Community & Southern Bank et al.v.First Bank Of Dalton et al.
After a foreclosure sale, banks holding participation interests in the underlying loans disputed how the sale proceeds had to be distributed under their agreements. The trial court granted partial summary judgment against Community and Southern Bank, concluding that it could not deduct expenses before distributing proceeds and awarding attorney fees to the other banks. The Court of Appeals vacated the order and remanded. It held that the agreement’s specific default provision controlled over more general payment and expense provisions and permitted the seller to deduct qualifying expenses before distribution. The appellate court also vacated the attorney-fee award because the other banks were no longer prevailing parties on the issue after the contract interpretation was reversed. The court remanded for the trial court to determine which expenses were properly deductible and how the remaining proceeds should be distributed. It did not resolve unrelated claims involving other parties or decide the ultimate amount of any deduction. Two judges concurred.
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