Bradford Mortgage Co. v. Johnnie Ganem Appraisal Co.

Citations: 712 S.E.2d 859; 310 Ga. App. 165; 2011 Fulton County D. Rep. 1993; 2011 Ga. App. LEXIS 522Docket: A11A0425

Court: Court of Appeals of Georgia; June 20, 2011; Georgia; State Appellate Court

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Bradford Mortgage Company appeals the trial court's summary judgment favoring Johnnie Ganem Appraisal Company in a professional negligence claim. Bradford contends that the trial court incorrectly determined that it lacked evidence of Ganem's failure to meet the standard of care and that any potential negligence was overshadowed by the actions of other defendants. The appellate court affirms the trial court's decision, emphasizing the necessity for the moving party to prove no genuine issue of material fact exists, which was upheld in this case.

Bradford had provided mortgages for three townhomes purchased by members of an investment group, utilizing a risky approval method that only verified employment. After approving loans and advancing 90% of the purchase prices, the mortgages defaulted, leading Bradford to uncover significant misrepresentations by the buyers regarding their financial status. Bradford then filed suit against multiple parties, including Ganem, claiming professional negligence for allegedly overvaluing the properties.

The trial court granted Ganem's summary judgment motion, citing Bradford's failure to prove a breach of the standard of care and concluding that any negligence by Ganem was negated by the intervening actions of the buyers. For Bradford to succeed in its professional negligence claim, it must establish that Ganem owed a duty, breached that duty, caused injury, and resulted in damages. The court's ruling reinforces that Ganem met its burden by demonstrating insufficient evidence for at least one essential element of Bradford's claim.

Questions of negligence are generally for a jury, but clear cases can be resolved by the court as a matter of law. Bradford contends that the trial court erred in finding no evidence of Ganem's failure to meet the standard of care in appraising properties. The court disagrees, noting that Bradford's area production manager engaged Ganem for appraisals based on her prior experience with the company and Ganem's familiarity with the townhomes from a previous comprehensive appraisal. This earlier 'master appraisal' valued the properties significantly higher than the developers' reduced sale price. Subsequent individual appraisals by Ganem valued the townhomes at $835,000, $820,000, and $815,000, which Bradford claims were overvalued by over 20% due to alleged negligence.

In support of his claims, Bradford submitted an expert affidavit asserting that Ganem overvalued the townhomes, had a vested interest in maintaining prior appraisal values, and used superior comparables. However, the expert did not specify or provide the documents he reviewed, nor did he support his opinions with evidence of market valuation at the time of sale. Consequently, the trial court granted summary judgment for Ganem, citing the lack of concrete valuation data in Bradford's expert affidavit and the comprehensive justification provided by Ganem for the appraisal values.

Summary judgment for Ganem was deemed appropriate by the trial court because Bradford did not provide sufficient evidence to demonstrate a genuine issue of material fact regarding potential negligence in the appraisals. Bradford failed to substantiate claims that Ganem overvalued three townhomes or used inappropriate comparable properties. The expert affidavit submitted by Bradford contained only general conclusions without probative value. Additionally, the expert's reliance on unidentified documents undermined the affidavit's credibility, as failure to specify such documents warrants summary judgment. Bradford's argument that Ganem's prior appraisal created a vested interest leading to negligence in subsequent appraisals was deemed unfounded, lacking supporting authority. Consequently, the trial court's decision to grant summary judgment was upheld, and Bradford's secondary argument was not necessary to address. The judgment was affirmed, with Judges Blackwell and Adams concurring.

Bradford settled with the closing attorney after a trial court issued a verdict for damages against other defendants. The appraisal company was used repeatedly, and despite its high commission of approximately 32% on three properties, Bradford's representatives failed to read the relevant paperwork, only discovering the suspicious commission amount post-issue. Legal precedents support that an expert affidavit must provide factual basis for conclusions; mere assertions are inadequate to resist summary judgment. Additionally, a case involving an appraiser highlighted the requirement for adherence to standards of conduct in preparing appraisal reports, particularly when personal interest is involved.