Synovus Bank v. Hyche

Filing 33

MEMORANDUM OPINION AND ORDER GRANTING IN PART and DENYING IN PART 27 MOTION for Summary Judgment as set out herein. Signed by Judge Virginia Emerson Hopkins on 7/9/2014. (JLC)

FILED
2014 Jul-09 AM 10:34
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
SYNOVUS BANK,
Plaintiff,
v.
HILDA HYCHE, an individual,
Defendant.

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) Case No.: 2:12-CV-3649-VEH
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MEMORANDUM OPINION AND ORDER
This civil action was filed on October 19, 2012, by the plaintiff, Synovus Bank,
against defendants Tarrie H. Hyche and Hilda Hyche. (Doc. 1). Against both
defendants, the complaint alleged counts for breach of promissory notes (Counts I
and II) and alternatively for unjust enrichment (Counts IV). These counts arise out of
two loans made by the plaintiff to both defendants. Counts III and V of the complaint
were alleged only against Tarrie Hyche, and concerned a third loan made only to him.
On November 16, 2012, Tarrie Hyche filed a notice of bankruptcy. (Doc. 7.)
Pursuant to 11 U.S.C. § 362, this action was then automatically stayed against him,
pending the outcome of the bankruptcy proceedings. On November 21, 2012, Tarrie

Hyche filed a “Notice of Filing Removal”1 which Tarrie Hyche stated “[constituted]
the removal of this cause of action from the United States District Court . . . to the
United States Bankruptcy Court . . ..” (Doc. 9 at 1).
On December 4, 2012, Hilda Hyche filed a document entitled “Notice of Filing
Answer and Counterclaim in Bankruptcy Court.” (Doc. 12). A document entitled
“Hilda Hyche’s Answer to Synovus Bank’s Complaint and Counterclaim,” was
attached to that document. (Doc. 12 at 3-20). The caption of that document states that
it is to be filed in “The United States Bankruptcy Court for the Northern District of
Alabama, Western Division.” (Doc. 12 at 3). However, there is no indication that it
was filed in that court. In that document, Hilda Hyche alleges counterclaims against
Synovus

for

“Improper/Intentional/Wanton/Reckless/Negligent

Loan

Original/Handling/Administration” (Count I), suppression (Count II), promissory
estoppel (Count III), equitable estoppel (Count IV), breach of contract (Count V), and
breach of duty of good faith and fair dealing (Count VI). Other than being filed in as
an attachment to document 12, the counterclaim has not been officially filed in to the
record in this action. However, the parties treat the document as if it is filed in this
case and as if it adequately alleges counterclaims against the plaintiff. (Doc. 27 at 15,

1

The notice does not say by whom it was filed. However, it is signed by counsel “for
Tarrie Hyche,” and the attachment to which it refers states on its face that it was filed in the
bankruptcy court by Tarrie Hyche. (Doc. 9-1).
2

n. 4).
On December 26, 2012, the court severed the plaintiff’s claims against Tarrie
Hyche and dismissed those claims without prejudice. (Doc. 15 at 5). Those claims
included Counts I, II, and IV, to the extent brought against Tarrie Hyche, and Counts
III and V in their entirety. Counts I, II, and IV remain as to defendant Hilda Hyche
alone.
The case comes before the court on the plaintiff’s motion for summary
judgment. (Doc. 27). For the reasons stated herein, the motion will be GRANTED
in part and DENIED in part, and this matter will be set for trial.
I.

STANDARD
Under Federal Rule of Civil Procedure 56, summary judgment is proper if there

is no genuine dispute as to any material fact and the moving party is entitled to
judgment as a matter of law. Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986) (“[S]ummary judgment is proper if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.”) (internal quotation
marks and citation omitted). The party requesting summary judgment always bears
the initial responsibility of informing the court of the basis for its motion and
3

identifying those portions of the pleadings or filings that it believes demonstrate the
absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. Once the
moving party has met its burden, Rule 56(e) requires the non-moving party to go
beyond the pleadings in answering the movant. Id. at 324. By its own affidavits – or
by the depositions, answers to interrogatories, and admissions on file – it must
designate specific facts showing that there is a genuine issue for trial. Id.
The underlying substantive law identifies which facts are material and which
are irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). All
reasonable doubts about the facts and all justifiable inferences are resolved in favor
of the non-movant. Chapman, 229 F.3d at 1023. Only disputes over facts that might
affect the outcome of the suit under the governing law will properly preclude the
entry of summary judgment. Anderson, 477 U.S. at 248. A dispute is genuine “if the
evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Id. If the evidence presented by the non-movant to rebut the moving party’s
evidence is merely colorable, or is not significantly probative, summary judgment
may still be granted. Id. at 249.
How the movant may satisfy its initial evidentiary burden depends on whether
that party bears the burden of proof on the given legal issues at trial. Fitzpatrick v.
City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). If the movant bears the burden
4

of proof on the given issue or issues at trial, then it can only meet its burden on
summary judgment by presenting affirmative evidence showing the absence of a
genuine issue of material fact – that is, facts that would entitle it to a directed verdict
if not controverted at trial. Id. (citation omitted). Once the moving party makes such
an affirmative showing, the burden shifts to the non-moving party to produce
“significant, probative evidence demonstrating the existence of a triable issue of fact.”
Id. (citation omitted) (emphasis added).
For issues on which the movant does not bear the burden of proof at trial, it can
satisfy its initial burden on summary judgment in either of two ways. Id. at 1115-16.
First, the movant may simply show that there is an absence of evidence to support the
non-movant’s case on the particular issue at hand. Id. at 1116. In such an instance, the
non-movant must rebut by either (1) showing that the record in fact contains
supporting evidence sufficient to withstand a directed verdict motion, or (2)
proffering evidence sufficient to withstand a directed verdict motion at trial based on
the alleged evidentiary deficiency. Id. at 1116-17. When responding, the non-movant
may no longer rest on mere allegations; instead, it must set forth evidence of specific
facts. Lewis v. Casey, 518 U.S. 343, 358 (1996). The second method a movant in this
position may use to discharge its burden is to provide affirmative evidence
demonstrating that the non-moving party will be unable to prove its case at trial.
5

Fitzpatrick, 2 F.3d at 1116. When this occurs, the non-movant must rebut by offering
evidence sufficient to withstand a directed verdict at trial on the material fact sought
to be negated. Id.
II.

FACTS
Synovus made two commercial loans to Tarrie and Hilda Hyche, jointly and

severally.2 The most recent promissory note3 regarding loan one is dated December
19, 2011. (Doc. 1-1 at 2). In this document, the Hyches, jointly and severally, agree
to pay to Synovus the principal amount of $301,100.00. (Doc. 1-1 at 2). The maturity
date of the loan was December 19, 2012. (Doc. 1-1 at 2). The note also provided that:
– the borrowers agreed “to pay interest on the outstanding principal balance
from December 19, 2011[,] at the rate of 5.0% per year until the [interest] rate
changes” (doc. 1-1 at 2);
– the new rate, called the “index rate” in the promissory note, would be 1.0 %
above “Lender’s prime, which is the rate used by Lender to set interest rates at
which loans are made to various customers. Loan may be made at, above[,] or
below said prime rate” (doc. 1-1 at 2);
2

The loan was actually made by First Bank of Jasper, which was formerly known as First
National Bank of Jasper, a division of Synovus. For ease of reference, the court will refer to the
bank as Synovus.
3

The note states that it “amends and restates that certain note dated 09/01/2009.” (Doc. 1-

1 at 2).
6

– the rate could change as often as “monthly,” but would change “when the
index rate changes” (doc. 1-1 at 2);
– the rate would never be below 5.0% (doc. 1-1 at 2);
– after the maturity date of the loan, the borrowers would continue to pay the
same variable rate of interest “on the unpaid balance of the note owing after
maturity, and until paid in full” (doc. 1-1 at 2);
– the borrowers would pay late fees “on the portion of any payment not made
within 10 days after it is due equal to 5% of the unpaid amount with a
minimum of $100” (doc. 1-1 at 2);
– accrued interest would be paid monthly “beginning January 19, 2012” (doc.
1-1 at 2);
– the principal would be paid back by the maturity date of December 19, 2012
(doc. 1-1 at 2);
– the borrowers agreed “to pay all costs of collection, replevin or any other
similar type of cost if [they] are in default. In addition, if [Synovus] hire[s] an
attorney to collect this note, [the Borrowers] also agree to pay any fee
[Synovus] incur[s] with such attorney plus court costs . . .” (Doc. 1-1 at 3); and
– the note was secured by a real estate mortgage “on land only located at 278
Double Springs, AL 35553 Winston Co.” (Doc. 1-1 at 2; doc. 28-1 at 6-7, 267

32).
The defendant does not dispute the fact that she entered into this agreement, nor does
she dispute the terms of same. (Doc. 27 at 4-5; doc. 30 at 2).
The most recent promissory note4 regarding loan two is also dated December
19, 2011. (Doc. 1-2 at 2). In this document, the Hyches, jointly and severally, agree
to pay to Synovus the principal amount of $200,991.06. (Doc. 1-2 at 2). The maturity
date of the loan was December 19, 2012. (Doc. 1-2 at 2). It also provided that:
– the borrowers agreed “to pay interest on the outstanding principal balance
from December 19, 2011[,] at the rate of 5.0% per year until the [interest] rate
changes” (doc. 1-2 at 2);
– the new rate, called the “index rate” in the promissory note, would be 1.0 %
above “Lender’s prime, which is the rate used by Lender to set interest rates at
which loans are made to various customers. Loan may be made at, above[,] or
below said prime rate” (doc. 1-2 at 2);
– the rate could change as often as “daily,” but would change “when the index
rate changes” (doc. 1-2 at 2);
– the rate would never be below 5.0% (doc. 1-2 at 2);

4

The note states that it “amends and restates that certain note dated 06/01/2007.” (Doc. 1-

2 at 2).
8

– after the maturity date of the loan, the borrowers would continue to pay the
same variable rate of interest “on the unpaid balance of the note owing after
maturity, and until paid in full” (doc. 1-2 at 2);
– the borrowers would pay late fees “on the portion of any payment not made
within 10 days after it is due equal to 5% of the unpaid amount with a
minimum of $100” (doc. 1-2 at 2);
– accrued interest would be paid monthly “beginning January 19, 2012” (doc.
1-2 at 2);
– the principal would be paid back by the maturity date of December 19, 2012
(doc. 1-2 at 2);
– the borrowers agreed “to pay all costs of collection, replevin or any other
similar type of cost if [they] are in default. In addition, if [Synovus] hire[s] an
attorney to collect this note, [the Borrowers] also agree to pay any fee
[Synovus] incur[s] with such attorney plus court costs . . .” (Doc. 1-2 at 3); and
– the note was secured by a “deed to secure debt dated 06/01/2007, Cullman
County, Book 1524, Page 485” (Doc. 1-2 at 2; doc. 28-1 at 7, 35-42).
The defendant does not dispute the fact that she entered into this agreement, nor does
she dispute the terms of same. (Doc. 27 at 5-6; doc. 30 at 2).
Jeffrey Spielberger is a Managed Assets Officer for Synovus Bank. (Doc. 28-1
9

at 2). In his affidavit, he states that he is “personally involved in, and responsible for,
Synovus’[s] collection activities with respect to [the loans at issue in this case].”
(Doc. 28-1 at 3). In support of the statements in his affidavit, he references records
which he states “were made at or near the time of the event recorded by a person with
knowledge of the event and charged with the responsibility of recording such events,”
and “are kept in the ordinary course of Synovus’[s] regularly conducted business
activity, which is Synovus’[s] customary practice.” (Doc. 28-1 at 2-3). Spielberger
states that the last monthly interest payment received by the plaintiff on the loans
occurred on September 21, 2012, and the loans are now in default. (Doc. 28-1 at 3,
4). Spielberger states that, as of September 17, 2013, the following amounts were due
and payable on the loans:
Loan One

$160,060.09
$12,399.64
$4,870.50

principal
accrued interest
late fees

Loan Two

$200,991.06
$10,998.67
$6,157.18

principal
accrued interest
late fees

Collection Costs: $52,194.65

attorneys’ fees and expenses

(Doc. 28-1 at 6). The defendant offers no evidence to dispute these sums, and does
not challenge the admissibility of the affidavit or the documents it references. Further,
these sums were listed as part of the Synovus’s statement of fact number 27 in
10

support of the motion for summary judgment. (Doc. 27 at 8-9). In response to this
fact, the defendant did not dispute these calculations, instead denying only “that any
amounts are owed” because Synovus did not pursue foreclosure before instituting this
action, and claiming that the value of the security for the loans “exceeds any amount
due.” (Doc. 30 at 3).5
Spielberger attaches to his affidavit what he has identified as “a true and
correct copy of a Synovus principal, interest and late fee payoff statement for [each
loan] as of September 17, 2013.” (Doc. 28-1 at 3-4; doc. 28-1 at 4). The documents
to which he refers shows that, as of September 17, 2013, outstanding principal due
on loan one was $160,060.09, with accrued interest being $12,399.64, and late
charges equaling $4,870.50. (Doc. 28-1 at 14). The documents also show that, as of
September 17, 2013, outstanding principal due on loan two was $200,991.06, with
5

The court’s summary judgment scheduling order requires that:

The first section [of the brief opposing summary judgment] must consist of only
the non-moving party’s disputes, if any, with the moving party’s claimed
undisputed facts. The non-moving party’s response to the moving party’s claimed
undisputed facts shall be in separately numbered paragraphs that coincide with
those of the moving party’s claimed undisputed facts. Any statements of fact that
are disputed by the non-moving party must be followed by a specific reference to
those portions of the evidentiary record upon which the dispute is based. All
material facts set forth in the statement required of the moving party will be
deemed to be admitted for summary judgment purposes unless controverted by the
response of the party opposing summary judgment.
(Doc. 4 at 17) (emphasis in original).
11

accrued interest being $10,998.67, and late charges equaling $6,157.18. (Doc. 28-1
at 20). He also states that “[i]nterest continues to accrue on Loan One at the rate of
$22.23 per day, and interest continues to accrue on Loan Two at the rate of $27.92
per day.” (Doc. 28-1 at 6). The defendant offers no evidence to dispute these sums,
and does not challenge the admissibility of these documents, or the statements made
therein.
Spielberger states that he has “reviewed and approved” the legal bills from
Bradley Arant Boult Cummings LLP, which he states “include the above-described
collection costs.” (Doc. 28-1 at 6). Jennifer Harris Henderson, a partner with the law
firm of Bradley Arant Boult Cummings LLP, has submitted her affidavit in which she
states that she “has firsthand knowledge of the services rendered by [the firm] on
behalf of Synovus in connection with the collection of [these loans].” (Doc. 28-2 at
3). She also states that she is “familiar with the fees being charged to Synovus . . . in
this matter,” as well as those “charged in this area in matters such as this Lawsuit.”
(Doc. 28-2 at 3). Henderson’s affidavit describes in detail the services the firm
performed on behalf of Synovus6 and then states that “the . . . described fees and
expenses billed by [the firm] as of August 30, 2013[,] for services rendered to

6

It also goes into extensive detail as to the names and qualifications of the persons who
performed those services.
12

Synovus in connection with the Loans are described on [an attachment to her
affidavit].” (Doc. 28-2 at 5). She states that these fees and expenses total $52,194.65
as of August 30, 2013. (Doc. 28-2 at 6). The attachment to which she refers sets out
the invoice numbers presented to Synovus by the firm, summarizes the amounts
appearing on the invoices presented to Synovus, and separates out the portion which
applies only to legal services provided for collecting on these loans. That amount, as
noted on the form, is $52,194.65. (Doc. 28-2 at 12). The actual invoices also appear
in the record. (Doc. 28-2 at 14-89). The affidavit of J. David Dresher, who states that
he is the “billing attorney for this matter,” certifies that these time records are
accurate, and that they were “prepared contemporaneously with the performance of
the work for which the fees are claimed.” (Doc. 28-2 at 91). The defendant offers no
evidence to dispute these sums, and does not challenge the admissibility of these
documents, or the statements made therein.
It is undisputed that the plaintiff has not foreclosed upon the security for the
loans.7
III.

ANALYSIS
A.

This Case Was Not “Removed”

7

The court has omitted several facts offered by both parties which are neither material
nor relevant to the resolution of the motion.
13

The parties do not address the purported “removal” of this case by Tarrie
Hyche to the United States Bankruptcy Court for the Northern District of Alabama.
(Doc. 9). However, so as to avoid any confusion, the court addresses the issue now.
The notice of removal cites only 28 U.S.C. § 1446(d), which concerns the
removal of an action from a state court to a district court. This section says nothing
about removal from a district court to a bankruptcy court. Additionally, though the
Notice of Removal does not invoke 28 U.S.C. § 1452, the court would reach the same
conclusion under that provision. Section 1452 states that “[a] party may remove any
claim or cause of action in a civil action [which is related to a bankruptcy case] . . .
to the district court for the district where such civil action is pending, if such district
court has jurisdiction of such claim or cause of action under section 1334 of this
title.” 28 U.S.C. § 1452 (emphasis added). Section 1334 confers original and
exclusive jurisdiction of all cases under title 11 on “the district courts.” 28 U.S.C. §
1334. Similar to § 1446, §§ 1452 and 1334 say nothing about removing a claim from
a district court to a bankruptcy court. Though the Eleventh Circuit has not spoken to
this issue, several other district courts have held that § 1452 does not permit removal
from a district court to a bankruptcy court. See, e.g., Doyle v. Mellon Bank, N.A., 307
B.R. 462, 464 (E.D. Pa. 2004); Centrust Sav. Bank v. Love, 131 B.R. 64, 65 (S.D. Tex
1991). And, as the Bankruptcy Court for the Middle District of Florida put it:
14

“[b]ecause [this cause of action] was already pending in this district, the reported
cases make plain that the debtor/defendant may not remove it to this district pursuant
to the provisions of 28 U.S.C. § 1452.” In re The Acad., Inc., 288 B.R. 286, 290
(Bankr. M.D. Fla. 2002). The court agrees with these cases and holds that the Notice
of Removal (Doc. 9) is without effect.
B.

The Plaintiff Is Entitled to Summary Judgment on the Defendant’s
Counterclaims

The plaintiff moves for summary judgment as to the counterclaims. (Doc. 27
at 19-26). Because the defendant has not argued these claims in her response to the
motion, they have been abandoned, and summary judgment is appropriate. See,
Ekokotu v. Fed. Exp. Corp., 523 F. App’x 629, 632 (11th Cir. 2013)8 (citing
Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 599 (11th Cir.1995));
McIntyre v. Eckerd Corp., 251 F. App'x 621, 626 (11th Cir. 2007); Case v. Eslinger,
555 F.3d 1317, 1329 (11th Cir. 2009) (“When a party moves for final, not partial,
summary judgment, we have stated that ‘it [becomes] incumbent upon the
[nonmovant] to respond by, at the very least, raising in their opposition papers any
and all arguments or defenses they felt precluded judgment in [the moving party's]

8

“Unpublished opinions are not considered binding precedent, but they may be cited as
persuasive authority.” 11th Cir. Rule 36-2.
15

favor.’”).9
C.

The Plaintiff Is Entitled to Summary Judgment on Its Claims in the
Complaint
1.

The Plaintiff Does Not Have To Foreclose Before It Seeks
and/or Receives a Money Judgment

The defendant argues:
On June 23, 2013, Synovus affirmatively demanded the right to
foreclose on the property mortgaged for the Notes when it filed its
Motion to Stay in the Tarrie Hyche bankruptcy proceeding. Synovus
demanded in its Motion that the automatic stay imposed by the
bankruptcy court be lifted so Synovus could “exercise its rights against”
the mortgaged property securing the Notes, including, specifically, a
non-judicial foreclosure. (Synovus Foreclosure Motion at ¶1). By
insisting upon its right of foreclosure, Synovus effectively made its
choice with respect to Hilda [Hyche]; that being, rather than pursue
monetary damages against Hilda [Hyche], Synovus chose instead to
insist upon and demand its right to non-judicial foreclosure. That choice
cannot be undone at this point, and Synovus is left with the sole remedy
of foreclosing on the property mortgaged for the Notes unless the fair
market value of those properties is less than the amount owed (it is not).
(Doc. 30 at 7-8). The defendant cites no caselaw or other support for this position. It

9

The counterclaim is mentioned only once in the defendant’s response, and then only in
response to the plaintiff’s motion for summary judgment on the plaintiff’s claims. In arguing that
Synovus must foreclose before filing suit, the defendant states only: “in her counterclaim against
Synovus, Hilda [Hyche] alleged that Synovus breached its duty owed to Hilda [Hyche] by failing
to recoup its damages through judicial foreclosure on the subject property.” (Doc. 30 at 16). The
court does not see this one sentence as a defense to the counterclaim itself. However, to the
extent that it may be so construed, the statement makes clear that the counterclaims are based on
the failure to foreclose before filing suit. Summary judgment on the counterclaims is therefore
also appropriate because, as shown below, Synovus was under no duty to foreclose prior to filing
suit.
16

is without merit. See, Triple J Cattle, Inc. v. Chambers, 551 So. 2d 280, 282 (Ala.
1989) (““[a]bsent an agreement to the contrary, a secured lender may proceed on all
of its remedies simultaneously or elect to pursue these remedies at different times.”);
Whitney Bank v. Point Clear Dev., LLC, CIV.A. 11-0657-WS-M, 2012 WL 2277597
at *5 (S.D. Ala. June 18, 2012) (Steele, J.) (“Alabama courts have expressly declined
to impose any such mandatory duty of foreclosure in the mortgage context.”).
2.

The Breach of Promissory Note Claims (Counts I and II)
a.

The Plaintiff Is Entitled to Summary Judgment on the
Elements of the Claim

A breach of promissory note claim is merely a type of breach of contract claim.
See, PNC Bank, N.A. v. S. Home Builders, LLC, 5:13-CV-000961-KOB, 2013 WL
5524108 at *4 (N.D. Ala. Oct. 2, 2013) (Bowdre, J.); Branch Banking & Trust Co.
v. R & T Rentals, L.L.C., CIV.A. 10-0518-KD-N, 2012 WL 2872447 at *3 (S.D. Ala.
July 12, 2012) (DuBose, J.). “In order to establish a breach-of-contract claim, a
plaintiff must show (1) the existence of a valid contract binding the parties in the
action, (2) his own performance under the contract, (3) the defendant's
nonperformance, and (4) damages.” City of Gadsden v. Harbin, 1120537, 2013 WL
6516387 at *6 (Ala. Dec. 13, 2013) (citations omitted). In this case, as shown in the
statement of facts set out above, there is no genuine issue of material fact that all of

17

these elements are present.
Instead of addressing these elements, the defendant seems to be arguing that
summary judgment cannot be entered against her until the fair market value of the
mortgaged property is determined. (Doc. 30 at 8-13). The court, and the plaintiff, both
agree that she is entitled to a credit for the amount for which the property may be sold
at foreclosure, after it is sold. (Doc. 32 at 5, n. 6). However, while the defendant
argues that the fair market value of the property is “a question of fact that is not
proper for summary judgment” (doc. 30 at 8), she does not explain why a judgment
for the amount owed on the loan cannot be entered prior to a determination as to the
fair market value of the property, or its sale. As stated by the Alabama Supreme
Court:
The right of action is collateral to the debt, and as security for it. The
mortgagee may pursue any course he pleases to collect the debt, whether
it be a suit for a personal judgment against the debtor, or for damages
against one who has wrongfully converted the mortgaged property, or
otherwise destroyed his rights in it, or for a foreclosure. And he may do
them all at the same time. But when he once collects his debt, by any
one of those proceedings, or by a voluntary payment of it, he cannot
pursue any other remedy. They are all but means to accomplish one
purpose, and when that is accomplished, all the remedies, not used in so
doing, are terminated.
Sloss-Sheffield Steel & Iron Co. v. Wilkes, 231 Ala. 511, 515-16, 165 So. 764, 767
(1936) overruled on other grounds by Henderson v. Wade Sand & Gravel Co., Inc.,

18

388 So. 2d 900 (Ala. 1980).
The defendant also seems to argue that a judgment cannot be entered because,
under theories of recoupment or setoff, she must receive a credit for the value of the
mortgaged property. (Doc. 30 at 13-17). This argument is also without merit.
“Recoupment . . . is a reduction or rebate by the defendant of part of the plaintiff's
claim because of a right in the defendant arising out of the same transaction.” Finish
Line v. J.F. Pate & Associates Contractors, Inc., 90 So. 3d 749, 754 (Ala. Civ. App.
2012) (internal citations and emphasis omitted). This defense “authorizes the recovery
of any damages sustained by the defendant, which grow out of, or are connected with,
the matters set forth in the plaintiff’s complaint, and in breach of the contract upon
which his suit is founded, or in violation of any duty imposed by the contract.” Ewing
v. Shaw, 83 Ala. 333, 335, 3 So. 692, 693 (1888). The defendant seems to argue that
she is entitled to “recoupment” of the value of the property because Synovus failed
to foreclose. (Doc. 30 at 16-17). However, the plaintiff breached no terms of the notes
by failing to foreclose. Indeed, the notes specifically state that the plaintiff is entitled
to “use any remedy [it] has under state or federal law,” and can elect any remedy
available to it without waiver of any other remedy. (Doc. 1-1 at 3; doc. 1-2 at 3). This
lawsuit is one of its remedies under Alabama law. The defendant is not entitled to
“recoup” the value of the property.
19

The concept of “setoff” involves “mutual debts arising from unrelated
transactions.” Finish Line v. J.F. Pate & Associates Contractors, Inc., 90 So. 3d 749,
754 (Ala. Civ. App. 2012) (internal citations and emphasis omitted). As the mortgage
and note are not “unrelated,” there can be no “setoff.” Further, because there is no
duty to foreclose, the defendant’s argument that she is entitled to a “setoff” because,
in failing to foreclose, the plaintiff “has failed to act in a commercially reasonable
manner in relation to the collateral,” (doc. 30 at 14) is without merit.
The defendant also seems to argue that, in asking the bankruptcy court to lift
the stay so that it could foreclose, the plaintiff somehow is forced to foreclose before
filing suit. (Doc. 30 at 14-15). She cites no authority for this proposition and the court
is aware of none. This argument is without merit.
The court notes that the defendant argues:
Hilda [Hyche] does not dispute that the existence of a legal duty
is a question of law as cited in Plaintiff’s brief citing State Farm Fire
and Cas. Co. v. Owen, 729 So. 2d 834, 839 (Ala. 1998). However, to the
extent it is Synovus’[s] position that State Farm Fire & Cas. Co. v.
Owen, 729 So. 2d 834 (Ala. 1998) bars Hilda’s affirmative defense that
Synovus was obligated and under a duty to foreclose on the subject
property before attempting to recoup the balance of the note from Hilda;
Hilda disagrees. This disagreement stems from the principles the
Alabama Supreme Court applies when determining the existence of a
legal duty. In Waldrup v. Allstate Insurance Co., 2011 WL 2039584
(S.D. Ala. May 9, 2011), the District Court explained these principles as
follows: “[T]he Supreme Court in Owen, before reaching the
determination that plaintiff had not produced “sufficient evidence to
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support a finding of ‘special circumstances' justifying imposition of a
duty to disclose[,]” discussed a litany of factors developed through
discovery. Compare id. at 843 with id. at 842–843 (“In evaluating the
question whether State Farm had a duty to speak, we must consider a
number of factors: (1) the relationship of the parties; (2) the relative
knowledge of the parties; (3) the value of the particular fact; (4) the
plaintiff's opportunity to ascertain the fact; (5) the customs of the trade;
and (6) other relevant circumstances.”).
Here, in her counterclaim against Synovus, Hilda alleged that
Synovus breached its duty owed to Hilda by failing to recoup its
damages through judicial foreclosure on the subject property. In addition
to the note itself, Synovus cannot simply ignore the factors discussed in
Owen that created Synovus’[s] duty to obtain an appraisal and foreclose
on the property. Synovus’[s] duty meets all six facts to create a duty
discussed in Owen and, thus, is obligated to foreclose on the mortgaged
property and credit the value of that property against any debt owed,
which, in this case, means no amounts are ultimately owed by Hilda.
(Doc. 30 at 15-16). This argument is difficult to follow. To the extent that the
defendant is arguing that her “defense” of failure to disclose is not barred, the court
assumes that she is correct. To the extent that she is arguing that the Owen case
somehow creates a duty on the part of the plaintiff to foreclose, she is not correct. The
court can discern no other point that these paragraphs attempt to make.
b.

The Plaintiff Is Entitled to Summary Judgment as to
the Amount of Damages through September 17, 2013

There is no genuine issue of material fact that, as of September 17, 2013, the
amount of damages, was $447,671.79 which is comprised of:

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Loan One

$160,060.09
$12,399.64
$4,870.50

principal
accrued interest
late fees

Loan Two

$200,991.06
$10,998.67
$6,157.18

principal
accrued interest
late fees

Collection Costs: $52,194.65
c.

attorneys’ fees and expenses

A Fact Question Remains as to the Total Amount of
Damages

A fact question remains as to the total amount of damages from September 18,
2013, through the date of trial.
3.

The Unjust Enrichment Claim (Count IV)

The plaintiff agrees that “[i]f the Court determines that summary judgment is
appropriate on Counts I and II of the Complaint, then dismissal of Synovus’[s]
Count[] IV . . . is also warranted, as [that] Count[] present[s] [a] claim[] for unjust
enrichment which [is] pled in the alternative to Counts I and II.” (Doc. 27 at 15, n. 3).
Accordingly, summary judgment will be denied as to Count IV, and that claim will
be dismissed with prejudice.
IV.

CONCLUSION
Based on the foregoing, it is hereby ORDERED, ADJUDGED, and

DECREED as follows:

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1.

As to Counts I and II (breach of promissory note), the court expressly
determines that there is no genuine issue of material fact that there were
two contracts, that the plaintiff performed under the contracts, that the
defendant did not perform, and that the plaintiff was damaged because
of the defendant’s non-performance. The plaintiff’s motion for summary
judgment is GRANTED on those issues.

2.

As to Counts I and II, the court also expressly determines that there is
no genuine issue of material fact that, as of September 17, 2013, the
plaintiff had incurred damages in the amount of $447,671.79. Summary
judgment is hereby GRANTED on that issue.

3.

There remains a genuine issue of material fact as to the exact amount of
damages after September 17, 2013, through the date of judgment. The
plaintiff’s motion is DENIED as to those issues, and the case will
proceed to trial on those issues alone.

4.

Summary judgment is GRANTED in favor of the plaintiff and against
the defendant as to all counterclaims. All counterclaims are hereby
DISMISSED with prejudice.

5.

Summary judgment is DENIED as to Count IV (unjust enrichment), and
that claim is DISMISSED with prejudice.
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6.

An order will follow setting this case for a final pre-trial conference.

DONE and ORDERED this 9th day of July, 2014.

VIRGINIA EMERSON HOPKINS
United States District Judge

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