Renasant Bank v. Lake Cyrus Development Company Inc et al

Filing 41

MEMORANDUM OPINION. Signed by Chief Judge Sharon Lovelace Blackburn on 08/20/12. (CVA)

FILED
2012 Aug-20 PM 04:13
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
RENASANT BANK,
Plaintiff,
vs.
LAKE CYRUS DEVELOPMENT
COMPANY, INC.; CONCETTA S.
GIVIANPOUR; SAEID C.
GIVIANPOUR, aka Charles S.
Givianpour; THE LAKE CYRUS
MASTER OWNERS ASSOCIATION,
INC.,
Defendants.
LAKE CYRUS DEVELOPMENT
COMPANY, INC.,
Counter Claimant,
vs.
RENASANT BANK,
Counter Defendant.

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Case Number 2:11-CV-3924-SLB

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MEMORANDUM OPINION
This case is presently pending before the court on plaintiff’s Motion for Summary
Judgment and Motion for Rule 54(b) Certification, (doc. 21),1 and Motion to Strike filed by
defendants Lake Cyrus Development Company, Saeid “Charles” Givianpour, and Concetta

1

Reference to a document number, [“Doc. ___”], refers to the number assigned to each
document as it is filed in the court’s record.

Givianpour, (doc. 39).

Plaintiff Renasant Bank has sued defendants – Lake Cyrus

Development Company, Inc. [Lake Cyrus]; Concetta S. Givianpour; Saeid C. “Charles”
Givianpour; the Lake Cyrus Master Owners Association, Inc. – to recover on unpaid loans
and for a declaratory judgment regarding the ownership of the developer rights on foreclosed
property. Upon consideration of the record, the submissions of the parties, the arguments of
counsel, and the relevant law, the court is of the opinion that defendants’ Motion to Strike,
(doc. 39), is due to be denied, and plaintiff’s Motion for Summary Judgment and Motion for
Rule 54(b) Certification, (doc. 21), is due to be granted.
I. MOTION TO STRIKE
In their Motion to Strike and Response to Renasant Bank’s Supplemental Submissions
in Support of its Motion for Summary Judgment, (doc. 39), defendants contend:
Pursuant to Rule 56(c)(2) of the Federal Rules of Civil Procedure,
Defendants object and move to strike the appraisal reports, as such documents
are inadmissible hearsay and may not be considered for purposes of proving
the truth of the matters asserted therein (i.e., the value of the subject
properties). See Fed. R. Evid. 802. Defendants also object on grounds of lack
of authentication and appropriate foundation for the proffered evidence.
(Doc. 39 at 2.) Rule 56(c)(2) states, “A party may object that the material cited to support
or dispute a fact cannot be presented in a form that would be admissible in evidence.” Fed.
R. Civ. P. 56(c)(2); see also Jones v. UPS Ground Freight (11th Cir. 2012)(“The general
rule is that inadmissible hearsay cannot be considered on a motion for summary judgment.
Nevertheless, 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
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reduced to admissible form.”)(quoting Macuba v. Deboer, 193 F.3d 1316, 1322, 1323
(1999)(internal quotations and citation omitted).
Defendants make no argument that the information contained in the appraisal could
not “be presented in a form that would be admissible in evidence.” Indeed, the court finds
that J. Craig Stephens and Travis Brian Prewett, the appraisers, could testify as to their
opinions as set forth in the written appraisal.
Because the court finds that the facts set forth in the written appraisals could be
presented in an admissible form, defendants’ Motion to Strike, (doc. 39), will be denied.
II. MOTION FOR SUMMARY JUDGMENT
A. SUMMARY JUDGMENT STANDARD
Pursuant to Fed. R. Civ. P. 56(a), summary judgment is appropriate “if 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); Clark v. Coats & Clark, Inc., 929 F.2d
604, 608 (11th Cir. 1991); see Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). Once
the moving party has met its burden, the non-moving party must go beyond the pleadings and
show that there is a genuine issue of fact for trial. See Celotex Corp. v. Catrett, 477 U.S.
317, 324 (1986). A dispute is genuine “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986).
A party asserting that a fact cannot be or is genuinely disputed must support
the assertion by:
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(A) citing to particular parts of materials in the record, including
depositions, documents, electronically stored information, affidavits or
declarations, stipulations (including those made for purposes of the
motion only), admissions, interrogatory answers, or other materials; or
(B) showing that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.
Fed. R. Civ. P. 56(c)(1); see also Clark, 929 F.2d at 608 (“it is never enough simply to state
that the non-moving party cannot meet its burden at trial”).
In deciding a motion for summary judgment, the court’s function is not to “weigh the
evidence and determine the truth of the matter but to determine whether there is a genuine
issue for trial.” Id. at 249. “[C]ourts are required to view the facts and draw reasonable
inferences ‘in the light most favorable to the party opposing the [summary judgment]
motion.’” Scott v. Harris, 550 U.S. 372, 378 (2007)(quoting United States v. Diebold, Inc.,
369 U.S. 654, 655(1962) (per curiam)). Nevertheless, the non-moving party “need not be
given the benefit of every inference but only of every reasonable inference.” Graham v.
State Farm Mut. Ins. Co., 193 F.3d 1274, 1282 (11th Cir. 1999)(citing Brown v. City of
Clewiston, 848 F.2d 1534, 1540 n.12 (11th Cir. 1988)); see also Scott, 550 U.S. at 380
(“When opposing parties tell two different stories, one of which is blatantly contradicted by
the record, so that no reasonable jury could believe it, a court should not adopt that version
of the facts for purposes of ruling on a motion for summary judgment.”).

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B. STATEMENT OF FACTS
Plaintiff has moved for summary judgment as to its breach of contract claims against
defendants – Lake Cyrus, Mr. Givianpour, and Ms. Givianpour – based on the notes and
guaranties at issue. According to the Declaration of Jerry Harris, plaintiff’s Vice President,
plaintiff entered into three loan transactions with these three defendants. (Doc. 16-1 ¶¶ 2,
3, 8, 13.)
On or about November 8, 2004, plaintiff loaned Lake Cyrus $3.5 million. (Id. ¶ 3.)
The loan, referred to by the parties as “Note 1,” was guaranteed by Mr. Givianpour and
secured by a mortgage. (Id. ¶¶ 3, 6.) The mortgage gave plaintiff the right to foreclose on
the property securing the loan, 44 lots in the Lake Cyrus development, and to sell the
property at a foreclosure sale. (Doc. 16-4 at 7; doc. 20-1 at 2, 15-17.) Lake Cyrus defaulted
on the loan. (Doc. 16-1 ¶ 4.) According to plaintiff’s Complaint, on July 25, 2011, the
balance of Note 1 was $1,084,958.56. (Doc. 1 ¶ 13.)
On or about April 17, 2006, plaintiff loaned Lake Cyrus $3 million. (Doc. 16-1 ¶ 8.)
This loan, Note 2, was guaranteed by Mr. Givianpour and secured. (Id. ¶¶ 3, 6.) The
mortgage gave plaintiff the right to foreclose on the property securing the loan, 73 lots in the
Lake Cyrus development, and to sell the property at a foreclosure sale. (Doc. 16-1 ¶ 11; doc.
5-2 at 7; doc. 20-2 at 2, 16, 18.) Lake Cyrus defaulted on the loan. (Doc. 16-1 ¶ 9.)
According to plaintiff’s Complaint, on July 25, 2011, the balance of Note 2 was
$1,128,197.18. (Doc. 1 ¶ 20.)

5

On or about July 31, 2006, plaintiff loaned Lake Cyrus, Mr. Givianpour, and Ms.
Givianpour $300,000. (Doc. 16-1 ¶ 13.) This loan, Note 3, was secured by a mortgage. (See
doc. 16-10.) The mortgage gave plaintiff the right to foreclose on the property securing the
loan, lots in the Grande View development and property at 4221 Caldwell Mill Road, and to
sell the property at a foreclosure sale.

(Id. at 2; doc. 16-11; doc. 38-1.) Defendants

defaulted on the loan. (Doc. 16-1 ¶ 14.) According to plaintiff’s Complaint, on July 25,
2011, the balance of Note 3 was $296,818.05. (Doc. 1 ¶ 26.)
On or about November 16, 2010, plaintiff received an appraisal on the 117 Lake
Cyrus lots that secured Notes 1 and 2. (Doc. 36-1 at 2.) The appraisal found that the “As Is”
market value for the 117 Lake Cyrus lots was $3,620,000, or approximately $30,940.17 each,
on November 7, 2010, assuming a bulk sale of the lots and marketing for 6-12 months. (Id.
at 3, 5; doc. 36-6 at 7.) Defendants contend that the market value of the lots was $70,000 per
lot based on prior sales of 12 lots in 2010. (Doc. 39 at 2-3.) Plaintiff’s appraisal considered
$70,000 to be the “retail lot value” of each lot and the Aggregate Retail Value of the 117 lots
to be $8,190,000. (Doc. 36-5 at 7.) However, the appraisal report noted:
The Aggregate Retail Value reflects only the sum of the retail lot values that
could potentially be derived from the sale of the lots at the weighted average
retail price of $70,000. It does not reflect the discounted bulk-sale value of
the lots based on the projected sell-out period. Therefore, it is useful only in
establishing lot sale prices and loan reduction amounts. Under no
circumstances can it be considered to represent the market value of the
117 lots in a bulk-sale scenario.

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(Id. [emphasis in original].) The appraisal applied a Discounted Cash Flow Analysis
[“DCF”] to determine “the Discounted Value of subject lots to a Single Purchaser (Bulk
Purchase.) That is, all of the lots [were] presumed to be purchased in bulk by one single
purchaser. The Present Value obtained from the DCF analysis reflect[ed] the market value
indication for the 117 lots under a bulk-sale scenario.” (Doc. 36-6 at 3 [emphasis in
original].) The DCF included the following variables:
!

Lot Prices: 117 lots at an average price of $70,000 each. Lot prices
are projected to remain stable over the sell-out period.

!

Legal Expenses: Estimated at $150 per-lot.

!

Sales/Marketing Expenses: Estimated at 5.0% of Aggregate Lot Sales
Proceeds.

!

Discount Rate Lots: Net Cash Flows discounted at 20.0%, with
entrepreneurial profit included in the discount rate, . . . and is in the
middle of the range of current required discount rates as indicated by
RealtyRates.com.

!

Compounding Periods: Sales are projected to occur semi-annually
over a 84-month sell-out period.

!

Lot Taxes: During the sell-out period, lots are projected to be taxed at
$529.01 per-lot, based on the current average tax rate for the subject
lots. . . .

(Doc. 36-6 at 4.) Based on these factors, the appraisers found as follows:
The subject property consists of 117 lots. Via direct comparison to similar lots
sold in the market area, we estimated an average retail value of $70,000 perlot. Next, via market comparison to similar subdivisions, we projected an 84month absorption/sell-out period for the sale of the 117 lots. Then, utilizing
the estimated average retail lot value, we estimated an aggregate retail value
for the lots of $8,190,000 (which is not to be construed as the market value
7

of the subject lots under a bulk-sale scenario). Finally, via [DCF], and
utilizing a market-derived discount rate deemed sufficient to attract a
knowledgeable investor, we estimated the market value of the 117 lots, based
on a bulk-sale scenario to a single purchaser.
This analysis produced the “As Is” market value indication for the subject 117
lots assuming that the lots are purchased in bulk by a single knowledgeable
investor. The reconciled “As Is” market value indication obtained via the bulksale scenario and DCF analysis is $3,620,000 for the 117 lots.
(Doc. 36-6 at 6 [emphasis in original].)
On or about November 12, 2010, plaintiff received an appraisal on the seven Grande
View lots. (Doc. 37 at 2.) The appraisal found that the “As Is” market value for the seven
Grande View lots was $90,000, or approximately $12,857.14 each, on November 7, 2010,
assuming the lots were available and marketed for 6-12 months. (Id. at 3, 5.) The liquidation
value of the Grande View lots for the same time period was $65,000. (Id. at 3.)
On or about October 21, 2010, plaintiff received an appraisal on the property on
Caldwell Mill Road. (Doc. 38 at 2.) The appraisal found that “appraised value of the subject
property was $592,000 as of October 20, 2010. (Id. at 8.) However, this property was
foreclosed by the first mortgagee and a second mortgagee received the excess funds after the
first mortgage was satisfied. (See doc. 36-4 n.1.) Plaintiff, the third mortgagee in line
received nothing, (id.), and its security interest in the Caldwell Mill Road property was
extinguished.
On January 19, 2011, plaintiff foreclosed on the property securing the notes and
bought the property at the foreclosure sale. (Doc. 16-1 ¶¶ 7, 12, 16.) It purchased the

8

property securing Note 1 for $1.669 million dollars, (id. ¶ 7); it purchased the property
securing Note 2 for $2.42 million dollars, (id. ¶ 12); and, it purchased the property securing
Note 3 for $58,500, (id. ¶ 16).
According to Harris, “As of February 27, 2012, Lake Cyrus and Charles Givianpour
were indebted to Renasant jointly and severally pursuant to Note 1 in the total amount of
approximately $1,140,618.79,” which included $808,913.31, unpaid principal; 287,998.51,
accrued interest; $6,500, appraisal fee; and $36,206.97, “other fees.” (Doc. 16-1 ¶ 16.) The
interest on this loan accrues at the rate of $84.26 a day. (Id.)
As to Note 2, Harris testified, “As of February 27, 2012, Lake Cyrus and Charles
Givianpour were indebted to Renasant jointly and severally pursuant to Note 2 and the
Guaranty in the total amount of approximately $1,154,855.99,” which included $860,470.24,
unpaid principal; $283,947.92, accrued interest; $2,100, appraisal fee; and $8,337.83, “other
fees.” (Id.) The interest on this loan accrues at the rate of $83.66 a day. (Id.)
And, as to Note 3, Harris testified, “As of February 27, 2012, Lake Cyrus, Concetta
Givianpour and Charles Givianpour were indebted to Renasant jointly and severally pursuant
to Note 3 in the total amount of approximately $305,246.20,” which included $257,828.00,
unpaid principal; $38,096.87, accrued interest; $6,775, appraisal fee; and $2,546.33, “other
fees.” (Id.) The interest on this loan accrues at the rate of $26.86 a day. (Id.)
Ms. Givianpour calculated the amount due to plaintiff, as of July 25, 2011, as
$887,224.93 on Note 1; $837,936.38 on Note 2; and $281,722.33 on Note 3. (Doc. 26-1 at

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11.) The total difference between Ms. Givianpour’s calculations and the amount plaintiff
claims in its Complaint is $503,090.15. (Id.)
In their Reply Brief, plaintiff contends that this difference results from Ms.
Givianpour’s failure to include ad valorem taxes paid by plaintiff before foreclosure and
interest accruing after July 25, 2011.

(Doc. 27 at 3-4.) The court ordered plaintiff to

supplement its Motion for Summary Judgment with evidence of such taxes and interest and
gave defendants a chance to respond. (Doc. 28.)
Plaintiff submitted the Supplemental Declaration of Jerry Harris, which recalculates
the amount owed using numbers submitted by defendants. (Doc. 29-1.) Plaintiff contends
that defendants have “admitted” these amounts set forth in Ms. Givianpour’s Declaration and
attached exhibits are owed. (Doc. 29 ¶ 2; doc. 29-1 ¶¶ 3-5; see doc. 26-1.) Mr. Harris
testified as follows:
Note 1
$2,534,080.51

($1,669,000.00)

Total debt as of January 19, 2011 per Ms. Givianpour
(Principal $2,309,000; Interest $225,080.51)
Foreclosure Bid

$ 865,080.51

Admitted principal as of January 19, 2011

$ 168,913.31

Past due ad valorem taxes paid and added to principal
pursuant to § 7 of Mortgage and Security Agreement
(Exh. C to the Declaration of Jerry Harris)

$1,033,993.82
$ 48,755.60

Actual principal as of January 19, 2011
Interest from January 19, 2011 [at 3.5% = $100.527
per day] until May 22, 2012 (485 days)
10

$ 6,500.00
$1,089,149.42

Admitted Appraisal Fee
Total Amount Due Exclusive of Attorney’s Fees

6. Attached hereto as Exh. A is a copy of the Title update counsel
obtained from Magic City Title Company. It shows past due ad valorem taxes
with respect to the real estate securing Note 1. In January of 2011, I personally
went to the Bessemer Courthouse and paid $168,913.31 in past due taxes on
the properties securing Note 1.
7. The difference between Defendant’s calculations and my calculations
is $202,024.48 ($1,089,249.42 - $887,224.93). On its face the Defendants’
calculations omit ad valorem taxes of $168,913.31 that are added to principal
and $30,158.10 (300 days x $100.527) interest from July 25, 2011 until May
22, 2012. The omitted ad valorem taxes and omitted interest total
$199,071.41.
8. When the items omitted by the Defendants are added, the difference
between the calculations is $2,953.07. Defendants admit they owe
$1,086,196.35 under Note 1.
Note 2
$3,245,291.66

($ 2,420,000.00)

Total debt as of January 19, 2011 per Ms.
Givianpour (Principal $3,000,000; Interest
$245,291.66)
Foreclosure Bid

$825,291.66

Admitted principal as of January 19, 2011

$ 280,470.24

Past due ad valorem taxes paid and added to
principal pursuant to § 7 of Mortgage and Security
Agreement (Exh. G to the Declaration of Jerry
Harris)

$1,105,761.90
$51,425.50

Actual principal as of January 19, 2011
Interest from January 19, 2011 [at 3.5% = $106.0319
per day] until May 22, 2012 (485 days)
11

$2,100.00
$1,159,287.40

Admitted Appraisal Fee
Total Amount Due Exclusive of Attorney’s Fees

9. Attached hereto as Exh. B is a copy of the Title update counsel
obtained from Magic City Title Company. It shows past due ad valorem taxes
with respect to the real estate securing Note 2. In January of 2011, I personally
went to the Bessemer Courthouse and paid $280,470.24 in past due taxes.
10. The difference between Defendant’s calculations and my
calculations is $321,351.02 ($1,159,287.40 - $837,936.38). On its face the
Defendants’ calculations omit ad valorem taxes of $280,470.24 that are added
to principal and $31,809.59 (300 days x $106.0319) interest from July 25,
2011 until May 22, 2012. The omitted ad valorem taxes and omitted interest
total $312,279.83.
11. When the items omitted by the Defendants are added, the
difference between the calculations is $9,071.19. Defendants admit they owe
$1,150,216.21 under Note 2.
Note 3
$328,695.36

Total debt as of January 19, 2011 per Ms.
Givianpour (Principal $302,451.40; Interest
$26,243.96)

($58,500.00)

Foreclosure Bid

$270,195.36

Admitted principal as of January 19, 2011

$13,877.60

$284,072.96
$13,211.34

Past due ad valorem taxes paid and added to
principal pursuant to §§6 and 8 of Accommodation
Mortgage and Security Agreement attached hereto as
Exh. C
Actual principal as of January 19, 2011
Interest from January 19, 2011 [at 3.5% = $27.24 per
day] until May 22, 2012 (485 days)
12

$6,775.00
$304,059.30

Admitted Appraisal Fee
Total Amount Due Exclusive of Attorney’s Fees

12. Attached hereto as Exh. D is a copy of the Title update counsel
obtained from Magic City Title Company. It shows past due ad valorem taxes
with respect to the real estate securing Note 3. In January of 2011, I personally
went to the Bessemer Courthouse and paid $13,877.60 in past due taxes.
13. The difference between Defendant’s calculations and my
calculations is $22,336.97 ($304,059.30 - $281,722.33). On its face the
Defendants’ calculations omit ad valorem taxes of $13,877.60 that are added
to principal and $8,171.96 (300 days x $27.24) interest from July 25, 2011
until May 22, 2012. The omitted ad valorem taxes and omitted interest total
$22,049.56.
14. When the items omitted by the Defendants are added, the
difference between the calculations is $287.41. Defendants admit they owe
$303,771.89 under Note 3.
(Doc. 29-1 at 3-4 [footnotes omitted].)
As a result of its recalculation of the amounts owed, plaintiff asks the court to enter
Judgment against plaintiffs for $1,089,149.42, on Note 1; $1,159,287.40, on Note 2; and
$304,059.30, on Note 3; with leave to prove attorneys’ fees and other costs of collection.
(Doc. 29 at 2-3.)
III. DISCUSSION
A. CALCULATION OF AMOUNT OWED
Plaintiff argues that it is entitled to summary judgment on its claims based on the
deficiencies in the three notes with leave to prove other costs and attorneys’ fees. (Doc. 22
at 5-7; doc. 29 at 2-3.) Defendants contend that an issue of fact exists as to the amount of
13

deficiencies because, “[T]he Supplemental Declaration of Jerry Harris is apparently
inaccurate and unreliable,” and plaintiff’s “evidence is presented in a conclusory and
summary fashion without supporting documents.” (Doc. 33 at 6.) The court disagrees.
In his Supplemental Declaration, Mr. Harris testified that he “personally went to the
Bessemer Courthouse and paid [the] past due taxes” in the amount of $163,913.31 for the
property securing Note 1; $280,470.24 for the property securing Note 2, and $13,877.60 for
the property securing Note 3. (Doc. 29-1 ¶¶ 6, 9, 12.) This testimony, which is neither
conclusory nor a summary, is sufficient to establish the amount of past due ad valorem taxes
paid by plaintiff. Defendants have submitted nothing to rebut Harris’s testimony that these
are the amounts actually paid to settle the outstanding property taxes.
Therefore, the court finds defendants have not shown any disputed issue of fact with
regard to the amount of the property taxes paid by plaintiff.
B. FAILURE TO MITIGATE DAMAGES – AD VALOREM TAXES
Defendants argue,
Although it is unclear when Renasant claims the default occurred, the
evidence demonstrates that Renasant did not pay any property taxes until
January of 2011, the month it foreclosed. By failing to pay the taxes before
such time, Renasant allowed the properties to be sold for taxes, potentially at
amounts substantially higher than the actual taxes due, and allowed substantial
interest to accrue on the unpaid amounts, thereby substantially increasing the
balance due.
(Doc. 33 at 7.)

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The Alabama Supreme has set forth the general law regarding mitigation of contract
damages:
We begin our analysis by recognizing the long-standing rule that the
law imposes upon all parties who seek recompense from another a duty to
mitigate their losses or damages. Aetna Life Insurance Co. v. Lavoie, 470 So.
2d 1060 (Ala. 1984). It is equally well established that a plaintiff can recover
only for that damage or loss that would have been sustained if the plaintiff had
exercised such care as a reasonably prudent person would have exercised
under like circumstances to mitigate the damage or loss (Equilease Corp. v.
McKinney, 52 Ala. App. 109, 289 So. 2d 809 (1974)); and whether the plaintiff
has sufficiently mitigated the damages, generally speaking, is a question of
fact. Carnival Cruise Lines, Inc. v. Goodin, 535 So. 2d 98 (Ala. 1988).
Stated otherwise, the injured or damaged party is legally bound to
lessen the recoverable damages so far as is practicable by the use of ordinary
care and diligence. Thus, the rule of mitigation requires a party suffering
injury, damage, or loss to take reasonable steps to reduce it.
The rule of mitigation finds its application only in the context of
evidence from which the factfinder may reasonably infer that the claimant
rejected a reasonable course of action that an ordinarily prudent person
would have taken under similar circumstances to minimize the injury,
damage, or loss. In other words, the party seeking to invoke the rule must
meet a threshold “sufficiency of the evidence” test, lest the issue be resolved
against the movant as a matter of law. The rule does not apply where the
injured party, in an effort to minimize the loss, would be required to incur
considerable personal risk or expense with but a slight chance of an
alternative recovery. Id.
Avco Financial Services, Inc. v. Ramsey, 631 So. 2d 940, 942-43 (Ala. 1994)(emphasis
added).
Defendants have not demonstrated that plaintiff “rejected a reasonable course of
action that an ordinarily prudent person would have taken under similar circumstances to
minimize the injury, damage, or loss,” Avco Financial Services, 631 So. 2d at 942, by waiting
15

until January of 2011 to pay the ad valorem taxes. The court finds that the payment of such
taxes was a “considerable expense,” and, given the fact that defendants were already indebted
to plaintiff, plaintiff would have had no more than a “slight chance” of recovering any ad
valorem taxes paid on behalf of defendants. See id. at 942-43. Defendants have not
presented evidence from which a reasonable jury could find otherwise.
Based on the foregoing, the court finds that there are no questions of fact regarding
the amount owed by defendants and that, as of May 22, 2012, the outstanding indebtedness
of defendants was $1,089,149.42 on Note 1; $1,159,287.40 on Note 2, and $304,059.30 on
Note 3.
C. MITIGATION – FORECLOSURE SALE
Defendants also contend that plaintiff’s Motion for Summary Judgment is premature
and that they should be allow the opportunity to conduct discovery as to whether plaintiff has
mitigated its damages as to the foreclosure sale. (Doc. 26 at 3, 5.) Specifically, “Defendants
question whether Renasant’s foreclosure sales were commercially reasonable and whether
Renasant made reasonable efforts to sell the foreclosed lots within the year following
foreclosure to mitigate its own damages and its deficiency claim.” (Id. at 4.) Plaintiff
contends:
In the context of a foreclosure sale, the issues of reasonableness of the bid and
the mitigation of damages issues are identical. In the absence of collusion,
“the purchase price at a properly conducted foreclosure sale is deemed
conclusive of the fair and reasonable price at the sale.” Mt. Carmel Estates,
Inc. v. Regions Bank, 853 So. 2d 160, 166 (Ala. 2002). Thus, the foreclosure
bid is determinative of the deficiency unless collusion is established. Id.
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(Doc. 27 at 3.)
The court notes that plaintiff failed to note the context of the quote pulled from Mt.
Carmel Estates. Indeed, this quote is from the appellee/mortgagee’s brief on appeal, and not
the court’s ruling.2 Mt. Carmel Estates, Inc., 853 So.2d at 166. The Mt. Carmel court held
the price paid at a foreclosure sale could be “so inadequate as to raise a presumption of
fraud, unfairness, or culpable mismanagement,” id. at 168 (quoting Breen v. Baldwin County
Federal Savings Bank, 567 So. 2d 1329, 1333 (Ala. 1990)(citing Hayden v. Smith, 113 So.
293 (1927)), before it found that the price paid by the mortgagee was not “so low as to shock
the conscience,” id.
The law in Alabama with regard to foreclosure sales was set forth in the Hayden v.
Smith, in which the Alabama Supreme Court held:
The general rule is that, “where the price realized at the sale is so
inadequate as to shock the conscience, it may itself raise a presumption of
fraud, trickery, unfairness, or culpable mismanagement, and therefore be
sufficient ground for setting the sale aside.” 27 Cyc. 1508.

2

The court noted:

Regions Bank [the appellee/mortgagee] counters that “the purchase price at a
properly conducted foreclosure sale is deemed conclusive of the fair and
reasonable price at the sale.” (Regions Bank’s brief, p. 13.) In support of its
argument, Regions Bank cites BFP v. Resolution Trust Corp., 511 U.S. 531,
114 S. Ct. 1757, 128 L. Ed. 2d 556 (1994), Wood River Development, Inc. v.
Armbrester, 547 So. 2d 844 (Ala. 1989), and Breen v. Baldwin County Federal
Savings Bank, 567 So. 2d 1329 (Ala. 1990).
Mt. Carmel Estates, Inc., 853 So.2d at 166.
17

And, although mere inadequacy of price is not sufficient to that end, it
is “always a circumstance to be considered in connection with other grounds
of objection to the sale, and will be sufficient to justify setting the sale aside,
when coupled with any other circumstances showing unfairness, misconduct,
fraud, or even stupid management, resulting in the sacrifice of the property.”
27 Cyc. 1508; Holdsworth v. Shannon, 113 Mo. 508, 21 S.W. 85, 35 Am. St.
Rep. 719, where the subject is discussed quite fully, with a review of many
pertinent cases; 2 Jones on Mortgages (6th Ed.) 1670.
The remedial action of courts in such cases is grounded upon the duty
of the mortgagee, as stated by Shaw, C.J., in Howard v. Ames, 3 Metc. (Mass.)
311:
“In executing such power, he becomes the trustee of the debtor, and is
bound to act bona fide, and to adopt all reasonable modes of proceeding, in
order to render the sale most beneficial to the debtor.”
The decided cases indicate that in general a price less than one-third of
the value of the land will be regarded as grossly inadequate, but, of course,
there is no definite rule or basis for such a conclusion, and each case must be
judged by its own circumstances. But, when it is not more than one-tenth of
its actual value, we think it is upon its face so grossly inadequate as to shock
the judicial conscience and justifies the setting aside of the sale. And when,
in such a case, there was an unsatisfactory publicity in the advertisement
because of the obscurity of the newspaper medium, and of its limited
circulation both as to readers and municipal territory, coupled with the
mortgagor’s ignorance of the intended sale, we are convinced that it is the duty
of a court of equity to set aside the foreclosure sale, and let in the mortgagor
to redeem upon the payment of what is justly due to the purchasing junior
mortgagee.
Hayden v. Smith, 113 So. 293, 295 (Ala. 1927), cited in Mt. Carmel Estates, Inc. v. Regions
Bank, 853 So. 2d 160, 168 (Ala. 2002). “[T]he rule in Hayden [that the mortgagee owes the
mortgagor a duty of good faith and fairness] is specially applicable where the mortgagee
becomes the purchaser at the sale.” In re Sharpe, 391 B.R. 117, 154 (Bkrtcy. N.D. Ala.
2008)(quoting Appelbaum v. First Nat. Bank, 179 So. 373, 375 (Ala. 1938))(internal
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quotations omitted); see also id. (quoting Brabham v. American Nat. Bank of Union Springs,
689 So. 2d 82, 88 (Ala. Civ. App. 1996).
Defendants do not challenge the foreclosure sale or the bid price for the lots securing
Note 3. Therefore, the court will grant plaintiff’s Motion for Summary Judgment on Note
3 and enter Judgment against defendants Lake Cyrus Development Company, Saeid
“Charles” Givianpour, and Concetta Givianpour on Count III for $291,516.46, plus interest.
The bid prices for the 117 Lake Cyrus lots guaranteeing Notes 1 and 2 were 100% or
more than the “As Is” Market Value of the lots. Defendants’ evidence that the retail market
value of a single lot was more than twice the per lot value of plaintiff’s appraisal does not,
without more, create an issue of fact as to whether plaintiff acted in good faith and fairly, in
conducting the foreclosure sale. Defendants have not questioned the accuracy of the
calculations contained in plaintiff’s appraisal; indeed, they do not even address the bulk-sale
scenario. Also, they have not pointed to any irregularity in the foreclosure proceedings
except the difference between the $70,000 per lot price and plaintiff’s bid price.
Defendants have not offered evidence on which a reasonable fact-finder could
conclude that the foreclosure proceedings were not reasonable. Plaintiff conducted an
appraisal to establish the market value of all 117 lots sold to a single purchaser – the bulk
purchase. It bought the lots at issue for over 100% of their appraised value.
In response to plaintiff’s showing defendants “request an opportunity to conduct
discovery” on “issues includ[ing] the adequacy of [plaintiff’s] foreclosure bid and whether

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it acted reasonably to mitigate its damages.” (Doc. 39 at 3.) Rule 56(d) of the Federal Rules
of Civil Procedure provides:
If a nonmovant shows by affidavit or declaration that, for specified reasons,
it cannot present facts essential to justify its opposition, the court may:
(1) defer considering the motion or deny it;
(2) allow time to obtain affidavits or declarations or to take discovery;
or
(3) issue any other appropriate order.
Fed. R. Civ. P. 56(d). Considering defendants’ submissions, including the Affidavit of
Brenton K. Morris, their counsel, which states that “no discovery has been undertaken in this
case,” and he “anticipate[s] conducting discovery on issues relating to [plaintiff’s] efforts to
mitigate its damages,” (doc. 26-2 ¶¶ 2, 3), the court finds that defendants have not indicated
any issue with regard to plaintiff’s foreclosure bid or the conduct of the foreclosure sale.
Defendants argue that plaintiff has not acted reasonably to mitigate its damages. They
contend:
Renasant apparently engaged in negotiations in 2011 to sell the foreclosed lots
to NSH Corp. d/b/a Signature Homes (“Signature”), but did not enter into any
contract until December. [(See doc. 12-3.)] Defendants are not privy to
Renasant’s efforts to sell the lots, to any negotiations with Signature or any
other potential purchaser, or to the financial details of Renasant’s deal with
Signature. If given the opportunity to conduct discovery, Defendants may be
able to present facts indicating Renasant has failed to properly mitigate its
damages.
(Doc. 26 at 4-5.)

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If plaintiff had sold the mortgaged property within the redemption period, under
Alabama law, the difference would be applied to reduce defendant’s debt. See Johnny Ray
Sports, Inc. v. Wachovia Bank, 982 So. 2d 1067, 1074 (Ala. 2007). However, plaintiff had
no duty to sell the property within the redemption period. Id. at 1075-76. Therefore, the
failure to sell the property is not relevant to the calculation of defendants’ deficiencies and/or
plaintiff’s mitigation of its damages.
Also, defendants contend:
Lake Cyrus attempted to purchase the subject property from Renasant within
the redemption period. See Exhibit A. In December, 2011 or January, 2012,
Lake Cyrus offered the amount that Renasant had demanded in exchange for
the property and a release of any deficiency claim. However, by that time,
Renasant had entered into an agreement (or was in the process of finalizing an
agreement) to sell the lots to another buyer.
(Doc. 39 at 3.)
Ms. Givianpour testified that Lake Cyrus had offered plaintiff $4,650,000 for the 117
lots and release from its deficiency balances. (Doc. 39-1 at 2-3.) According to the
Complaint, the deficiency balances on all three Notes, together with the foreclosure bids
totaled $6,657,473.79 – over $2,000,000 more than Lake Cyrus’s offer. Plaintiff has no duty
to compromise its claims by $2,000,000. Mitigation does not require a compromise or
settlement of plaintiff’s claim against defendants. See Gunn Infiniti, Inc. v. O’Byrne, 996
S.W.2d 854, 859 (Tex. 1999)(“[F]oreclosing a plaintiff from pursuing suit is not mitigation.
If a defendant is truly offering to mitigate, the offer cannot implicitly or explicitly seek a
release of the plaintiff’s claims. It must be an unconditional offer to mitigate. (citing Barrett
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v. United States Brass Corp., 864 S.W.2d 606, 634 (Tex. App. 1993), rev'd on other grounds
sub nom. Amstadt v. United States Brass Corp., 919 S.W.2d 644 (Tex. 1996); Restatement
(Second) of Contracts § 350 cmt. e, illus. 15 (1981))).
Therefore, the court finds that plaintiff has established that it is entitled to judgment
as a matter of law as to Count I and Count II of its Complaint, seeking a deficiency judgment
on Notes 1 and 2. A Judgment in favor of plaintiff and against defendants Lake Cyrus
Development, Saeid “Charles” Givianpour, and Concetta Givianpour, will be entered in the
amount of $1,094,175.24, plus interest, on Count I, and $1,164,482.96, plus interest, on
Count II.
IV. RULE 54(b) CERTIFICATION
Plaintiff asks the court to certify as final a judgment in its favor on Count I-III. (Doc.
21 § 2 [citing Fed. R. Civ. P. 5(b)].) Rule 54(b) provides:
When an action presents more than one claim for relief – whether as a claim,
counterclaim, crossclaim, or third-party claim – or when multiple parties are
involved, the court may direct entry of a final judgment as to one or more, but
fewer than all, claims or parties only if the court expressly determines that
there is no just reason for delay. Otherwise, any order or other decision,
however designated, that adjudicates fewer than all the claims or the rights and
liabilities of fewer than all the parties does not end the action as to any of the
claims or parties and may be revised at any time before the entry of a judgment
adjudicating all the claims and all the parties’ rights and liabilities.
Fed. R. Civ. P. 54(b).
“A district court must follow a two-step analysis in determining whether a partial final
judgment may properly be certified under Rule 54(b). First, the court must determine that

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its final judgment is, in fact, both ‘final’ and a ‘judgment.’” Lloyd Noland Foundation, Inc.
v. Tenet Health Care Corp., 483 F.3d 773, 777 (11th Cir. 2007)(quoting Curtiss-Wright
Corp. v. Gen. Elec. Co., 446 U.S. 1, 7 (1980))(internal quotations omitted). “[T]he court’s
decision must be ‘final’ in the sense that it is an ultimate disposition of an individual claim
entered in the course of a multiple claims action, and a ‘judgment’ in the sense that it is a
decision upon a cognizable claim for relief.” Id. (quoting Curtiss-Wright Corp., 446 U.S. at
7 (citing Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 436 (1956)))(internal quotations
omitted). “Second, having found that the decision was a final judgment, the district court
must then determine that there is no ‘just reason for delay’ in certifying it as final and
immediately appealable.” Id. (citing Curtiss-Wright Corp., 446 U.S. at 8). “This inquiry is
required because not all final judgments on individual claims should be immediately
appealable. The district court must act as a dispatcher and exercise its discretion in certifying
partial judgments in consideration of judicial administrative interests – including the historic
federal policy against piecemeal appeals – and the equities involved.” Id. at 777-78 (quoting
Curtiss-Wright Corp., 446 U.S. at 8 (quoting Sears, Roebuck, 351 U.S. at 438))(internal
quotations and citations omitted). The Eleventh Circuit has held:
The federal concept of sound judicial administration and efficiency will
not normally be furthered by having piecemeal appeals that require two (or
more) three-judge panels to familiarize themselves with a given case, instead
of having the trial judge, who sits alone and is intimately familiar with the
whole case, revisit a portion of the case if he or she has erred in part and that
portion is overturned following the adjudication of the whole case. This is
particularly true given that the caseload of the federal courts of appeals has
grown faster than that of any other component of the federal judiciary.
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Affording Rule 54(b) a liberal construction would only exacerbate the
difficulties associated with our burgeoning caseload by promoting multiple
appeals in a single case.
Ebrahimi v. City of Huntsville Bd. of Educ., 114 F.3d 162, 166 (11th Cir. 1997).
Therefore, “Rule 54(b) certifications must be reserved for the unusual case in which
the costs and risks of multiplying the number of proceedings and of overcrowding the
appellate docket are outbalanced by pressing needs of the litigants for an early and separate
judgment as to some claims or parties.” Id. at 166 (quoting Morrison-Knudsen Co. v. Archer,
655 F.2d 962, 965 (9th Cir. 1981)
In its Motion for Summary Judgment, plaintiff “avers that there is no just reason for
delay and that the judgments entered by this Court should be certified as final pursuant to
Rule 54(b).” (Doc. 21 at 2.) However, it does not indicate any “pressing need,” Ebrahimi,
114 F.3d at 166, for a final judgment on less than all claims sufficient to overcome the
“historic federal policy against piecemeal appeals,” Sear, Roebuck, 351 U.S. at 438.
Therefore, plaintiff’s Motion for 54(b) Certification, (doc. 21), will be denied.
CONCLUSION
For the foregoing reasons, the court is of the opinion that there are no material facts
in dispute and plaintiff is entitled to judgment as a matter of law on Count I-III of its
Complaint. However, the court finds no pressing need for a Final Judgment on these claims.
An Order granting plaintiff’s Motion for Summary Judgment, (doc. 21), and denying

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defendants’ Motion to Strike, (doc. 39), and plaintiff’s Motion for Rule 54(b) Certification,
(doc. 21), will be entered contemporaneously with this Memorandum Opinion.
DONE, this 20th day of August, 2012.

SHARON LOVELACE BLACKBURN
CHIEF UNITED STATES DISTRICT JUDGE

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