Ordinary Lawsuit Rights Do Not Apply When The Bank Wants Your Stuff

OK, I'm sensationalizing.  But last Friday we had one of those seemingly innocuous, maybe even boring, procedural decisions that means a heck of a lot more than it would seem at first glance.  Were this being written for lawyers, the comment would be that "the right to open a default given  by the Civil Practice Act does not apply in a personalty foreclosure."  And that would indeed be an accurate description, providing no meaning to the general public.  So I had to dress up the headline a little bit.  Today's topic is Mathis v. River City Bank, handed down last Friday.

Most lawsuits are governed by the rules set out in what's referred to as the Civil Practice Act.  These rules contain various deadlines, requirements and procedure so that lawsuits are not free-for-all battles.  One rule is that if you are sued, you have 30 days to respond.  If you don't respond, you are in "default," which means, very generally, that you automatically lose.  (It is much more complex than that, but that's the gist.)  But, you have a second chance.  For the 31st to the 45th day, all you have to do is pay "costs" (like, ninety dollars) and you are out of default.  It's a forgiving system for people who just miss the deadline.  The consequences are much harsher after that.

A judicial foreclosure is a kind of lawsuit.  That is, something is filed in court, there's a requirement that the filing be responded to, etc.  Mathis v. River City Bank was one of those -- a judicial foreclosure.  Mathis had borrowed money from the bank, and the bank was given a lien on Mathis's farm equipment and other things. Mathis didn't pay, and the bank went to court seeking the right to take the equipment.  Mathis did not answer on the 30th day but did follow the procedure for answering by the 45th day.  The trial court said that was too late, and our Court of Appeals agreed.   Simply put, the law is now that the 15 day grace period that does apply in nearly every lawsuit filed in Georgia does not apply in the context of the taking of property by a creditor.

What would the reaction be if the Governor proposed making it easier and faster for creditors (e.g. banks) to take property from debtors (i.e. consumers, borrowers)?  There would be a massive outcry about government being too helpful to business.    But here, when the Court of Appeals does exactly the same thing, the decision will be met with silence.  Why?  Because no one follows these subjects.  So I am writing about it here.

(Note:  I am not providing a technical legal analysis of why the court decided the case the way it did, which involved interpreting a couple of statutes to determine what kinds of lawsuits the Civil Practice Act applies to.  The purpose here is not to go to the rationale of the decision, but, rather, to note that a decision occurred.)