BBT v. Camco Management, LLC, et al

Filing

Opinion issued by court as to Appellants Camco Management, LLC, Jeffrey A. Cohen and Lori E. Cohen. Decision: Affirmed. Opinion type: Non-Published. Opinion method: Per Curiam. The opinion is also available through the Court's Opinions page at this link http://www.ca11.uscourts.gov/opinions.

Case: 16-17470

Date Filed: 08/21/2017

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[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-17470
Non-Argument Calendar
________________________
D.C. Docket No. 1:15-cv-00720-WBH

BRANCH BANKING & TRUST COMPANY,
Plaintiff-Appellee,
versus
CAMCO MANAGEMENT, LLC,
JEFFREY A. COHEN,
LORI E. COHEN,
Defendants-Appellants.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(August 21, 2017)

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Before MARCUS, MARTIN and ANDERSON, Circuit Judges.
PER CURIAM:
Camco Management, LLC (“Camco”), Jeffrey Cohen, and Lori Cohen
(collectively, “Appellants”) appeal from the district court’s denial of a motion to
dismiss and grant of summary judgment in favor of the Branch Banking & Trust
Company (“BB&T”) on BB&T’s claims for breach of contract and attorneys’ fees.
BB&T’s claims stem from Camco’s default on a promissory note secured by a
shopping center and the Cohens’ default on their personal guaranty agreements
guaranteeing payment of the promissory note. On appeal, the Appellants argue
that the district court erred by: (1) denying their motion to dismiss BB&T’s claim
for attorneys’ fees under O.C.G.A. § 13-1-11; (2) granting summary judgment on
the breach of contract claims; (3) considering a supplemental affidavit filed by
BB&T after it had filed its motion for summary judgment; and (4) failing to
examine the reasonableness of the award of attorneys’ fees under O.C.G.A. § 13-111(b). After careful review, we affirm.
We review a district court’s denial of a motion to dismiss de novo, applying
the same standard as the district court. Estate of Gilliam ex rel. Waldroup v. City
of Prattville, 639 F.3d 1041, 1044 (11th Cir. 2011). We also review a district
court’s order granting summary judgment de novo, applying the same standard as
the district court. Nat’l Parks Conservation Ass’n v. Norton, 324 F.3d 1229, 1236
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(11th Cir. 2003). We view the material presented and draw all factual inferences
in the light most favorable to the nonmoving party. Brooks v. Cnty. Comm’n of
Jefferson Cnty., Ala., 446 F.3d 1160, 1161–62 (11th Cir. 2006).

Summary

judgment is proper where “the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). “A mere scintilla of evidence supporting the nonmoving party’s
position will not suffice.” Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.
1997) (alteration adopted) (quotations omitted).

We review a district court’s

evidentiary rulings at the summary judgment stage only for abuse of discretion.
Wright v. Farouk Sys., Inc., 701 F.3d 907, 910 (11th Cir. 2012).
The Appellants argue that the district court should have dismissed BB&T’s
claim for attorneys’ fees because BB&T sought an amount of fees based on the
percentages in O.C.G.A. § 13-1-11(a)(2), and not the amount of fees “actually
incurred,” as provided in the note and guaranties. We disagree. The statute
provides that “[o]bligations to pay attorney’s fees upon any note or other evidence
of indebtedness . . . shall be valid and enforceable and collectable as a part of such
debt if such note or other evidence of indebtedness is collected by or through an
attorney after maturity . . . .” O.C.G.A. § 13-1-11(a). It further provides methods
for calculating the amount of fees, id. § 13-1-11(a)(1)-(2), and requires that the
holder of the note meet certain notice requirements and give the debtor an
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opportunity to pay the principal and interest without attorney’s fees, id.
§ 13-1-11(a)(3).

The Georgia Supreme Court has recognized that a trial court

lacks discretion to deny fees under § 13-1-11 when:
(1) the note’s terms include an obligation to pay attorney fees; (2) the
debt owed under the note has matured; (3) notice was given to the
debtor informing him that if he pays the debt within ten days of the
notice’s receipt, he may avoid attorney fees; (4) the ten day period has
expired without payment of the principal and interest in full; and
(5) the debt is collected by or through an attorney.
TermNet Merch. Servs., Inc. v. Phillips, 588 S.E.2d 745, 747 (Ga. 2003). The
Appellants do not argue that these statutory conditions were not satisfied or were
inadequately pled. Even assuming BB&T was entitled to the amount of attorneys’
fees “actually incurred,” and not an amount calculated under § 13-1-11(a)(2), it
was nevertheless entitled to fees under the statute. Accordingly, the district court
did not err in denying the motion to dismiss this claim.
We are also unpersuaded by the Appellants’ argument that genuine issues of
material fact exist concerning their default and the amount of damages. As for the
issue of default, the undisputed evidence shows that the Appellants signed two
forbearance agreements, in which they acknowledged the default of the promissory
note.

During his deposition, Jeffrey Cohen admitted that he signed the loan

documents and did not pay the remaining amount of indebtedness when the term
for the second forbearance agreement ended. The Appellants note, however, that
BB&T’s High Risk Reports that were made after the second forbearance term
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ended documented that the loan continued to be paid according to contractual
terms. They argue that this statement creates a genuine dispute as to whether they
defaulted on the loan at the end of the second forbearance term. But Steven Paulk,
a vice president and problem loan administrator for BB&T, explained in his
deposition -- sealed in the district court -- why the High Risk Reports included
those notations. The Appellants did not provide any evidence to dispute Paulk’s
explanation for the notations in the reports.

On this undisputed record, the

notations alone were not “sufficient evidence favoring the [Appellants] for a
reasonable jury to return a verdict in [their] favor.” Chapman v. AI Transp., 229
F.3d 1012, 1023 (11th Cir. 2000) (citation omitted).
As for the amount of loss, Paulk’s initial declaration provided the principal
balance of the loan, the accrued interest, and the per diem interest after the date of
the calculation. BB&T provided the Loan History upon which the loss calculation
was based and a copy of the loss calculation. Paulk and Carol Webb, who helped
prepare the loss calculation, testified in depositions about how the loss amount was
calculated. The Appellants point out that the Loan History contained inaccuracies,
Webb made errors in her initial calculation of the loss, and the Loan History was
inconsistent with the High Risk Reports. However, Paulk and Webb explained in
their sealed depositions that the inaccuracies were corrected, and provided a likely
explanation for the inconsistencies with the High Risk Reports. The Appellants
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did not produce evidence to contradict these explanations, and, again, the errors in
the source material were insufficient to create a genuine factual dispute. Id.
The Appellants next claim that BB&T did not produce sufficient evidence to
demonstrate the interest rates applicable to the loan. However, Paulk’s declaration
and the loss calculation contained the interest rates, and Webb testified at her
deposition that she verified the appropriate interest rates. The Appellants did not
provide contradictory evidence regarding the interest rates, and BB&T’s
undisputed evidence was more than sufficient. See Hutcherson v. Progressive
Corp., 984 F.2d 1152, 1155 (11th Cir.1993) (stating, in the context of a damages
issue, that state law “provides the controlling substantive law” but “federal law
governs the sufficiency of the evidence necessary to preclude a grant of summary
judgment”). The Appellants also argue that the district court could not rely on
BB&T’s loss calculation because it was hearsay created in anticipation of
litigation. Even assuming that the calculation was inadmissible hearsay, “a district
court may consider a hearsay statement in passing on a motion for summary
judgment if the statement could be reduced to admissible evidence at trial or
reduced to admissible form.” Macuba v. Deboer, 193 F.3d 1316, 1322 (11th Cir.
1999) (internal quotation marks omitted). Paulk and Webb could have testified
regarding the calculation at trial, and there is no dispute that the loan documents
supporting the loss calculation would be admissible at trial.
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We likewise reject the Appellants’ argument that the district court
impermissibly weighed evidence in granting BB&T’s motion for summary
judgment. BB&T proffered evidence that demonstrated the Appellants’ default
and the amount of damages. It was the Appellants’ responsibility then to present
evidence of a genuine issue of material fact, which would have precluded summary
judgment. Chapman, 229 F.3d at 1023. The Appellants did not satisfy that
burden, and the district court properly granted summary judgment.
The district court also did not abuse its discretion by considering a second
declaration by Paulk that BB&T filed when it filed its reply in support of its
summary judgment motion. Wright, 701 F.3d at 910. In its motion for summary
judgment, BB&T explained that, if the shopping center was sold prior to entry of
judgment, it would submit a supplemental affidavit to explain how the net sale
proceeds applied to the Appellants’ indebtedness. After the sale of the shopping
center, the Appellants filed the settlement statement from the sale of the property.
That same day, BB&T filed its reply in support of the summary judgment motion
and the second Paulk declaration, which explained how BB&T credited the net sale
proceeds against the Appellants’ indebtedness. Rule 6(c) of the Federal Rules of
Civil Procedure provides that “[a]ny affidavit supporting a motion must be served
with the motion.” Fed. R. Civ. P. 6(c)(2). The purpose of this rule is to give the
opposing party sufficient time to respond to the affidavits and avoid any undue
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prejudice. Here, however, the Appellants were not prejudiced by the filing of
Paulk’s second declaration, since they were aware that an affidavit would be filed
when the shopping center was sold, and they also provided evidence of the sale.
The Appellants argue that the second declaration included evidence beyond the
limited purpose of determining the effect of the sale on their indebtedness, but the
district court explained that it limited its reliance on the second declaration to that
limited purpose, and did not abuse its discretion in doing so.
Finally, reversal and remand for a reasonableness determination on the
award of attorneys’ fees is not warranted. O.C.G.A. § 13-1-11(b) provides that a
debtor may challenge as unreasonable an award of attorneys’ fees exceeding
$20,000. However, that provision was added in the 2012 amendment to the statute,
and the Georgia Supreme Court has recognized that it does not apply to contracts,
like the instant note and guaranties, that were dated prior to July 1, 2011. Austin v.
Bank of Am., N.A., 743 S.E.2d 399, 404 n.2 (Ga. 2013). Thus, the Appellants
were not entitled to the requested reasonableness determination. Although the
district court said in its summary judgment order that the Appellants’ motion for a
reasonableness determination was premature and did not address the retroactivity
of § 13-1-11(b), we may affirm for any reason supported by the record, even if not
relied upon by the district court. United States v. Al Arian, 514 F.3d 1184, 1189
(11th Cir. 2008).
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AFFIRMED.

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