Duty of mortgagee to exercise fairly and in good faith power of sale.

- There exists a statutory duty upon a mortgagee to exercise fairly and in good faith the power of sale in a deed to secure debt. Although arising from a contractual right, breach of this duty is a tort compensable at law. Clark v. West, 196 Ga. App. 456, 395 S.E.2d 884 (1990).

The words "sell" and "dispose" are synonymous when coupled together in designating a power in a will authorizing the sale and disposal of property, when accompanied by a further statement that the sale or disposition may be made at public or private sale, since such words limit the method of disposition of property to a conveyance, and they are equally synonymous when so used in a trust deed. Lindsey v. Robinson, 180 Ga. 648, 180 S.E. 106 (1935).

A power of sale does not authorize a trustee to transfer the title for some other purpose. Lindsey v. Robinson, 180 Ga. 648, 180 S.E. 106 (1935).

Payment in full of the debt renders the trust deed functus officio, and ipso facto extinguishes the power of sale. Thurman v. Lee, 181 Ga. 408, 182 S.E. 609 (1935).

An owner of land sold at public auction under a power of sale in a security deed has a right to come into equity whenever it appears that the purchaser or trustee made untrue representations, whereby other persons were prevented from bidding and by which the land was obtained at an undervalue. Holbrook v. Dickson, 195 Ga. 821, 25 S.E.2d 671 (1943).

Claimant lacked standing to challenge the validity of the assignment of the mortgage under Georgia law because the claimant was not a party to that assignment. Harvin v. Nationwide Title Clearing, F.3d (11th Cir. Jan. 28, 2016)(Unpublished).

Wrongful foreclosure action recognized.

- Trial court erred by directing verdict in favor of plaintiff on defendants' wrongful foreclosure claim, as Georgia recognized such a claim and even allowed for damages for mental anguish, despite no evidence indicating that wrongful foreclosure interfered with any attempted sale of the property. DeGolyer v. Green Tree Servicing, LLC, 291 Ga. App. 444, 662 S.E.2d 141 (2008).

Homeowner's allegation that the homeowner did not receive notice of default and an opportunity to cure before acceleration of the debt, as required by the security deed, appeared to allege properly a breach of the duty to exercise the power of sale fairly under the statute. Carter v. HSBC Mortg. Servs., F.3d (11th Cir. July 9, 2015)(Unpublished).

Wrongful foreclosure claim sufficiently pled.

- Trial court erred by dismissing the mortgagors' complaint for wrongful foreclosure because, construed in the light most favorable to the mortgagors, the complaint sufficiently alleged that the bank owed obligations to the mortgagors under the security deed and that the bank breached those contractual obligations by going forward with the foreclosure sale despite the error in the published foreclosure advertisements. Racette v. Bank of Am., N.A., 318 Ga. App. 171, 733 S.E.2d 457 (2012).

Putative successor in interest was not entitled to summary judgment on the debtor's wrongful foreclosure claim because the debtor pointed to evidence from which a reasonable jury could have concluded that the successor's conduct at the foreclosure sale, which included abruptly deciding to sell the personal property separately and offering a bid of $25,000 for property the successor believed was worth substantially more, chilled the bidding. LSREF2 Baron, LLC v. Alexander SRP Apts., LLC, F. Supp. 2d (N.D. Ga. Mar. 31, 2014).

There was a genuine issue of material fact as to whether the defendant's wrongful exercise of the power of sale was a breach of the duty of good faith owed to the debtor and there was also a genuine issue as to whether the debtor had suffered damages as a result of the foreclosure sale. McDaniel v. SunTrust Bank (In re McDaniel), 523 Bankr. 895 (Bankr. M.D. Ga. 2014).

Wrongful foreclosure claim defeated.

- Plaintiff's claim for wrongful exercise of a power of sale under O.C.G.A. § 23-2-114 was defeated by the plaintiff's default on the plaintiff's loan obligations and failure to cure the default before foreclosure. Thus, the plaintiff could not show causation because any alleged injury was solely attributable to the plaintiff's own actions. Howard v. Mortg. Elec. Registration Sys., F. Supp. 2d (N.D. Ga. Aug. 17, 2012).

Law firm was not a proper party to a claim for wrongful foreclosure when the plaintiff alleged only that the firm acted as counsel in the foreclosure. Thompson-El v. Bank of Am., N.A., 327 Ga. App. 309, 759 S.E.2d 49 (2014).

HUD regulations clearly referenced in a deed as conditions precedent to the power to accelerate and the power of sale could form the basis of a breach of contract action; the homeowner asserted a duty that the bank owed the homeowner, and the homeowner's claim was not barred by the preexisting duty rule. Bates v. JPMorgan Chase Bank, NA, 768 F.3d 1126 (11th Cir. 2014).

Allegation of failure to provide notice supports wrongful foreclosure claim.

- Trial court erred in finding that a mortgagor's claim that the mortgagee breached the mortgagee's duty in failing to provide proper notice of the foreclosure sale showed no basis for a wrongful foreclosure claim because an allegation that the lender failed to provide notice of foreclosure as required by O.C.G.A. § 44-14-162.2 supported a wrongful foreclosure claim under Georgia law and the trial court erroneously considered the mortgagee's evidence outside of the pleadings. Mbigi v. Wells Fargo Home Mortg., 336 Ga. App. 316, 785 S.E.2d 8 (2016).

Cited in Sims v. Etheridge, 169 Ga. 400, 150 S.E. 647 (1929); Oliver v. Wayne, 183 Ga. 316, 188 S.E. 535 (1936); McMullen v. Carlton, 192 Ga. 282, 14 S.E.2d 719 (1941); Renfroe v. Butts, 192 Ga. 720, 16 S.E.2d 551 (1941); Delray, Inc. v. Reddick, 194 Ga. 676, 22 S.E.2d 599 (1942); Gurr v. Gurr, 198 Ga. 493, 32 S.E.2d 507 (1944); Cordell v. Cordell, 206 Ga. 214, 56 S.E.2d 251 (1949); Sale City Peanut & Milling Co. v. Planters & Citizens Bank, 107 Ga. App. 463, 130 S.E.2d 518 (1963); Tybrisa Co. v. Tybeeland, Inc., 220 Ga. 442, 139 S.E.2d 302 (1964); Smith v. Taylor, 120 Ga. App. 389, 170 S.E.2d 752 (1969); Holderness v. Lands W., Inc., 232 Ga. 452, 207 S.E.2d 464 (1974); Andrews v. Holloway, 140 Ga. App. 622, 231 S.E.2d 548 (1976); Moody v. Mendenhall, 238 Ga. 689, 234 S.E.2d 905 (1977); Roberts v. Cameron-Brown Co., 556 F.2d 356 (5th Cir. 1977); Oglethorpe Co. v. United States, 558 F.2d 590 (Ct. Cl. 1977); Curl v. Federal Sav. & Loan Ass'n, 241 Ga. 29, 244 S.E.2d 812 (1978); Hartrampf v. Citizens & S. Realty Investors, 146 Ga. App. 227, 246 S.E.2d 134 (1978); Heard v. Decatur Fed. Sav. & Loan Ass'n, 157 Ga. App. 130, 276 S.E.2d 253 (1980); Hilton v. Millhaven Co., 158 Ga. App. 862, 282 S.E.2d 415 (1981); Cummings v. Anderson, 173 Bankr. 959 (Bankr. N.D. Ga. 1994); Green Rivers Forest, Inc. v. Aetna Life Ins. Co., 200 Bankr. 956 (Bankr. M.D. Ga. 1996); Aikens v. Wagner, 231 Ga. App. 178, 498 S.E.2d 766 (1998); Atlanta Dwellings, Inc. v. Wright, 272 Ga. 231, 527 S.E.2d 854 (2000).

Individual debt of one of parties executing security deed.

- See Americus Fin. Co. v. Wilson, 189 Ga. 635, 7 S.E.2d 259 (1940); Bank of LaFayette v. Giles, 208 Ga. 674, 69 S.E.2d 78 (1952); Cordele Banking Co. v. Powers, 217 Ga. 616, 124 S.E.2d 275 (1962); Hill v. Perkins, 218 Ga. 354, 127 S.E.2d 909 (1962).

Formal assignment of deed effectively transfers power of sale contained in deed.

- Where a security deed, and the power of sale therein contained, were assigned by the original grantee to a new grantee with the same formality of execution as the deed itself, the power of sale therein contained was one which might properly be exercised by second grantee in the foreclosure proceedings. Williams v. Joel, 89 Ga. App. 329, 79 S.E.2d 401 (1953).

Where power of sale in the security deed executed prior to the act providing that a power of sale may be exercised by the assignee of the instrument was limited to the grantee, the transferee was without power to exercise the power of sale, and consequently, transferee's deed to another in pursuance of the invalid sale did not convey any title. Etheridge v. Boroughs, 209 Ga. 634, 74 S.E.2d 873 (1953).

Under O.C.G.A. §§ 23-2-114 and44-14-64(b), the assignments of plaintiff homeowner's security deed granted to the defendant bank did not diminish the deed's powers in the bank's foreclosure action; thus, the homeowner's wrongful foreclosure claim failed to state a claim for relief. Milani v. OneWest Bank FSB, F.3d (11th Cir. Oct. 17, 2012)(Unpublished).

When grantee accepts a warranty deed from the grantor and enters thereunder, he succeeds to all the rights and liabilities of grantor in regard to the latter's equity in the property. Williams v. Joel, 89 Ga. App. 329, 79 S.E.2d 401 (1953).

Debtor has no standing to challenge assignment.

- Lower court correctly determined that the debtors lacked standing to challenge the assignment of the security deed to a bank because the security deed afforded the debtors no right to dispute the assignment as the debtors were not third-party beneficiaries of the assignment as a whole and were not intended to directly benefit from the transfer of the power of sale. Ames v. JP Morgan Chase Bank, N.A., 298 Ga. 732, 783 S.E.2d 614 (2016).

Assignment of security deed did not prohibit foreclosure sale.

- Lender's assignment of a security deed through a custodial agreement that did not prohibit the "Custodian/Trustee" bank from exercising a power of sale authorized the bank to conduct the foreclosure sale. Lynn v. US Bank Nat'l Ass'n, F.3d (11th Cir. Oct. 2, 2013)(Unpublished).

District court properly dismissed the plaintiff's suit against multiple financial institutions and fictitious parties seeking declaratory and equitable relief to stop foreclosure proceedings as there was no dispute that the holder of the security deed at the time of the proposed foreclosure had the authority to foreclose on the property in accordance with the security deed's power of sale. Assignment of the security deed did not diminish the instrument's powers under Georgia law. Stabb v. GMAC Mortg., LLC, F.3d (11th Cir. Aug. 21, 2014)(Unpublished).

Standing to foreclose.

- Nominee of a lender had standing to foreclose on the plaintiff's property since a note and the security deed clearly provided that the note could be sold and that the nominee would remain the assignee of any subsequent note holder. The plain language of the security deed unequivocally granted to the nominee the right to foreclose and sell the property in the event of the plaintiff's default. Howard v. Mortg. Elec. Registration Sys., F. Supp. 2d (N.D. Ga. Aug. 17, 2012).

Power of sale in a security deed was properly exercised since borrowers were in default and received a timely notice of foreclosure containing the requisite contact information, and there was no requirement to ensure that the foreclosing party was the proper party to foreclose. Sheely v. Bank of Am., N.A., F. Supp. 2d (N.D. Ga. Aug. 11, 2014).

Proof of mailing sufficient.

- Trial court did not err in granting summary judgment in favor of the mortgagee in a wrongful foreclosure action because the mortgagee submitted evidence that the mortgagee's attorney mailed written notice of the initiation of foreclosure proceedings on the mortgagor by certified mail and by regular mail to the property address and to the mortgagor's post office box and, although there is no evidence that the mortgagor received any of the notices, the evidence of the proof of mailing was sufficient. Thompson-El v. Bank of Am., N.A., 327 Ga. App. 309, 759 S.E.2d 49 (2014).

Damages for wrongful foreclosure.

- Measure of damages for wrongful foreclosure was the fair market value of the property foreclosed rather than the full bid price at a foreclosure sale to an agent of the grantee, in light of the grantee's subsequent sale of the property to a good faith purchaser which prevented the grantors from redeeming their equity. Tower Fin. Servs., Inc. v. Smith, 204 Ga. App. 910, 423 S.E.2d 257, cert. denied, 204 Ga. App. 922, 423 S.E.2d 257 (1992).

Tort action for wrongful foreclosure.

- Where mortgagor did not seek to have foreclosure set aside, but chose to pursue an action in tort "for damages for wrongful foreclosure", mortgagor was not entitled to recover both the property itself and the value of her equity. Calhoun First Nat'l Bank v. Dickens, 264 Ga. 285, 443 S.E.2d 837 (1994).

Fraud was not required as the basis for a wrongful foreclosure action against a materials supplier who had no right to foreclose on the property under improperly recorded security deeds. Sears Mtg. Corp. v. Leeds Bldg. Prods., Inc., 219 Ga. App. 349, 464 S.E.2d 907 (1995), aff'd in part and rev'd in part, 267 Ga. 300, 477 S.E.2d 565 (1996).

It was not necessary that a foreclosure be completed to bring an action for wrongful foreclosure. Sears Mtg. Corp. v. Leeds Bldg. Prods., Inc., 219 Ga. App. 349, 464 S.E.2d 907 (1995), aff'd in part and rev'd in part, 267 Ga. 300, 477 S.E.2d 565 (1996).

Trial court erred in dismissing a pro se borrower's complaint for wrongful foreclosure and breach of contract against the borrower's lender's alleged assignee; the trial court could not consider documents attached to the motion to dismiss, and the complaint adequately alleged failure to give the borrower notice and improper advertising, contrary to O.C.G.A. §§ 44-14-162.2 and44-14-162(a). Babalola v. HSBC Bank, USA, N.A., 324 Ga. App. 750, 751 S.E.2d 545 (2013).

Borrower in default can maintain wrongful foreclosure action.

- Borrower could maintain wrongful foreclosure action, despite being in default on the underlying loan, because the borrower alleged damages were not solely attributable to the borrower's default. LSREF2 Baron, LLC v. Alexander SRP Apts., LLC, 15 F. Supp. 3d 1295 (N.D. Ga. 2013).

Refusal of a creditor to accept loan corporation bonds in lieu of cash will not afford the debtor ground for injunctive relief to prevent a duly advertised sale of land under a valid power of sale contained in security deed. Biddle v. Papa, 180 Ga. 468, 179 S.E. 357 (1935).

Sale not void merely because made on legal holiday.

- A sale of property in this state under the power of sale contained in a deed to secure debt is not void because the sale is had on a legal holiday. Miller Grading Contractors v. Georgia Fed. Sav. & Loan Ass'n, 247 Ga. 730, 279 S.E.2d 442 (1981).

Payment of surplus received from sale.

- Grantee of deeds to secure debt had to pay to grantors the surplus from a foreclosure sale of two properties to the grantee's agent and a subsequent transfer of the properties to third parties for profit. Tower Fin. Servs., Inc. v. Smith, 204 Ga. App. 910, 423 S.E.2d 257, cert. denied, 204 Ga. App. 922, 423 S.E.2d 257 (1992).

Intention of parties controls.

- That portion of the mortgage containing a power of sale is to be construed so as to effectuate the intention of the parties, and the power must be exercised in accordance with the intention of the parties as indicated in the clause in the mortgage conferring the power. Cadwell v. Swift & Co., 174 Ga. 313, 162 S.E. 814 (1932).

Mortgagee may purchase mortgaged property at sale by him under power of sale in the mortgage, if by the terms of the mortgage he is expressly authorized to do so. Miller Grading Contractors v. Georgia Fed. Sav. & Loan Ass'n, 247 Ga. 730, 279 S.E.2d 442 (1981).

Foreclosure notice as published was not confusing because it narrowly defined what would be excluded from the sale as funds, and the notice clearly stated what would be sold as realty included anything defined as realty under Georgia law; thus, the notice's publication could not be the basis for the wrongful foreclosure claim. LSREF2 Baron, LLC v. Alexander SRP Apts., LLC, 15 F. Supp. 3d 1295 (N.D. Ga. 2013).

In absence of specific provision, holder of mortgage with power of sale is not required to give notice of the exercise of the power to a subsequent purchaser or incumbrancer; and the validity of the sale is not affected by the fact that such notice is not given. Miller Grading Contractors v. Georgia Fed. Sav. & Loan Ass'n, 247 Ga. 730, 279 S.E.2d 442 (1981).

Bank has power to change terms of mortgage.

- Bank was the entity with full authority to negotiate, amend, or modify the terms of the plaintiffs' mortgage, and nothing in the statute shall be construed to require the bank, as servicer for the loan servicer, to do so. Fenello v. Bank of Am., N.A., F. Supp. 2d (N.D. Ga. Feb. 15, 2013).

The foreclosing party has a duty to obtain that amount which results from a sale conducted according to the terms of the deed and in good faith.

- In determining whether this duty under a power of sale has been breached the focus is on the manner in which the sale was conducted and not solely on the result of the sale. Kennedy v. Gwinnett Com. Bank, 155 Ga. App. 327, 270 S.E.2d 867 (1980).

But the foreclosing party is not an insurer of the results of his exercise of the power of sale; his only obligation is to sell according to the terms of the deed and in good faith and to obtain the amount produced by such a sale. Kennedy v. Gwinnett Com. Bank, 155 Ga. App. 327, 270 S.E.2d 867 (1980).

And when a power of sale is exercised all that is required of the foreclosing party is to advertise and sell the property according to the terms of the instrument, and that the sale be conducted in good faith. Kennedy v. Gwinnett Com. Bank, 155 Ga. App. 327, 270 S.E.2d 867 (1980).

Therefore allegations of inadequate price insufficient as basis for damages.

- If foreclosure sale is conducted according to the terms of the deed and in good faith, alleged failure to obtain an "adequate" price is not a sufficient basis upon which the debtor can base a claim for damages resulting from the exercise of that power. Kennedy v. Gwinnett Com. Bank, 155 Ga. App. 327, 270 S.E.2d 867 (1980).

Unless price is grossly inadequate.

- It is only when foreclosure sale is conducted in such a manner and under such circumstances as to result in a grossly inadequate price that the foreclosing party has breached his duty to the debtor. Massey v. National Homeowners Sales Serv. Corp., 225 Ga. 93, 165 S.E.2d 854 (1969); Kennedy v. Gwinnett Com. Bank, 155 Ga. App. 327, 270 S.E.2d 867 (1980).

It is only when the price realized is grossly inadequate and foreclosure sale is accompanied by either fraud, mistake, misapprehension, surprise, or other circumstances which might authorize a finding that such circumstances contributed to bringing about the inadequacy of price that the foreclosing party has breached his duty under the power of sale; it is only in these "circumstances," and not the mere failure to obtain fair market value or an "adequate" price, that a claim for damages arises against the foreclosing party for having failed to properly exercise his power of sale. Kennedy v. Gwinnett Com. Bank, 155 Ga. App. 327, 270 S.E.2d 867 (1980).

Where under a power of sale in a security deed the grantee in case of default was authorized to sell the land described in the deed to the highest bidder "for cash," and the sale was duly advertised and auctioned on that basis, the sale was not rendered invalid by a subsequent arrangement between such grantee and the highest bidder, whereby a note of the latter was accepted in lieu of cash, but the grantee would be accountable for the note as cash in settling with the debtor. Dorsey v. North Am. Life Ins. Co., 217 Ga. 650, 123 S.E.2d 919 (1962).

Where, under a power of sale in a security deed, the grantee in case of default was authorized, on compliance with certain conditions, to sell the land described in the deed to the highest bidder "for cash," and the sale was duly advertised and auctioned on that basis, the sale was not rendered invalid by an agreement between the grantee and the highest bidder that the bidder would place a certain amount as escrow and pay the entire amount upon delivery of the deed, and in case of default would forfeit the amount deposited as escrow. Dorsey v. North Am. Life Ins. Co., 217 Ga. 650, 123 S.E.2d 919 (1962).

Where under a power of sale in a security deed the grantee in case of default was authorized on compliance with certain conditions, to sell the land described in the deed to the highest bidder "for cash," and the sale was duly advertised and auctioned on that basis, the sale was not rendered invalid by a subsequent arrangement between such grantee and the highest bidder, not the result of any previous agreement or understanding, whereby a note of the latter was accepted in lieu of cash, but the grantee would be accountable for the note as cash in settling with the debtor. Adcock v. Berry, 194 Ga. 243, 21 S.E.2d 605 (1942).

Causation between conduct and inadequate price.

- In a wrongful foreclosure action, the borrower failed to allege a causal connection between defendants' alleged conduct and the grossly inadequate sales price at foreclosure; the borrower had not alleged that other parties were present and ready to bid or that such parties relied on the lender's winning bid. LSREF2 Baron, LLC v. Alexander SRP Apts., LLC, 15 F. Supp. 3d 1295 (N.D. Ga. 2013).

Circumstances of auction.

- Plaintiffs' complaint alleged facts that, if true, supported a cause of action by debtor for wrongful foreclosure. In particular, plaintiffs alleged that defendant did not sell the leasehold to the "highest bidder" and violated the contractual duty imposed by paragraph 19 of the security deed by re-auctioning the property and selling the leasehold for a price that was $900,000 less than the sale price of the first auction; additionally, plaintiffs alleged that the circumstances of the auction, such as changing the terms of the sale after accepting a bid of 3.9 million dollars, contributed to the resulting lower price that was accepted by defendant. Colony Bank Worth v. 150 Beachview Holdings, LLC (In re Fry), Bankr. (Bankr. S.D. Ga. Mar. 23, 2007).

Am. Jur. 2d.

- 31 Am. Jur. 2d, Executors and Administrators, § 439.

C.J.S.

- 72 C.J.S., Powers, §§ 1, 24 et seq.

ALR.

- Power of sale in mortgage or deed of trust as one coupled with interest, 56 A.L.R. 224.

Power to mortgage as authorizing insertion of power of sale in mortgage, 72 A.L.R. 158.

Power of sale as including power to mortgage, 92 A.L.R. 882.

Mortgagee's rights in respect of assumption clause in deed as affected by invalidity or avoidability of clause as between grantor and grantee, 100 A.L.R. 911.

Power of court to sell property in mortgage enforcement suit, or propriety of sale, as affected by opposition of mortgagee or trustee on whom mortgage or deed of trust confers discretion, 103 A.L.R. 1440.

Power of court to authorize pledge or other disposal of property in manner not authorized by trust deed or trust agreement securing bonds or participation certificates, 105 A.L.R. 195.

Exercise of power of sale in mortgage during pendency of suit to foreclose, 107 A.L.R. 721.

Doctrine of equitable conversion as affected by discretion as to time, manner or other circumstances of sale, where the duty to sell is mandatory, 124 A.L.R. 1448.

Power of sale conferred on executor by testator as authorizing private sale, 11 A.L.R.2d 955.

Foreclosure sale or mortgaged real estate as a whole or in parcels, 61 A.L.R.2d 505.

Mortgages: effect upon obligation of guarantor or surety of statute forbidding, or restricting deficiency judgments, 49 A.L.R.3d 554.

Power to appoint realty in fee or personalty absolutely as including power to appoint lesser estate or interest, 94 A.L.R.3d 895.

Recognition of action for damages for wrongful foreclosure - general views, 81 A.L.R.6th 161.

Recognition of action for damages for wrongful foreclosure - types of actions, 82 A.L.R.6th 43.