Vision Bank v. Kaiser

Filing 35

Order granting 25 MOTION for Summary Judgment filed by Vision Bank. The plaintiff is entitled to judgment in the amount of $480,587.33 plus per diem interest of $189.20 beginning October 2, 2010. Plaintiff is ordered by by 6/1/2011 to fi le materials to support its claim for fees & related nontaxable expenses. Defendant's response is due by 6/8/2011. The parties are ordered by 6/8/2011 to file a joint report regarding Count Two as set out. Signed by Chief Judge William H. Steele on 5/26/2011. (tgw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
VISION BANK,
Plaintiff,
v.
ANTHONY P. KAISER,
Defendant.

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) CIVIL ACTION 10-0392-WS-C
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ORDER

This matter is before the Court on the plaintiff’s motion for partial summary
judgment. (Doc. 25). The parties have filed briefs and evidentiary materials in support
of their respective positions. (Docs. 26, 27, 29, 30). The defendant obtained a generous
extension of time in which to develop evidence and argument to counter the motion,
(Doc. 34), which he ultimately declined to offer, and the motion is ripe for resolution.
According to the amended complaint, the defendant is in default on four
promissory notes executed in favor of the plaintiff, although the plaintiff acknowledges
that one note has since been paid off. Count One seeks recovery on the notes, and Count
Two seeks an accounting and/or inspection. (Doc. 8). The plaintiff’s motion extends
only to Count One, and only as to the three notes still outstanding.
The following facts are uncontroverted: (1) the defendant executed three
promissory notes (Notes 2, 3 and 4) in favor of the plaintiff; (2) pursuant to the notes, the
plaintiff loaned the defendant the principal amounts of $174,440.00; $203,628.22; and
$111,100.00, respectively; (3) the plaintiff is in default of payment under each of these
notes; and (4) the amount due under the notes (including principal, interest and late
charges) as of October 1, 2010 is $211,449.95; $250,850.64; and $18,286.74,
respectively. Interest accrues on Note 2 at $87.24 per diem and on Note 3 at $101.96 per
diem. (Doc. 26, Exhibit A at 2-4 & Exhibits 2-4).
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“The elements of a breach-of-contract claim under Alabama law are (1) a valid
contract binding the parties; (2) the plaintiff=s performance under the contract; (3) the
defendant’s nonperformance; and (4) resulting damages.” Shaffer v. Regions Financial
Corp., 29 So. 3d 872, 880 (Ala. 2009) (internal quotes omitted). The uncontroverted
evidence shows the existence of three contracts between the parties; the plaintiff’s
performance under the contracts by lending the defendant certain sums; the defendant’s
non-performance by failing to repay the borrowed sums and other amounts within the
time and other terms set forth in the contracts; and the plaintiff’s resulting damage from
the defendant’s non-payment. The defendant challenges none of these points.
The defendant’s only response to the plaintiff’s showing is his assertion that the
parties entered a forbearance agreement which either prevented a default by non-payment
from occurring or precluded the plaintiff from suing over the default. The defendant
testifies by affidavit that, in June 2010, he tendered, and the plaintiff accepted, a $5,000
payment in consideration of such a forbearance agreement. It is unclear whether the
defendant asserts that a forbearance agreement entered in September 2009 (and which
had expired by its own terms in February 2010) was thereby extended or that a new
forbearance agreement was created, but the result is the same under either theory.
Alabama’s statute of frauds renders “void” any “agreement or commitment to lend
money, delay or forbear repayment thereof or to modify the provisions of such an
agreement or commitment” unless (a) only a consumer loan with a principal amount
under $25,000 is involved or (b) “such agreement or some note or memorandum thereof
expressing the consideration is in writing and subscribed by the party to be charged
therewith or some other person by him thereunto lawfully authorized in writing.” Ala.
Code § 8-9-2(7). The defendant alleges an agreement to forbear repayment of the loaned
money or to modify the previous agreement to forbear repayment of the loaned money.
The subject matter is not a consumer loan under $25,000, so the defendant must satisfy
the statute of frauds. E.g., DeVenney v. Hill, 918 So. 2d 106, 115-16 (Ala. 2005).
The only document the defendant offers is a copy of two e-mails he sent to a
representative of the plaintiff. (Doc. 29, Kaiser Affidavit, Exhibit B). It is not clear from
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them that there was even an oral agreement to forbear, but the e-mails are not “subscribed
by the party to be charged” (the plaintiff or its authorized representative) and so are
inadequate as a matter of law to satisfy the statute of frauds. The alleged forbearance
agreement is therefore void.
For the reasons set forth above, the plaintiff’s motion for partial summary
judgment is granted. The plaintiff is entitled to judgment in the amount of $480,587.33
plus per diem interest of $189.20 beginning October 2, 2010. At the appropriate time,
judgment shall be entered accordingly by separate order.
The notes provide for payment of attorney’s fees and related costs. The plaintiff
does not seek summary judgment as to these amounts but requests the Court to enter
judgment under Rule 54(b) and resolve attorney’s fees issues later. (Doc. 26 at 4). The
Court declines to do so.
Rule 54(d) allows a claim for attorney’s fees and related nontaxable expenses to
be made by post-judgment motion “unless the substantive law requires those fees to be
proved at trial as an element of damages.” Fed. R. Civ. P. 54(d)(2)(A). “As noted in
subparagraph (A), [Rule 54(d)(2)] does not … apply to fees recoverable as an element of
damages, as when sought under the terms of a contract ….” Id. 1993 advisory committee
notes; see also Brandon, Jones, Sandall, Zeide, Kohn, Chalal & Musso, P.A. v.
MedPartners, Inc., 312 F.3d 1349, 1355 (11th Cir. 2002) (“In this Circuit, a request for
attorneys’ fees pursuant to a contractual clause is considered a substantive issue ….”);
Ierna v. Arthur Murray International, Inc., 833 F.2d 1472, 1476 (11th Cir. 1987) (“When
the parties contractually provide for attorneys’ fees, the award is an integral part of the
merits of the case.”). Accordingly, the Court will not enter any judgment in this case
before attorney’s fees and related costs are decided.
The plaintiff is ordered to file and serve, on or before June 1, 2011, whatever
materials it deems necessary and appropriate to support its claim for fees and related
nontaxable expenses. The defendant is ordered to file and serve any response on or
before June 8, 2011. The Court will take the issue of such fees and expenses under
submission on June 8, 2011.
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The plaintiff has not sought summary judgment with respect to Count Two, its
demand for an accounting and/or inspection. The parties are ordered to confer in good
faith and to submit a joint report to the Court, on or before June 8, 2011, as to whether
such relief is still desired, whether it is due to be granted and, if so, on what terms and
shall submit, if possible, a jointly proposed order concerning the resolution of Count
Two.
DONE and ORDERED this 26th day of May, 2011.

/s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE

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