Court Opinion

ID: 5646863
Source: CourtListenerOpinion
Date Created: 2022-01-11 06:54:25.18111+00
Date Added: 2024-06-11T08:38:24.033751
License: Public Domain

McMurray, Presiding Judge,
dissenting.
“The foreclosing party is not a guarantor or insurer of satisfactory results for a defaulting debtor as to market price. Kennedy v. Gwinnett Commercial Bank, 155 Ga. App. 327, 331 (270 SE2d 867). Its obligation is to sell according to the terms of the security instrument, in good faith, in compliance with the statutory requirements, *744and to obtain the highest amount possible by such a sale. Id.” Shingler v. Coastal Plain Prod. Credit Assn., 180 Ga. App. 539, 543 (4) (349 SE2d 785). Breach of this duty is a tort compensable at law. Clark v. West, 196 Ga. App. 456, 457 (395 SE2d 884).
In the case sub judice, plaintiff has presented evidence that the price realized on the foreclosure was grossly inadequate, amounting to approximately one-half the true market value of the property and a shortfall of perhaps $5,000,000. However, as this is a wrongful foreclosure claim, plaintiff’s burden extends beyond a showing of inadequate price as he must also demonstrate that the power of sale was exercised other than in good faith. Threadmill, Ltd. v. First Union Nat. Bank of Ga., 207 Ga. App. 688, 689 (1) (428 SE2d 685); Kennedy v. Gwinnett Commercial Bank, 155 Ga. App. 327, 331 (1) (270 SE2d 867).
One of the circumstances of the sale which plaintiff maintains was improper is the sale of many non-contiguous parcels of land, totaling several thousands of acres, as one unit. Recognizing an absence of direct Georgia authority, plaintiff has cited the cases of several other jurisdictions for the proposition that such an en masse sale of property is inconsistent with the foreclosing party’s duty to adopt a procedure intended to obtain the highest amount possible by such sales. See for example Garris v. Fed. Land Bank of Jackson, 584 S2d 791, 793-794. If we may not take notice of such as a general rule of economics, there is ample evidence that the offering of the many non-contiguous parcels in this case separately or in smaller lots would have opened the field to a greater number of bidders who would have offered higher prices.
Defendants have responded by relying upon the contractual language of the deeds to secure debt which authorize defendant Farm Credit to sell “all or any part of said land.” Such language has been construed to permit the secured party to sell the pledged property, in its sole discretion, either in parcels or en masse. Wardlaw v. Wood-ruff, 175 Ga. 515, 516 (7) (165 SE 557); Doyle v. Moultrie Banking Co., 163 Ga. 140, 142 (135 SE 501); Dutton v. Faulk, 159 Ga. 736 (1) (126 SE 718). Each of these cases involves a single security deed.
There are also cases holding that where property is sold under authority of a single security deed, it need not be sold in parcels absent a provision in the deed requiring such a sale. See Harwell v. First Fed. Savings &c. of Winder, 245 Ga. 757 (2) (267 SE2d 229); Marett Properties, L.P. v. Centerbank Mtg. Co., 204 Ga. App. 265 (419 SE2d 113); Marion G. Davis, Inc. v. Cameron-Brown Co., 177 Ga. App. 646 (340 SE2d 216); Classic Enterprises v. Continental Mtg. Investors, 135 Ga. App. 105 (1) (217 SE2d 411).
In the present case there are four security deeds. As noted by the majority, some tracts of land are described in more than one deed. *745However, none of the security deeds refers to all of the parcels. The simultaneous foreclosure of multiple security deeds upon the same property is permitted, Williams v. Joel, 89 Ga. App. 329 (3) (79 SE2d 401), and of course, several properties may be referenced by a single security deed. However, I find no authority for the procedure used by defendants of aggregating for sale different properties which are to be sold under the authority of multiple security deeds. To permit such a procedure is to make a mockery of the foreclosing party’s obligation to conduct the sale in a manner intended to bring the highest price. Recognizing that our case law is clear that in some respects Georgia does not aggressively demand procedures which attempt to maximize the proceeds from foreclosure sales, there still must be limits set in regard to the extent which foreclosing parties may depress prices by aggregating properties for sale.
Decided November 29, 1994
Reconsideration denied December 19, 1994
Warren S. Shulman, Bemon G. McBride III, for appellant.
Martin, Snow, Grant & Napier, John T. McGoldrick, Jr., Kirbo & Kendrick, Bruce W. Kirbo, Sr., for appellees.
In my view, the combined sale of all of the properties referenced in these four deeds as one unit was improper and when considered in conjunction with the inadequate price realized on the sale constitutes a just basis for an award of damages on plaintiff’s wrongful foreclosure claim. Therefore, I cannot agree with Division 1 of the majority opinion and must respectfully dissent. I would hold that, where multiple security deeds are involved, the foreclosing party’s duty to maximize the proceeds of the sale requires that the property be offered in parcels which maximize the proceeds of the sale, although the parameters of this rule must be limited by the foreclosing party’s rights to offer en masse the property referenced in a single security deed. This supposition has been seen in the confirmation case of First Nat. Bank of Louisville, Kentucky v. Childress-Ross Properties, 189 Ga. App. 765 (377 SE2d 533), and while the issues in the case sub judice are somewhat different, this earlier case is at least consistent with the rule I propose.