In National City Mortgage v. Gordon (In re Bennett), No. 12-13239, 2013 U.S. App. LEXIS 10765 (11th Cir. May 29, 2013) (click here for .pdf), the issue was the validity of a Security Deed that did not contain the signature of “one additional witness,” as required by O.C.G.A. § 44-14-33 and identified a larger tract of property than owned by the debtor.  National City, the lender, argued that the Security Deed was properly recorded because the “waiver of borrower’s rights” filed with (and attached to) the Security Deed did contain the signature of the additional witness.  Not surprisingly, the Court disagreed with National City based on the Georgia Supreme Court’s recent holding in Wells Fargo Bank, N.A. v. Gordon,  292 Ga. 474 (Ga. 2013).  In the Wells Fargo case, discussed here, the Georgia Supreme Court held that a deed’s incorporation of a rider that contained the attestations required by Georgia Code § 44-14-33 did not cure the deed’s lack of the additional witness’s signature.

The Court also disagreed with National City’s argument that the recordation of the flawed Security Deed still constituted inquiry notice of the security interest.  This argument was also dismissed by the Wells Fargo Court.

Finally, the Court held that the description of the property contained in the waiver was “manifestly too meager, imperfect, or uncertain to serve as adequate means of identification” as it encompassed parts of three different neighborhoods and not just the debtor’s property.

Accordingly, the Security Deed was not valid, and the Chapter 7 Trustee, as a bona fide purchaser for value, took priority over National City.  The Court affirmed the opinion of the District Court, which affirmed the Bankruptcy Court’s grant of summary judgment in favor of the Trustee.