National City Mortgage Co. v. Tidwell

749 S.E.2d 730, 293 Ga. 697, 2013 Fulton County D. Rep. 3045, 2013 WL 5508677, 2013 Ga. LEXIS 781
CourtSupreme Court of Georgia
DecidedOctober 7, 2013
DocketS12G2011
StatusPublished
Cited by7 cases

This text of 749 S.E.2d 730 (National City Mortgage Co. v. Tidwell) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National City Mortgage Co. v. Tidwell, 749 S.E.2d 730, 293 Ga. 697, 2013 Fulton County D. Rep. 3045, 2013 WL 5508677, 2013 Ga. LEXIS 781 (Ga. 2013).

Opinion

Hunstein, Justice.

In this foreclosure action, the trial court granted partial summary judgment to bankruptcy trustee J. Coleman Tidwell against National City Mortgage Company. Addressing its jurisdiction sua sponte, the Georgia Court of Appeals dismissed the appeal on the grounds that PNC Bank, N.A. was not a party to the foreclosure lawsuit and therefore lacked standing to appeal the order entered against National City. See PNC Bank, N.A. v. Tidwell, 317 Ga. App. 275 (728 SE2d 786) (2012). We granted the petition for writ of certiorari to consider whether the Court of Appeals correctly held that PNC Bank lacked standing to appeal on behalf of its predecessor National City Mortgage Company. Because the Court of Appeals erred in concluding that the appeal must be dismissed due to the trial court’s failure to substitute or join PNC Bank as a party under OCGA § 9-11-25 (c), we reverse and remand for the Court of Appeals to address the issues raised in this appeal.

Jennifer and Truman Littleton filed an action in 2007 against National City Mortgage Company alleging multiple claims related to the foreclosure of their home. While the action was pending, National City merged into PNC Bank. No motion was made to add or substitute PNC Bank as a party, and National City continued as the named, defendant in the case. In 2010, the trial court granted National City’s motion to substitute bankruptcy trustee J. Coleman Tidwell as the plaintiff. Tidwell moved for summary judgment, which the trial court granted in part on the breach of contract claim. A notice of appeal was filed in the Court of Appeals. The notice was entitled “Defendant National City’s Notice of Appeal”; its first sentence states that “Defendant PNC Bank, N.A.[,] the successor to National City Mortgage” appeals the summary judgment order to the Court of Appeals. In its docketing notice, the clerk’s office styled the case as “PNC Bank, N.A. v. J. Coleman Tidwell, trustee in bankruptcy for Jennifer P. [698]*698Littleton et al.” The Court of Appeals found that PNC Bank filed the appeal and the record contained no order or other document substituting PNC Bank for National City as the defendant. Based on the trial court’s failure to substitute or add PNC Bank as a party, the Court of Appeals dismissed the appeal for PNC Bank’s lack of standing. We granted National City’s petition for the writ of certiorari to consider this jurisdictional issue.

1. Rule 25 (c) of the Georgia Civil Practice Act is the procedural rule addressing the substitution of parties. OCGA § 9-11-25 (c) states: “In case of any transfer of interest, the action may be continued by or against the original party unless the court, upon motion, directs the person to whom the interest is transferred to be substituted in the action or joined with the original party.” This subsection vests in the trial court the discretion to determine whether the original plaintiff or defendant may continue the lawsuit alone or the surviving corporation must be substituted or joined as a party. See Gene Thompson Lumber Co. v. Davis Parmer Lumber Co., 189 Ga.App. 573 (3) (a) (377 SE2d 15) (1988). The Georgia Court of Appeals has previously held that a corporation’s merger or consolidation with another corporation does not affect any pending action by the corporation, and the action may proceed as if the merger or consolidation had never taken place. See Rosing v. Dwoskin Decorating Co., 141 Ga.App. 617 (1) (234 SE2d 128) (1977); see also Employers’ Liability Assurance Corp. v. Keelin, 132 Ga.App. 459 (2) (208 SE2d 328) (1974) (if transfer of interest had been made during pendency of litigation, action could proceed as if merger had not taken place or the surviving corporation could be substituted as a defendant).

In interpreting statutes, our rules of statutory construction provide that the ordinary signification of words shall apply, “except-words of art or words connected with a particular trade or subject matter.” OCGA § 1-3-1 (b). By its plain language, OCGA § 9-11-25 (c) provides that an action may be continued by or against the original party following a transfer of interest unless a motion is filed and the trial court orders the substitution or joinder of the party to whom the interest has been transferred. Based on this subsection, this action continued against National City as the original defendant despite the transfer of its interest to PNC Bank through a merger, unless the trial court directed the substitution or joinder of PNC Bank as a party. Cf. Georgia Power Co. v. Hunt, 266 Ga. 331 (2) (466 SE2d 846) (1996) (absent a motion to remove the original defendant through substitution, the transferor remains a named party bound by the judgment). A review of the record shows that no party filed a motion seeking to substitute or join PNC Bank, and the trial court did not enter an order or direct that PNC Bank become a party. In the absence of such an [699]*699order, the action continues against National City as the original party, and it retains the right to appeal the trial court’s order granting summary judgment against it.

This interpretation of OCGA § 9-11-25 (c) as permissive is consistent with the federal courts’ interpretation of the analogous federal rule. Under Rule 25 (c) of the Federal Rules of Civil Procedure, a transfer of a party’s interest after a lawsuit is filed does not compel the substitution or joinder of the entity receiving the interest.

Rule 25 does not require that the court or the parties take any action after an interest has been transferred. Instead, the suit may continue with the original parties. Joinder or substitution is not required unless the court determines, in its discretion, that the transferee’s presence would facilitate the case. Thus, in the absence of a motion to substitute, the case will continue without a change in the parties.

James Wm. Moore et al., 6 Moore’s Federal Practice § 25.34 [2] (3d ed. 2013) (footnote omitted); see State Fed. Sav. & Loan Assn. v. Campbell, 848 F2d 1186, 1188-1189 (A) (11th Cir. 1988) (trial court properly continued action in name of original plaintiff following assignment of its interest when no motion for substitution made). This interpretation also comports with the Civil Practice Act’s purpose to “secure the just, speedy, and inexpensive determination of every action on its merits” and “avoid dismissals of actions on technical grounds.” O’Kelley v. Alexander, 225 Ga. 32, 32-33 (165 SE2d 648) (1969); see also Felix v. State, 271 Ga. 534, 535 (523 SE2d 1) (1999) (Appellate Practice Act intended to secure speedy and uniform justice, not “set traps and pitfalls by way of technicalities for unwary litigants”).

The Court of Appeals premised its dismissal on the finding that PNC Bank filed the appeal. See 317 Ga. App. at 275, 276. The record, however, is ambiguous concerning which entity — National City or PNC Bank — appealed the trial court’s order.

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749 S.E.2d 730, 293 Ga. 697, 2013 Fulton County D. Rep. 3045, 2013 WL 5508677, 2013 Ga. LEXIS 781, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-city-mortgage-co-v-tidwell-ga-2013.