Lenders may resell property after a previous purchase at foreclosure sale is denied confirmation if they acted in good faith and show good cause.
David Sanusi owned property in Georgia. Community & Southern Rank (Rank) was the lender and foreclosed on the property. The Bank auctioned the property at a foreclosure sale, where it purchased the property for $1.4 million. The Bank then initiated confirmation proceedings. The trial court found the Bank failed to prove that the property brought its true market value at the sale and thus denied the Bank's application for confirmation. The Bank subsequently filed a motion for permission to resell the property, and that motion was granted. Sanusi appealed.
Sanusi argued that the trial court abused its discretion in finding good cause for resale of the property. The Court of Appeals of Georgia noted the $1.4 million bid that the Bank submitted at the foreclosure auction was based on an appraisal and that the Bank was a buyer in good faith. After hearing testimony from another appraiser, the trial court found that this appraisal was flawed and that the property was worth at least $1.5 million. In addition to finding the Bank had relied on a flawed appraisal in good faith, the trial court also found the Bank had shown good cause for a resale. The appellate court discussed the lack of any contention that the Bank had engaged in any unfair practices in connection with the foreclosure sale, stating that such would be cause for the trial court to penalize the Bank by denying a resale. Therefore, because Sanusi did not show the ruling was unsupported by the record or the law was misapplied or misstated, the appellate court found the trial court had not abused its discretion and affirmed the judgment.
Sanusi v. Community & Southern Bank
Court of Appeals of Georgia
December 4, 2014
2014 WL 6804331
by Alan M. Weinberger, JD, and Megan Murphy, JD
Alan M. Weinberger, JD, has been a professor at Saint Louis University School of Law since 1987. Previously, he practiced for twelve years with law firms in Detroit and Washington, DC, where he specialized in real estate transfer, finance, and development. Weinberger graduated magna cum laude from the University of Michigan Law School. He has published articles and chapters in the fields of real estate finance, partnership, and property law. He Is coauthor of Property Law Cases, Materials and Problems, 3rd ed., published by West Group. His most recent article, "Tools of Ignorance: An Appraisal of Deficiency Judgments," was published in the Spring 2015 issue of the Washington and Lee Law Review. Contact: firstname.lastname@example.org
Megan Murphy, JD, is an attorney in the Denver law firm of Hackstaff & Snow, LLC. She graduated magna cum laude from Saint Louis University School of Law where she was the Mel Friedman Fellow in Real Estate Law.
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|Title Annotation:||Recent Court Decisions|
|Date:||Mar 22, 2015|
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