PNC Bank, National Association v. Mobile Sheet Metal Co., Inc. et al
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
PNC BANK, NATIONAL,
ASSOCIATION, et al.,
MOBILE SHEET METAL CO.,
CIVIL ACTION NO. 14-00153-B
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.
Plaintiffs PNC Bank, National Association (“PNC Bank”)
(“Mobile Sheet Metal”).
(Doc. 1 at 3; Doc. 1-3).
December 2, 2010, the outstanding loans were consolidated,
evidencing its indebtedness to PNC Bank for $387,094.68.
(Doc. 1-3 at 2).
Individual Defendants David B. Brown and
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).
PNC Bank claims that the
guaranties have not been satisfied.
(Doc. 1 at 4).
Bank also asserts that as of April 1, 2014, the sum owed
was $371,282.67, which consisted of principal in the amount
$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
increasing from 7.45% to 18% after default. (Docs 1 at 6,
Doc. 19 at 2).
Defendants filed an answer, wherein they admitted the
Following the filing of
(Docs. 16, 18).
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
pledged by Mobile
Mobile Sheet Metal also contends that it should receive
credit for the value of the property that was pledged as
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.
After the pleadings are closed, but early enough not
pleadings is appropriate when there are no material facts
in dispute, and judgment may be rendered by considering the
See Hawthorne v. Mac Adjustment, Inc., 140 F.3d
Crumpton v. Stephens (In re Northlake Foods, Inc.),
715 F. 3d 1251, 1255 (llth Cir. 2013).
Mobile Sheet Metal has waived any argument regarding the
compilation of late charges or accrued interest because in
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
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
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 .
(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
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,
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
[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”).
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
Electing one rather than another
does not per se constitute a failure to
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.”).
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.
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. . .”
Jones v. Regions Bank, 25 So. 3d 427, 441
promissory note clearly reflects that PNC Bank is entitled
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
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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