Williams v. South Central Farm Credit, ACA

• Decision Date: 29 November 1994
• Docket Number: No. A94A1679,A94A1679
• Citation: 215 Ga.App. 740,452 S.E.2d 148
• Parties: WILLIAMS v. SOUTH CENTRAL FARM CREDIT, ACA et al.
• Court: Georgia Court of Appeals

Page 148

452 S.E.2d 148

215 Ga.App. 740

WILLIAMS v. SOUTH CENTRAL FARM CREDIT, ACA et al.

No. A94A1679.

Court of Appeals of Georgia.

Nov. 29, 1994.

Reconsideration Denied Dec. 19, 1994.

Certiorari Denied April 6, 1995.

Warren S. Shulman, Bemon G. McBride, III, Columbus, for appellant.

Martin, Snow, Grant & Napier, John T. McGoldrick, Jr., Macon, Kirbo & Kendrick, Bruce W. Kirbo, Sr., Bainbridge, for appellees.

SMITH, Judge.

This litigation arose from loans and corresponding deeds to secure debt executed by Loron E. Williams, Jr., in favor of the predecessors in interest of South Central Farm Credit, ACA ("Farm Credit"). Williams began purchasing land in 1946, financing his purchases with mortgages and security deeds to individuals, banks and other entities. In 1987 he filed for relief under Chapter 11 of the United States Bankruptcy Code. A reorganization plan was provisionally confirmed in 1988, discharging approximately half of Farm Credit's claim and providing for periodic payments to retire the remainder of Farm Credit's claim. When Williams failed to make those payments, Farm Credit and Williams renegotiated the plan, and the resulting settlement agreement was approved by the bankruptcy court. However, Williams also failed to make the payments provided under the settlement agreement. Farm Credit notified Williams of the acceleration of his indebtedness and gave notice of foreclosure and sale to take place on April 7, 1992.

On April 3, 1992, Williams filed a second bankruptcy proceeding, which he testified was for the purpose of stopping the foreclosure. After an emergency hearing held on April 6, 1992, the bankruptcy court determined Williams had failed to abide by the terms of the settlement agreement, terminated the automatic stay of bankruptcy with respect to Farm Credit, and authorized Farm Credit to proceed with the foreclosure. On the morning of the foreclosure sale, Williams filed a petition to enjoin the sale in the Crisp County Superior Court. The petition was denied, and the property was sold to Brooks County Land Partnership.

Williams then filed this action in the Crisp County Superior Court seeking injunctive relief and damages against Farm Credit, the partners of Brooks County Land Partnership, Farmers & Merchants Bank, The Citizens Bank, Del-Cook Lumber Company, and The Commercial Bank of Thomasville. After his prayer for an interlocutory injunction was denied, Williams dismissed all defendants except Farm Credit and filed a second amended complaint naming Farm Credit and one of its officers as defendants. ¹ The amended complaint alleged wrongful foreclosure on his property and sought compensatory damages for loss of equity in the property, punitive damages and attorney fees. After extensive discovery, the trial court denied Williams's motion for summary judgment and granted defendants' motion for summary judgment. Williams appeals.

1. In his first enumeration of error, Williams contends the realty should not have been advertised and sold as a single unit. Citing decisions from other jurisdictions, Williams urges the adoption of a rule that distinct parcels of land secured by separate deeds to secure debt should be advertised and sold separately. However, we need not address that question on the facts presented here. The four deeds to secure debt at issue do not each refer to a distinct and separate tract of realty. The same tracts of land are described in more than one deed. Moreover, the deeds were successive deeds executed in favor of Farm Credit's predecessors in interest over a period of eleven years; two deeds expressly refer to priorities established on the same tracts of property by earlier deeds. ² This enumeration is without merit.

2. Williams next contends the trial court should not have granted summary judgment to defendants because there was evidence their pre-foreclosure conduct "chilled" the sale, causing the realty to be sold at a grossly inadequate price. He first contends Farm Credit and its officer chilled the sale by fraudulently leading him to believe it would accept delinquent payments or a deed in lieu of foreclosure. However, these contentions were fully addressed in the April 6, 1992 emergency hearing before the bankruptcy court. At the hearing, Williams testified at length to the alleged negotiations regarding the payment of the delinquent installments as well as the alleged agreement to accept a deed in lieu of foreclosure. The bankruptcy court concluded Williams had failed to abide by the terms of its final order incorporating the parties' settlement agreement and allowed the foreclosure sale to proceed. These issues were litigated and necessarily decided by the bankruptcy court, and Williams is barred by the doctrine of collateral estoppel from reasserting them here. Sorrells Constr. Co. v. Chandler Armentrout & Roebuck, P.C., 214 Ga.App. 193, 194, 447 S.E.2d 101 (1994). Because the bankruptcy court ruled that Farm Credit had a right under the terms of the court-approved settlement agreement to require timely payments and to proceed to foreclosure, Williams cannot now complain that this conduct chilled the sale. There can be no liability for the exercise of an absolute right. See generally Automatic Sprinkler Corp. v. Anderson, Inc., 243 Ga. 867, 257 S.E.2d 283 (1979) (no breach of implied covenant of good faith); Systems Engineering Assoc. v. Peachtree Corners, 179 Ga.App. 48, 345 S.E.2d 136 (1986) (no liability based on fraud); J. C. Penney Co. v. Davis & Davis, Inc., 158 Ga.App. 169, 170-171(1), 279 S.E.2d 461 (1981) (no tortious interference with contract). Even were this not the case, Williams has not shown, as he must, a causal connection between this conduct and any chilling of the sale. Kennedy v. Gwinnett Commercial Bank, 155 Ga.App. 327, 329-331(1), 270 S.E.2d 867 (1980).

Williams next contends Farm Credit represented to a prospective purchaser that the property would be sold for ten percent down, with the balance due in thirty days. He alleges Farm Credit's later withdrawal of this representation chilled the sale. However, assuming without deciding such a representation was indeed made and relied upon by the prospective purchaser, this does not establish that the sale was chilled. Williams must also establish that the particular conduct complained of caused the property to be sold for a grossly inadequate price. Kennedy, supra. The prospective purchaser testified the property ultimately sold for more than he was prepared to pay for it. It is apparent, therefore, that any belief or conduct on the part of this witness did not cause the property to be sold for a grossly inadequate price.

Williams also contends three errors in the advertisement for the sale had a chilling effect. The advertisement consisted of ten closely printed columns published in the Cordele Dispatch on four successive occasions. The three errors were two substitutions of "southeast" for "southwest" in describing an outparcel, and the omission of one line of text referring to a land lot identified immediately below. The errors appeared in the first two publications of the advertisement but were corrected in the third and fourth publications. Each advertisement referenced the deeds to secure debt, giving the book and page number in the records of Crisp County.

If a notice or advertisement of a foreclosure sale under power does not substantially meet the legal requirements, the sale should be set aside. However, in order to void the sale, the irregularity or deficiency in the advertisement must contribute to chilling the price on the sale of the property. Walker v. Northeast Production Credit Assn., 148 Ga.App. 121, 122(2), 251 S.E.2d 92 (1978). Errors that would not confuse the bidding intentions of any potential bidder of sufficient mental capacity to enter a binding contract for the sale of the real property do not show a chilling of the sale so that a fair market value bid was not obtained. Tarleton v. Griffin Fed. Savings Bank, 202 Ga.App. 454, 455(2)(b), 415 S.E.2d 4 (1992). Moreover, reference in a foreclosure advertisement to extrinsic evidence such as official records constitutes "a sufficient key" to correct a typographical error and show the precise location of the property. Penn Mut. Life Ins. Co. v. Donalson, 177 Ga. 84, 85, hn. 4, 169 S.E. 337 (1933) (reference to recorded security deed). See also Shantha v. West Ga. Nat. Bank, 145 Ga.App. 712, 713, 244 S.E.2d 643 (1978) (reference to unrecorded plat).

Williams's witness acknowledged the reference in the advertisements to the deeds to secure debt. Also, he did not examine those deeds or any other extrinsic evidence to determine whether the errors were cured. There was no evidence that any prospective purchaser was confused by three errors in two out of four publications of the advertisement. Williams stated in an interrogatory response that he knew of no prospective purchasers who were confused by the advertisement. The only testimony presented was that the prospective purchasers had no problem determining the property offered for sale through the use of official records such as tax plats and maps. Again, Williams has failed to show a causal connection between the alleged wrongdoing and any chilling of...