                             SECOND DIVISION
                               MILLER, P. J.,
                            BROWN and GOSS, JJ.

                  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


                                                                    March 8, 2019




In the Court of Appeals of Georgia
 A18A1467. APEX BANK v. THOMPSON et al.
 A18A1468. THOMPSON et al. v. APEX BANK.

      BROWN, Judge.

      We have consolidated these interlocutory appeals arising from a trial court’s

order on cross-motions for summary judgment. In the underlying action, Apex Bank

(“Apex”) sued Ernest A. Thompson and Douglas O. Thompson (the “Thompsons”)

for a deficiency judgment following a non-judicial foreclosure sale of the real

property collateralizing the loan, alleging that they were guarantors of the debt

remaining on a promissory note. In Case No. A18A1467, Apex contends that the trial

court erred by failing to grant summary judgment in its favor on the issue of the

Thompsons’ liability for the difference between the amount due on the note and the

foreclosure proceeds based upon their alleged waiver of the requirements of the
confirmation statute, OCGA § 44-14-161. In Case No A18A1468, the Thompsons

contend, in part, that the trial court erred by denying their cross-motion for summary

judgment on the issue of liability based upon Apex’s failure to comply with the

requirement that it obtain confirmation of the sale under OCGA § 44-14-161 before

filing suit for a deficiency judgment. For the reasons explained below, we affirm the

trial court’s denial of summary judgment in Apex’s favor in Case No. A18A1467, and

reverse the trial court’s denial of summary judgment in favor of the Thompsons in

Case No. A18A1468.

       “On appeal, we review the grant or denial of summary judgment de novo,

construing the evidence and all inferences in a light most favorable to the nonmoving

party.” (Citation and punctuation omitted.) Seki v. Groupon, Inc., 333 Ga. App. 319

(775 SE2d 776) (2015). So viewed, the record shows that in November 2007, Direct

Land & Development, LLC (“the LLC”) executed a security deed in favor of the

Bank of Valdosta that encumbered real property owned by the LLC in connection

with a $208,000 promissory note. The security deed was signed by the Thompsons

in their capacity as members of the LLC. Although a copy of the 2007 note is not a

part of the record before us, the Thompsons state in their briefs that they were not a



                                          2
party to this loan, either individually or as guarantors. In its appellate brief, Apex

objects to this characterization of the facts in the Thompsons’ brief, stating:

      Apex objects to the statement that the Thompsons were not individually
      parties to the original loan made when the security deed was executed
      November 8, 2007 (the “Security Deed”). (R. 12). The promissory note
      providing the underlying debt for the Security Deed when the original
      loan was made is not at issue in the lower court action, as it was
      replaced during a subsequent refinancing of the debt. The subject
      promissory note is dated October 26, 2011.


      In October 2011, the LLC refinanced the 2007 note. The Thompsons “jointly

and severally promise[ed] to pay” the lender,1 and signed the new note in both their

individual capacity and as members on behalf of the LLC. On the same day, the

Thompsons signed, in their capacity as members on behalf of the LLC, a

Modification of Security Deed which deleted the definition of note in the original

security deed and replaced it with the new October 2011 note. Additionally, Douglas

O. Thompson granted the lender a security interest in $14,393.09 placed in a

certificate of deposit account through an “Assignment of Deposit Account.” The


      1
        Apex asserts that the Bank of Valdosta changed its name to Sunrise Bank on
July 30, 2010. Sunrise Bank is listed as the lender in the 2011 and 2012 agreements
signed by the Thompsons. The 2012 “Change in Terms Agreement” identifies the
Bank of Valdosta “as predecessor to Sunrise Bank.”

                                          3
“Assignment of Deposit Account” states that it was “made and executed among

Douglas O. Thompson (“Grantor”), [the LLC], Douglas O. Thompson and Ernest A.

Thompson (“Borrower”); and Sunrise Bank (“Lender”). In December 2012, the

Thompsons signed a “Change in Terms Agreement,” in both their individual capacity

and as members on behalf of the LLC, that extended the due date for payment of the

loan an additional six months.

      In 2013, the Federal Deposit Insurance Corporation, in its capacity as the

receiver for Sunrise Bank, assigned the 2007 security deed to the Bank of Camden.

In 2015, the Bank of Camden changed its name to Apex Bank. In December 2016,

Apex foreclosed upon the property securing the loan and was the highest bidder at a

non-judicial foreclosure sale with a bid in the amount of $118,900. It is undisputed

that Apex Bank did not file for confirmation of the foreclosure sale within 30 days

under the procedure provided by OCGA § 44-14-161.

      In 2017, Apex filed a complaint against the Thompsons seeking a deficiency

judgment. Based upon the Thompsons’ alleged status as guarantors who waived their

right to the protection provided by the confirmation statute in the 2011 and 2012 loan

documents, Apex moved for summary judgment in its favor. The Thompsons filed a

cross-motion for summary judgment asserting that they were debtors entitled to the

                                          4
protection of the confirmation statute, that the 2011 and 2012 agreements do not

include valid waivers of their rights under the statute, and that an alleged requirement

for a separate guaranty agreement was not met. After both sides presented argument

in a hearing, the trial court entered an order denying each of the pending motions for

summary judgment without an explanation of its reasoning.

      1. In Case No. A18A1467, Apex asserts that the trial court erred “by failing to

rule that the contractual waiver language found in the Thompson[s’] loan documents

was sufficient to waive the defense of compliance with the [c]onfirmation [s]tatute.”

See OCGA § 44-14-161 (a) (“no action may be taken to obtain a deficiency judgment

unless the person instituting the foreclosure proceedings, shall, within 30 days after

the sale, report the sale to the judge of the superior court of the county in which the

land is located for confirmation and approval and shall obtain an order of

confirmation and approval thereon”). In Case No. A18A1468, the Thompsons

contend the opposite – that the trial court should have granted their motion for

summary judgment because the loan documents failed to include an adequate waiver

of the confirmation process required by OCGA § 44-14-161. We agree with the

Thompsons.



                                           5
      It is well-established that a lender cannot obtain a deficiency judgment against

a guarantor without complying with the foreclosure confirmation requirements of

OCGA § 44-14-161, unless the guarantor has waived its right to insist on compliance.

See York v. RES-GA LJY, 300 Ga. 869, 872-873 (2) (799 SE2d 235) (2017); PNC

Bank v. Smith, 298 Ga. 818, 822 (3) (a) (785 SE2d 505) (2016). In HWA Properties

v. Community & Southern Bank, 322 Ga. App. 877 (746 SE2d 609) (2013), we

outlined the following provisions in a guaranty agreement and concluded that “these

provisions” showed a waiver of the guarantor’s right to confirmation under OCGA

§ 44-14-161:

      [the] personal guaranty includes an express and comprehensive waiver
      of any and all defenses to [the guarantor’s] liability on the entire balance
      due on the note. Further, even absent this broad waiver of defenses, the
      guaranty expressly gives [] consent for the “Lender” to collect on other
      collateral and to apply the proceeds to the amount due on the note and
      that “[s]uch application of receipts shall not reduce, affect or impair the
      liability of [the guarantor].” In fact, the guaranty specifically provides
      that [the guarantor] shall remain liable for any deficiency remaining
      after the foreclosure of any property securing the note,


            whether or not the liability of Borrower or any other
            obligor for such deficiency is discharged pursuant to
            statute or judicial decision. [Guarantor] shall remain


                                           6
             obligated, to the fullest extent permitted by law, to pay
             such amounts as though the Borrower’s obligations had
             not been discharged.


(Punctuation omitted; emphasis in original.) Id. at 887 (2) (b).

      Relying upon HWA Properties, Apex Bank points to various language

contained within the 2011 note, the 2011 agreement assigning the deposit account,

and the 2012 change in terms agreement, all of which were signed by the Thompsons

in their individual capacities, to support its claim of waiver. We will therefore

examine each of these agreements in turn.

      (a) 2011 Note. Apex relies upon the following italicized language to support

its claim of waiver in the 2011 Promissory Note :

      GENERAL PROVISIONS. This Note is payable on demand. The
      inclusion of specific default provisions or rights of Lender shall not
      preclude Lender’s right to declare payment of this Note on its demand.
      If any part of this Note cannot be enforced, this fact will not affect the
      rest of the Note. Lender may delay or forgo enforcing any of its rights
      or remedies under this Note without losing them. Each Borrower
      understands and agrees that, with or without notice to Borrower, Lender
      may with respect to any other Borrower (a) make one or more additional
      secured or unsecured loans or otherwise extend additional credit; (b)
      alter, compromise, renew, extend, accelerate, or otherwise change one
      or more times the time for payment or other terms of any indebtedness,

                                          7
including increases and decreases of the rate of interest on the
indebtedness; (c) exchange, enforce, waive, subordinate, fail or decide
not to perfect, and release any security, with or without the substitution
of new collateral; (d) apply such security and direct the order or
manner of sale thereof, including without limitation, any non-judicial
sale permitted by the terms of the controlling security agreements, as
Lender in its discretion may determine; (e) release, substitute, agree not
to sue, or deal with any one or more of Borrower’s sureties, endorsers,
or other guarantors on any terms or in any manner Lender may choose;
and (f) determine how, when and what application of payments and
credits shall be made on any other indebtedness owing by such other
Borrower. Borrower and any other person who signs, guarantees or
endorses this Note, to the extent allowed by law, waive presentment,
demand for payment, and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All
such parties waive any right to require Lender to take action against any
other party who signs this Note as provided in O.C.G.A. Section 10-7-24
and agree that Lender may renew or extend (repeatedly and for any
length of time) this loan or release any party or guarantor or collateral;
or impair, fail to realize upon or perfect Lender’s security interest in the
collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties also agree
that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The
obligations under this Note are joint and several.

                                     8
(Bold in original; italics supplied.) We disagree.

      Language providing that a change in the terms of the note will not release a

party who has signed the note from liability unless it is expressly stated in writing is

not and should not be construed as a waiver of a guarantor’s right to insist upon

compliance with the confirmation statute. Likewise, language regarding a lender’s

right to change the collateral and exercise discretion over which collateral it might

foreclose upon first and how it chooses to apply the proceeds also fails to show a

waiver of a guarantor’s rights under the confirmation statute.

      (b) 2011 Assignment of Deposit Account. Apex contends that language in the

“Assignment of Deposit Account” agreement, executed on the same day as the 2011

note, waived the Thompsons’ rights under the confirmation statute. This agreement

provides, in relevant part:

      ASSIGNMENT. For valuable consideration, Grantor assigns and grants
      to Lender a security interest in the Collateral, including without
      limitation the deposit accounts described below, to secure the
      indebtedness and agrees that Lender shall have the rights stated in this
      Agreement with respect to the Collateral, in addition to all other rights
      which Lender may have by law.


      COLLATERAL DESCRIPTION. . . . In addition, the word
      “Collateral” includes all of the Grantor’s property . . . in Lender’s

                                           9
possession . . . including without limitation . . . property to which Lender
acquires title or documents of title. . . .


CROSS-COLLATERALIZATION. In addition to the Note, this
Agreement secures all obligations, debts, and liabilities . . . of either
Grantor or Borrower to Lender, or any one or more of them, as well as
claims by Lender against Borrower and Grantor or any one or more of
them, whether now existing or hereafter arising, whether related or
unrelated to the purpose of the Note, whether voluntary or otherwise,
whether due or not due, direct or indirect, determined or undetermined,
absolute or contingent, liquidated or unliquidated, whether Borrower or
Grantor may be liable individually or jointly with others, whether
obligated as guarantor, surety, accommodation party or otherwise, and
whether recovery upon such amounts may be or hereafter may become
barred by any statute of limitations, and whether the obligation to repay
such amounts may be or hereafter may become otherwise unenforceable.


BORROWER’S WAIVERS AND RESPONSIBILITIES. Except as
otherwise required under this Agreement or by applicable law, (A)
Borrower agrees that Lender need not tell Borrower about any action or
inaction Lender takes in connection with this Agreement; (B) Borrower
assumes the responsibility for being and keeping informed about the
Collateral; and (C) Borrower waives any defenses that may arise
because of any action or inaction of Lender, including without
limitation any failure of Lender to realize upon the Collateral or any
delay by Lender in realizing upon the Collateral; and Borrower agrees



                                     10
      to remain liable under the Note no matter what action Lender takes or
      fails to take under this Agreement.


      DEFINITIONS. The following capitalized words and terms shall have
      the following meanings when used in this Agreement. . . .


             Agreement.     The    word     “Agreement”     means     this
             Assignment of Deposit Account, as this Assignment of
             Deposit Account may be amended or modified from time
             to time, together with all exhibits and schedules attached to
             this Assignment of Deposit Account from Time to Time.


             Grantor. The word “Grantor” means Douglas O[.]
             Thompson. . . .


             Note. The word “Note” means the Note executed by Direct
             Land & Development LLC, Douglas O Thompson and
             Ernest A Thompson in the principal amount of
             $196,553.20 dated October 26, 2011, together with all
             renewals of, extensions of, modifications of, refinancings
             of, consolidations of, and substitutions for the note or
             credit agreement.


(Emphasis in italic supplied; emphasis in bold in original.)

      While this document contains a specific waiver of defenses, we cannot say,

after reading this document as a whole, that it includes a waiver of the Thompsons’

                                          11
defenses under the confirmation statute. “Agreement” is clearly defined to mean only

the “Assignment of Deposit Account,” and the agreement of the Thompsons “to

remain liable under the Note no matter what action Lender takes or fails to take under

this Agreement” cannot be read to apply to Apex’s failure to comply with the

requirements of the confirmation statute. The collateral covered by this agreement

applied only to the particular identified deposit account and other property owned by

the Grantor, Douglas O. Thompson, in the possession of Apex. The foreclosed-upon

property, on the other hand, was owned by the LLC, not Douglas O. Thompson.

      Apex also points to some of the language in the “Cross-Collateralization”

paragraph as evidence that the Thompsons waived their rights under the confirmation

statute. We disagree as this paragraph provides, in essence, that no matter what

eventuality might occur, the security interest provided by the agreement will not be

affected. For example, Apex would still have the right to apply the deposit account

(the security) to amounts owed under the note even if “the obligation to repay such

amounts may hereafter become otherwise unenforceable.”

      The Thompsons’ agreement to “waive any defenses that may arise because of

any action or inaction of [Apex], including without limitation any failure of Lender

to realize upon the Collateral or any delay by Lender in realizing upon the Collateral”

                                          12
presents a closer question. (Emphasis supplied.) While this language could be broadly

interpreted to apply to Apex’s failure to seek confirmation of the foreclosure sale, we

cannot ignore that it is included within an agreement providing that a deposit account

with an approximate balance of $14,000 would provide additional collateral for the

note. Accordingly, it could also be interpreted to mean that the Thompsons were only

waiving defenses to enforcement of the collateral agreement, not defenses to a

deficiency judgment based upon Apex’s failure to seek confirmation of the

foreclosure sale. The Thompsons correctly assert that a guaranty contract cannot be

“extended by implication or interpretation,” OCGA § 10-7-3, and must be strictly

construed. York, supra, 300 Ga. at 871 (2). Based upon this well-established law, we

decline to find that the language at issue waived the Thompsons’ rights under the

confirmation statute.

      (c) 2012 Change in Terms Agreement. Apex relies upon the following language

in the “Change In Terms Agreement” to establish a waiver:

      CONTINUING VALIDITY. Except as expressly changed by this
      Agreement, the terms of the original obligation or obligations, including
      all agreements evidenced or securing the obligation(s), remain
      unchanged and in full force and effect. Consent by Lender to this
      Agreement does not waive Lender’s right to strict performance of the


                                          13
      obligation(s) as changed, nor obligate Lender to make any future change
      in terms. Nothing in this Agreement will constitute a satisfaction of the
      obligation(s). It is the intention of Lender to retain as liable parties all
      makers and endorsers of the original obligation(s), including
      accommodation parties, unless a party is expressly released by Lender
      in writing. Any maker or endorser, including accommodation makers,
      will not be released by virtue of this Agreement. If any person who
      signed the original obligation does not sign this agreement below, then
      all persons signing below acknowledge that this Agreement is given
      conditionally, based on the representation to Lender that the non-signing
      party consents to the changes and provisions of this Agreement or
      otherwise will not be released by it. This waiver applies not only to any
      initial extension, modification or release, but also to all such subsequent
      actions.


      MISCELLANEOUS PROVISIONS. . . . Lender may delay or forgo
      enforcing any of its rights or remedies under this Agreement without
      losing them. . . . Upon any change in the terms of this Agreement, and
      unless otherwise expressly stated in writing, no party who signs this
      Agreement, whether as maker, guarantor, accommodation maker or
      endorser, shall be released from liability.


(Bold in original; italic supplied.)

      These provisions also fail to establish a waiver. As we have previously stated,

an agreement that a change in the terms of the note will not release a party who has



                                          14
signed the note from liability unless it is expressly stated in writing is not and should

not be construed as a waiver of a guarantor’s rights or defenses under the

confirmation statute. Likewise, the statement in the “Continuing Validity” paragraph

about the intent of the Lender when executing an agreement to extend the maturity

date of a loan an additional six months should not be construed as a waiver of a

guarantor’s defenses under the confirmation statute. Finally, the Lender’s decision to

delay or forgo “its rights or remedies under this Agreement” also fails to show a

guarantor’s waiver of defenses.

      Having carefully examined all of the contractual provisions Apex claims

established a waiver and finding that all of them fall short, we must reverse the trial

court’s denial of summary judgment in favor of the Thompsons and affirm its denial

of summary judgment to Apex.

      2. Based upon our holding in Division 1, we need not address the Thompsons’

remaining claims. .

      Judgment affirmed in Case No. A18A1467. Judgment reversed in Case No.

A18A1468. Miller, P. J., and Goss, J., concur.




                                           15
