PRODUCERS CREDIT CORPORATION v. C2 FARMS INC et al
ORDER GRANTING 13 Motion for Summary Judgment; DENYING as moot 18 Motion for Extension of Time to Complete Discovery. The Defendants are jointly and severally liable for the amount owed under the Note, $146,643.05, and are ORDERED to pay damages in that amount. Ordered by US DISTRICT JUDGE MARC THOMAS TREADWELL on 1/27/2017. (tlh)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
PRODUCERS CREDIT CORP.,
C2 FARMS, INC., et al.
CIVIL ACTION NO. 5:16-CV-320 (MTT)
Producers Credit Corp. has moved for summary judgment on its claim to enforce
a promissory note against Defendants C2 Farms, Inc., Joe David Cox, and Benjamin
Cox.1 Doc. 13. The Defendants have not responded. The Court has carefully
considered the record, and the Motion is GRANTED.
SUMMARY JUDGMENT STANDARD
Summary judgment is warranted “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.” Fed. R. Civ. P. 56(a). A factual dispute is only genuine if, based on the evidence
presented, “a reasonable jury could return a verdict for the nonmoving party.” Info. Sys.
& Networks Corp. v. City of Atlanta, 281 F.3d 1220, 1224 (11th Cir. 2002) (quoting
United States v. Four Parcels of Real Prop., 941 F.2d 1428, 1437 (11th Cir. 1991)).
In their Answer, the Defendants claimed they did not have sufficient knowledge to admit or deny that
Producers Credit is not a citizen of Georgia. Likely for this reason, Producers Credit, in support of its
motion for summary judgment, adduced evidence establishing this Court’s diversity jurisdiction. Doc. 131 at 2. It is undisputed that Producers Credit is a foreign profit corporation, authorized to do business in
the State of Georgia, with its principal place of business in Columbus, Ohio.
The movant may support its assertion that a fact is undisputed by “citing to particular
parts of materials in the record, including depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including those made for purposes of
the motion only), admissions, interrogatory answers, or other materials.” Fed. R. Civ. P.
The burden then shifts to the non-moving party, who must rebut the movant’s
showing “by producing affidavits or other relevant and admissible evidence beyond the
pleadings.” Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1315
(11th Cir. 2011) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). Where a
party fails to address another party’s assertion of fact as required by Fed. R. Civ. P.
56(c), the Court may consider the fact undisputed for purposes of the motion. Fed. R.
Civ. P. 56(e)(2). However, “[c]redibility determinations, the weighing of the evidence,
and the drawing of legitimate inferences from the facts are jury functions, not those of a
judge . . . . The evidence of the non-movant is to be believed, and all justifiable
inferences are to be drawn in his favor.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
PLAINTIFF’S BURDEN TO ENFORCE A PROMISSORY NOTE
Georgia law applies in this diversity action. See, e.g. Goodwin v. George Fischer
Foundry Sys., 769 F.2d 708, 711-12 (11th Cir. 1985). “[A] plaintiff seeking to enforce a
promissory note establishes a prima facie case by producing the note and showing that
it was executed.” Collins v. Regional Bank, 282 Ga. App. 725, 726, 639 S.E.2d 626,
627 (2006) (quoting Stewart v. Johnson, 269 Ga. App. 698, 699, 605 S.E.2d 111, 113
(2004)). To prove a note was executed, the plaintiff must prove the validity of the
signatures. O.C.G.A. § 11-3-308(b). “[T]he authenticity of and authority to make each
signature on the instrument is admitted unless specifically denied in the pleadings.” Id.
at (a). When the validity of a signature is specifically denied, “the burden of establishing
validity is on the person claiming validity.” Id. Once the plaintiff establishes a prima
facie right to enforce the note, the burden then shifts to the defendant to establish any
defense. Greenwald v. Columbus Bank & Trust Co., 228 Ga. App. 527, 529, 492
S.E.2d 248, 250 (1997). If the defendant cannot establish such a defense, the plaintiff
is entitled to summary judgment as a matter of law. Id.
When a note entitles a plaintiff to an award of attorneys’ fees, in addition to
principal and interest, such an award is valid subject to O.C.G.A. § 13-1-11. To recover
attorneys’ fees under a note, a plaintiff must notify the defendant, after maturity of the
note, that the plaintiff will seek attorneys’ fees under the terms of the note and that the
defendant has ten days from the receipt of notice to pay the principal and interest
amount owed in order to avoid an award of attorneys’ fees. O.C.G.A. § 13-1-11(a)(3).
In addition, an award of reasonable attorneys’ fees will be interpreted to be 15% of the
first $500 of principal and interest owed and 10% of the remaining amount owed in
excess of $500. Id. at (a)(2).
Undisputed Facts and Liability
The undisputed facts are as follows. On January 20, 2015, the Defendants
executed the Note in connection with a loan agreement for $200,000.2 Docs. 1-5; 13-1
The Court notes that although Producers Credit maintained in its summary judgment motion that the
amount of the loan was $250,000, the Note suggested that the loan amount was $200,000. Doc. 15;
Compare Doc. 13-1 at 3; Doc. 13-3 at 2 with Doc. 1-5 at 3. When the Court inquired about the difference,
Producers Credit responded that indeed Producers Credit loaned only $200,000 but this discrepancy did
at ¶ 2. The note required the Defendants to pay the loan amount, along with any
accrued interest, by the maturity date. Doc. 1-5 at 3. Upon default, Producers Credit
would be entitled to collect the remaining balance plus accrued interest, reasonable
attorneys’ fees (15% of the first $500.00 and 10% of the amount remaining in excess of
$500), and court costs. Id. at 2; Doc. 13-3 at ¶ 12.
The Note matured on February 10, 2016. Docs. 1-5 at 3. The debt therefore
became due and payable on that date and continued to accrue interest under the terms
of the Note. Doc. 1-5 at 2-3. The Defendants did not pay the full amount owed by the
maturity date, constituting a default, and all amounts due under the Note became due
and payable. Docs. 1-5 at 2-3.
On July 1, 2016, Producers Credit sent a letter to the Defendants by certified mail
with return receipt requested demanding payment. Doc. 1-6. Producers Credit
informed the Defendants (1) the Note had matured; (2) the amount owed was due and
payable; and (3) Producers Credit would be pursuing attorneys’ fees. Id. The letter
stated the amount due as of that date was “$124,356.78 . . . plus per diem interest of
$23.27 and per diem late charges of $20.44 thereafter.” Id. Producers Credit filed the
complaint to enforce the Note soon thereafter and the Defendants were served with the
complaint. Docs. 1; 3-5. The Defendants failed to pay the full amount owed within ten
days of the letter or service of the complaint. Docs. 13-1 at ¶ 9; 13-3 at ¶ 6.
The undisputed facts establish Producers Credit has proven a prima facie right to
enforce the Note: it has (1) produced the Note and (2) proven the Note was executed.
not affect the amount owed. Doc. 17. This explanation is not a part of the summary judgment record,
although the Defendants have not disputed this explanation. Nevertheless, the record establishes that
the amount of principal owed is $113,245.52. Nothing in the record suggests that the confusion over the
loan has any impact on the amount owed.
Producers Credit attached a copy of the Note to its complaint. Doc. 1-5. Producers
Credit proved the copy of the Note is what it purports to be and is a “true and correct
copy” of the Note through the affidavit of Kent Mosier, Servicing Agent for Producers
Credit Corp. Doc. 13-3 at ¶ 4. The Note is signed, individually, by Defendants Joe
David Cox and Benjamin M. Cox. Doc. 1-5 at 1. Defendants Joe David Cox and
Benjamin M. Cox also signed the Note in their capacities as “CFO” and “CEO”,
respectively, of Defendant C2 Farms. Id. The Note stated the Defendants would repay
the principal plus any accrued interest before the maturity date on February 10, 2016.
Doc. 1-5 at 2-3. The Defendants did not specifically deny the validity of the signatures
on the Note and therefore admitted the validity of the signatures and that the Note was
executed.3 See O.C.G.A. § 11-3-308(a) (“[T]he authenticity of and authority to make
each signature on the instrument is admitted unless specifically denied in the
pleadings.”). The Defendants have failed to present a defense in response to
Producers Credit’s prima facie case. Therefore, the Defendants are liable for the
amount owed under the terms of the Note.
Under the Note, as of January 27, 2017, Producers Credit is entitled to collect
$113,245.52 in principal plus $23.27 in per diem interest for a total of $13,139.18 (at the
stated interest rate of 7.5% per annum) and $20.44 in per diem late charges through the
In their answer, the Defendants did not specifically deny the authenticity of the note or the validity of the
signatures. Doc. 9 at § 7-12. Instead, they refused to respond to allegations regarding the note until the
original was produced and demanded “strict proof” that the copies of the Note and the demand letter are
what they purport to be. See Id. Mosier’s affidavit served as sufficient proof of the authenticity of the
Note and the letter. See Doc. 13-3 at § 4, 6. In addition, if Defendants’ Answer (Doc. 9) serves as a
specific denial of the validity of the signatures, Mosier’s affidavit is sufficient to carry Producers Credit’s
burden to establish the validity of the signatures. See Doc. 13-3; O.C.G.A. § 11-3-308.
date of judgment for a total of $7,194.88 (at the stated interest rate of 6% per annum).4
Docs. 1-6; 13-3 at 3. Additionally, Producers Credit has fulfilled its obligations under
O.C.G.A. § 13-1-11(a)(3) to collect attorneys’ fees. Producers Credit notified the
Defendants of the maturity of the obligation under the Note, that it would be enforcing its
right to collect attorneys’ fees, and that the Defendants had ten days upon receipt of the
notice to pay the principal and interest in order to avoid paying attorneys’ fees. Doc. 16. The Defendants did not pay the principal and interest within ten days of receipt of
this notice. Therefore, as stated in the Note, Producers Credit is entitled to recover
“reasonable” attorneys’ fees equal to 15% of the first $500.00 of principal and interest
and 10% of the remaining amount in excess of $500, or $12,663.47, and court costs of
$400.5 Therefore, in total, Producers Credit is entitled to $146,643.05.
Producers Credit’s Motion for Summary Judgment (Doc. 13) is GRANTED. The
Defendants are jointly and severally liable for the amount owed under the Note,
$146,643.05, and are ORDERED to pay damages in that amount. Accordingly,
Producers Credit’s Motion for Extension of Time to Complete Discovery (Doc. 18) is
DENIED as moot.
SO ORDERED, this 27th day of January, 2017.
S/ Marc T. Treadwell
MARC T. TREADWELL
UNITED STATES DISTRICT COURT
The late charges are calculated from the date of maturity (February 10, 2016) through the entry of
Because the attorneys’ fees award is less than $20,000, the Court need not determine further the
reasonableness of the award. O.C.G.A. § 13-1-11(b).
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