Whitney Bank v. Marr

Filing 27

ORDER granting in part and denying in part 10 Motion for Summary Judgment; finding as moot 14 Motion for Extension of Time. Signed by Senior Judge Charles R. Butler, Jr on 3/12/2012. (adk)

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
WHITNEY BANK,

)
Plaintiff,

)

v.

)

THOMAS M. MARR, JR.

)
Defendant.

CIVIL ACTION NO. 11-00534-CB-M

)

ORDER
One day after the Defendant filed an answer, the Plaintiff filed a motion for summary
judgment. (Doc. 10.) In response to the summary judgment motion, Defendant filed a motion to
defer ruling or to extend time to respond until discovery is complete. (Doc. 14.) In support,
Defendant’s counsel filed an affidavit explaining the need for discovery on damages-related
issues.1 Thereafter, Plaintiff filed a “Motion to Bifurcate” which is actually a request that the
Court enter partial summary judgment on the issue of liability. (Doc. 15.) Because Defendant’s
response contests only the amount of damages and Plaintiff does not contest the need for
discovery on that issue, the Court hereby grants summary judgment, insofar as liability is
concerned and denies summary judgment at this time on the issue of damages.

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Thus, the Defendant has satisfied the Court that he cannot at this time “present facts essential to justify
[his] opposition.” Fed. R. Civ. P. 56(d). This is an action on several promissory notes secured by mortgages on real
property. Plaintiff foreclosed and sold the properties in foreclosure. Defendant contends that the foreclosure price
was so low as to “shock the conscience” of the court and seeks discovery to support his contention.

Findings of Fact
The Parties
The plaintiff, Whitney Bank, is a Louisiana banking organization with its principal place
of business in Louisiana. The defendant, Thomas M. Marr, Jr., is a citizen of Alabama and
resides in Baldwin County, Alabama. From 2004 through 2007, Whitney Bank and Marr entered
into a series of loan transactions secured by real property located in Baldwin County. Marr has
defaulted on each of those loans.
Loan No. 1
On or about October 28, 2004, Defendant Thomas Marr executed a promissory note
in the amount of $270,000.00 in favor of Whitney Bank (hereinafter “Loan No. 1”). This
promissory note was secured by a mortgage Defendant executed in favor of Whitney on October
28, 2004, granting Whitney a security interest in real property located at Unit W-404 of the
Dunes Condominium in Baldwin County, Alabama. At some point, Defendant defaulted on
Loan No. 1, and Plaintiff accelerated the indebtedness as permitted by the terms of the note. In
the event of default, the agreement gives Plaintiff the right to collect attorney’s fees and costs in
addition to principal and interest. The mortgage for Loan No. 1 contains a “Power of Sale”
provision allowing for nonjudicial foreclosure of the collateral. On May 9, 2011, Plaintiff
conducted a foreclosure sale on the subject real property located in Baldwin County, Alabama.
Plaintiff was the successful purchaser of the property at this foreclosure sale. After the sale, a
deficiency balance remained.

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Loan No. 2
On or about May 4, 2005, Defendant executed a commercial note in the amount of
$669,000.00 in favor of Whitney (hereinafter “Loan No. 2”). This commercial note was secured
by a mortgage Defendant executed in favor of Whitney on May 4, 2005, granting Whitney a
security interest in the following real property: (1) 40 +/- acres located on County Road 49 in
Baldwin County, Alabama (“Parcels A and B”); (2) 17598 Scenic 98 in Baldwin County,
Alabama (“Parcel C”); and (3) 9170 Clubhouse Drive/Lot 170-B located in Baldwin County,
Alabama (“Parcel D”). Loan No. 2 was subsequently cross-collateralized by a mortgage
executed by Defendant in favor of Whitney, granting Whitney a security interest in real property
located at Lot 55, Island Wood in Baldwin County, Alabama. Defendant defaulted on Loan No.
2, and Plaintiff accelerated the indebtedness as permitted under the terms of the agreement. In
the event of default, the agreement gives Plaintiff the right to collect attorney’s fees and costs in
addition to principal and interest. The mortgages for Loan No. 2 contain “Power of Sale”
provisions allowing for nonjudicial foreclosure of the collateral. On May 9, 2011, Plaintiff
conducted a foreclosure sale on the following real property: (1) 17598 Scenic 98 in Baldwin
County, Alabama (“Parcel C”); (2) 9170 Clubhouse Drive/Lot 170-B located in Baldwin County,
Alabama (“Parcel D”); and (3) Lot 55, Islandwood. Plaintiff was the successful purchaser of the
property at this foreclosure sale. After the sale, a deficiency balance remained.
Loan No. 3
On or about January 23, 2006, Defendant executed a promissory note in the amount of
$750,000.00 in favor of Whitney (hereinafter “Loan No. 3”). This promissory note was secured
by a mortgage Defendant executed in favor of Whitney on January 23, 2006, granting Whitney a
security interest in real property located at 9889 Wilson Road in Baldwin County, Alabama.

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Defendant defaulted on Loan No. 3, and Plaintiff accelerated the indebtedness as permitted under
the terms of the agreement. In the event of default, the agreement gives Plaintiff the right to
collect attorney’s fees and costs in addition to principal and interest. The mortgage for Loan
No. 3 contains a “Power of Sale” provision allowing for nonjudicial foreclosure of the collateral.
On July 11, 2011, Plaintiff conducted a foreclosure sale on the subject real property located in
Baldwin County, Alabama. Plaintiff was the successful purchaser of the property at this
foreclosure sale. After the sale, a deficiency balance remained.
Loan No. 4
On or about March 29, 2007, Defendant executed a promissory note in the amount of
$131,7000.00 in favor of Whitney (hereinafter “Loan No. 4”). The promissory note for Loan
No. 4 was secured by a mortgage Defendant executed in favor of Whitney on March 29, 2007,
granting Whitney a security interest in real property located at 17359 Wildwood Court in
Baldwin County, Alabama. Defendant defaulted on Loan No. 4. Plaintiff accelerated the
indebtedness as permitted under the terms of the agreement. In the event of default, the
agreement gives Plaintiff the right to collect attorney’s fees and costs in addition to principal and
interest. An outstanding balance remains consisting of principal balance in the amount of
$94,745.78, plus prejudgment interest at the rate of $19.73 per diem.2
Lawsuit Filed
Plaintiff filed this lawsuit on September 21, 2011 invoking the Court’s diversity
jurisdiction. Although not explicitly stated in the complaint, Plaintiff seeks to recover for breach
of contract.

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Plaintiff has failed to prove the date of the default. Unless that date is proved by
affirmative evidence, the Court cannot award prejudgment interest.

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Conclusion of Law
Summary Judgment Standard
Summary judgment should be granted only if "there is no issue as to any material fact
and the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The
party seeking summary judgment bears "the initial burden to show the district court, by reference
to materials on file, that there are no genuine issues of material fact that should be decided at
trial." Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). Once the moving party
has satisfied his responsibility, the burden shifts to the nonmoving party to show the existence of
a genuine issue of material fact. Id.
Where the moving party also has the burden of proof at trial,
that party must show affirmatively the absence of a genuine issue of material fact:
it must support its motion with credible evidence ... that would entitle it to a
directed verdict if not controverted at trial. In other words, the moving party must
show that, on all the essential elements of its case on which it bears the burden of
proof at trial, no reasonable jury could find for the non-moving party. If the
moving party makes such an affirmative showing, it is entitled to summary
judgment unless the non-moving party, in response, come[s] forward with
significant, probative evidence demonstrating the existence of a triable issue of
fact.
United States v. Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 1991) (citations
and internal quotation marks omitted). Consequently, Plaintiff has the burden of affirmatively
proving Defendant’s liability on each of the breach of contract claims.
Breach of Contract
To prevail on a breach of contract claim based on a promissory note, a plaintiff’s burden
is quite simple. Plaintiff must prove the existence of the note, the amount due, and lack of
payment. See Griffin v. American Bank, 628 So. 2d 540, 543 (Ala. 1993). In its summary
judgment motion and supporting evidence, Plaintiff has proved the existence of each of the four
promissory notes and has also proved the Defendant’s failure to pay. Thus, Defendant is
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undisputedly liable for breach of contract, and the only issue remaining is the amount of
damages.
Conclusion
Plaintiff’s motion for summary judgment is GRANTED, in part, on the issue of liability
and DENIED, in part, on the issue of damages. The denial is without prejudice to Plaintiff’s
right to reassert the motion, with supporting evidence, after the conclusion of discovery.
Defendant’s motion to defer ruling or to extend time to respond is moot.
DONE and ORDERED this the 12th day of March, 2012.

s/Charles R. Butler, Jr.
Senior United States District Judge

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