BankBryanCave.com

Bank Bryan Cave

Georgia

Main Content

Georgia Court Holds Foreclosure Confirmation Statute Inapplicable to Certain Guarantors

September 19, 2013

Authors

Curtis Romig

Georgia Court Holds Foreclosure Confirmation Statute Inapplicable to Certain Guarantors

September 19, 2013

by: Curtis Romig

In a landmark decision, the Georgia Court of Appeals recently ruled that a guarantor may waive the right to require the holder of a secured debt to confirm a forceclosure sale prior to seeking a deficiency judgment.  In HWA Properties, Inc. v. C&S Bank, 2013 WL 3498088 (Ga. App. July 15, 2013), the Court of Appeals was asked to consider whether a guarantor could be liable for a loan deficiency where there had not been a valid confirmation pursuant to O.C.G.A. § 44-14-161 and the borrower had been discharged.  The Court of Appeals held that a confirmation following a foreclosure sale is no longer a prerequisite to suing the guarantor for a deficiency when the guaranty waives such a confirmation.

The Georgia confirmation statute, which has been on the books in Georgia since the Great Depression, requires a secured creditor to show that it bid the fair market value of

Read More

Proposed Rule for Georgia Merchant Acquirer Limited Purpose Bank

August 27, 2013

Authors

Jerry Blanchard

Proposed Rule for Georgia Merchant Acquirer Limited Purpose Bank

August 27, 2013

by: Jerry Blanchard

The Georgia DBF recently published its proposed rules (the “Rule”) for implementing the Georgia Merchant Acquirer Limited Purpose Bank Act. The Act was adopted 2012 to create a special purpose state-chartered bank that would allow companies to enter card networks directly rather than renting a Bank Identification Number (“BIN”) from a financial institution sponsor. Existing networks currently require that members be “eligible” for FDIC deposit insurance coverage in order to obtain a BIN and currently the only institutions that are eligible for such coverage are state and federal owned financial institutions that accept demand deposits. The Act addresses that issue by only authorizing a MALPB to accept deposits from a corporation that owns majority of the shares of the MALPB. It may not operate in any manner that attracts deposits from the general public and no deposit can be withdrawn by check or similar means for payment to third

Read More

Significant Georgia Supreme Court Lender Liability Decision

June 21, 2013

Authors

Jerry Blanchard

Significant Georgia Supreme Court Lender Liability Decision

June 21, 2013

by: Jerry Blanchard

The typical lender liability lawsuit is premised on an allegation that a bank has violated some “duty” owed to a bank customer or even a third party. Sometimes that duty arises under contract and sometimes under common law such as for negligence. In the recent case of Wells Fargo Bank v. Jenkins, the Georgia Supreme Court grappled with the issue of whether a party can  sue  a bank for negligence based upon an alleged violation of a federal statute where the federal statute itself does not contain such a remedy. The case arose out of an identify theft situation. Stephen Jenkins was a former customer of a financial institution acquired by Wells Fargo Bank (the “Bank”). A teller improperly accessed Jenkins’s confidential information and gave it to her husband, allowing the husband to steal Jenkins’s identity. Jenkins asserted claims that the Bank negligently failed to protect the information, breached a

Read More

A Rundown on Georgia’s FDIC Failed Bank Litigation

June 11, 2013

Authors

Michael Carey

A Rundown on Georgia’s FDIC Failed Bank Litigation

June 11, 2013

by: Michael Carey

As we have reported before, Georgia has the unfortunate distinction of leading the nation in bank failures since the onset of the late-2000s financial crisis.  Georgia has also seen far more FDIC bank failure lawsuits than any other state:  15 of the 63 bank failure cases brought by the FDIC since 2010 involve Georgia banks and are currently pending in Georgia federal courts.  While some allegations vary from case to case, the general thrust of all of these lawsuits is that the former directors and/or officers of the banks were negligent or grossly negligent in pursuing aggressive growth strategies, with these strategies usually involving a high concentration of risky and speculative speculative real estate and acquisition, construction and development loans.  Here is a rundown of the most interesting and significant developments to date:

The most heavily litigated issue has been whether the business judgment rule insulates bank directors and officers

Read More

Georgia Supreme Court Addresses Non-Judicial Foreclosures

May 20, 2013

Authors

Jennifer Dempsey

Georgia Supreme Court Addresses Non-Judicial Foreclosures

May 20, 2013

by: Jennifer Dempsey

On May 20, 2013, the Georgia Supreme Court issued a unanimous opinion in the You v. JP Morgan Chase case (Case No. S13Q0040).  The You Opinion addresses several questions that the United States District Court for the Northern District of Georgia had certified to the Supreme Court regarding the operation of Georgia’s law governing non-judicial foreclosures.

First, the Supreme Court addressed the question: “Can the holder of a security deed be considered a secured creditor, such that the deed holder can initiate foreclosure proceedings on residential property even if it does not also hold the note or otherwise have any beneficial interest in the debt obligation underlying the deed?” The Supreme Court answered “Yes” to this first question.

Second, the Supreme Court addressed the question “Does O.C.G.A. § 44-14-162.2 (a) require that the secured creditor be identified in the notice described by the statute?”  The Supreme Court answered “No”

Read More

Georgia Appellate Court Decisions Back Secured Lenders

April 18, 2013

Authors

Bryan Cave

Georgia Appellate Court Decisions Back Secured Lenders

April 18, 2013

by: Bryan Cave

Two recent Georgia Court of Appeals en banc decisions issued on March 29 have weighed in on one aspect of the MERS fallout, holding in favor of the secured lender.

In Montgomery v. Bank of America et al., No. A12A0514, 2013 WL 1277830 (Ga. App. March 29, 2013) and LaRosa v. Bank of America, N.A., et al., No. A12A2393, 2013 WL 1286692 (Ga. App. March 29, 2013), the Court of Appeals was asked whether a security deed which includes a non-judicial power of sale is transferable without evidence of the transfer of the underlying debt instrument. Montgomery at *2; LaRosa at *1.  Without discussing the myriad legal issues on both sides of this debate, the Court of Appeals upheld the trial court’s ruling in favor of the mortgagee, citing the lack of statutory authority or case law supporting the mortgagor’s theory that the note and deed must “travel together” for

Read More

Constitutional Challenge to Garnishment Statute

March 4, 2013

Authors

Bill Custer and Julia Fenwick Ost

Constitutional Challenge to Garnishment Statute

March 4, 2013

by: Bill Custer and Julia Fenwick Ost

This update is provided to our earlier post regarding the passage of HB 683 in 2012 permitting banks to answer garnishments without the need for an attorney.   As you may recall, we advised you then that there may subsequently be a challenge to the statute of on the grounds that the statute allegedly violates the separation of power principle set forth in the Constitution of Georgia.  As we predicted, Georgia Legal Services Program (“GLSP”) has recently challenged HB 683 on precisely this ground.

GLSP is challenging this law on the grounds that the General Assembly cannot define the practice of law and that defining the practice of law is instead reserved for the Supreme Court of Georgia.  Specifically, GLSP is seeking an advisory opinion from the Standing Committee on the Unlicensed Practice of Law of the State Bar of Georgia finding that only lawyers should be permitted to file

Read More

2013 Georgia Banking and Finance Law Seminar

January 24, 2013

Authors

Bryan Cave

2013 Georgia Banking and Finance Law Seminar

January 24, 2013

by: Bryan Cave

Make your plans now to attend the 2013 Banking and Finance Law seminar.  The seminar, sponsored by the Business Law Section of the State Bar of Georgia, will be Feb. 8, at the Bar Center in Atlanta. The seminar chair, Gerald L. Blanchard, Bryan Cave LLP, has put together a terrific set of topics and speakers for this program.

Topics include:

  • Reading the Regulatory Tea Leaves:  Basel III and Dodd-Frank Update
  • Advising Bank Board Directors on Regulatory Relations and Legal Risk Minimization
  • Recent Banking Law Cases
  • Consumer Financial Protection Bureau – There’s A New Sheriff in Town!
  • Regulator Panel Discussion on Bank Examinations Trends
  • Challenges to Bank Consolidation
  • Recent Trends IN D&O Litigation

The program qualifies for 6 CLE Hours including 1 Ethics Hour and 1 Trial Practice Hour. For additional information and to register for this program, visit the ICLE website.

Read More

Federal Courts in Georgia and Florida Dismiss Ordinary Negligence Claims

September 13, 2012

Authors

Bard Brockman

Federal Courts in Georgia and Florida Dismiss Ordinary Negligence Claims

September 13, 2012

by: Bard Brockman

We have previously summarized an important district court ruling dismissing the FDIC’s ordinary negligence claims against former directors and officers of Integrity Bank of Alpharetta, Georgia.  The FDIC asked the U.S. District Court for the Northern District of Georgia to reconsider its decision in that case, but the court recently denied that request and reaffirmed its rationale that Georgia’s version of the Business Judgment Rule bars claims for ordinary negligence against corporate directors and officers.  A copy of the court’s recent order in the Integrity Bank case is available here.  Although the district court declined to reconsider its prior dismissal of the ordinary negligence claims, it acknowledged that there was “substantial ground for difference of opinion” on that issue, and it granted the FDIC’s request to certify an order of interlocutory appeal to the Eleventh Circuit Court of Appeals.  Everyone in the D&O defense community, and especially

Read More

Rescission of Foreclosure Sales in Georgia

April 9, 2012

Authors

Jerry Blanchard

Rescission of Foreclosure Sales in Georgia

April 9, 2012

by: Jerry Blanchard

Georgia foreclosure law has been given a lot of attention over the last several years, both by the courts as well as the legislature. The Georgia Supreme Court has had to resolve the issue of whether a lender must sue on a note prior to foreclosing under a security deed and held that the choice is up to the lender. (See REL Development, Inc. v. BB&T, 699 SE2d 779 (2010).)  Likewise, the legislature addressed a perceived problem in large loan servicing companies foreclosing on real property even though a division of the servicer was still negotiating with the borrower to cure the default.  Thus, a lender can rescind a foreclosure, for among other reasons, the fact that it had entered into an agreement when the default was cured prior to the sale or the borrower had entered into an agreement to cure the default. (See OCGA 9-13-172.1.)  What happens though

Read More
The attorneys of Bryan Cave LLP make this site available to you only for the educational purposes of imparting general information and a general understanding of the law. This site does not offer specific legal advice. Your use of this site does not create an attorney-client relationship between you and Bryan Cave LLP or any of its attorneys. Do not use this site as a substitute for specific legal advice from a licensed attorney. Much of the information on this site is based upon preliminary discussions in the absence of definitive advice or policy statements and therefore may change as soon as more definitive advice is available. Please review our full disclaimer.