Stewart Title Guaranty Company v. Groundfloor Holdings Ga, LLC

CourtCourt of Appeals of Georgia
DecidedMarch 14, 2025
DocketA24A1848
StatusPublished

This text of Stewart Title Guaranty Company v. Groundfloor Holdings Ga, LLC (Stewart Title Guaranty Company v. Groundfloor Holdings Ga, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stewart Title Guaranty Company v. Groundfloor Holdings Ga, LLC, (Ga. Ct. App. 2025).

Opinion

SECOND DIVISION MARKLE, J., LAND and DAVIS, 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. https://www.gaappeals.us/rules

March 14, 2025

In the Court of Appeals of Georgia A24A1846. GROUNDFLOOR HOLDINGS GA, LLC v. WFG NATIONAL TITLE INSURANCE COMPANY. A24A1847. GROUNDFLOOR HOLDINGS GA, LLC v. TRADITIONAL TITLE SERVICES, INC. A24A1848. STEWART TITLE GUARANTY COMPANY v. GROUNDFLOOR HOLDINGS GA, LLC.

DAVIS, Judge.

This complicated property dispute involves the purchase of ten properties in

a subdivision in Augusta, Georgia, that, unbeknownst to the buyer and the lender,

were already covered by a superior lien that was subsequently foreclosed upon, costing

over a million dollars to those involved. Groundfloor Holdings GA, LLC, the lender,

brought this lawsuit against multiple entities, seeking to recover the nearly $2 million

that it provided to finance the doomed transaction. After the trial court made various

summary judgment rulings, these three appeals followed. In Case No. A24A1846, Groundfloor appeals from the trial court’s grant of

summary judgment to WFG National Title Insurance Company, which Groundfloor

argues had agreed to provide title insurance to cover two of the properties. We agree

that fact questions remain as to whether Groundfloor paid WFG’s agent the requisite

premiums to issue title insurance and whether an enforceable agreement existed, and

so we reverse the trial court’s grant of summary judgment on Groundfloor’s breach

of contract claim, vacate its grant of summary judgment on its claim for attorney fees,

and remand for the trial court to consider the attorney fees issue in the first instance.

In Case No. A24A1847, Groundfloor appeals from the trial court’s grant of

summary judgment to Traditional Title Services, Inc. (“TTS”), which it argues was

negligent in performing the title search and failing to discover the superior lien on the

properties. We agree that fact questions remain as to whether TTS conducted the title

search negligently, and so we reverse the trial court’s grant of summary judgment on

Groundfloor’s negligence claim, vacate its grant of summary judgment on its claims

for punitive damages and attorney fees, and remand for the trial court to consider

those two claims in the first instance.

2 In Case No. A24A1848, Stewart Title Guaranty Company cross-appeals from

the denial of its motion for summary judgment on Groundfloor’s claims against it. We

conclude that fact questions remain about whether Stewart had agreed to provide title

insurance coverage, but we agree with Stewart that Groundfloor’s claim for OCGA

§ 13-6-11 attorney fees fails as a matter of law. As a result, we reverse the trial court’s

denial of summary judgment on Groundfloor’s claim for OCGA § 13-6-11 attorney

fees against Stewart, but we otherwise affirm the trial court’s summary judgment

order.

A party is entitled to summary judgment 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. Summary judgment is proper if the defendants present evidence negating an essential element of the plaintiff’s claims or establish from the record an absence of evidence to support those claims. If the defendants establish those requirements, the plaintiff must point to specific evidence giving rise to a triable issue. The appellate court conducts a de novo review of an order granting or denying a motion for summary judgment, viewing the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant.

3 (Citations and punctuation omitted.) Bedsole v. Action Outdoor Advertising JV, LLC,

325 Ga. App. 194 (750 SE2d 445) (2013).

So viewed, the record shows that Flourish Home Investors, LLC contracted to

purchase ten properties owned by 230 Goshen Investment Group, LLC on East

Barcelona Way in Augusta, Georgia. Initially, Velocity Commercial Capital, LLC was

chosen to finance the purchase, but after Velocity backed out, Groundfloor agreed to

loan $1,970,730 to Flourish to cover the transaction. The agreement between

Groundfloor and Flourish required Flourish to obtain title insurance to ensure that

Flourish’s title would be free and clear of any encumbrances and to provide

Groundfloor with a senior, first-priority security interest in the properties. SSP Title

& Escrow Solutions was hired to be the settlement agent to handle the sale of all ten

properties. As part of the closing process, SSP hired TTS to perform a title search for

the ten properties, and TTS found “no open loans of record” for any of the properties

during the search.

In anticipation of the closing of two of the properties on August 10, 2018, WFG,

through SSP, issued two “Commitment[s] for Title Insurance” for the two

4 properties.1 These “Commitments” were standardized forms which WFG uses in

connection with real estate closings. Under the terms of the Commitments, WFG

agreed to issue title insurance upon the closing and the payment of the premium.

Generally, WFG would issue the Commitments before closing, and it would issue a

full title insurance policy after closing once it received its premium payment at closing.

Further, the bottom of each page contained a disclaimer:

This is only a part of a 2016 ALTA ® Commitment for Title Insurance issued by Stewart Title Guaranty Company. This Commitment is not valid without the Notice; the Commitment to Issue Policy; the Commitment Conditions; Schedule A; Schedule B, Part I – Requirements; and Schedule B, Part II – Exceptions; and a counter signature by the Company or its issuing agent that may be in electronic form.

Notably, the Commitments did not include the Notice or Commitment to Issue

Policy. Only one of the two commitments was signed by SSP and WFG.

1 “A ‘commitment for title insurance’ is also sometimes called an insurance binder, which is a contract offering proof of temporary insurance at the time of closing until the title policy issues.” CoreVest American Finance Lender LLC v. Stewart Title Guar. Co., 358 Ga. App. 596, 597 n. 1 (854 SE2d 381) (2021). 5 At the August 10, 2018, closing, Groundfloor wired a lump sum of money to

SSP to cover the property sale and the various closing costs, and SSP was responsible

for disbursing payment to the relevant parties. On the settlement statements,

“Stewart Title/Worden & Asociados, LLC” was listed as the title insurance provider,

and WFG did not receive any money from SSP for either property.

The remaining eight properties were scheduled to close on August 31, 2018.

Prior to the August 31 closings, SSP coordinated with Worden and Asociados — “a

non-exclusive agent authorized to issue [Stewart’s] title policies covering property in

the State of Georgia” — to provide title insurance for the eight properties. According

to Stewart, its customary practice is to first issue a title commitment, and then issue

a title insurance policy after the closing once the lender pays the premium to Worden,

who then passes along a portion of the premium to Stewart. On August 6, 2018,

Worden issued a “Commitment for Title Insurance” for each property. Each

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Bluebook (online)
Stewart Title Guaranty Company v. Groundfloor Holdings Ga, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stewart-title-guaranty-company-v-groundfloor-holdings-ga-llc-gactapp-2025.