Court Opinion

ID: 3157049
Source: CourtListenerOpinion
Date Created: 2015-11-23 21:05:36.391239+00
Date Added: 2024-06-11T18:17:12.415160
License: Public Domain

FOURTH DIVISION
                                 BARNES, P. J.,
                             RAY and MCMILLIAN, JJ.

                    NOTICE: Motions for reconsideration must be
                    physically received in our clerk’s office within ten
                    days of the date of decision to be deemed timely filed.
                                http://www.gaappeals.us/rules

                                                                  November 10, 2015

In the Court of Appeals of Georgia
 A15A1590. McKETHAN v. WELLS FARGO BANK, N. A.

      BARNES, Presiding Judge.

      Pamela McKethan appeals from the trial court’s grant of default judgment to

Well Fargo Bank, N. A. on the bank’s action seeking reformation of a security deed

to correct errors in the legal description of the subject property, and to secure its

interest in the property. McKethan contends that the trial court erred in granting the

default judgment because Wells Fargo failed to file an affidavit of non-military service

pursuant to 50 USCS Appx § 521, and McKethan filed a timely motion to dismiss

which should have been construed as an answer. Because the motion to dismiss was

sufficient to construe an answer, we reverse.

      On appeal, we review a trial court’s entry of default judgment for abuse of

discretion. Edenfield & Cox, P.C. v. Mack, 282 Ga. App. 816 (640 SE2d 343)

(2006).The facts demonstrate that on May 31, 2007, McKethan obtained title to the

subject property and on June 1, 2007, she transferred title, by quitclaim deed, to the
property to Home Bound Investment Group, LLC, (“HBIG”), a limited liability

company of which McKethan was the only member. The original warranty deed and

quitclaim deed were both recorded in Cobb County on June 11, 2007. On October 26,

2007, McKethan obtained a loan from Wachovia Bank for $101,000 which she secured

with the subject property. She executed a security deed conveying the property to

Wachovia which was also recorded.

      On January 13, 2014, Wells Fargo brought an action against HBIG and

McKethan in the Superior Court of Cobb County seeking to reform the security deed

to correct the legal description and to include HBIG’s interest in the property. On April

30, 2014, by order of the superior court, McKethan was served by publication pursuant

to OCGA § 9-11-4 (f) (1), and required to file an answer within 60 days of the date of

the order for publication.

      McKethan did not file a responsive pleading, but on June 27, 2014, she filed a

pro se notice of removal to the United States District Court for the Northern District

of Georgia, citing as a basis for removal federal question jurisdiction and diversity of

the parties. She also filed a pro se motion to dismiss Wells Fargo’s complaint in the

District Court. Thereafter, Wells Fargo filed a motion to remand, which, on November

12, 2014, the District Court granted after finding that all of Wells Fargo’s claims arose

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under state law rather than federal law, and that removal to federal court was not

proper based on the diversity of the parties because McKethan “is a citizen of the state

in which Wells Fargo brought suit.” The District Court also denied McKethan’s motion

to dismiss for lack of subject matter jurisdiction, and remanded the case to the Superior

Court of Cobb County.

         On January 9, 2015, Wells Fargo filed a motion for default judgment based on

McKethan’s failure to file an answer or any pleadings to its complaint within 60 days

of the order allowing service by publication, even taking into account the time period

tolled due to the removal to federal court. It further maintained that more than 15 days

had passed since the date of default, and thus the default could not be opened as a

matter of right within the period permitted by OCGA § 9-11-55 (a). The trial court

granted the motion and entered a default judgment for Wells Fargo. It also ordered that

legal descriptions in the warranty, security, and quitclaim deeds be reformed to correct

them, and that the Security Deed be reformed to include HBIG as a grantor and be

declared a first priority lien against the subject property. McKethan appeals from that

order.

         1. McKethan contends that the trial court erred in granting a default judgment

against her because Wells Fargo failed to file an affidavit of non-military service

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pursuant to 50 USCS Appx. §521 (b) (“Protection of Servicemembers Against Default

Judgments”). However, she does not assert that she is an active service member who

should be afforded that protection under the Service Members Civil Relief Act, 50

USCS Appx §§ 501 et seq. McKethan instead argues that in any civil proceeding in

which the defendant does not make an appearance, the trial court must require the

plaintiff to provide an affidavit stating whether or not the plaintiff is in military service.

       Even assuming without deciding that Wells Fargo was required to file an

affidavit showing that McKethan was not an active service member, see In re

Hampson, 429 B.R. 360, 362 (Bankr. N.D. Ga. 2009), 50 USCS Appx § 521 (g) (1)

further provides that

       [i]f a default judgment is entered in an action covered by this section
       against a servicemember during the servicemember’s period of military
       service (or within 60 days after termination of or release from such
       military service), the court entering the judgment shall, upon application
       by or on behalf of the servicemember, reopen the judgment for the
       purpose of allowing the servicemember to defend the action if it appears
       that– (A) the servicemember was materially affected by reason of that
       military service in making a defense to the action; and (B) the
       servicemember has a meritorious or legal defense to the action or some
       part of it.

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       Thus, even if McKethan was entitled to protection under the Act, her recourse

was to file an application in the trial court to open the default on that basis pursuant to

50 USCS Appx § 521 (g) (1), and this she has not done.1 Accordingly, this

enumeration fails.

       2. McKethan also contends that the trial court erred in granting Wells Fargo’s

default judgment because her timely-filed a motion to dismiss in the District Court,

should have been construed as an answer. We agree.

       Here, McKethan was served by publication on April 30, 2014, and given 60

days to file an answer. The notice of removal to the District Court was filed on June

27, 2014, and on the same day McKethan filed a motion to dismiss. The Superior

Court lost jurisdiction until the case was remanded by the District Court on November

12, 2014. 28 USCS § 1446 (d); Cotton v. Fed. Land Bank of Columbia, 246 Ga. 188,

189 (269 SE2d 422) (1980). When the case was removed, the 60-day period for filing

an answer in the Superior Court had not expired. Until the Superior Court resumed

jurisdiction pursuant to the remand from the District Court, no responsive pleadings

could be filed in the Superior Court, and the running of the 60-day period for filing an

       1
       We note that there is no indication in the record that McKethan presently or
formerly served in the military.

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answer in the Superior Court was suspended. Allen v. Hatchett, 91 Ga. App. 571,

576-577 (1) (86 SE2d 662) (1955). When the District Court remanded the case to the

Superior Court, “the case stood as it did at the time of removal,” and the remaining

portion of the 60-day period for filing an answer in the Superior Court commenced to

run. Id. at 577. Despite the recommencing of the 60-day period, McKethan had not

filed an answer in superior court at the time the trial court entered the default judgment.

       Our courts have held, however that,

       [u]nder federal practice, a removed case proceeds according to the
       Federal Rules of Civil Procedure and is treated as though it had been
       commenced originally in the federal court. Repleading according to the
       federal rules is generally not required unless there is a substantial
       difference between the state and federal practice. Where, as here, a
       pleading [McKethan’s motion to dismiss in the district court]... has been
       timely filed, logic, reasoning and comity all support the conclusion that
       a similar rule should be applied by the Georgia courts upon remand.
       Since the Georgia Civil Practice Act and the Federal Rules of Civil
       Procedure are similar in most respects, the instances in which repleading
       would be required would be few, and such requirement should be upon
       directive of the trial court. Thus, . . . a defendant who files in state court
       with his petition for removal a copy of his answer to be filed in district
       court is not in default upon remand.

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(Citations and punctuation omitted; emphasis supplied.) Teamsters Local 515 v.

Roadbuilders, Inc. of Tenn., 249 Ga. 418, 420 (2) (291 SE2d 698) (1982), overruled

in part on other grounds, Shields v. Gish, 280 Ga. 556, 557 (1) (629 SE2d 244) (2006).

      With regard to the sufficiency of McKethan’s motion to dismiss as a purported

answer, in Georgia, under our system of notice pleading, the substance, rather than the

nomenclature, of legal pleadings determines their nature. Frost v. Frost, 235 Ga. 672,

674 (1) (221 SE2d 567) (1975).

      The Civil Practice Act pleading requirements are to be construed liberally
      and in favor of the pleader, in furtherance of the basic premise behind the
      Act — to substitute notice pleading for issue pleading. Pleadings are
      intended to serve as a means of arriving at fair and just settlements of
      controversies between litigants. They should not raise barriers which
      prevent the achievement of that end.

(Citations and punctuation omitted.) Cotton v. Federal Land Bank of Columbia, 246

Ga. 188, 191 (269 SE2d 422) (1980).

      The required elements of an answer are set forth in OCGA § 9-11-8 (b) as

follows:

      A party shall state in short and plain terms his defenses to each claim
      asserted and shall admit or deny the averments upon which the adverse
      party relies. If he is without knowledge or information sufficient to form

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       a belief as to the truth of an averment, he shall so state, and this has the
       effect of a denial. Denials shall fairly meet the substance of the averments
       denied. When a pleader intends in good faith to deny only a part or a
       qualification of an averment, he shall specify so much of it as is true and
       material and shall deny only the remainder.... [and] when he does so
       intend to controvert all its averments, he may do so by general denial....

       Wells Fargo sought equitable reformation of its security deed due to mistake or

fraud, unjust enrichment, and a declaratory judgment determining property ownership.

In her motion to dismiss, McKethan raised affirmative defenses, and contended that

the statute had run on Wells Fargo’s claims, that it refused to accept loan payments,

and that it was solely responsible for any errors in the deed or loan documents because

it deliberately avoided its own underwriting guidelines.

       Thus, given that “a timely answer filed in district court following timely removal

of the action is sufficient to prevent a default in a state court if the case is subsequently

remanded from district court,” Teamsters, 249 Ga. at 421 (2), and McKethan’s motion

to dismiss was sufficient to put Wells Fargo on notice that she had contested its claims

in federal court, the trial court erred in granting Wells Fargo a default judgment.

       Judgment reversed. Ray, J., concurs. McMillian, J., concurs in judgment only.

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