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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*
*
*
*
*
*
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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
4
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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