McCrary & Associates, P.C.

12/10/2014

02/29/2012

An interesting turn of events for condominium owners: Last week, the Georgia Court of Appeals handed down a ruling in the case of Demere Landing Condominium Owners Association v. Matthews. The ruling essentially states that, unless the condominium documents state otherwise, proxies cannot be used to determine the existence of a quorum at meeting of condo associations.

For years, I have done work both for, and in some cases against, condo associations. It is always hard to get unit owners to attend the annual meeting of owners, where things like budgets and assessments are decided. I believe that it has historically been assumed that, if a quorum of living, breathing people do not appear, the meeting can still proceed if there a sufficient number of people present, personally OR BY PROXY. In some cases, the condo documents say this explicitly. In some cases, they do not. If the documents do not address this issue, however, under the new decision, and if a quorum is not actually, physically present, then any action taken at the meeting might be invalid.

Though this is an innocuous ruling to many, it may cause an upheaval within the condo management and legal communities. There are probably quite a few special assessments which have been levied in Association meetings where no valid quorum was present.

02/28/2012

Update on H.B. 397, the Georgia Open Records Act. The provision allowing government agencies to charge "reasonable attorneys fees" to comply with Open Records Act requests, has been removed from the Bill. The Bill's sponsors apparently got too much flack about that provision.

02/24/2012

On the flip side, there's H.B. 64. Under current Georgia law, contracting parties (e.g. lenders and borrowers) can agree that, in the event of a default, the non-defaulting party can recover up to 15% of the debt for legal fees. So, a lender who is owed $1 million can sue and collect from the borrower up to $150,000 in legal fees, even if its actual legal fees were only $1,000. Consider the situation where a bank sues to collect a loan, and the borrower never answers. If the legal fees actually incurred were minimal, this often results in a windfall for the bank.... assuming the bank ever collects anything (which is becoming rarer).

H.B. 64, currently before the legislature, would require that a court consider the reasonableness of any legal fee in excess of $10,000, so the bank does not get an automatic 15%. I support at least the theory behind the bill, but maybe not that specific result in all cases. Making the parties spend more time in front of a judge (or a jury), spending even more legal fees, oftentimes serves no one's best interests.

There is often no justification for an excessive attorneys fee award, particular in banking collection cases, vastly in excess of what the bank has actually paid for legal services. Current law holds that it is irrelevant what the bank actually pays its attorneys, if the contract with the borrower contains the standard attorneys fee clause. That's often unfair.

But, also unfair is the situation which arises when the debt is only $1,0000, and the bank is limited to a fee award of $150 (15%), when it actually had to spend thousands of dollars collecting from a particularly litigious borrower. It often takes a bank the same amount of legal fees to collect a little debt as a big one. Sometimes I have spent months or more trying to get a judgment for a client for a small debt, but only hours for some big ones.

There needs to be a common sense solution to these legal fee issues. A flat 15% regardless of what the bank actually spends, often does not make any sense, so long as the debt is actually recoverable. Likewise, too small of an authorized fee can place a considerable financial burden on honest lenders. Remember that these rules apply to just about all written contracts in Georgia (where one party owes another money), not just to mortgage transactions. One thing that might help is requiring mortgages, at least for home loans, to contain MUTUAL attorneys fees clauses as are required for leases in Georgia. If the contract states that EITHER party who defaults or loses has to pay the other party's legal fees, folks might be a bit more circumspect about the money they spend in litigation.

02/24/2012

A troubling case for lenders: The Georgia Court of Appeals recently handed down a decision in the case of Lee v. Suntrust Bank, that could have some far-reaching implications. In this case, a man and (allegedly) his wife obtained a loan from Suntrust Bank. They didn't repay the loan. Suntrust sued to recover the money. The wife denied that she had signed any of the loan papers. The Court of Appeals denied Suntrust's right to "summary judgment" on the validity of the Note which the wife allegedly signed, forcing the parties to go to a jury trial at least over that issue.

The implications of this case include: For the benefit of consumers, banks can't simply allege that loan papers were signed by the consumers, and get a judgment without proving that actually happened. Banks will have to bring to court, probably in an expensive jury trial, someone who actually saw the papers being signed (something sometimes particularly difficult to do, especially if the loan has been resold in the secondary market) and/or handwriting analysts. To the detriment of banks, dishonest borrowers will be able to simply say, "I didn't sign that paper," and force the lender into an expensive legal battle.

I strongly support the rights of honest consumers to contest corrupt banking practices. Banks ought to get the pants sued off of them if they engage in illegal or dishonest transactions. Consumers are entitled to raise all legitimate defenses in a mortgage foreclosure or collection case. But, I also believe that the recent mortgage debacle has created a new minority breed of consumer who takes money from a bank in a fair lending transaction, don't repay what they owe, for whatever reason, and then engage in a variety of frivolous defenses designed to thwart lenders getting repaid what they are fairly due. I have combated both in my practice.

The decision in the Lee case is clearly valid law, and it probably isn't really new law. It is quite possible that the wife in this case did not sign any of the loan papers in question. But, I worry that if consumers take advantage of such defenses unfairly, the banking industry could be in even greater trouble than it is now.

My solution would be mandatory mediation in mortgage default situations. I think that Roy Barnes even made that suggestion in his (unsuccessful) bid for the governor's office. Make lenders and borrowers sit down at a table and try to work out a solution, in good faith, before running to the courthouse. I think this could avoid problems, and considerable expense, for both sides.

02/24/2012

H.B. 397. There was an interesting article in the Daily Report this week about H.B. 397, currently under consideration by the Georgia legislature, concerning the Georgia Open Records Act.

All Georgia citizens are currently entitled to access to certain public records, under the Georgia Open Records Act. There are exclusions under the Act for certain types of arguably confidential information, such as personnel records, medical information and the like. Currently, a governmental entity presented with an Open Records Act request can charge $.25 per page for producing such documents.

H.B. 397 currently under consideration during the present legislative session, would reduce the per-page charge for records to $.10, but would also allow government offices to also pass along to the requesting citizen reasonable legal fees for the government redacting private information from such requested records.

Problematical with this bill, is the fact that "reasonable legal fees" is a very subjective concept. This bill may create a very serious impediment to citizens being able to obtain access to public records as necessary to prove their claims against governmental offices, such as claims of corruption, etc. The parties might have to go to court, at considerable expense to the requesting party, in order to determine if the fee charged is "reasonable." And, in that event, presumably the government would b able to recoup those fees as well from the requesting party.

01/17/2012

Our office is close, convenient and comfortable. We're located 3 blocks west of I-75/85 in Midtown Atlanta, near Atlantic Station, Georgia Tech, Turner Broadcasting, and Georgia Public Television, within walking distance of two Marta train stations. We have ample free parking on-site: http://mccrarylawyers.com/find_us.htm

Traveling South on I-75 or I-85: Exit at Exit 250 (for 16th Street/17th Street/14th Street & 10th Street). At the traffic light at 14th Street, take a right, heading west. We are three (3) blocks west of I-75/85, on the right, at the corner of 14th Street NW and Holly Street NW

01/17/2012

We share offices with two other law firms (Keith Eady & Associates, LLC and Ashley McCartney, LLC, specializing in bankruptcy and divorce, respectively) and with financial planners Don Dusick and David Summers with Cornerstone Financial. We strive to make available to our clients, under one roof, a broad range of professional services: http://mccrarylawyers.com/our_office.htm

Our office is located at 275 14th Street, N.W., Atlanta, Georgia 30318-9100, in the Home Park neighborhood, near Georgia Tech, on the west side of I-75/I-85 in Midtown Atlanta. We share offices with Keith Eady & Associates, LLC (a law firm which specializes in bankruptcy), Ashley McCartney, LLC (a...

01/16/2012

And, we have a sense of humor too:http://mccrarylawyers.com/a_bit_of_humour.htm

The next daty the following notice appeared in the paper: "We regret that the report of Attorney Critchley's death was in error."

01/16/2012

We are mediators: http://mccrarylawyers.com/mediation.htm

For years, I have offered mediation and arbitration services to my clients. I have served as advocate in numberous mediation proceedings during my career. I have acted as both private and court-appointed mediator in civil matters. I have completed formal mediator training through Henning M...

01/16/2012

We are litigators: http://mccrarylawyers.com/litigation.htm

I started practice in 1983 as a commercial trial lawyer. I now consider myself to be a recovering litigator. It is my personal belief that, especially in the area of real estate and in most business litigation, the only winners are the lawyers and expert witnesses who get paid big fees to hel...

01/16/2012

We draft Real Estate Partnership Agreements for non-traditionally-married couples and Prenuptial Agreements: http://mccrarylawyers.com/domesticrelations.htm

We do not do divorce, child support, or child custody work of any kind, though we can certainly refer you to qualified legal experts in those areas. We do, however, provide certain similar services, including domestic relations assistance for same-sex and other non-traditionally married couples.