Justia Banking Opinion SummariesArticles Posted in Georgia Supreme Court
Alstep, Inc. v. State Bank & Trust Co.
Appellant Alstep, Inc. obtained a multimillion dollar loan from Appellee State Bank and Trust Company (SB&T) for the purchase of a sandwich shop, gas station and liquor store. Alstep fell behind on loan payments, and the Bank conducted a non-judicial foreclosure. SB&T was the highest bidder at the sale, and applied the proceeds of that sale to Alstep's loan balance. There was still a deficit. The Bank demanded immediate possession of the property, but Alstep refused. Despite receiving notice of a temporary restraining order, Alstep continued to operate the gas station and otherwise make use of the property. SB&T filed and served Alstep with an emergency motion for appointment of a receiver. SB&T cited three grounds in support of its motion: (1) that Alstep converted rent from the property's tenant (the sandwich shop) that should have gone to SB&T; (2) that Alstep was depleting the property that served as collateral for its debt; and (3) that SB&T needed to take control of the property to guard against its potential liability under state and federal environmental regulations as the owner of the gas station. Appellant never filed a response to the motion, but ultimately challenged the trial court's appointment of a receiver. The Supreme Court held that the trial court had broad discretion in deciding whether to appoint a receiver, and found no abuse of that discretion. View "Alstep, Inc. v. State Bank & Trust Co." on Justia Law
Wells Fargo Bank, N.A. v. Jenkins
Stephen Jenkins brought a tort action against Wells Fargo Bank, N.A. alleging that a Bank teller had improperly accessed Jenkins’s confidential information and given it to her husband, allowing the husband to steal Jenkins’s identity. Jenkins claimed the Bank negligently failed to protect the information, breached a duty of confidentiality, and invaded his privacy. The trial court granted the Bank’s motion for judgment on the pleadings. The Court of Appeals reversed as to Jenkins’s negligence claim after finding that the allegations of his complaint established the elements of negligence. The Supreme Court granted certiorari to consider whether the Court of Appeals erred in holding that a violation of an alleged duty imposed the Gramm–Leach–Bliley Act gave rise to a cause of action for negligence under Georgia law. The Supreme Court concluded that the holding was in error, and reversed that portion of the judgment of the Court of Appeals. View "Wells Fargo Bank, N.A. v. Jenkins" on Justia Law
You v. JP Morgan Chase Bank, N.A.
The United States District Court for the Northern District of Georgia certified three questions regarding the operation of the State's law governing non-judicial foreclosure to the Georgia Supreme Court. After careful analysis, the Georgia Court concluded that current law did not require a party seeking to exercise a power of sale in a deed to secure debt to hold, in addition to the deed, the promissory note evidencing the underlying debt. The Court also concluded that the plain language of the State statute governing notice to the debtor (OCGA 44-14-162.2), required only that the notice identify "the individual or entity [with] full authority to negotiate, amend, and modify all terms of the mortgage with the debtor." This construction of OCGA 44-14-162.2 rendered moot the third and final certified question. View "You v. JP Morgan Chase Bank, N.A." on Justia Law
Austin v. Bank of America N.A.
This appeal arose from appellee Bank of America, N.A.'s attempts to enforce the terms of the promissory note and deed to secure debt executed in its favor by appellant Johnta M. Austin ("Borrower"). The Bank sued to collect the debt it claimed the Borrower owed as a result of default, including attorney fees, and the trial court awarded the Bank summary judgment. The issue came on appeal to the Georgia Supreme Court because the constitutionality of the statute at issue was called into question. The Court has long held that "all presumptions are in favor of the constitutionality of an act of the legislature and that before an [a]ct of the legislature can be declared unconstitutional, the conflict between it and the fundamental law must be clear and palpable and [the] Court must be clearly satisfied of its unconstitutionality." The Court found that the statute in this case bore a rational relation to the purpose for which the statute was intended, namely to provide debtors with the opportunity to avoid the contractual obligation to pay the creditor’s attorney fees by allowing the debtor a last chance to pay the balance of the debt and avoid litigation. Further, the Court concluded that the application of OCGA 13-1-11 to arrive at the amount of the award of attorney fees in this case was neither punitive nor violative of Borrowers’ due process rights, nor was the award contrary to the intent of the statute. View "Austin v. Bank of America N.A." on Justia Law