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Marvin Nix Development Co. v. United Community Bank
Citations: 692 S.E.2d 23; 302 Ga. App. 566; 2010 Fulton County D. Rep. 634; 2010 Ga. App. LEXIS 188Docket: A09A1824
Court: Court of Appeals of Georgia; March 2, 2010; Georgia; State Appellate Court
United Community Bank initiated a lawsuit against Marvin Nix Development Company and its principals, Marvin and Donna Nix, seeking recovery on a promissory note, guaranty agreements, and claims for fraudulent transfer, conversion, and unjust enrichment. The trial court granted partial summary judgment in favor of the Bank on the recovery of the note, guaranty agreements, and the conversion claim, determining these recoveries were separate and cumulative. Nix contested the judgment on the conversion claim and the note, arguing it constituted double recovery. The appellate court agreed, vacating the trial court's judgments and remanding for the Bank to choose a single remedy. The facts established that the Bank loaned Nix $1,677,097.70 for a real estate project, secured by land and sewer tap rights, with $600,000 designated for sewer taps. The trial court confirmed Nix's loan obligation of $600,000 and that Nix no longer possessed the collateral. Following an amendment to its order, the trial court clarified that the amounts due under the different claims were cumulative, leading to the appeal. The court noted that a secured creditor can claim conversion if the debtor disposes of property under their security interest without authorization, requiring proof of a valid security interest, unauthorized disposition, and resulting damage. However, a creditor cannot obtain judgments under both the note and conversion claims for the same debt. The potential recovery for conversion is limited to the lesser of the value of the converted property or the outstanding debt, preventing duplicate recovery for the same loss from both claims. A party is prohibited from recovering damages for both breach of an installment contract and conversion of secured property, as it constitutes a double recovery for the same wrong. Although pursuing inconsistent remedies is permitted, only one satisfaction for the same damages can be obtained, whether under contract or tort law. In the referenced case of Pope, the court found that while a lender could pursue actions for breach of contract and conversion, it could not receive a double recovery and must choose one remedy. Consequently, the court vacated that portion of the judgment and required the lender to elect between contractual and tort remedies. The current case is similarly vacated and remanded to the trial court for the same election of remedies, with a new judgment to follow. Additionally, Nix did not contest any errors regarding the note's face amount, interest, or attorney fees.