CERTUSBANK NA v. MLJJ PROPERTIES LLC et al
ORDER granting 21 Motion for Summary Judgment. Ordered by Judge Clay D. Land on 08/05/2013.(aaf)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
CERTUSBANK, N.A., as successor *
by assignment to FIRST GEORGIA
CASE NO. 3:12-cv-46 (CDL)
MLJJ PROPERTIES, LLC, MARTIN J. *
O R D E R
prohibited as long as the positions asserted are not frivolous.
sanctionable conduct, but the Court declines to find their nonmeritorious
hesitate to conclude, however, that Plaintiff is entitled to
summary judgment on its claims.
In 2011, Defendants executed a Commercial Promissory Note
(“Note”) in the principal amount of $328,205.95, and Defendants
Martin Mulligan (“Mulligan”) and Linda Chamberlin (“Chamberlin”)
executed personal guaranties for repayment of the Note.
the Note matured, Defendants defaulted under the terms of the
Note and the guaranties.
After assignment of the Note to Plaintiff CertusBank, N.A.
(“CertusBank”), CertusBank demanded payment.
Defendants do not contest that they are in default on the Note,
but they maintain that CertusBank has not presented sufficient
proof that the Note was assigned to it.
They also maintain that
a jury must determine the amount owed, even though a middle
school student could easily do the arithmetic to determine the
amount due based on the present record.
The present record
clearly establishes that the Note was assigned to CertusBank,
that Defendants are in default, and that the amount due is not
CertusBank’s Motion for Summary Judgment (ECF No. 21).
SUMMARY JUDGMENT STANDARD
Summary judgment may be granted only “if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Civ. P. 56(a).
In determining whether a
material fact exists to defeat a motion for summary judgment,
the evidence is viewed in the light most favorable to the party
opposing summary judgment, drawing all justifiable inferences in
the opposing party’s favor.
Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986).
A fact is material if it is relevant
or necessary to the outcome of the suit.
Id. at 248.
dispute is genuine if the evidence would allow a reasonable jury
to return a verdict for the nonmoving party.
Compl. Ex. A, Note, ECF No. 1-1; Pl.’s Mot. for
Summ. J. Ex. A, Crawford Aff. ¶ 6, ECF No. 21-1; Mulligan Dep.
18:11-25, ECF No. 23; Chamberlin Dep. 9:22-10:11, ECF No. 24.
On that same date, Mulligan executed a personal guaranty for
Mulligan Guaranty, ECF. No. 1-2.
Chamberlin also executed a
personal guaranty on that same date.
Guaranty, ECF No. 1-3.
Compl. Ex. C, Chamberlin
The Note matured on March 15, 2011.1
appointed as receiver for First Georgia Banking Company after
the bank failed on May 20, 2011.
As part of the receivership,
the FDIC negotiated with CertusBank to take over outstanding
Hereinafter, the Court will refer to the Mulligan Guaranty and the
Chamberlin Guaranty collectively as “the Guaranties.”
loans of First Georgia Banking Company.
The FDIC executed an
Assignment of Loan Documents (“Assignment”) on November 7, 2011,
assigning all of its rights, title, and interest in the failed
bank’s loan documents to CertusBank.
Assignment, ECF No. 21-4.
Crawford Aff. App’x 3,
The Note and Guaranties were included
Crawford, CertusBank’s Senior Vice President, and the recorded
Assignment 1-2; Crawford Aff. ¶ 12.
assigned to CertusBank because another employee of CertusBank,
Paul Sparks, allegedly without any legal authority to do so,
signed the Assignment as Receiver for the FDIC and on behalf of
It is undisputed that CertusBank sent notice of non-payment
and demand for payment in full under the loan documents to the
Defendants on October 17, 2011.
Compl. Ex. D, Letter from M.
Wing to Defendants (Oct. 17, 2011), ECF No. 1-4.
included notice pursuant to O.C.G.A. § 13-1-11 that the bank
would enforce the portions of the Note providing for payment of
reasonable attorneys’ fees if Defendants did not pay the amount
due under the Note within ten days of receiving the notice. Id.
It is also undisputed that Defendants have not paid the
amounts due under the Note.
Defs.’ Statement of Material Facts
¶ 12, ECF No. 27.
Furthermore, the present record establishes
Crawford Aff. App’x 2, Loan Payoff Statement (Mar. 21, 2013),
ECF No. 21-3.
It is also clear from the loan documents that
interest continues to accrue at a per diem rate of $59.26.
Crawford Aff. ¶ 17.
Finally, under the terms of the Note,
Defendants are responsible for costs of collection, including
reasonable attorneys’ fees, in the amount of $34,558.00 as of
March 21, 2013.
Crawford Aff. ¶ 20.
Defendants admit that they signed the Note and guaranties
and that they are in default.
They argue, however, that a jury
must decide (1) whether the Note and Guaranties were properly
assigned to CertusBank and (2) the amount Defendants owe under
Defendants argue that Paul Sparks signed the Assignment on
behalf of the FDIC and that he did not have authority to do so.
But, Defendants point to nothing in the record to support this
The record establishes that under a limited power
of attorney Paul Sparks was authorized to act on behalf of the
FDIC for the purpose of executing the Assignment.
in Supp. of Mot. for Summ. J. Ex. A, Limited Power of Att’y, ECF
No genuine factual dispute exists on this issue.
The Note and Guaranties were properly assigned to CertusBank.
See 685 Penn, LLC v. Stabilis Fund I, L.P., 316 Ga. App. 210,
211-12, 728 S.E.2d 840, 842-43 (2012); Salahat v. FDIC, 298 Ga.
App. 624, 628, 680 S.E.2d 638, 642 (2009).
established, production of the instrument entitles a holder to
Burks v. Cmty. Nat’l Bank, 216 Ga. App. 155, 156, 454 S.E.2d
144, 145 (1995) (internal quotation marks omitted); see also
Caves v. Columbus Bank & Trust Co., 264 Ga. App. 107, 107-08,
589 S.E.2d 670, 671 (2003) (stating the same standard in an
action on a guaranty).
Defendants have no meritorious defense.
They admit that they signed the Note and Guaranties and that
they are in default.
Therefore, the holder of the Note and
Guaranties, which is CertusBank, is entitled to recover on the
Note and Guaranties.
Defendants are liable, as a matter of law,
for the amounts due.
Defendants’ final “Hail Mary” is that the amount owed under
the Note and Guaranties has not been established.
is as specious as Defendants’ contention that CertusBank is not
the holder of the Note.
To establish the amount due, CertusBank
Note; Crawford Aff. App’x 1, Loan History, ECF No.
hearsay and cannot be considered.
The Court finds that these
records are business records and may be considered under Federal
provides as follows:
The following are not excluded by the rule against
hearsay, regardless of whether the declarant is
available as a witness . . . (6) Records of a
Regularly Conducted Activity. A record of an act,
event, condition, opinion, or diagnosis if:
(A) the record was made at or near the time by--or
(B) the record was kept in the course of a regularly
occupation, or calling, whether or not for profit;
(C) making the record was a regular practice of that
(D) all these conditions are shown by the testimony of
the custodian or another qualified witness, or by a
certification that complies with Rule 902(11) or (12)
or with a statute permitting certification; and
(E) neither the source of information nor the method
or circumstances of preparation indicate a lack of
The Court finds under the circumstances presented here that
successor entity under a merger or receivership, the successor
Phillips v. Morg. Elec. Registration Sys., Inc.,
No. 5:09-cv-2507-TMP, 2013 WL 1498956, at *2 (N.D. Ala. Apr. 5,
2013); see also id. at *2-3 (citing United States v. Parker, 749
F.2d 628, 633 (11th Cir. 1984), and other cases addressing this
evidentiary issue and reaching the same conclusion).
finds that there is sufficient evidence that these records are
trustworthy and admissible for the purpose of establishing the
authenticates the records and
shows they are records maintained in the ordinary course of
Crawford Aff. ¶¶ 2, 4-5, 23-24; see also Fed. R.
Defendants do not otherwise dispute the amount due under
the Note and Guaranties.
Moreover, they present no legitimate
argument as to why they are not liable to CertusBank for its
Therefore, CertusBank is entitled to summary
See Hovendick v. Presidential Fin. Corp., 230 Ga.
App. 502, 505, 497 S.E.2d 269, 272-73 (1998) (“Once [the note
holder] introduced the Note and established a prima facie right
to judgment on the Note, the burden shifted to [the defendants]
to produce evidence showing a different amount owed and thereby
creating a jury issue . . . because [the defendants] introduced
no evidence showing that the amount claimed by [the note holder]
is incorrect and no evidence as to any other amount, there is no
[jury issue.]”) (citations omitted).
The present record establishes as a matter of law that
Defendants are individually and jointly liable to CertusBank as
As of March 21, 2013, Defendants owed $328,205.95 in
interest continues to accrue at a per diem rate of $59.26 until
the Note is paid in full.
Statement; Note 1.
Crawford Aff. ¶ 17; Loan Payoff
Per diem interest at the rate of $59.26 from
amounts to $8,177.88.
Therefore, Defendants are jointly and
individually liable to CertusBank for the principal, interest,
and fees on the Note in the amount of $353,707.85.
Section 13-1-11(a)(2) provides:
If such note or other evidence of indebtedness
provides for the payment of reasonable attorney's fees
provision shall be construed to mean 15 percent of the
first $500.00 of principal and interest owing on such
note or other evidence of indebtedness and 10 percent
of the amount of principal and interest owing thereon
in excess of $500.00[.]
The Note allows for the recovery of “reasonable attorneys’ fees”
and caps the amount at 15 percent of the principal and interest
The current version of O.C.G.A. § 13-1-11 applies to contracts
entered into on or after July 1, 2011.
2012 Georgia Laws Act 725
Because the Note and Guaranties were executed prior to
July 1, 2011, the former version of the statute applies in this case.
Since a percent is not specified, the Court
finds that CertusBank is entitled to 15 percent of the first
$500.00 owed (which is $75.00) plus 10 percent of the remaining
attorneys’ fees of $35,345.78.3
CertusBank’s Motion for Summary Judgment (ECF No. 21) is
The Clerk shall enter judgment in favor of CertusBank,
N.A. and against Defendants, jointly and individually, in the
amount of $389,053.63.
IT IS SO ORDERED, this 5th day of August, 2013.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE
This calculation takes into consideration the per
accrued from March 21, 2013 to the date of this Order.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?