Court Opinion

ID: 7878687
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:18:42.382386+00
Date Added: 2024-06-11T09:11:18.551297
License: Public Domain

MCFADDEN, Judge,
dissenting.
I respectfully dissent. The central issue presented by this case is whether a security deed holder who does not also hold the promissory note can validly institute foreclosure proceedings. This very issue is pending before the Supreme Court of Georgia on a certified question from a federal district court because there is no clear Georgia precedent on this matter. Accordingly, rather than rendering an opinion that may ultimately be inconsistent with our Supreme Court’s decision and for purposes of judicial economy, we should vacate the trial court’s order of dismissal, remand the case to the trial court, and direct the trial court to stay further proceedings until the Supreme Court’s decision on this dispositive issue. We recently did exactly that in another case presenting this same issue: U. S. Bank, N.A. v. Phillips, 318 Ga. App. 819, 826 (4) (734 SE2d 799) (2012). I recognize that, in another case decided today, we follow the approach advocated by the majority. Montgomery v. Bank of America, 321 Ga. App. 343, 345 (2) (740 SE2d 434) (2013). But I think the approach followed in U. S. Bank, N.A. v. Phillips is the better approach.
On appeal, Larose contends that the trial court erred in dismissing the wrongful attempted foreclosure claim and based on that error it also improperly dismissed the other related claims. Larose argues that Georgia law mandates that a bank hold both the security deed and the note in order to initiate foreclosure proceedings. Thus, it is *470apparent that the instant case raises the very question that is presently before our Supreme Court and that led this court to vacate, remand, and stay in U. S. Bank, N.A.
[I]n You v. JPMorgan Chase Bank, N.A., No. 1:12-cv-202-JEC-AJB, 2012 U. S. Dist. LEXIS 127461, at *17 (III) (C) (N.D. Ga. Sept. 7, 2012), inquiring “whether a security deed holder who does not also hold the note, or have an interest in the underlying debt obligation, can validly institute foreclosure proceedings.” Recognizing that there are no clear controlling precedents deciding this issue, the federal court certified the question to the Supreme Court of Georgia. Id. The Supreme Court of Georgia’s decision in You v. JP Morgan Chase Bank, N.A., Case No. S13Q0040 (docketed Sept. 13, 2012) will be dispositive of the question of whether [the] complaint asserts a viable claim for relief against [the defendants]. Accordingly, the trial court’s order as to the wrongful attempted foreclosure claim [and related claims] is vacated, and this case is remanded. Any further proceedings in this matter should be stayed until the Supreme Court of Georgia has rendered its decision in You, supra.
(Punctuation omitted.) U. S. Bank, N.A., supra. It is true that Larose enumerates a second error regarding the validity of MERS’s assignment of the security deed, but that issue is intertwined with the question pending before our Supreme Court.
Notwithstanding that pending certified question, the majority resolves this case on the merits. Its resolution may well match the decision eventually reached by our Supreme Court. But it may not. That court’s analysis may diverge from ours — perhaps substantially, perhaps just enough to confound the parties and the trial court.
There is a split of authority in the Northern District of Georgia on this issue — which is why that court certified the question. See You v. JPMorgan Chase Bank, N.A., No. 1:12-CV-202-JEC-AJB, 2012 WL 3904363, at *5 (III) (C), 2012 U. S. Dist. LEXIS 127461, at *16 (III) (C) (N.D. Ga. Sept. 7, 2012). In her Order and Opinion certifying the question, Chief Judge Carnes acknowledged that the reasoning which the majority has adopted has been adopted by “most judges” in the Northern District of Georgia and “is grounded in well-established principles of contract law.” Id. at *4. That reasoning
has not been universally followed in this district, however, and a split of authority has developed as to whether a deed *471holder who does not also possess the note can validly institute foreclosure proceedings under Georgia law. Denying a motion to dismiss on facts similar to those presented here, a colleague has held that “separation of the note and the security deed . . . create [s] a substantial question of what entity has the right to foreclose when the borrower defaults on the loan.” Morgan v. Ocwen Loan Serv., LLC, 795 F.Supp.2d 1370, 1375 (N.D. Ga. 2011) (Totenberg, J.). Addressing the issue more directly in a later case, the Morgan court concluded that “Georgia statutes and case law require the holder of the loan to carry out the foreclosure and to identify itself as the secured creditor of public record prior to the foreclosure sale.” Stubbs v. Bank of Am., 844 F.Supp.2d 1267, 1273 n. 3 (N.D. Ga. 2012) (Totenberg, J.).
Id. at *5.
There is no merit to the majority’s suggestion that we are compelled to disregard that split of authority and the pending certified question by OCGA § 5-6-30, OCGA § 5-6-48 (b), or by our Supreme Court’s decision in Felix v. State, 271 Ga. 534 (523 SE2d 1) (1999). OCGA § 5-6-30 provides that the Appellate Practice Act is to be liberally construed. OCGA § 5-6-48 (b) pertains to dismissals of appeals. Felix disapproved this court’s former practice of frequently refusing to address issues based on perceived deficiencies in enumerations of error. So the application of those authorities to the procedural dilemma before us is attenuated at best. The majority’s argument that a remand is contrary to our statutory obligations ignores U. S. Bank, N.A., supra, which is directly on point and in which this court took the very action being taken in this case.
As in U. S. Bank, N.A., the circumstances here are analogous to those in which a trial court’s summary judgment ruling relied on an erroneous legal theory. In such cases “we have discretion either to [reach the merits] or to return the case to the trial court for further proceedings.” McRae v. Hogan, 317 Ga. App. 813, 818 (4) (732 SE2d 853) (2012). “[J]udicial economy may be maximized by returning the case to the trial court upon the appellate court’s discovery that the trial court relied on an erroneous legal theory or reasoning----Which course to pursue must be left to the appellate court’s discretion.” (Emphasis supplied.) Id., quoting City of Gainesville v. Dodd, 275 Ga. 834, 838-839 (573 SE2d 369) (2002).
In this case, as the issue is pending before our Supreme Court, we cannot authoritatively determine whether or not the trial court relied on an erroneous legal theory in dismissing the complaint. But that *472matter is pending before and will be resolved by the Supreme Court in You. Thus, the appropriate course in this case is for this court to exercise its discretion and promote judicial economy by simply returning the case to the trial court so that it can have the benefit of an authoritative decision from our Supreme Court ■— rather than a decision from this court which may match our Supreme Court’s decision, may be contrary to that decision, or may differ from that decision just enough to confound the parties and the trial court.
Decided March 29, 2013
Reconsideration denied April ll, 2013
Carlo Larose, pro se.
McGuire Woods, Andrew G. Phillips, Kimberly A. Wright, Robert J. Waddell, Jr., Jimmy T. Howell, Steven J. Flynn, for appellees.
Accordingly, as we didin U. S. Bank, N.A., we should remand this case to the trial court and direct that further proceedings should be stayed pending the Supreme Court’s decision in You. The trial court should be directed, upon decision by our Supreme Court, to reconsider the motion to dismiss and enter an order consistent with that opinion. The parties would, of course, be entitled to pursue appropriate appellate rights from that trial court order.
I am authorized to state that Presiding Judge Miller joins in this dissent.