November 7, 2014
by Susan Reid and Kent Altom
McCalla Raymer, LLC
USFN Member (Georgia)
For 16 months, since the Georgia Supreme Court’s decision in You v. JP Morgan Chase Bank, N.A., 743 S.E.2d 428, 293 Ga. 67 (May 20, 2013), default services attorneys in Georgia have been holding their collective breath wondering if, and when, the Georgia Supreme Court or the Georgia Court of Appeals would adopt the Eleventh Circuit’s unpublished decision in Carr v. U.S. Bank, NA, 534 Fed. Appx. 878 (2013). (Carr was aligned with two previous opinions of the Georgia Court of Appeals: In both TKW Partners v. Archer Capital Fund, 302 Ga. App. 443, 445-446(1), 691 S.E.2d 300 (2010); and Stowers v. Branch Banking & Trust Co., 317 Ga. App. 893, 896(1), 731 S.E.2d 367 (2012), the appellate court held that a lender’s foreclosure notice to its borrower need only substantially comply with Georgia’s foreclosure statute.)
Specifically, regarding lenders’ foreclosure notices sent to borrowers, the Eleventh Circuit in Carr cited TKW and stated that, in order to satisfy the contact information requirement of OCGA § 44-14-162.2(a), “… the notice only needs to inform the debtor of the contact information if he wishes to pursue a modification of the security deed.” In so doing, the Eleventh Circuit in Carr implicitly — if not directly — adopted the “substantial compliance” standard for providing contact information in foreclosure notices, which had been set forth by the Georgia Court of Appeals in TKW and Stowers.
For the most part, the wait ended in early September. In Peters v. CertusBank National Association, A14A1274 (Ga. App., Sept. 8, 2014), the Georgia Court of Appeals has indicated its likely concurrence with the standard articulated by the Eleventh Circuit in Carr, albeit without expressly stating as much. Notably, in Peters, the foreclosing lender’s mistake was that its foreclosure notice was sent by regular mail rather than by certified mail — an error too critical, according to the court, to overcome even under the “substantial compliance” standard. The court observed that: “… It is true that we have permitted substantial compliance with OCGA § 44-14-162.2(a) in a limited circumstance involving the requirement to provide certain contact information. See TKW Partners v. Archer Capital Fund, [citations omitted] (permitting substantial compliance where notice listed contact information for an individual — the lender’s attorney — who had “as much authority as any individual to negotiate a loan modification on [the lender’s] behalf, [in circumstances where] there was no individual at [the lender] with full authority to modify the loan because [that] would be a group decision”) (punctuation omitted); see also Stowers v. Branch Banking & Trust Co., [citations omitted] (noting that holding in TKW Partners stands for the principle “that substantial compliance with the contact information requirement of OCGA § 44-14-162.2(a) is sufficient.”) We decline to extend that holding [to the foreclosing lender in this instance]” Peters, at 6.
For Georgia default services attorneys, the real question has been: what impact, if any, did the Georgia Supreme Court’s You decision have on the Georgia Court of Appeals’ earlier holdings requiring mere “substantial compliance” in Stowers and TKW? That question seems to have been answered in Peters, even if the appellate court did not reference Carr by name or adopt its holding outright. With a strong degree of certainty, foreclosing lenders and their Georgia counsel can anticipate that the “substantial compliance” standard articulated by the Eleventh Circuit in Carr will be applied by Georgia courts post-You. That said, while “substantial compliance” will cure certain mistakes in a foreclosure notice, foreclosing lenders and their Georgia counsel should not assume that it will cure all mistakes. Lastly, it should be noted that because one of the three judges in Peters concurred in the judgment only, the appellate decision is considered physical, not binding, precedent. Ga. Ct. App. R. 33(a).
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Autumn 2014 USFN Report