. (Id. ¶ 8.) On July 7, 2009, Defendant held a foreclosure sale for Lots 2, 3, 5, 6, 7, and 24. (Id. ¶ 9.) Defendant was the high bidder for all six parcels. Defendant's bid amount for all six parcels totaled $3,266,738.18—the outstanding principal balance owed by Plaintiff on the six parcels, plus the expenses incurred by Defendant to maintain and complete the residential units, and the required taxes and assessments. (Id.) The parties agree that at the time of the July 2009 foreclosure sale, the balance owed by Plaintiff on the outstanding loans exceeded the bid amount. (Id. ¶ 12.)
(Doc. 29, Exs. 2-7, 10-15.) The plat referred to was made before Turner's Cove subdivision had been completely subdivided and showed only an undivided parcel of land labeled "Lots 1 through 7" and another undivided parcel labeled "Lots 24 through 30." (Id. ¶ 14.) Moreover, it is also undisputed that Plaintiff redrew the boundaries for Lots 1-7 after the Deed to Secure Debt on Lot 7 had been executed. (Id. ¶ 16.)
As a result, Defendant readvertised and conducted a second foreclosure sale on December 1, 2009 pursuant toother Deeds to Secure Debt, Assignments of Rents and Security Agreements. (Id. ¶ 18.) Defendant again was the high bidder at the foreclosure sale and purchased the foreclosed property pursuant to two Deeds Under Power of Sale that conveyed Plaintiff's interest in the property. (Id. ¶ 19.) Defendant's winning second sales bid totaled $3,266,738.18, the identical bid amount from the July 2009 foreclosure proceedings. (Doc. 29-1 ¶ 22.)
Plaintiff brought this action in the State Court of Chatham County, Georgia seeking to recover, as mortgagor, surplus monies from the two foreclosure sales. (Doc. 1.) Plaintiff contends that under O.C.G.A. § 44-14-190, it is entitled to recover the surplus amount from both foreclosure sales. (Id. at 8.) According to Plaintiff, Defendant received over $6 million from both the July 2009 and December 2009 foreclosure sales. After adjusting for the amount Plaintiff owed to Defendant, Plaintiff avers that it is due the excess amount—$3,142,351.83. (Id.) In addition, Plaintiff alleges theories of unjust enrichment and conversion, and seeks attorney's fees and punitive damages. Defendant filed a timely notice of removal. Both Plaintiff (Doc. 22) and Defendant (Doc. 29) have filed Motions for Summary Judgment.
According to Federal Rule of Civil Procedure 56(a), "[a] party may move for summary judgment, identifying each claim or defense—or the part of each claim of defense—on which summary judgment is sought." Such a motion must be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Id. The "purpose of summary judgment is to 'pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.' " Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) ().
Summary judgment is appropriate when the nonmovant "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (198 6). The substantive law governing the action determines whether an element is essential. DeLong Equip. Co. v. Wash. Mills Abrasive Co., 887 F.2d 1499, 1505 (11th Cir. 1989).
As the Supreme Court explained:
[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.
Celotex, 477 U.S. at 323. The burden then shifts to the nonmovant to establish, by going beyond the pleadings, that there is a genuine issue as to facts that are material to the nonmovant's case. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991).
The Court must review the evidence and all reasonable factual inferences arising from it in the light most favorable to the nonmovant. Matsushita, 475 U.S. at 587-88. However, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Id. at 586. A mere "scintilla" of evidence, or simply conclusory allegations, will not suffice. See, e.g., Tidwell v. Carter Prods., 135 F.3d 1422, 1425 (11th Cir. 1998). Nevertheless, where a reasonable fact finder may "draw more than one inference from the facts, and that inference creates a genuine issue of material fact, then the Court should refuse to grant summary judgment." Barfield v. Brierton, 883 F.2d 923, 933-34 (11th Cir. 1989).
"In a diversity jurisdiction case, the court applies the substantive law of the state in which the case arose." Azar v. Nat'l City Bank, 382 F. App'x 880, 884 (11th Cir. 2010). Therefore, the choice of law rules of the forum state of Georgia determine what substantive law applies to this dispute. U.S. Fid. & Guar. Co. v. Liberty Surplus Ins. Corp., 550 F.3d 1031, 1033 (11th Cir. 2008). The parties agree that Georgia law governs this dispute. Accordingly, the Court will apply Georgia law, where applicable.
Defendant has moved for summary judgment alleging that the Deeds to Secure Debt and the Deeds Under Power of Sale pursuant to the July 2009 foreclosure sale are void because the descriptions were legally insufficient, thus nullifying the July 2009 foreclosure. (Doc. 29-2 at 9.) In response, Plaintiff contends that its debts to Defendant were fully satisfied through the July 2009 foreclosure sale and that Defendant had no legal right to foreclosure on the same property in December 2009. (Doc. 36 at 5.) According to Plaintiff, because the mortgagee made a full credit bid, the mortgage debt is satisfied and the mortgage is extinguished. (Id. at 5-6.)
In Georgia, a deed must have a "sufficiently full and definite" description of the property in order to be properly conveyed. Lord v. Holland, 282 Ga. 890, 892, 655 S.E.2d 602, 603-04 (2008). Where a description is vague and indefinite, the deed is invalid. Id. The sufficiency of the description of property in a deed is a question of law. Strickland v. CMCR Investments, LLC, 279 Ga. 112, 115, 610 S.E.2d 71, 73 (2005) (citing Pirkle v. Turner, 277 Ga. 308, 588 S.E.2d 733 (2003)). The Georgia Supreme Court has clarified when a deed's description is adequate. In Strickland, the deed was declared invalid because it...
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