                               FOURTH DIVISION
                                 DOYLE, P. J.,
                            MILLER and DILLARD, 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/


                                                                       July 11, 2014




In the Court of Appeals of Georgia
 A14A0717. COMMUNITY & SOUTHERN BANK v. DCB
     INVESTMENTS, LLC et al.

      DILLARD, Judge.

      Community Southern Bank (“CSB”) brought this action against DCB

Investments, LLC, David Belke, Glenn Couey, and Julie Couey (the latter three

collectively “defendants”), seeking a deficiency judgment pursuant to three

simultaneously executed promissory notes and guaranties. Following the denial of its

motion for summary judgment and the grant of summary judgment in favor of the

defendants, CSB appeals, arguing that the trial court erred in finding that CSB is

barred from seeking a deficiency judgment because it failed to obtain judicial

confirmation of an earlier foreclosure and in finding that this same failure also bars

it from recovering on the guaranties. For the reasons set forth infra, we affirm the trial
court’s ruling that CSB cannot seek a deficiency judgment against the borrowers

because it failed to comply with the judicial-confirmation requirements. However, we

reverse the ruling that CSB is barred from recovering on the guaranties, and, thus, we

reverse the denial of summary judgment to CSB on this issue.

      At the outset, we note that summary judgment is only warranted if the

“pleadings, depositions, answers to interrogatories, and admissions on file, together

with the affidavits, if any, show that there is no genuine issue as to any material fact

and that the moving party is entitled to a judgment as a matter of law.”1 If summary

judgment is granted by a trial court, it enjoys no presumption of correctness on

appeal, “and an appellate court must satisfy itself de novo that the requirements of

OCGA § 9-11-56 (c) have been met.”2 And in our de novo review of a trial court’s

grant of a motion for summary judgment, we are charged with “viewing the evidence,

and all reasonable conclusions and inferences drawn from the evidence in the light

most favorable to the nonmovant.”3


      1
          OCGA § 9-11-56 (c).
      2
          Cowart v. Widner, 287 Ga. 622, 624 (1) (a) (697 SE2d 779) (2010).
      3
       Benefield v. Tominich, 308 Ga. App. 605, 607 (1) (708 SE2d 563) (2011)
(punctuation omitted); see also Roberson v. Leone, 315 Ga. App. 459, 460 (726 SE2d
565) (2012).

                                           2
      So viewed, the record shows that on February 13, 2009, Belke, Glenn Couey,

Julie Couey, and DCB Investments, LLC (an entity controlled by Belke), executed

three separate promissory notes with First Commerce Community Bank (“FCCB”)

for the purpose of developing real estate in Douglas and Carroll Counties. The first

note (Loan No. 4000287300, “Note 1”) named DCB as the borrower of a principal

sum of $616,961.00, and indicated that its purpose was for renewal and the

development of commercial real estate. Note 1 also indicated that it was secured by

certain property in Douglas County and stated that it was “CROSSED WITH LOAN

#’S 4000310300 & 400194800” (“Note 2 and 3,” respectively). Accordingly, DCB

executed a security deed, pledging the Douglas County property as security for Note

1.4

      In a form identical to that of Note 1, Note 2 named Belke and both of the

Coueys as borrowers of a principal sum of $1,012,708.93, and indicated that its

purpose was similarly for renewal and the development of commercial land.


      4
        This security deed was originally executed on April 21, 2008, as the Douglas
property served as collateral for an earlier loan agreement between DCB and FCCB.
Note 1 was a renewal of that earlier agreement. In fact, all three notes were renewals
of earlier agreements between FCCB, DCB, Belke, and the Coueys, and, thus, the
security deeds serving as collateral, discussed infra, were executed on dates earlier
than February 13, 2009.

                                          3
Additionally, Note 2 stated that it was secured by certain property in Carroll County

and that it was “CROSS DEFAULTED WITH [Notes 1 and 3].” And pursuant to

Note 2, Belke and the Coueys executed a security deed, pledging the Carroll County

property as security.

      In a form identical to the previous two, Note 3 designated Belke and both of

the Coueys as borrowers of a principal sum of $1,600,543.92. Note 3 indicated that

its purpose was for renewal and additional money for the development loan. It too

was secured by the Carroll County property, via a security deed, which specifically

noted that it was inferior to the deed pledging the same property as collateral for Note

2. Note 3 similarly indicated that it was cross defaulted with Notes 1 and 2.

      On the same day that the three promissory notes were executed, Belke, Glenn

Couey, and Julie Couey executed three separate guaranties of the notes. And finally,

also on that same day, the parties executed two modification agreements, which

pertained to the Carroll and Douglas County properties, respectively. The purpose of

these agreements was to further ensure that all three notes were subject to cross-

default and cross-collateralized, i.e., that all three notes were secured by both the

Carroll and Douglas County properties. Toward that end, for instance, the Douglas

modification, in part, provides: “Lender has required as a condition to the extension

                                           4
of credit evidenced by [Note 2] and [Note 3], that [Note 2] and [Note 3] also be

secured by the [Douglas] Security Deed.” In a similar fashion, the Carroll

modification, in part, provides: “In addition to all other indebtedness described

therein, the First [Carroll] Security Deed and the Second [Carroll] Security Deed shall

secure payment of [Note 2], [Note 3], and [Note 1].” Both agreements also included

provisions stating that a default under any one of the notes would constitute a default

under all of the notes.

      On June 1, 2009, FCCB, DCB, Belke, and the Coueys executed what they

collectively characterized as the Assumption Agreement. Pursuant to that agreement,

FCCB allowed Belke and the Coueys to transfer ownership of the Carroll County

property to DCB, and, as a result, DCB assumed Belke and the Coueys’ obligations

as “borrower” on Notes 2 and 3. However, Belke and the Coueys’ obligations under

the separate personal guaranties remained intact. The Assumption Agreement also

reconfirmed the parties’ intention to cross-collateralize all three notes.

      At some point thereafter, DCB defaulted on Note 1, and on April 6, 2010,

FCCB foreclosed on the Douglas County property. The foreclosure sale garnered

$734,558.88. It is undisputed, however, that FCCB did not seek judicial confirmation

for that foreclosure sale. Then, nearly six months later, FCCB failed, and the Federal

                                           5
Deposit Insurance Corporation (“FDIC”) was appointed as receiver. Ultimately,

pursuant to an agreement with the FDIC, CSB acquired all rights and possession of

the subject notes, guaranties, and loan-related documents.

      In November 2011, CSB notified DCB, Belke, and the Coueys that the notes

were in default. Subsequently, on or about December 14, 2011, CSB foreclosed on

the Carroll County property, and the foreclosure sale garnered $1,980,000.00

Thereafter, CSB filed an application for judicial confirmation of that foreclosure sale

in the Superior Court of Carroll County, which the court granted on March 1, 2012.

      Less than one week after obtaining judicial confirmation of the foreclosure sale

of the Carroll County property, CSB filed suit against DCB, Belke, Glenn Couey, and

Julie Couey, alleging breach of all three of the promissory notes and guaranties and

seeking, inter alia, a deficiency judgment. And although it indicated that it was

seeking such a judgment pursuant to all three of the notes, as well as the foreclosure

sale of the Carroll County property, CSB’s complaint made no mention of the

Douglas County property, which originally secured Note 1, or the foreclosure sale of

that property.




                                          6
      Belke and the Coueys filed answers,5 and the parties engaged in discovery.

Subsequently, the parties filed cross motions for summary judgment. And after a

hearing and supplemental briefing by both parties, the trial court denied CSB’s

motion and granted summary judgment in favor of defendants. Specifically, the trial

court found that CSB was barred from seeking a deficiency judgment because it failed

to obtain judicial confirmation of the foreclosure sale of the Douglas County property

and that this same failure also barred it from recovering on the personal guaranties.

This appeal follows.

      1. CSB contends that the trial court erred in finding that its failure to obtain

judicial confirmation of the foreclosure sale on the Douglas County property

associated with Note 1 barred it from seeking a deficiency judgment on Notes 2 and

3, arguing that the debts represented by the three notes are not inextricably

intertwined. We disagree.

      Under Georgia law, a deficiency judgment is “the imposition of personal

liability on mortgagor for unpaid balance of mortgage debt after foreclosure has failed




      5
        CSB dismissed DCB without prejudice, and, therefore, DCB is no longer a
party in this matter.

                                          7
to yield full amount of due debt.”6 And the requirements for obtaining such a

judgment are delineated in OCGA § 44-14-161 (a), which provides:

      When any real estate is sold on foreclosure, without legal process, and
      under powers contained in security deeds, mortgages, or other lien
      contracts and at the sale the real estate does not bring the amount of the
      debt secured by the deed, mortgage, or contract, 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.


As our Supreme Court has noted, the purpose of this legislation “was stated to limit

and abate deficiency judgments in suits and foreclosure proceedings on debts.” 7 Thus,



      6
        Iwan Renovations, Inc. v. N. Atlanta Nat’l Bank, 296 Ga. App. 125, 127 (1)
(673 SE2d 632) (2009) (punctuation omitted); see Hill v. Moye, 221 Ga. App. 411,
412 (1) (471 SE2d 910) (1996) (noting that a deficiency judgment is a judgment for
that part of a debt secured by a mortgage not realized from a sale of the mortgaged
property).
      7
        First Nat’lBank & Trust Co. v. Kunes, 230 Ga. 888, 890 (199 SE2d 776)
(1973) (punctuation omitted); see also Bank of N. Ga. v. Windermere Dev., Inc., 316
Ga. App. 33, 37 (728 SE2d 714) (2012) (“This statute, which was enacted in 1935
during the Great Depression, was intended to relieve debtors from the economic
depression of the times . . . . [T]he aim of the legislation was stated to limit and abate
deficiency judgments in suits and foreclosure proceedings on debts.”) (citation and
punctuation omitted).

                                            8
as made clear by the plain meaning of the relevant statutory text, before a creditor is

entitled to file an action to obtain a deficiency judgment against a debtor, it must

report the foreclosure sale to and obtain confirmation of the sale from the superior

court of the county where the foreclosed land was located by demonstrating that the

sale was lawfully conducted and brought at least the fair-market value of the land on

the date of the sale.8

      Importantly, this Court has applied OCGA § 44-14-161(a) to “foreclosure

proceedings on separate debts which are inextricably intertwined to prevent creditors

from circumventing the statute’s mandates by making successive loans against the

security of the same property.”9 Such an application prevents creditors from avoiding

the central dictates of the confirmation statute, which are there to “protect debtors

from deficiency judgments when their property is sold at a foreclosure sale for less

than its market value.”10 And as a general rule, “two debts that are incurred for the




      8
          See Bank of N. Ga., 316 Ga. App. at 38 (1); OCGA § 44-14-161 (b), (c).
      9
          Iwan Renovations, Inc., 296 Ga. App. at 128 (1).
      10
           Id. (punctuation omitted).

                                          9
same purpose, secured by the same property, held by the same creditor, and owed by

the same debtor are inextricably intertwined.”11

      Here, although there were three separate promissory notes that were secured

by two separate parcels of property, all three notes were executed on the same date

by DCB, Belke, the Coueys, and the same creditor (FCCB) and were executed for the

same purpose of developing the properties at issue. In addition, each note contained

cross-default language that specifically referenced the other two notes. Furthermore,

as previously noted, to unequivocally ensure that all three notes were subject to cross-

default and cross-collateralized, on the same day that the notes were executed, the

parties also executed the two modification agreements, which explicitly stated that

both the Douglas and Carroll County properties secured all three notes. Given these

circumstances, we conclude that the three notes were indeed inextricably

intertwined.12 Accordingly, the trial court did not err in finding that CSB’s failure to

      11
        Id.; accord Bank of N. Ga., 316 Ga. App. at 38 (1); Tufts v. Levin, 213 Ga.
App. 35, 39 (2) (443 SE2d 681) (1994).
      12
         See Bank of N. Ga., 316 Ga. App. at 39 (1) (holding that because mortgages
and letters of credit both were used for purpose of developing properties subject to
mortgage, were held by the same creditor, and were secured by the same property,
debts were inextricably intertwined such that mortgagee’s action against mortgagors
was a suit for deficiency judgment and was barred by mortgagee’s failure to obtain
judicial confirmation of foreclosure sale); Iwan Renovations, Inc., 296 Ga. App. at

                                          10
obtain judicial confirmation of the foreclosure sale of the Douglas County property

barred it from seeking a deficiency judgment from the borrowers on the notes.

      2. CSB also contends that the trial court erred in finding that its failure to

obtain judicial confirmation of the foreclosure sale on the Douglas County property

likewise barred it from recovering on the personal guaranties. We agree.

      At the outset, we note that Georgia’s appellate courts are required to construe

agreements in a manner that “respects the parties’ sacrosanct freedom of contract.”13

Indeed, it is well settled that contracts will not be avoided by the courts as against

public policy, “except where the case is free from doubt and where an injury to the



129 (1) (holding that two debts were inextricably intertwined given the fact that notes
were incurred only seven months apart for the same purpose, both deeds pertained to
same property, were held by same creditor, and contained cross-default clauses).
Compare Lawson v. Habersham Bank, 233 Ga. App. 88, 91-92 (503 SE2d 341)
(1998) (finding that mortgagee’s attempt to foreclose on mortgagors’ home after
foreclosing on their farm, pursuant to a consolidated loan secured by both properties,
was not an action for a deficiency judgment, but was a separate contractual remedy
not barred by mortgagor’s failure to obtain judicial confirmation of foreclosure on
home).
      13
         Monitronics Int’l, Inc. v. Veasley, 323 Ga. App. 126, 134-135 (746 SE2d
793) (2013) (physical precedent only as to Division 2); see also Duncan v. Integon
General Ins. Corp., 267 Ga. 646, 650 (482 SE2d 325) (1997) (“Georgia has
historically afforded great protection to the freedom to contract with another person.
Georgia courts are thus bound to enforce contracts as made so long as they are not
contrary to law or public policy.”).

                                          11
public interest clearly appears.”14 Consequently, a guarantor may consent in advance

to a course of conduct which would otherwise result in his discharge, “and this

includes the waiver of defenses otherwise available to a guarantor.”15

      In the case sub judice, Belke’s guaranty, in relevant part, provides:

      1. No act or thing need occur to establish the liability of Undersigned,
      and no act or thing, except full payment and discharge of all
      indebtedness, shall in any way exonerate Undersigned or modify,
      reduce, limit or release the liability of the Undersigned hereunder.


      4. The liability of the Undersigned shall be limited to a principal amount
      of $ Unlimited (if unlimited or if no amount is stated, the Undersigned
      shall be liable for all indebtedness, without any limitation as to amount),
      plus accrued interest thereon and all attorneys’ fees, collection costs and
      enforcement expenses referable thereto. Indebtedness may be created
      and continued in any amount, whether or not in excess of such principal
      amount, without affecting or impairing the liability of the Undersigned.
      The Lender16 may apply any sums received by or available to Lender on
      account of the Indebtedness from Borrower or any other person (except
      the Undersigned), from their properties, out of any collateral security or

      14
           Id. (punctuation omitted).
      15
       HWA Props., Inc. v. Cmty. & S. Bank, 322 Ga. App. 877, 887 (2) (b) (746
SE2d 609) (2013) (punctuation omitted).
      16
        The guaranty identifies the “Lender” as FCCB and its “participants,
successors and assigns,” which includes CSB.

                                          12
from any other source to payment of the excess. Such application of
receipts shall not reduce, affect or impair the liability of the Undersigned
hereunder. . . .


6. . . . The liability of the Undersigned shall not be affected or impaired
by any of the following acts or things (which Lender is expressly
authorized to do, omit or suffer from time to time, both before and after
revocation of this guaranty, without notice to or approval by the
Undersigned): (i) any acceptance of collateral security, guarantors,
accommodation parties or sureties for any or all indebtedness; . . . (iii)
any waiver, adjustment, forbearance, compromise or indulgence granted
to Borrower, any delay or lack of diligence in the enforcement of
Indebtedness, or any failure to institute proceedings, file a claim, give
any required notices or otherwise protect any Indebtedness; (iv) any full
or partial release of, settlement with, or agreement not to sue, Borrower
or any other guarantor or other person liable in respect of any
Indebtedness; (v) any discharge of any evidence of Indebtedness or the
acceptance of any instrument in renewal thereof or substitution therefor;
(vi) any failure to obtain collateral security (including rights of setoff)
for Indebtedness, or to see to the proper or sufficient creation and
perfection thereof, or to establish the priority thereof, or to protect,
insure, or enforce any collateral security; (vii) any foreclosure or
enforcement of any collateral security[.] . . .


7. The Undersigned waives any and all defenses, claims and discharges
of Borrower, or any other obligor, pertaining to Indebtedness, except the
defense of discharge by payment in full. Without limiting the generality

                                    13
      of the foregoing, the Undersigned will not assert, plead or enforce
      against Lender any defense of waiver, release, statute of limitations, res
      judicata, statute of frauds, fraud, incapacity, minority, usury, illegality
      or unenforceability which may be available to Borrower or any other
      person liable in respect of any Indebtedness, or any setoff available
      against Lender to Borrower or any such other person, whether or not on
      account of a related transaction. The Undersigned expressly agrees that
      [he] shall be and remain liable, to the fullest extent permitted by
      applicable law, for any deficiency remaining after foreclosure of any
      mortgage or security interest securing Indebtedness, whether or not the
      liability of Borrower or any other obligor for such deficiency is
      discharged pursuant to statute or judicial decision. The Undersigned
      shall remain obligated, to the fullest extent permitted by law, to pay such
      amounts as though the Borrower’s obligations had not been discharged.


      The guaranties executed by Glenn and Julie Couey were identical to each

other—although they contained language somewhat different than Belke’s

guaranty—and, in relevant part, provide:

      1. . . . This Guaranty may be enforced by the Lender against the
      Guarantor without the necessity at any time of the Lender’s resorting to
      or exhausting any other security or collateral now or hereafter pledged,
      assigned, or granted to the Lender and without the necessity at any time
      of the Lender’s having recourse against the Borrower on the Note or
      against the Land through foreclosure proceedings under the Security
      Deed or otherwise. . . .


                                          14
2. . . . Without limiting the generality of the foregoing, the Guarantor
gives its consent for the Lenders to do any one or more of the following
without in any manner affecting, impairing, limiting, modifying or
releasing any of the obligations of the Guarantor under this Guaranty
and without notice to or consent of the Guarantor (a) exchange,
compromise, or surrender the whole or any part of the security now or
hereafter held for the Indebtedness, (b) exchange, extend or renew the
time or place of payment of the Indebtedness in whole or in part, to a
time certain or otherwise whether or not longer than the original period,
or withdraw credit or time to pay, (c) extend or change the terms of
performance of any other obligations of the Borrower under the Loan
Documents, (d) modify, amend, or waive any of the provisions of the
Loan Documents, (e) release or grant indulgences to the Borrower, any
co-guarantor, or any party to the Loan Documents, (f) receive additional
property or other security as collateral for the Indebtedness, (g) fail to
exercise due diligence or omit to enforce any right, power, or privilege
under the Loan Documents, and (h) apply any payment received by the
Lender from the Borrower of, or on account of, the Indebtedness, in any
manner the Lender elects.


3. Waiver of Rights. The Guarantor expressly waives (a) notice of the
execution and delivery of the Loan Documents and creation of the
Indebtedness, (b) notice of acceptance of this Guaranty by the Lender
and of all extensions of credit to the Borrower by the Lender, (c)
presentment and demand for payment of any of the Indebtedness, (d)
protest and notice of dishonor or of default or nonpayment to the
Guarantor or to any other party with respect to the Indebtedness or with

                                   15
      respect to any security therefor, (e) notice of the Lender’s obtaining,
      amending, substituting for, releasing, waiving, or modifying any security
      interest, liens, or encumbrances now or hereafter securing the
      Indebtedness, or      the   Lender’s subordinating,       compromising,
      discharging, or releasing such security interests, liens, or encumbrances
      and any other notices whatever, (f) the defense of impairment of
      collateral, (g) demand for payment under this Guaranty, (h) the
      provisions of Section 10-7-24 . . . , and (i) all rights of subrogation,
      indemnification, contribution and reimbursement from the Borrower, all
      rights to enforce any remedy the Lender may have against the Borrower,
      and any benefit of, or right to participate in, any collateral or security
      now or hereafter held by the Lender in respect of the Indebtedness, even
      upon payment in full of the Indebtedness.


      A review of the language contained in these respective guaranties demonstrates

that both include an express waiver of any and all defenses to Belke and the Coueys’

liability on the notes. In fact, Belke’s guaranty specifically provides that he 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. Similarly, the

guaranties executed by the Coueys include language specifically stating that CSB

may enforce the guaranty without the necessity at any time of CSB having recourse

against the Borrower on the Note or against the Land through foreclosure

                                         16
proceedings under the Security Deed. Given the aforementioned provisions, we

conclude that CSB’s failure to obtain a valid confirmation of the foreclosure sale,

pursuant to OCGA § 44-14-161, does not “impair its authority to collect the

difference between the amount due on the note and the foreclosure sale proceeds from

[Belke and the Coueys] based upon [their] personal [guaranties].”17 Accordingly, the

trial court erred in granting the defendants’ motion for summary judgment and in

denying CSB’s motion as to this specific issue.

      Judgment affirmed in part and reversed in part. Doyle, P. J., and Miller, J.,

concur.




      17
         HWA Props., Inc., 322 Ga. App. at 888-89 (2) (b); see also Gen. Motors
Acceptance Corp. v. Newton, 213 Ga. App. 405, 406-07 (444 SE2d 805) (1994)
(holding that the failure to confirm a nonjudicial foreclosure sale pursuant to a
security deed does not prevent a creditor from seeking to enforce a contractual right
to recover against additional security on the debt).

                                         17
