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Community S. Bank v. First Bank of Dalton

The trial court erred in ruling that the defendant was not entitled to deduct expenses from the proceeds of a foreclosure sale of real property before distribution to the parties holding an interest in loans secured by the property.

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Following the foreclosure sale of real property, First Bank of Dalton Dalton and Community Bank of Pickens County Pickens Bank filed a petition for a temporary restraining order, interlocutory injunction, and declaratory judgment, seeking to determine their rights to the proceeds of the sale under the terms of Participation Agreements that gave each of these entities a partial interest in loans secured by the property. Relevant to this appeal, the trial court granted partial summary judgment to Dalton and Pickens Bank, finding that Defendant Community Southern Bank CSB was not entitled to deduct expenses from the proceeds of the sale before distribution and that Dalton and Pickens Bank were entitled to attorney’s fees. CSB now appeals.

CSB raises two errors on appeal. First, CSB contends that the trial court improperly interpreted the terms of the Participation Agreements by concluding that CSB was not permitted to deduct expenses before distributing the proceeds of the sale. Second, it argues that the trial court erred by awarding attorney’s fees to Dalton and Pickens Bank. For the reasons that follow, we vacate the trial court’s order and remand the case.

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