PNC Bank, National Association v. Mobile Sheet Metal Co., Inc. et al

Filing 25

Order re: 14 MOTION for Judgment on the Pleadings filed by PNC Bank, National Association is GRANTED as to liability only. PNC Bank is entitled to recover from Mobile Sheet Metal the outstanding principal, late charges, accrued unpaid interest, and attorney fees, as set forth under the terms of the promissory note, which calculations, previously provided to the court, are to be supplemented by PNC Bank and filed in the form of a proposed order of final judgment, no later than Aug ust 12, 2014; Any objections are due 14 days after proposed final judgment is filed at which time court will take the proposed order of final judgment under submission; ( Responses due by 8/12/2014, Replies due by 8/26/2014., Motion to be taken under submission on 8/26/2014.). Signed by Magistrate Judge Sonja F. Bivins on 8/5/2014. (mjn)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
PNC BANK, NATIONAL,
ASSOCIATION, et al.,

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Plaintiff,
vs.
MOBILE SHEET METAL CO.,
et al.,
Defendants.

CIVIL ACTION NO. 14-00153-B

ORDER
This action is before the Court on Plaintiffs’ Motion
for Judgment on the Pleadings. (Doc. 14).

The motion has

been briefed and is now ripe for resolution.
I.

Background

Plaintiffs PNC Bank, National Association (“PNC Bank”)
and

its

Bank”)

predecessors

made

loans

to

(collectively

referenced

Mobile

Metal

(“Mobile Sheet Metal”).

Sheet

as

“PNC

Company,

Inc.

(Doc. 1 at 3; Doc. 1-3).

On

December 2, 2010, the outstanding loans were consolidated,
and

Mobile

Sheet

Metal

executed

a

promissory

note

evidencing its indebtedness to PNC Bank for $387,094.68.
(Doc. 1-3 at 2).

Individual Defendants David B. Brown and

Linda

executed

J.

Brown

guaranty

agreements

for

the

consolidated loan, and in addition, the loan was secured by
two mortgages that have been recorded in Mobile County.

(Docs. 1-4, 1-5, 1-8, 1-11).
consolidated

loan

is

in

PNC Bank claims that the

default

and

guaranties have not been satisfied.

that

the

personal

(Doc. 1 at 4).

PNC

Bank also asserts that as of April 1, 2014, the sum owed
was $371,282.67, which consisted of principal in the amount
of

$325,954.63,

accrued

interest

in

the

amount

of

$24,291.81 and late charges in the amount of $21,036.23.
(Doc. 1 at 6, Doc. 19).

According to PNC Bank, interest

accrues at the rate of $65.64 from April 1, 2014 through
the

present,

authorized

and

by

that

the

interest

promissory

and

late

notes,

charges

with

are

interest

increasing from 7.45% to 18% after default. (Docs 1 at 6,
Doc. 19 at 2).
Defendants filed an answer, wherein they admitted the
truth

of

“all

material

Plaintiffs’ complaint.
Plaintiffs’
individual
thus,

this

Motion

case

(Doc. 11).

for

Defendants
has

individual Defendants.

allegations”

Judgment

filed
been

a

in

Following the filing of
on

the

Suggestion

stayed

contained

with

(Docs. 16, 18).

Pleadings,
of

the

Bankruptcy;

respect

to

the

Mobile Sheet Metal

filed a response to the motion and admitted that PNC Bank
is entitled to judgment against Mobile Sheet Metal in the
amount of $325, 954.63, plus reasonable interest, and that
PNC Bank is entitled to the security

2

pledged by Mobile

Sheet

Metal,

Baptist

namely

Church

property

Subdivision,

located
Mobile

at

Lot

County.

2,

Central

(Doc.

17).

Mobile Sheet Metal also contends that it should receive
credit for the value of the property that was pledged as
collateral.

Mobile

Sheet

Metal

also

disputes

PNC’s

assertion that it is entitled to the sum of $21,036.23 as
late charges and to accrued interest through May 12, 2014
in the sum of $26,983.05.

(Id.)

II. Analysis
After the pleadings are closed, but early enough not
to

delay

trial,

pleadings.

a

FED.

party

R.

may

CIV.

move

P.

for

on

the

“Judgment

12(c).

judgment

on

the

pleadings is appropriate when there are no material facts
in dispute, and judgment may be rendered by considering the
substance
facts.”
1367,

of

pleadings

and

any

judicially

noticed

See Hawthorne v. Mac Adjustment, Inc., 140 F.3d

1370

allegations
construed
party.

the

in

(11th
in

Cir.

the

the

1998).

complaint

light

most

Under
are

Rule

accepted

favorable

to

12(c),
as

the

true

all
and

nonmoving

Crumpton v. Stephens (In re Northlake Foods, Inc.),

715 F. 3d 1251, 1255 (llth Cir. 2013).
The

undersigned

finds

as

a

threshold

matter,

that

Mobile Sheet Metal has waived any argument regarding the
compilation of late charges or accrued interest because in

3

its

answer,

allegations”
Admissions
binding

on

it

expressly

contained

in

an

the

in

answer

party

who

admitted

the

are

“the

complaint.

deemed

makes

material
(Doc.

judicial

them.

11).

admissions,

See

Best

Canvas

Prods. & Supplies, Inc. v. Ploof Truck Lines, Inc., 713 F.
2d 618, 621 (llth Cir. 1983) ("[A] party is bound by the
admissions in his pleadings."); see also Shuler v. Ingram &
Assocs., 441 Fed. Appx. 712, 719 (llth Cir. 2011)(a party
is

bound

admissions
probative

by

the

are

admissions

proof

value.).

in

possessing

Further,

his

pleading

the

aside

highest

from

its

and

such

possible
conclusory

assertion in its response denying the appropriateness of
PNC Bank’s claimed late fees and interest, Mobile Sheet
Metal has set forth no grounds for contesting the late fees
or interest.

Moreover, the promissory note (attached to

PNC Bank’s complaint) clearly provides that if a payment is
10 days or more late, Mobile Sheet Metal will be charged
5.00% of the unpaid portion of the regular payment, and
that upon default, the interest rate increases from 7.25%
to 18% per annum unless prohibited by law 1 .

1

(Doc. 1-3 at

The Alabama legislature has expressly clarified that there
is no maximum rate of interest for loan transactions whose
original principal balance exceeds $2000. See Ala. Code §
8-8-5(a)(“Any person or persons [or] corporations. . . may
agree to pay such rate or rates of interest for the loan. .
. of money. . . as such person [or] corporation. . . may
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2). Accordingly, Mobile Sheet Metal’s assertion regarding
the late fee and interest are without merit.
Turning next to Mobile Sheet Metal’s argument that PNC
Bank is required to foreclose on the collateral first and
credit it with the amount obtained for such collateral,
this

argument

jurisdiction.

has

been

flatly

rejected

in

this

See Whitney Bank v. Point Clear Dev., LLC,

2012 U.S. Dist. LEXIS 83869, *19, 2012 WL 2277597, *5 (S.D.
Ala. June 18, 2012)(Steele, C.J.).

In Whitney Bank, the

Court observed:
[C]ompelling a lender to foreclose on collateral
instead of suing to recover unpaid debts (in the
absence of any contract provision imposing such
a condition precedent) would stretch the concept
of mitigation beyond all reasonable boundaries.
See, e.g., SE Property Holdings, LLC v. Foley,
2012 U.S. Dist. LEXIS 55853, 2012 WL 1382523, *4
(S.D. Ala. Apr. 20, 2012) (rejecting argument
that lender had a duty to mitigate damages by
foreclosing on property rather than allowing
interest to accrue at default rate); REL
Development, Inc. v. Branch Banking & Trust Co.,
305 Ga. App. 429, 699 S.E.2d 779, 781-82 (Ga.
App. 2010) (where contract provisions give
lender the right to choose between foreclosure
and filing suit, “the bank was under no duty to
appellant to proceed against the collateral to
collect payment,” such that “the bank had no
obligation to mitigate its damages in relation
to the collateral”); Fifth Third Bank v.
Canvasser, 2011 Mich. App. LEXIS 1054, 2011 WL
2347707, *2 (Mich. App. June 14, 2011) (finding
determine, notwithstanding any law of this state otherwise
prescribing or limiting such rate or rates of interest;
provided that the original principal balance of the loan. .
. is not less than $2000”).
5

no
merit
to
defendants’
contention
that
plaintiff lender breached duty to mitigate by
suing instead of foreclosing on collateral,
reasoning that “plaintiff suffered damages as
soon as the promissory notes were defaulted on;
foreclosure is merely one possible remedy, and
under the contracts, plaintiff had its choice of
remedies.
Electing one rather than another
does not per se constitute a failure to
mitigate.”).
Besides, Alabama courts have
expressly declined to impose any such mandatory
duty of foreclosure in the mortgage context.
See Triple J Cattle, Inc. v. Chambers, 551 So.
2d 280, 282 (Ala. 1989) (“Upon a default by the
mortgagor, the mortgagee has three remedies, and
he may pursue any one or all of them until the
debt is satisfied....
He is not required to
foreclose the mortgage first, but may bring his
action on the note alone.”).
Id.

at

5.

setoff

is

interest

Mobile
thus

rate

Sheet

without
on

Metal’s
merit.

default

assertion

regarding

Accordingly,

specified

in

the

the

a

18%

parties’

promissory note is lawful and enforceable and shall be used
as the basis for computing all interest accruing from date
of default through the date of judgment.
In

addition

to

unpaid

principal,

interest

and

late

fees, PNC Bank seeks an award of attorney’s fees and costs.
“Alabama follows the American rule, whereby attorney fees
may be recovered if they are provided for by statute or by
contract. . .”
(Ala.

2009)

Jones v. Regions Bank, 25 So. 3d 427, 441
(citations

omitted).

A

review

of

the

promissory note clearly reflects that PNC Bank is entitled
to

an

award

of

reasonable

attorney’s

6

fees

incurred

in

connection with this action.

(Doc. 1-3 at 3).

For these reasons, PNC Bank’s Motion for Judgment on
the Pleading is GRANTED as to liability only.

PNC Bank is

entitled to recover from Mobile Sheet Metal the outstanding
principal,
attorney

late
fees,

charges,
as

set

accrued
forth

unpaid

under

the

interest,

and

terms

the

of

promissory note, which calculations, previously provided to
the court, are to be supplemented by PNC Bank and filed in
the form of a proposed order of final judgment, no later
than August 12, 2014.

Any objections to such calculations

are due 14 days after the proposed order of final judgment
is filed. At the end of such 14 day period, the proposed
order will be under submission.
ORDERED this 5th day of August, 2014.
/s/ SONJA F. BIVINS
UNITED STATES MAGISTRATE JUDGE

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