Granite Loan Solutions, LLC v. King

Citations: 334 Ga. App. 305; 779 S.E.2d 86; 2015 Ga. App. LEXIS 626Docket: A15A1525

Court: Court of Appeals of Georgia; November 2, 2015; Georgia; State Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Clarence King obtained a default judgment of $4 million against Granite Loan Solutions, LLC, after Granite failed to respond to a complaint alleging fraudulent foreclosure practices. Granite subsequently filed a motion to set aside the judgment and open the default, claiming the judgment was due to fraud, accident, or mistake, and requested a new trial on damages. The trial court denied this motion, leading to Granite's appeal, which was affirmed by the appellate court. The court found no abuse of discretion in the trial court's decision and noted that Granite failed to provide sufficient grounds for setting aside the judgment or opening the default. Granite's arguments included improper venue, lack of notice regarding the damages hearing, and procedural errors, none of which were deemed sufficient to alter the trial court's ruling. The appellate court clarified that the denial of the new trial request was directly appealable, making Granite's application for discretionary review unnecessary but granted. Ultimately, the appellate court upheld the trial court's rulings, confirming that Granite had not demonstrated entitlement to relief under the cited statutes.

Granite claims that certain factual allegations in King's complaint were "patently false" and contradicted King's positions in a previous case. However, under OCGA 9-11-60(d)(2), relief can only be granted if the grounds are free from the movant's negligence or fault. In instances where a judgment is entered due to a defendant's negligent inaction leading to a default, a trial court does not abuse its discretion in determining that such negligence does not constitute a valid basis for setting aside the judgment. Granite argues that its attorney's neglect caused the default, yet this is legally attributed to Granite itself and cannot justify its failure to respond timely.

Granite also raises additional grounds for setting aside the judgment, citing the trial court's inherent discretion to do so for meritorious reasons during the same term of court in which the judgment was entered. Once the term concludes, however, setting aside a judgment must follow OCGA 9-11-60(d) procedures. The trial court maintained this power because Granite filed its motion to set aside the default judgment within the same term.

Regarding venue, Granite contends that the judgment should be vacated due to improper venue when the judgment was issued, claiming that King’s voluntary dismissal of the only Chatham County resident defendant invalidated the court's jurisdiction. Nevertheless, King argues that after the dismissal, the remaining out-of-state defendants were subject to long-arm jurisdiction, as per OCGA 9-10-93. This statute allows for the joinder of nonresident defendants in cases involving resident defendants, ensuring that the action does not abate if the resident defendant is dismissed before trial, and mandates a transfer to a court with proper venue if necessary.

The parties involved dispute the timing of King’s dismissal of a Chatham County resident, with evidence indicating that the dismissal occurred after the damages trial commenced. King needed a court order for the voluntary dismissal to be effective, as it did not include all defendants, per Gresham v. Harris and Kilgore v. Stewart, along with OCGA 9-11-21. The record includes sworn testimony from King’s attorney confirming that the trial court signed the dismissal order after the damages hearing had begun, supporting the venue's propriety in Chatham County under OCGA 9-10-93.

Granite argues the trial court should have set aside the default judgment due to a lack of notice regarding the damages hearing. However, it is established that a party's failure to file pleadings waives their right to notices, including those for trial, as per T. A. I. Computer. Granite's failure to timely respond means it waived notice of subsequent actions, including the damages hearing.

Granite also claims three procedural errors warranting the default judgment's dismissal: an incorrect name in the complaint caption, a process server’s misidentification of the trial court, and an incorrect date in the default judgment order. These errors are deemed minor and did not necessitate setting aside the judgment. Specifically, the misnaming of Granite as “Granite Solutions, LLC” in the caption is not material since the body of the complaint consistently identifies the correct name, Granite Loan Solutions, LLC. Courts prioritize substance over form, allowing for the identification of the party based on the entirety of the allegations. Additionally, because Granite did not raise the misnomer issue until after the final judgment, it has waived any objections.

Granite argues that the trial court improperly accepted a return of service form which incorrectly identified the court as the “UNITED STATES DISTRICT COURT, Chatham District of Georgia.” However, no authority was cited to support the claim that this error rendered the proof of service inadequate per OCGA 9-11-4 (h). Additionally, the court erroneously stated that the hearing on damages occurred on January 6, 2014, instead of June 26, 2014. Granite did not provide authority to argue that this clerical error warranted setting aside the default judgment, noting that such mistakes can be corrected by the court at any time (OCGA 9-11-60 (g)).

Granite contended that the trial court wrongly denied its motion to open default under OCGA 9-11-55 (b), which allows for opening default before final judgment. Since a final judgment had already been entered, the court could not open the default without first setting aside that judgment, which it declined to do, as supported by case law (Rapid Taxi Co. v. Broughton, 244 Ga. App. 427, 428 (1) 535 SE2d 780, 2000; Archer v. Monroe, 165 Ga. App. 724, 725 (2) 302 SE2d 583, 1983).

Furthermore, Granite argued that the trial court erred in denying its motion for a new trial regarding damages due to a lack of supporting evidence. The appellate review requires construing evidence in favor of the opposing party, and because Granite defaulted, it admitted participation in the fraudulent conspiracy alleged in the complaint. As there was no transcript from the evidentiary hearing, it is presumed that the trial court’s findings were supported by the evidence presented. Consequently, the court did not err in denying the new trial motion, and the judgment was affirmed.