Y. C. Development Inc. v. Norton.

FOURTH DIVISION
DILLARD, C. J.,
RAY, P. J., and SELF, J.

NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules

November 1, 2017

In the Court of Appeals of Georgia
A17A1591. Y. C. DEVELOPMENT INC. v. NORTON.

DILLARD, Chief Judge.

Y. C. Development Inc. (“YCD”) appeals from the trial court’s grant of

summary judgment to Chandra Norton on her claims against YCD for wrongful

foreclosure. YCD argues that the trial court erred by (1) erroneously construing the

terms of the parties’ purchase money note and security deed and (2) finding that YCD

failed to comply with the terms of those documents before exercising its power of sale

and foreclosing on Norton’s property. Because we agree that the trial court erred in

its interpretation of the terms contained in the purchase money note and security deed,

we reverse.
 Viewed in the light most favorable to YCD (i.e., the nonmoving party),1 the

undisputed facts show that on October 21, 2010, Norton executed a purchase money

note in favor of YCD in the amount of $258,000 , which was secured by the Cherokee

County property at issue. In the event of default, the note provided specific remedies,

as follows:

If [Norton] fails to pay when due any amount payable under this note or
if [Norton] shall be in default under the Security Deed and such failure
or default continues for ten (10) days after [Norton’s] receipt of [YCD’s]
written notice thereof, in the case of failure to pay any amount payable
under this note, or for thirty (30) days after [Norton’s] receipt of
[YCD’s] written notice thereof, in the case of any other defaults, then
[Norton] shall be in default under this note. In the event [Norton] shall
be in default under this note, at the option of [YCD] and without further
demand or notice, the entire unpaid principal balance of this note may
be declared and thereupon immediately shall become due and payable,
and the principal portion of such sum shall bear interest at the rate of ten
percent (10%) per annum from the date of default until paid, and [YCD],
at the option of [YCD] and without demand or notice of any kind, may
exercise any and all rights and remedies provided for or allowed by the
Security Deed, or provided for or allowed or in equity[.]

1
See, e.g., SunTrust Bank v. Equity Bank, S.S.B., 312 Ga. App. 644, 644 (719
SE2d 539) (2011).

2
The note also included definitions for certain terms, but it did not define the use of

the word “receipt.” The note did, however, specify that “[a]ll notices, requests,

demands and other communications under this note shall be in writing and shall be

deemed to have been duly given if given in accordance with the provisions of the

Security Deed.”2

The security deed, which was executed the same day as the note, provided as

follows in terms of giving “notice” to the grantor (Norton):

All notices, requests, demands and other communications under
this Security Deed or the Note shall be in writing and shall be deemed
to have been duly given: (i) to [Norton] when personally delivered to
any office of [Norton], . . . or (iii) two (2) days after deposited in the
United States Mail, certified mail with return receipt requested and with
all postage prepaid, addressed as follows:

(a) To [Norton]: [address left blank]

(b) To [YCD]: [address provided]

On September 30, 2015, YCD sent a notice of default to both Norton’s primary

residence address and to the Cherokee County address. Then, after Norton’s loan

2
(Emphasis supplied.)

3
matured and became due in full, YCD sent out a second notice of default on February

3, 2016, by sending a letter via certified mail to Norton’s primary residence address,

the Cherokee County property, and to a business address listed in Norton’s email

signature.3 The certified letters sent to Norton’s primary residence and the business

address were returned as undeliverable. And according to the postal carrier assigned

to the Cherokee County property’s route, mail accumulated in the box at that address,

he had been unable to deliver certified mail, and he personally signed for the certified

mail delivery of the February 3, 2016 letter on February 18, 2016, because he

mistakenly believed that the recipient had requested re-delivery after an initial failed

attempt.

On February 26, 2016, YCD sent a letter by certified mail to notify Norton of

its intent to foreclose upon the Cherokee County property. This letter was again

mailed to Norton’s primary residence address, the subject property itself, and to the

business address; and each was returned to YCD as undeliverable. Thereafter, YCD

initiated non-judicial foreclosure proceedings, eventually purchasing the property as

3
YCD also sent notice of default to Norton via email on February 3, 2016. The
trial court struck an affidavit statement that Norton “received the e-mail simply
because [an asset manager] sent it” due to the fact that the asset manager did not
indicate that this statement was based upon personal knowledge. Norton denied ever
receiving the email.

4
the highest bidder at the sale. YCD then began disposessory proceedings, and Norton

filed suit against YCD in April 2016, asserting that YCD had wrongfully foreclosed

upon her property and was in breach of contract, as well as seeking to set aside the

deed. Norton contended that YCD failed to comply with the notice provisions in the

note and security deed because she never received notice. In its answer, YCD denied

that it failed to comply with the notice provisions or that it had wrongfully foreclosed

upon the Cherokee County property.

Norton filed a motion for summary judgment, arguing that the terms of the note

and security deed required actual receipt of notice of default and that, because she

never actually received such notice, YCD failed to comply with those terms and

wrongfully foreclosed upon the property. Norton averred that she purchased the

Cherokee County property as a second home and designated her primary residence

as the location for notice. But as previously noted, the face of the security deed shows

that Norton’s address for purposes of notice via certified mail was left blank.

Nevertheless, in her “statement of material facts as to which there is [sic] no genuine

issues to be tried,” she relied upon her affidavit to assert that it was undisputed that

she had designated her primary residence as the location for notice. And in response

5
to that filing, YCD explicitly stated that, for purposes of summary judgment, it did

not dispute this assertion.

YCD opposed Norton’s motion for summary judgment, arguing that it had

complied with the terms of the parties’ agreement; that Norton was supplying a term

not required by the agreements, which specified provision of “notice” and not “actual

notice”; and that Norton had in fact refused to accept the notice sent by certified mail.

YCD also moved for summary judgment on the basis that it had complied with the

notice requirements.

Norton thereafter filed an amended complaint. In addition to amending her

claims for wrongful foreclosure and breach of contract, and adding new claims and

requests for relief,4 the second complaint also amended Paragraph 6 , which originally

read as follows: “The subject premises was primarily used by Plaintiff as a ‘weekend

home’ and was never utilized as a full time residence. As such, the home remained

vacant for much of the year with no one living on the property to accept mail

deliveries, especially during the week.” In the amended complaint, Norton added the

4
The amended complaint added claims for equity of redemption, tortious
interference with property rights, slander of title, and defamation, and sought
declaratory judgment/quiet title, attorney fees and costs of litigation, and punitive
damages.

6
following sentence to Paragraph 6: “Plaintiff designated her primary home as the

location for notice.”

Following a hearing, the trial court issued an order on February 2, 2017, ruling

on the parties’ cross motions for summary judgment. The court granted summary

judgment in Norton’s favor after concluding that the text of the security deed was

unambiguous and required that Norton actually receive notice of default before YCD

could initiate the default remedy of power of sale. The court rejected YCD’s

arguments as to “constructive receipt” of the certified mail or (alternatively) that the

letter dated February 26, 2016, satisfied the notice requirements.

YCD now appeals from the trial court’s grant of summary judgment in favor

of Norton and the denial of summary judgment in its favor. Summary judgment is, of

course, proper when “there is no genuine issue as to any material fact and . . . the

moving party is entitled to a judgment as a matter of law[.]”5 And we review a grant

or denial of summary judgment de novo, construing “the evidence in the light most

5
OCGA § 9-11-56 (c); accord Matson v. Bayview Loan Srv., LLC, 339 Ga.
App. 890, 890 (795 SE2d 195) (2016).

7
favorable to the nonmovant.”6 With these guiding principles in mind, we will now

address YCD’s contentions in turn.

1. First, YCD argues that the trial court erred in its interpretation of the notice

requirements contained in the note and security deed. We agree.

In Georgia, “a security deed which includes a power of sale is a contract and

its provisions are controlling as to the rights of the parties thereto and their privies.”7

And the construction of an unambiguous deed, like the construction of any other

contract, is “a question for determination by the court.”8 The cardinal rule of

construction is, of course, to “ascertain the intention of the parties, as set out in the

language of the contract.”9 In this regard, contract disputes are “particularly well

6
Matson, 339 Ga. App. at 890.
7
Clark v. AgGeorgia Farm Credit ACA, 333 Ga. App. 73, 75 (1) (775 SE2d
557) (2015) (punctuation omitted); accord Stewart v. Suntrust Mortg., Inc., 331 Ga.
App. 635, 638 (3) (770 SE2d 635) (2015); Kennedy v. Gwinnett Commercial Bank,
155 Ga. App. 327, 328 (270 SE2d 867) (1980); see also Giordano v. Stubbs, 228 Ga.
75, 77 (184 SE2d 165) (1971) (“The deed constituted a contract . . . and its provisions
are controlling as to the rights of the parties and their privies.”).
8
Clark, 333 Ga. App. at 75 (1) (punctuation omitted); accord Turk v.
Jeffreys–McElrath Mfg. Co., 207 Ga. 73, 76 (2) (60 SE2d 166) (1950).
9
Clark, 333 Ga. App. at 75-76 (1) (punctuation omitted); accord Envision
Printing, LLC v. Evans, 336 Ga. App. 635, 638 (1) (786 SE2d 250) (2016); Shepherd
v. Greer, Klosic & Daugherty, 325 Ga. App. 188, 189-90 (750 SE2d 463) (2013).

8
suited for adjudication by summary judgment because construction of contracts is

ordinarily a matter of law for the court.”10

It is well established that contract construction entails a three-step process,

beginning with the trial court’s determination as to “whether the language is clear and

unambiguous.”11 If no construction is required because the language is clear, the court

then enforces the contract according to its terms.12 But if there is ambiguity in some

respect, the court then proceeds to the second step, which is to “apply the rules of

contract construction to resolve the ambiguity.”13 Finally, in the third step, “if the

ambiguity remains after applying the rules of construction, the issue of what the

ambiguous language means and what the parties intended must be resolved by a

jury.”14

10
Elwell v. Keefe, 312 Ga. App. 393, 394-95 (718 SE2d 587) (2011)
(punctuation omitted); accord Evans, 336 Ga. App. at 638 (1).
11
Evans, 336 Ga. App. at 638 (1) (punctuation omitted); accord Michna v. Blue
Cross & Blue Shield of Ga., Inc., 288 Ga. App. 112, 113 (653 SE2d 377) (2007).
12
Evans, 336 Ga. App. at 638 (1); Michna, 288 Ga. App. at 113.
13
Evans, 336 Ga. App. at 638 (1) (punctuation omitted); accord Michna, 288
Ga. App. at 113.
14
Evans, 336 Ga. App. at 638 (1) (punctuation omitted); accord Michna, 288
Ga. App. at 113.

9
 Importantly, as an initial matter, “the existence or nonexistence of an ambiguity

is a question of law for the court.”15 Should the court determine that ambiguity exists,

“a jury question does not automatically arise, but rather the court must first attempt

to resolve the ambiguity by applying the rules of construction in OCGA § 13-2-2.”16

Here, the trial court found no ambiguity in the terms of the contract and ruled in

Norton’s favor, using her interpretation of the note and security deed. We disagree

that the relevant terms of the note and security deed support Norton’s interpretation

of same. Instead, after applying the rules of contract construction, we conclude that

the language at issue demands summary judgment in favor of YCD.

As previously explained, the note provided that if Norton failed to pay, when

due, any amount payable under the note, or that if Norton was in default under the

terms of the security deed and continued to be in default or failed to pay “for ten (10)

days after [her] receipt of [YCD’s] written notice thereof, in the case of failure to pay

any amount payable under this note, or for thirty (30) days after [her] receipt of

[YCD’s] written notice thereof, in the case of any other defaults, then [she] [would]

be in default under [the] note.” It is the use of “receipt of . . . written notice” upon

15
Evans, 336 Ga. App. at 638 (1) (punctuation omitted).
16
Id. (punctuation omitted).

10
which Norton hangs her hat and contends that she was required to actually receive

notice before YCD could initiate foreclosure proceedings. But Norton’s interpretation

ignores the remainder of the note, and “[t]he construction which will uphold a

contract in whole and in every part is to be preferred, and the whole contract should

be looked to in arriving at the construction of any part[.]”17

Indeed, as we detailed supra, although the note did not define the use of the

word “receipt,” it did specify that “[a]ll notices, requests, demands and other

communications under this note shall be in writing and shall be deemed to have been

duly given if given in accordance with the provisions of the Security Deed.”18 Thus,

the note made specific reference to the terms of the security deed to define when

notice would be “deemed to have been duly given.”

17
OCGA § 13-2-2 (4). Cf. W. Ray Camp, Inc. v. Cavalry Portfolio Servs., Inc.,
308 Ga. App. 597, 599 (708 SE2d 560) (2011) (“In determining whether notice
required under a specific statute must be received, the language of the particular
statute in issue must be interpreted in accordance with recognized principles of
construction . . . .” (punctuation omitted)); Five Star Steel Contractors, Inc. v.
Colonial Credit Union, 208 Ga. App. 694, 696 (431 SE2d 712) (1993) (same).
18
(Emphasis supplied.)

11
 The security deed provided that:

All notices, requests, demands and other communications under
this Security Deed or the Note shall be in writing and shall be deemed
to have been duly given: (i) to [Norton] when personally delivered to
any office of [Norton], . . . or (iii) two (2) days after deposited in the
United States Mail, certified mail with return receipt requested and with
all postage prepaid, addressed as follows:

(a) To [Norton]: [address left blank]

(b) To [YCD]: [address provided]

Once again, notwithstanding that Norton’s address was left blank on the face of the

security deed, it is undisputed between the parties that Norton provided her primary

residence address for purposes of notice under the security deed. It is also undisputed

that YCD did not make personal delivery of notice to Norton under the first option

for providing notice. Thus, according to the terms of the security deed, the only other

method by which YCD could “duly give” notice to Norton was to send “certified mail

with return receipt requested and with all postage prepaid, addressed” to Norton’s

primary residence. And this portion of the security deed further specified that the

notice would be “deemed to have been duly given” by this method “two (2) days after

deposited in the United States Mail[.]”

12
 It is generally true that, when notice is required to be given, “in the absence of

anything appearing to the contrary, that the notice is not complete until it is received,

and that, while mailing a notice duly directed and stamped may furnish presumptive

evidence of its receipt, it does not alone constitute notice.”19 Indeed, the word

“receipt,” which is used in the note, means “[t]he act of receiving something given or

handed to one; the fact of being received.”20 And “received” means “[t]o have (a

thing) given or handed to oneself; to get from another or others” or “[t]o get (a letter,

etc.) brought to oneself or delivered into one’s hands.”21 But the security deed, which

the note references as controlling how notice will be given, specifies that the act of

“duly giving” notice between the parties is deemed accomplished, when using

certified mail, two days after depositing the notice in the mail—not when the notice

19
Puryear v. Farmers’ Mut. Ins. Ass’n, 137 Ga. 579, 578 (2) (73 SE 851)
(1912); accord Menke v. First Nat’l Bank of Am., 168 Ga. App. 495, 497 (1) (309
SE2d 835) (1983) (physical precedent only); St. Paul Fire & Marine Ins. Co. v. C.I.T.
Corp., for Use of Houston, 55 Ga. App. 101, 101 (189 SE 390) (1936) (Syllabus
Opinion by the Court).
20
The Compact Oxford English Dictionary 312 (2d ed. 1991) (emphasis
supplied).
21
The Compact Oxford English Dictionary 316 (2d ed. 1991) (emphasis
supplied).

13
is actually received or delivered.22 As a result, the note and security deed explicitly

22
See Genone v. Citizens Ins. Co. N.J., 207 Ga. 83, 86-88 (2) (60 SE2d 125)
(1950) (holding that, when parties to contract “agreed that the mailing of the notice
would constitute sufficient proof of notice,” the parties “made the act of mailing the
written notice, and not the actual receipt of the notice, the essential requirement to
cancel the policy,” and case was distinguishable from those holding that when “notice
of cancellation is attempted to be effected by mail, there must be proof that the
insured received the notice before cancellation can be effected” because, in the cited
cases, “the policy did not prescribe a method or manner in which notice of
cancellation could be given”); Queen Ins. Co. of Am. v. Nalley Discount Co., 215 Ga.
837, 838 (1)-(2) (114 SE2d 21) (1960) (applying the holding in Genone to terms of
a similar policy, and holding that “the cancellation provision of the policy was clear
and unambiguous, and that mailing of notice of cancellation to the insured at the
address given in the policy without proof of actual receipt of the notice effected
cancellation of the policy”); St. Paul Fire & Marine Ins. Co., 55 Ga. App. at 390-91
(holding that, when policy provided that “[n]otice of cancellation mailed to the
address of the assured stated in this policy shall be a sufficient notice,” the general
rule requiring receipt did not apply because the policy provided for “how the notice
of cancellation and return of unearned premium could be effected”); see also In re
Glover, Case No. 13-12445, 2014 WL 688095, at *1, *6 (Bankr. S.D. Ga. Feb. 19,
2014) (interpreting provision that “[a]ny notice mailed shall be deemed to have given
on the second (2nd) business day following the date of deposit of such item in a
depository of the United States Postal Service” as avoiding requirement that notice
actually be received, and applying the foregoing Georgia state appellate court cases).
Cf. Menke, 168 Ga. App. at 495, 498 (1) (physical precedent only) (construing
provision that “holder must, before the exercise of his option to declare the entire
remaining balance due and payable[,] give maker written notice specifying the default
and giving maker fifteen (15) days in which to cure said default. Said notice must be
by certified mail addressed to the maker’s last address” as “obligat[ing] appellee to
‘give’ appellant notice, not merely to send him notice” and that “mailing of the
notices was contemplated as the means and method by which notice to appellant
would be effectuated, not the contemplated ‘notice’ itself, and that for notice to be
effectuated appellant would have to have received them” (punctuation omitted)).

14
delineate what constitutes sufficient notice under these documents.

The conclusion that “actual receipt” of the certified mail was not required

because notice by this method was deemed “duly given” two days after being

deposited is bolstered not only by the inclusion of this specific two-day period, but

also by the language that appears directly below this provision and reads as follows:

“Either party may, by written notice to the other, designate a different address for

receiving notices hereunder; provided, however, that no change to [Norton’s] address

for receiving notices hereunder shall be effective until [YCD] has actually received

notice thereof.”23 This provision conclusively demonstrates that the note and security

deed draw a clear distinction between “receipt” and “actual receipt.”24

23
(First emphasis in original; second emphasis supplied.)
24
See OCGA § 13-2-2 (4) (“The construction which will uphold a contract in
whole and in every part is to be preferred, and the whole contract should be looked
to in arriving at the construction of any part[.]”). Cf. W. Ray Camp, Inc., 308 Ga. App.
at 599 (“In determining whether notice required under a specific statute must be
received, the language of the particular statute in issue must be interpreted in
accordance with recognized principles of construction . . . .” (punctuation omitted));
Five Star Steel Contractors, Inc., 208 Ga. App. at 696 (same).

15
 Accordingly, because actual receipt of notice was not required by the terms of

the security deed when providing notice by certified mail, the trial court erred in its

interpretation of the contract.25

2. Next, YCD contends that the court erroneously concluded that YCD failed

to comply with the terms of the purchase money note and security deed before

exercising the power of sale and foreclosing upon Norton’s property. We agree.

Given our holding in Division 1, YCD complied with the terms of the note and

security deed when it sent by “certified mail with return receipt requested and with

all postage prepaid” notice of default to Norton’s primary residence on February 3,

2016. Indeed, it is undisputed between the parties that Norton specified her primary

residence as the address for receiving notice and that on February 3, 2016, YCD sent

notice to that address by certified mail. All that the parties disputed was whether

Norton was required to actually receive the notice. Because we determined in

Division 1 that actual receipt was not required by the terms of the security deed when

using certified mail, Norton was deemed to have been “duly given” (i.e., to have

received) the February 3, 2016 notice “two (2) days after [YCD] deposited [same] in

25
See supra note 22.

16
the United States Mail, certified mail with return receipt requested and with all

postage prepaid[.]”

For all these reasons, we reverse the grant of summary judgment in favor of

Norton and the denial of summary judgment in favor of YCD.

Judgment reversed. Ray, P. J., and Self, J., concur.

17