                                FOURTH DIVISION
                                  DOYLE, P. J.,
                             COOMER and MARKLE, 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


                                                                       October 9, 2019




In the Court of Appeals of Georgia
 A19A1262. TIMMONS et al. v. SUNTRUST BANK.                                     DO-044

      DOYLE, Presiding Judge.

      Jean C. Timmons and Lauren L. Timmons (“the Plaintiffs”) purchased a

vehicle, entering into a loan contract with Master Buick GMC (“the Dealer”); the loan

was then assigned to SunTrust Bank (“the Bank”). The Plaintiffs sued the Dealer and

the Bank, seeking to revoke acceptance of the vehicle and alleging claims including

violation of the Georgia Fair Business Practices Act (“GFBPA”) and breach of

various warranties.1 The Bank moved for summary judgment, arguing that that it was

a holder in due course of a note pursuant to OCGA § 11-3-302 and that the Plaintiffs’

allegations did not meet any of the available defenses set forth in OCGA § 11-3-305.




      1
          The Plaintiffs’ claims against the dealer are not at issue in this appeal.
The trial court granted the motion, and the Plaintiffs appeal. For the following

reasons, we reverse.

              Summary judgment is proper when there is no genuine issue of
       material fact and the movant is entitled to judgment as a matter of law.
       A de novo standard of review applies to an appeal from a grant or denial
       of summary judgment, and we view the evidence, and all reasonable
       conclusions and inferences drawn from it, in the light most favorable to
       the nonmovant.2


       So viewed, the record shows that on July 9, 2015, the Plaintiffs purchased a

2015 GMC Sierra from the Dealer. On that day, the Affidavit of Sale was signed by

the Plaintiffs and a representative of the Dealer; it lists identifying information about

the Sierra, including the 6,738-mile odometer reading, and states that “the above

described vehicle is free of all liens and encumbr[a]nces in the buyer’s name except:

SUNTRUST BANK.” The “Customer Order” document, also dated July 9, 2015,

identifies the Sierra and the vehicle that the Plaintiffs traded to the Dealer, details the

line items of the transaction, including purchase price, trade allowance, etc., and

states: “LIEN TO SUNTRUST BANK.” A third document (“the Contract”), which



       2
       (Punctuation omitted.) L.D.F. Family Farm v. Charterbank, 326 Ga. App. 361
(756 SE2d 593) (2014). See also OCGA § 9-11-56 (c).

                                            2
identifies the Plaintiffs as co-buyers and the Dealer as “Creditor-Seller,” contains

Federal Truth In-Lending Disclosures specifying the annual percentage rate, the

finance charge, the total amount financed, and details regarding the monthly

payments, including amount, due date, and number. In the Contract, the Plaintiffs

agreed “to pay the Creditor-Seller” the amount financed and the finance charge

pursuant to the payment schedule listed. The Contract provides that “[t]he Seller may

assign this Contract,” which “contains the entire agreement between you and us

relating to this contract.” It also states:

       NOTICE: ANY HOLDER OF THIS CONSUMER CREDIT
       CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES
       WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER
       OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR
       WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY
       THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE
       DEBTOR HEREUNDER.


       In March 2017, the Plaintiffs sued GM Motors, LLC, the Dealer, and the Bank,

seeking to revoke acceptance of the vehicle and alleging various claims including

breach of warranty and breach of the GFBPA, contending that the truck sold as “new”




                                              3
had collision damage that was unrepaired.3 In the complaint, the Plaintiffs alleged that

their

        truck is financed by [the] Bank and that financing was arranged through
        [the Dealer]. As a result[, the Bank] is not a holder in due course and is
        subject to any defenses that the Plaintiffs have against [the Dealer]. As
        a result[,] the Plaintiffs owe little if anything to [the Bank]. The note
        should be cancelled as to the Plaintiffs.4


The Plaintiffs reiterated such claims against the Bank in a subsequent amended

complaint. In their answers to the initial and amended complaints, the Bank

“admit[ted] that it financed the purchase of the Plaintiffs’ vehicle[, but] denie[d] the

remaining allegations. . . .”

        The Bank moved for summary judgment on the ground that it is a holder in due

course of Plaintiff’s “financial note” for the vehicle. The trial court granted the

motion, concluding that the Bank entered into a loan agreement with the Plaintiffs

and that the Bank “was assigned the financing for the subject vehicle, via a note and



        3
       The Plaintiffs contend that the truck “was sold as a new truck even though it
had 6738 miles on the odometer because the service manager was using it as his
personal truck.”
        4
       In support of this allegation against the Bank, the Plaintiffs refer to Exhibit
B, which is the first page of the TIL statement.

                                            4
financial agreement in which financing terms were agreed upon and signed by [the]

Plaintiffs and [the Dealer]”; the court cited only the complaint and the single-paged

Contract as support for this conclusion. The court then concluded that the Bank “is

a holder in due course of the financial note for the subject vehicle, and [the]

Plaintiffs’ allegations do not meet any of the available defenses under Georgia law.

Therefore, [the Bank] has the right to enforce the terms of the vehicle note.” This

appeal followed.

         The Plaintiffs contend that the trial court erred by granting summary judgment

to the Bank based on its conclusion that the Bank was a holder in due course. We

agree.




                                            5
      “‘Holder in due course’ status gives the holder of an instrument . . . the right

to enforce it and to cut off certain defenses of the obligor under the instrument.”5

Under Georgia law,

      the holder of an instrument[6] is holding “in due course” if: (1) the
      instrument is not apparently forged, altered, irregular, or incomplete “as
      to call into question its authenticity,” and (2) the holder took the
      instrument for value; in good faith; and without notice that the

      5
        Jenkins v. Wachovia Bank, Nat. Assn., 309 Ga. App. 562, 564 (1) (711 SE2d
80) (2011), citing OCGA § 11-3-305 (b) and official comment 2 thereunder; “Proof
of Fraud in the Making of Commercial Paper and the Resulting Consequences,” by
Thomas M. Geisler, Jr., 93 Am. Jur. Proof of Facts 3d 141 §11 (except for certain
“real defenses,” an obligor’s possible defenses are extinguished if the holder is one
“in due course”). See also OCGA § 11-3-306 (“A person taking an instrument, other
than a person having rights of a holder in due course, is subject to a claim of a
property or possessory right in the instrument or its proceeds, including a claim to
rescind a negotiation and to recover the instrument or its proceeds. A person having
rights of a holder in due course takes free of the claim to the instrument.”).
      6
          Pursuant to OCGA § 11-3-104 (b), an “[i]nstrument” is “a negotiable
instrument.” A “negotiable instrument” is defined as “an unconditional promise or
order to pay a fixed amount of money, with or without interest or other charges
described in the promise or order, if it: (1) Is payable to bearer or to order at the time
it is issued or first comes into possession of a holder; (2) Is payable on demand or at
a definite time; and (3) Does not state any other undertaking or instruction by the
person promising or ordering payment to do any act in addition to the payment of
money, but the promise or order may contain: (i) An undertaking or power to give,
maintain, or protect collateral to secure payment; (ii) An authorization or power to the
holder to confess judgment or realize on or dispose of collateral; or (iii) A waiver of
the benefit of any law intended for the advantage or protection of an obligor. OCGA
§ 11-3-104 (a).

                                            6
      instrument was overdue, dishonored, contained an unauthorized
      signature, was subject to claims as set forth in OCGA § 11-3-306, or
      was subject to defenses or recoupment under OCGA § 11-3-305 (a)
      (infancy, duress, fraud, bankruptcy).7


OCGA § 11-3-106 (d), however, provides:

      If a promise or order at the time it is issued or first comes into
      possession of a holder contains a statement, required by applicable
      statutory or administrative law, to the effect that the rights of a holder
      or transferee are subject to claims or defenses that the issuer could
      assert against the original payee, the promise or order is not thereby
      made conditional for the purposes of subsection (a) of Code Section
      11-3-104; but, if the promise or order is an instrument, there cannot be
      a holder in due course of the instrument.8


      Here, assuming that the Contract, which the parties agree was thereafter

assigned to the Bank, was a negotiable instrument, the first page explicitly states that

any holder of the Contract is subject to all claims and defenses that the Buyers could

assert. Thus, pursuant to OCGA § 11-3-106 (d), the Bank is not a holder in due




      7
      Dalton Point, L.P. v. Regions Bank, Inc., 287 Ga. App. 468, 470 (1) (651
SE2d 549) (2007). See also OCGA § 11-3-302 (a).
      8
          (Emphasis supplied).

                                           7
course, and the trial court erred by granting summary judgment to the Bank on this

basis.

         The Bank argues that it is entitled to summary judgment on the Plaintiffs’s

claims even if it is not a holder in due course because the record is devoid of evidence

that would permit the Plaintiffs to void the Contract. But neither the parties nor the

trial court have engaged (either in the trial court or on appeal) in any meaningful

argument regarding defenses that the Plaintiffs might have against the Bank’s right

to enforce the Contract, and the evidence submitted by the Plaintiffs, including

Lauren Timmons’s deposition testimony, creates genuine issues of material fact that

preclude summary judgment to the Bank.

         Judgment reversed. Coomer and Markle, JJ., concur.




                                           8
