Justia Georgia Supreme Court Opinion Summaries

The United States Court of Appeals for the Eleventh Circuit certified to three questions of law to the Georgia Supreme Court relating to a lawsuit brought in federal district court by Fife Whiteside, the trustee of the bankruptcy estate of Bonnie Winslett. Whiteside sued GEICO to recover the value of Winslett’s failure-to-settle tort claim against GEICO so that the bankruptcy estate could pay creditor Terry Guthrie, who was injured in an accident caused by Winslett. The certified questions certified asked the Supreme Court to analyze how Georgia law applied to an unusual set of circumstances that implicated both Winslett’s duty to give GEICO notice of suit and GEICO’s duty to settle the claim brought against Winslett. The Supreme Court was unable to give unqualified “yes” or “no” answers to two of the certified questions as they were posed; rather, the Court answered the questions only in the context of the circumstances of this particular case. "Winslett remains liable to Guthrie, even if her bankruptcy trustee succeeds on the failure-to-settle claim against GEICO; therefore, if the bankruptcy estate does not recover enough from GEICO to satisfy Guthrie’s judgment, the estate would not be fully compensated for Winslett’s damages, and GEICO would escape responsibility for breaching its settlement duty to Winslett. Such an outcome would deny Winslett the full measure of compensatory damages allowed under Georgia law." View "GEICO Indemnity Co. v. Whiteside" on Justia Law

Summary judgment was awarded to Fulton County, Georgia on Sandra Ward-Poag’s civil whistleblower claims on the ground of judicial estoppel. Specifically, the superior court concluded judicial estoppel barred Ward-Poag’s claims because she took an inconsistent position regarding the nature of those claims when she failed to disclose her claims in her bankruptcy case, and then amended her bankruptcy petition to value her claims against the County as worth far less than alleged here. The Court of Appeals reversed the superior court’s decision, concluding that Ward-Poag’s amendment to her bankruptcy petition to list the claim in fact showed that she did not take an inconsistent position in the superior court. In making that determination, the Court of Appeals relied on its case law that created a bright-line rule that a party takes consistent positions, and thus lacks an intent to deceive the court system, when the party successfully amends a bankruptcy schedule to include a previously undisclosed asset. The Georgia Supreme Court disapproved the Court of Appeals’s analysis and its previous case law to the extent it created that bright-line rule, because "such rules have no place in the application of judicial estoppel." The Supreme Court nevertheless affirmed the Court of Appeals’s ultimate conclusion that the superior court abused its discretion in applying the doctrine at this procedural stage because there were genuine issues of material fact that precluded summary judgment to Fulton County. View "Fulton County v. Ward-Poag" on Justia Law

The United States District Court for the Middle District of Georgia certified two questions to the Georgia Supreme Court regarding the timing under Georgia law when a lien is created on the title of real property as between a judgment creditor and a judgment debtor: at the time the judgment is entered or at the time the writ of fieri facias on that judgment is recorded. "This timing makes a difference under federal bankruptcy law because certain transfers of the bankrupt debtor’s property may be avoided if they occur within 90 days of the filing of the bankruptcy petition." The Supreme Court responded to the district court that under Georgia law, as between the judgment creditor and judgment debtor, a lien on the title to real property is not created until the judgment is recorded, that the date of that lien is the date of recording, and the date of the lien does not relate back to the date the judgment was entered. View "Synovus Bank d/b/a First Community Bank of Tifton v. Kelley" on Justia Law

The Eleventh Circuit Court of Appeals certified two questions of Georgia law to the Georgia Supreme Court, centering on whether Georgia exempts the funds in a health savings account (HSA) from inclusion in a bankruptcy estate. Debtor Denise Mooney filed for Chapter 7 bankruptcy protection, listing a HSA on her petition, but exempting the entire amount in the account. Georgia law exempts the debtor’s right to receive “[a] disability, illness, or unemployment benefit,” and and “payment[s] under a pension, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.” The Chapter 7 trustee in this case objected to the HSA exemption. The Georgia Supreme Court held that an HSA did not constitute a right to receive a "disability, illness or unemployment benefit" under Georgia law, nor did it constitute a right to receive a "payment under a pension, annuity or similar plan or contract." View "Mooney v. Webster" on Justia Law

In 2006, debtor Denise Codrington executed a security deed with appellant Wells Fargo that was recorded with the Clerk of the Superior Court of Fulton County on October 13, 2006. The deed provided: "[i]f one or more riders are executed by Borrower and recorded together with this Security Instrument, the covenants of each such rider shall be incorporated into ...this Security Instrument as if the rider(s) were a part of this Security Instrument." The security deed specifically identified the "ARM Rider" as being incorporated. The last page of the deed was signed by the debtor, the co-debtor (Alvina Codrington), and a notary, but the signature line for an "Unofficial Witness" was left blank. Contemporaneously recorded with the security deed were a number of other exhibits, including a "Waiver of Borrower's Rights." The waiver provided that "the provisions hereof are incorporated into and made a part of the security deed." The parties agreed that the waiver was signed by the debtor, the co-debtor, an unofficial witness, and a notary. In June 2008, the debtor filed for Chapter 7 bankruptcy. Appellee Neil Gordon, Trustee for the debtor's bankruptcy estate, commenced an adversary proceeding against Wells Fargo seeking to avoid Wells Fargo's interest in the property. Appellee asserted that because the security deed lacked the signature of an unofficial witness, it was not duly recorded and it did not provide constructive notice to a subsequent bona fide purchaser, rendering the security deed avoidable per 11 U.S.C. 544. Wells Fargo moved for summary judgment, the bankruptcy court denied the motion, and the bankruptcy court entered judgment in favor of appellee. Wells Fargo appealed to the Eleventh Circuit Court of Appeals which certified two questions to the Georgia Supreme Court: (1) whether a security deed that lacks the signature of an unofficial witness should be considered "duly filed, recorded, and indexed" as required by OCGA 44-14-33; and (2) if no, whether such a situation would nonetheless put a subsequent hypothetical bona fide purchaser on inquiry notice. Upon review, the Supreme Court answered both certified questions in the negative. View "Wells Fargo Bank, N.A. v. Gordon" on Justia Law

Lou Ann Cassell inherited $220,000 from a relative. After consulting with advisors, she used the inherited funds to purchase a single-premium fixed annuity from National Life Insurance Company. Cassell was 65 years old at the time she purchased the annuity. The annuity agreement provided monthly annuity payments of $1,389.14, and guaranteed payments for 10 years regardless of when Cassell died, naming her children as beneficiaries should she die within the guaranteed payment period. Cassell was not authorized to withdraw any funds from the annuity, cancel the annuity, or change the payment terms of the agreement. She was authorized to assign the right to the annuity payments and to change the name of her beneficiaries during the guaranteed period. In May 2010, Cassell filed a Chapter 7 bankruptcy petition in the Bankruptcy Court and included the annuity as an asset. However, she also listed the annuity as exempt property under OCGA 44-13-100 (a) (2) (E). The trustee objected, arguing the annuity payments did not meet two of the requirements necessary to qualify for the statutory exemption, specifically that the annuity was not funded by employment related wages or benefits and the payments due under the annuity were not "on account of age." The bankruptcy court disagreed and entered an order concluding that the two challenged requirements were met. It did not make a ruling with regard to the third requirement, that the payments be reasonably necessary for the support of the debtor or her dependents, because it concluded the parties had provided insufficient evidence pertaining to that issue. The United States District Court affirmed on appeal and remanded to the bankruptcy court for it to rule on the issue not addressed in its original order. Rather than litigate that issue in the bankruptcy court, the trustee conceded the annuity was reasonably necessary for the support of Cassell and appealed to the Eleventh Circuit Court of Appeals. After briefing and oral argument by the parties, the Eleventh Circuit recognized the absence of precedent on the dispositive issues of state law and certified its questions to the Georgia Supreme Court: (1) is a single-premium fixed annuity purchased with inherited funds an "annuity" for purposes of OCGA 44-13-100 (a) (2) (E); and (2) is a debtor's right to receive a payment from an annuity "on account of . . .age" for the purposes of OCGA 44-13-100 (a) (2) (E) if the annuity payments are subject to age-based federal tax treatment, if the annuitant purchased the annuity because of age, or if the annuity payments are calculated based on the age of the annuitant at the time the annuity was purchased. The Supreme Court found that a single-premium fixed annuity purchased with inherited funds may qualify as an exempt annuity under 44-13-100 (a) (2) (E) and that the determination of whether a right to receive payment from an annuity is "on account of" age for purposes of 44-13-100 (a) (2) (E) is not necessarily based on the existence of a single factor but requires consideration of a variety of factors pointing to the existence of a causal connection between the payee's age and the right to payment. View "Silliman v. Cassell" on Justia Law

BB&T brought suit against Borrowers and Guarantors for more than $19 million then due under certain promissory notes at issue. The promissory notes were executed as a result of BB&T's issuance of 16 loans for residential housing development. In Case No. S1161728, appellants argued that the Court of Appeals in holding that no valid foreclosure sale occurred, erroneously relied on its determination that BB&T did not satisfy the Statue of Frauds. The court held that there were no valid foreclosure sales to prevent BB&T from suing on the notes in the absence of confirmation under OCGA 44-14-161, regardless of whether there was a valid executory sales contract which satisfied the Statute of Frauds. In Case No. S11G1729, the court held that, although the Court of Appeals correctly held that none of BB&T's claims was barred by its failure to seek confirmation after the foreclosure auctions, that court did err in holding that the 2008 guaranties did not sufficiently identify any pre-2008 notes and that the 2008 Guarantors were estopped by BB&T's part performance from asserting a Statute of Frauds defense to BB&T's claims against them on pre-2008 notes.View "Tampa Investment Group, Inc., et al. v. Branch Banking and Trust Co., Inc.; Legacy Communities Group, Inc., et al. v. Branch Banking and Trust Co., Inc." on Justia Law