In Georgia, does a judgment lien attach to real property as of the date the judgment was entered or as of the date and time the writ of fieri facias on that judgment is properly recorded in the county records, as required under Georgia law? The Supreme Court of Georgia answered this question in Synovus Bank v. Kelley, No. S20Q0843 (August 24, 2020) (click here for .pdf). The case came to the Georgia Supreme Court after the United States District Court for the Middle District of Georgia certified the question to the Court. Specifically, the following two questions were certified:
Whether as between a creditor, who obtains a judgment against a debtor’s real property, and the judgment debtor, OCGA § 9-12-80 creates a lien on the debtor’s real property or rather is a lien against the debtor’s real property created at the time of recordation pursuant to OCGA § 9-12-86. If such lien is created at the time of recordation, whether the effective date of creation of that lien relates back to the date of the judgment for purposes of establishing the date a creditor obtained a lien against the judgment debtor’s real property.
The basic, relevant facts were stipulated to by the parties. On December 7, 2016 Synovus obtained a judgment against the Brownlees in Tift County, Georgia and the Writ of Fieri Facias (“FiFa”) was issued on December 22, 2016 and recorded on the court’s General Execution Docket. On January 25, 2017 the FiFa was recorded on the GED of the Superior Court of Worth County, where the Brownlees owned real property. On March 21, 2017, the Brownlees filed a Chapter 11 Bankruptcy petition, and the case was converted to Chapter 7 on March 7, 2018. In July 2018, Chapter 7 Trustee Walter Kelley filed an adversary proceeding to avoid the judicial lien on the Brownlee’s real property as preferential transfers, as the recording of the FiFa in both counties was within 90 days of the Bankruptcy petition date.
Both the Trustee and Synovus filed motions for summary judgment. The Bankruptcy Court granted the Trustee’s motion “holding that ‘[u]nder Georgia law, only recording a judgment creates a judicial lien on real property’ and thus the transfer of interest in the Brownlees’ real property occurred on the date the Fi. Fa. was recorded, not the date the judgment was entered.” In re Brownlee, 593 BR 916, 923 (IV) (Bankr. M.D. Ga. 2018). Synovus appealed to the District Court, which certified the above questions to the Georgia Supreme Court. For purposes of this post, knowledge of preferential transfer law is presumed and the focus is on Georgia real estate law.
OCGA § 9-12-86 (b) provides that
[n]o judgment, decree, or order or any writ of fieri facias issued pursuant to any judgment, decree, or order of any superior court, city court, magistrate court, municipal court, or any federal court shall in any way affect or become a lien upon the title to real property until the judgment, decree, order, or writ of fieri facias is recorded in the office of the clerk of the superior court of the county in which the real property is located and is entered in the indexes to the applicable records in the office of the clerk.
Synovus argued that this section must be read in conjunction with OCGA § 9-12-80, which provides that “[a]ll judgments obtained in the superior courts, magistrate courts, or other courts of this state shall be of equal dignity and shall bind all the property of the defendant in judgment, both real and personal, from the date of such judgments except as otherwise provided in this Code.” Thus, their argument goes, judgments have effect from the date of judgment and bind the property of the defendant from that time. Using basic principles of statutory construction, the Supreme Court held that the specific language in OCGA § 9-12-86(b) concerning the manner in which the judgment binds the debtor’s real property was an exception to the general rule of OCGA § 9-12-80 and fell within the “except as otherwise provided in this Code” language in that section.
The text of § 9-12-86 (b) could not be plainer in defining when a judgment lien is created on the title to real property, providing that “[n]o judgment . . . of any superior court . . . shall in any way affect or become a lien upon the title to real property until the judgment . . . is recorded . . . in . . . the county in which the real property is located.” (Emphasis supplied.) The phrase “in any way” is broad enough to encompass not only the effect of a recorded lien as to third parties, but also as to the parties to the judgment underlying the lien. Accordingly, we hold that as between the judgment creditor and the judgment debtor, no lien is created on the title to the debtor’s real property until “the judgment, decree, order, or writ of fieri facias” is properly recorded as required by § 9-12-86. This reading applies the plain text of the statutes to give effect to both.
For the second certified question, the Supreme Court found no authority that supports Synovus’ argument that the recording of a lien should “relate back” to the original judgment date.
On October 22, 2020, after Supreme Court’s decision, the District Court affirmed the Bankruptcy Court’s summary judgment order. Kelly v. Synovus Bank, 624 B.R. 512 (Bankr. M.D. Ga 2020).
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