BANK OF THE OZARKS v. CROCKETT et al

Filing 43

ORDER granting 30 Motion for Summary Judgment; terminating as moot 34 Motion for Summary Judgment. Ordered by U.S. District Judge Clay D. Land on 01/14/2014 (jcs)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
ATHENS DIVISION
BANK OF THE OZARKS,

*

Plaintiff,

*

vs.

*

JAMES R. GOFF, JR.,

*

Defendant.

CASE NO. 3:13-CV-23 (CDL)

*
O R D E R

Defendant James R. Goff, Jr. guaranteed a loan made by the
Chestatee

State

Bank

to

Sherman

Barbara Womack Crockett.

Nathaniel

Crockett,

Jr.

and

After Chestatee State Bank failed,

Plaintiff Bank of the Ozarks assumed the loan, including Goff’s
guaranty, pursuant to its agreement with the Federal Deposit
Insurance Corporation to assume certain assets and liabilities
of the failed bank.

The Crocketts defaulted on the loan, and

Goff has refused to honor his obligations under the guaranty.
He

admits

maintains
Ozarks

that
that

he

is

he

improperly

in

should

default
be

increased

on

excused
his

risk

the

guaranty,

but

from

liability

because

as

guarantor.

he

Ozarks

responds that Goff expressly waived his “increased risk” defense
in the guaranty agreement that he signed.
summary

judgment

on

its

claim

against

Goff

Ozarks now seeks
pursuant

to

the

guaranty.

For the reasons explained in the remainder of this

Order, Ozarks’s motion (ECF NO. 30) is granted.1
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

genuine

Fed. R.

dispute of

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.
477 U.S. 242, 255 (1986).

Anderson v. Liberty Lobby, Inc.,
A fact is material if it is relevant

or necessary to the outcome of the suit.

Id. at 248.

A factual

dispute is genuine if the evidence would allow a reasonable jury
to return a verdict for the nonmoving party.

Id.

FACTUAL BACKGROUND
On August 29, 2008, the Crocketts executed a promissory
note in favor of Chestatee State Bank in the principal amount of
$266,221.25.

The Note obligates the Crocketts to timely pay the

lender or its successors and assigns all amounts due under the
Note,

including

principal,

interest,

other

accrued

charges,

collection costs, and attorneys’ fees of “15 percent of the
1

Although Goff requested oral argument (ECF No. 36), the Court finds
that the issues to be decided are clear from the briefing and that no
hearing is necessary.

2

principal and interest then owed, plus court costs.”

Kundrat

Aff. Ex. 1, Promissory Note 1-2, ECF No. 30-2 at 15-16.
executed

two

documents

(collectively,

the

Goff

“Guaranty”)

“absolutely and unconditionally” guaranteeing all amounts owed
by

the

Crocketts,

including

an

“UNLIMITED”

principal

amount

“plus accrued interest, attorneys’ fees and collection costs . .
. and all other amounts agreed to be paid under all agreements
evidencing

the

debt

and

securing

the

payment

of

the

debt.”

Kundrat Aff. Exs. 4-5, Guaranty, ECF No. 30-2 at 25-27.
Guaranty signed by Goff contains the following waivers:
No modification of this agreement is effective unless
in writing and signed by you and me, except that you
may, without notice to me and without the addition of
a signed writing or my approval . . . (12) renew,
extend, refinance or modify the borrower’s debt on any
terms agreed to by you and the borrower (including,
but not limited to, changes in the interest rate or in
the method, time, place or amount of payment) without
affecting my obligation to pay under this guaranty.
. . . I waive presentment, demand, protest, notice of
dishonor, and notice of acceptance of this guaranty.
I also waive, to the extent permitted by law, all
notices, all defenses and claims that the borrower
could assert, any right to require you to pursue any
remedy or seek payment from any other person before
seeking payment under this agreement, and all other
defenses to the debt, except payment in full. You may
without notice to me and without my consent, enter
into agreements with the borrower from time to time
for purposes of creating or continuing the borrower’s
debt as allowed by this guaranty.
Id.

3

The

Chestatee State Bank failed before the Crocketts paid back
the

loan.

The

FDIC

negotiated

a

Purchase

and

Agreement (“P & A Agreement”) with

Ozarks

Ozarks

liabilities

assuming

certain

assets

and

Assumption

which resulted in
of

Chestatee

State Bank, including the Crocketts’ Note and the Goff Guaranty.
Goff does not dispute that the Crocketts defaulted on the Note
and as of October 25, 2013 owe Ozarks $209,334.91 in principal,
$10,226.07 in interest continuing to accrue at $39.48 per day,
$1,795.00

in

late

charges,

and

attorneys’

percent of the principal and interest due.
Material

Facts

¶

24,

ECF

No.

30-1;

fees

fifteen

Pl.’s Statement of

Def.’s

Statement of Material Facts ¶ 24, ECF No. 32.
that he is in default on the Guaranty.

of

Resp.

to

Pl.’s

Goff also admits

Id. ¶ 14.

DISCUSSION
Ozarks

seeks

summary

judgment

on

its

Goff’s Guaranty of the Crocketts’ Note.

action

to

enforce

It is undisputed that

the Crocketts’ Note and the Goff Guaranty were validly executed,
that the Crocketts are in default on the Note, and that Goff has
refused to pay the Note obligation pursuant to his Guaranty.
Therefore,

Goff

is

liable

on

the

Guaranty

establish a defense for his non-payment.

unless

he

can

Fielbon Dev. Co. v.

Colony Bank, 290 Ga. App. 847, 850, 660 S.E.2d 801, 805 (2008).
Goff argues that he should be discharged of his guarantor
obligation because Ozarks increased his risk by increasing the

4

Crocketts’

monthly

modifications.

payments

and

not

offering

further

See O.C.G.A. § 10-7-22 (“Any act of the creditor

. . . which injures the surety or increases his risk or exposes
him

to

greater

liability

shall

discharge

him.”).

Ozarks

responds that Goff waived any right to object to an increase in
his risk by the clear language of his Guaranty.
may

consent

in

advance

to

a

course

of

“A guarantor

conduct

that

would

otherwise result in his discharge” and waive defenses that would
otherwise be available to a guarantor.
of

Adairsville,

218

Ga.

App.

752,

Baby Days, Inc. v. Bank

755,

463

S.E.2d

171,

174

(1995); accord Panasonic Indus. Co. v. Hall, 197 Ga. App. 860,
861, 399 S.E.2d 733, 734 (1990).

Goff does not dispute that the

language of his Guaranty permitted Chestatee State Bank and/or
Ozarks

to

modify

the

underlying

debt

without

notifying

him.

Def.’s Resp. in Opp’n to Pl.’s Mot. for Summ. J. 14, ECF No. 31.
And

any

argument

to

the

contrary

would

be

frivolous.

The

Guaranty clearly provides that Goff unconditionally guarantees
an unlimited amount of the Crocketts’ debt to the bank and that
Goff consents in advance to modifications to the debt without
providing him notice or obtaining his approval.

Guaranty 1.

Goff has waived the “increased risk” defense he now seeks to
assert.

See Fielbon, 290 Ga. App. at 854, 660 S.E.2d at 807-08

(holding as a matter of law that guarantor waived increased risk
defense based on similar language in guaranty).

5

To the extent that

Goff

seeks to avoid his obligations

under the Guaranty based on Ozarks’s alleged failure to treat
the Crocketts’ loan as residential and thus offer modifications
as part of the residential loan program contained in the P & A
Agreement between the FDIC and Ozarks, that argument is also
unpersuasive.
defense.

As explained previously, Goff has waived this

But even if he had not, he has no legal basis for

relying on an agreement between the FDIC and Ozarks.

Goff’s

argument relies on the alleged improper classification of the
Crocketts’ loan as commercial instead of residential according
to the terms of the P & A Agreement between Ozarks and the FDIC.
See Def.’s Resp. 3-7 (summarizing the P & A Agreement’s terms as
to residential and commercial loans then arguing that the Bank
“refuses to modify the . . . residential loan pursuant to the
Agreement, increasing Mr. Goff’s risk”); see also Def.’s Resp.
to

Pl.’s

Statement

of

Material

Facts

¶

29

(explaining

that

Ozarks increased Goff’s risk under the guaranty by raising the
interest rate and refusing to modify the loan as required by the
P & A Agreement).

The Court has previously ruled that the P & A

Agreement clearly and unambiguously disclaimed the creation of
any rights, remedies, or claims by third parties.
Order 4-7, ECF No. 22.
his

affirmative

July 31, 2013

For the same reasons, Goff cannot base

defense

of

increased

risk

on

obligation of Ozarks pursuant to the P & A Agreement.

6

an

alleged

Goff

is

in

default

on

his

Guaranty

and

has

no

valid

affirmative defenses to Ozarks’s claim.

Pursuant to the terms

of

the

his

Guaranty,

Goff

is

liable

for

total

amount

of

$257,967.69.2
CONCLUSION
For

the

reasons

set

forth

above,

Summary Judgment (ECF No. 30) is granted.3

Ozarks’s

Motion

for

The Clerk shall enter

judgment in favor of Bank of the Ozarks against James R. Goff,
Jr. in the amount of $257,967.69.

IT IS SO ORDERED, this 14th day of January, 2014.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE

2

This figure represents $209,334.91 in principal, $13,423.95 in
interest (calculated as $10,226.07 up to October 25, 2013 plus
eighty-one days of interest from October 25, 2013 to today at $39.48
per diem), $1,795.00 in late charges, and $33,413.83 in attorneys’
fees calculated as fifteen percent of the principal and total interest
owed.
3
The Court notes that Ozarks abandons its unjust enrichment claim.
Pl.’s Mot. For Summ. J. 1 n.1, ECF No. 30. Therefore, Goff’s motion
for partial summary judgment on this claim (ECF No. 34) is terminated
as moot.

7