CERTUSBANK NA v. THAXTON NOTE ACQUISITION LLC et al
ORDER granting 27 Motion for Summary Judgment. Plaintiff is hereby DIRECTED to submit a proposed judgment within seven (7) days of the date of this Order addressing the amount due on the Note and the amount of attorneys fees due. Ordered by US DISTRICT JUDGE C ASHLEY ROYAL on 2/23/17 (lap)
IN THE UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF GEORGIA
RREF II CER CO ACQUISITIONS,
No. 5:15‐CV‐143 (CAR)
THAXTON NOTE ACQUISITION, :
LLC; CCS DEVELOPMENT, INC.;
GILLIARD TRUCKING, INC.; and
KENNETH SAMS THAXTON,
ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
In this breach of contract action, Plaintiff RREF II CER CO Acquisitions, LLC,
seeks to collect amounts owing under a commercial loan agreement, the payment of
which was guaranteed by three guaranty agreements. Currently before the Court is
Plaintiff’s Motion for Summary Judgment. Defendants have responded, and Plaintiff
filed a reply. The Court has thoroughly considered the Motion, the relevant facts, and
applicable law and, for the reasons explained below, GRANTS Plaintiff’s Motion [Doc.
Summary judgment is proper 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.”1 The moving party “always bears the initial responsibility of informing the
district court of the basis for its motion, and identifying those portions of the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence of a genuine issue of
material fact” and that entitles it to a judgment as a matter of law.2 If the moving party
discharges this burden, the burden then shifts to the nonmoving party to go beyond the
pleadings and present specific evidence showing that there is a genuine issue of
The Court must view the facts, and any reasonable inferences drawn from those
facts, in the light most favorable to the party opposing the motion.4 “The inferences,
however, must be supported by the record, and a genuine dispute of material fact
requires more than ‘some metaphysical doubt as to the material facts.’”5 In cases where
opposing parties tell different versions of the same events, and one is “blatantly
contradicted by the record, so that no reasonable jury could believe it, a court should
not adopt that version of the facts.”6 A disputed fact will preclude summary judgment
Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
Catrett, 477 U.S. at 323 (internal quotation marks omitted).
3 See Fed. R. Civ. P. 56(e); see also Catrett, 477 U.S. at 324‐26.
4 Penley v. Eslinger, 605 F.3d 843, 848 (11th Cir. 2010); Welch v. Celotex Corp., 951 F.2d 1235, 1237 (11th Cir.
5 Logan v. Smith, 439 F. App’x 798, 800 (11th Cir. 2011) (quoting Penley, 605 F.3d at 848).
6 Pourmoghani‐Esfahani v. Gee, 625 F.2d 1313, 1315 (11th Cir. 2010) (per curiam) (quoting Scott v. Harris, 550
U.S. 372, 380 (2007)).
only “if the dispute might affect the outcome of the suit under the governing law.”7
“The court may not resolve any material factual dispute, but must deny the motion and
proceed to trial if it finds that such an issue exists.”8
On June 11, 2010, Plaintiff’s predecessor‐in‐interest, Atlantic Southern Bank
(“Atlantic”), and Defendant Thaxton Note Acquisition, LLC (TNA) executed a
Commercial Loan Agreement (“Loan Agreement”) [Ex. B, Patel Aff. Doc. 25‐2] and
Promissory Note (“Note”) [Ex. F, Patel Aff., Doc. 25‐6] whereby Atlantic loaned
Defendant TNA $1,108,511.88. On the same date, Defendants CCS Development,
Gilliard Trucking, Inc., and Kenneth S. Thaxton individually signed personal
guarantees guaranteeing payments of the amounts owed to Atlantic (“Guarantees”)
[Exs. C, D, E, Patel Aff., Docs. 25‐3, 25‐4, 25‐5]. On May 20, 2011, Atlantic failed and was
closed by the FDIC as receiver. The FDIC then assigned the Loan Agreement, the Note
and the Guarantees (collectively, the “Loan Documents”) to CertusBank N.A.
(“CertusBank”) [Ex. A, Patel Aff., Doc. 25‐1], who subsequently assigned the Loan
Documents to Plaintiff [Doc. 26‐1].
Defendant TNA made payments to Atlantic and then to CertusBank, as
Atlantic’s successor, until July of 2014. After July 9, 2014, no Defendant made any
Id. (internal quotation marks omitted).
Envtl. Def. Fund v. Marsh, 651 F.2d 983, 991 (5th Cir. 1981). In Bonner v. City of Prichard, 661 F.2d 1206,
1209 (11th Cir. 1981) (en banc), the Eleventh Circuit adopted as binding precedent all the decisions of the
former Fifth Circuit handed down prior to the close of business on September 30, 1981.
payment pursuant to the Loan Documents. CertusBank initiated this breach of contract
action pursuant to the Court’s diversity jurisdiction, and Plaintiff was substituted as the
proper party after CertusBank assigned the Loan Documents to Plaintiff.
Plaintiff contends Defendants are in default under the Loan Documents and owe
Plaintiff the principal, interest, plus interest at 5.75% per annum (or $169.9342 per
diem), plus attorney’s fees and costs in pursuing this action. Defendants do not contest
they are in default under the Loan Documents. Instead, Defendants contend summary
judgment is inappropriate because the parties are not diverse, and therefore this Court
lacks jurisdiction. The Court disagrees.
In the Complaint, Plaintiff states it is a corporation organized under the laws of
the State of South Carolina, with its principal office located at 2400 Redford Road, Suite
100, Charlotte, North Carolina 28211, and all Defendants are either corporate or natural
citizens of the State of Georgia. Thus, Plaintiff has alleged complete diversity between
the parties. Indeed, in their Answers, Defendants conceded jurisdiction and venue are
proper in this Court based on diversity jurisdiction. Now, Defendants contest Plaintiff’s
citizenship citing to news reports that Plaintiff is withdrawing its office from North
Carolina. Even if these “news reports” could establish Plaintiff’s principal place of
business has changed, it is of no consequence. “It has long been the case that ‘the
jurisdiction of the court depends upon the state of things at the time of the action
brought.’”9 All evidence shows at the time this action was filed Plaintiff had its
principal place of business in North Carolina. Post‐filing changes of a corporation’s
citizenship does not destroy diversity between the parties. Because “all challenges to
subject matter jurisdiction premised upon diversity of citizenship” are judged “against
the state of the facts that existed at the time of filing—whether the challenge be brought
shortly after filing, after the trial, or even for the first time on appeal”—Plaintiff’s
arguments are without merit.
Having established jurisdiction, the Court now turns to the merits of Plaintiff’s
breach of contract claims. Under Georgia law, “[t]o constitute a valid contract, there
must be parties able to contract, a consideration moving to the contract, the assent of the
parties to the terms of the contract, and a subject matter upon which the contract can
operate.”10 An action for breach of contract requires breach of a valid contract and
resultant damages to the party who has the right to complain about the breach.11 To
establish a prima facie right to judgment as a matter of law on these claims, Plaintiff
may produce the Loan Documents and show that they were executed.12 Once the prima
facie case has been made, Plaintiff is entitled to judgment as a matter of law unless
Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 570 (2004); see also PTA‐FLA, Inc. v. ZTE USA, Inc.,
844 F.3d 1299, 1306 (11th Cir. 2016) (“Again, diversity jurisdiction is determined at the time of filing the
complaint[.]”) (citation omitted).
10 O.C.G.A. § 13‐3‐1.
11 Budget Rent‐A‐Car of Atlanta, Inv. v. Webb, 220 Ga. App. 278, 279 (1996).
12 Jay Gleason Advertising Svc. v. Gleason, 193 Ga. App. 445 (1989); Shropshire v. Alostar Bank of Commerce,
314 Ga. App. 310, 315 (2012).
Defendants can establish an affirmative defense.13 If Defendants fail to establish any
defense, liability is established, and Plaintiff need only prove the amount owed.14
Here, Plaintiff has clearly established its entitlement to summary judgment.
Plaintiff has produced the Note, the Loan Agreement, and the Guarantee Agreements,
and Defendants have admitted they were executed. Plaintiff has established it is the
current holder of the Note and the Guarantee Agreements, and Defendants do not
contest they failed to meet their obligations under such contracts. The defenses
Defendants raised in their Answers fail to defeat summary judgment. Thus, Plaintiff is
entitled to judgment as a matter of law on its claims for breach of the Loan Documents.
Attorney’s Fees Pursuant to O.C.G.A. § 13‐1‐11
Plaintiff also brings a claim for attorneys’ fees pursuant to O.C.G.A. § 13‐1‐11.
Because Plaintiff has satisfied the requirements of O.C.G.A. § 13‐1‐11, it is entitled to
attorneys’ fees. O.C.G.A. § 13‐1‐11 provides that “[o]bligations to pay attorney’s fees
upon any note . . . shall be valid and enforceable and collectable as a part of such debt if
such note or other evidence of indebtedness is collected by or through an attorney after
maturity.”15 Here, the Loan Documents include an obligation to pay attorney’s fees.
Moreover, Plaintiff has hired counsel to collect the debt, and Plaintiff’s counsel sought
to collect the debt after the Note matured.
Kelly v. Pierce Roofing Co., 220 Ga. App. 391, 392‐93 (1996).
First Nat’l Bank of Dalton v. Damil, Inc., 171 Ga. App. 237, 238 (1984).
15 O.C.G.A. § 13‐1‐11(a).
The statute also requires that the holder of the note notify the debtor that the
attorney’s fees provision will be enforced and that the debtor has ten (10) days from the
receipt of such notice to pay the principle and interest without the attorney’s fees.16
Here, Plaintiff properly notified Defendants of its intention to collect attorneys’ fees,
and Defendants failed to pay the amounts owing within the ten (10) days. Thus,
pursuant to the terms of the Loan Documents, Plaintiff is entitled to recover attorneys’
fees amounting to fifteen percent (15%) of the principal plus accrued interest in
connection with collecting the amounts owing under the Loan Documents.
In sum, Plaintiff’s Motion for Summary Judgment [Doc. 27] is GRANTED.
Plaintiff is hereby DIRECTED to submit a proposed judgment within seven (7) days of
the date of this Order addressing the amount due on the Note and the amount of
attorneys’ fees due.
SO ORDERED, this 23rd day of February 2017.
S/ C. Ashley Royal
C. ASHLEY ROYAL, SENIOR JUDGE
UNITED STATES DISTRICT COURT
O.C.G.A. § 13‐1‐11(a)(3).
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