Federal Deposit Insurance Corporation v. Adams et al

Filing 20

OPINION AND ORDER GRANTING Plaintiff's 16 Motion for Summary Judgment. The Clerk shall enter judgment in favor of Plaintiff and against Defendants for $2,250,000.00 in principal, $278,671.81 in interest, $4300.00 in contractual fees and late charges, $379,300.77 as attorney's fees, and costs of this action. Defendants are jointly and severally liable for the judgment entered in this action. Signed by Judge William S. Duffey, Jr on 1/3/2014. (anc)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
FEDERAL DEPOSIT INSURANCE
CORPORATION as Receiver for
ENTERPRISE BANKING
COMPANY,
Plaintiff,
v.

1:12-cv-3983-WSD

DOUGLAS R. ADAMS, STRONG
ROCK HOLDINGS, INC., a Georgia
Corporation, and DRA
DEVELOPMENT, INC., a Georgia
Corporation,
Defendants.

OPINION AND ORDER
This matter is before the Court on Plaintiff Federal Deposit Insurance
Corporation as Receiver for Enterprise Banking Company’s (“FDIC-R”)
unopposed Motion for Summary Judgment [16] against Defendants Douglas
Adams (“Adams”), Strong Rock Holdings, Inc. (“Strong Rock”) and DRA
Development, Inc. (“DRA”).

I.

BACKGROUND
On September 6, 2006, Adams entered into a loan with Enterprise Banking

Company in the principal amount of $2,400,100. Adams acknowledged in
deposition testimony that he signed a Multipurpose Note and Security Agreement
memorializing the terms of the loan and that he received $2,400,100 from
Enterprise.
In order to provide additional security for the loan, Defendant Strong Rock
executed a Continuing Guaranty that guaranteed the prompt and full payment and
performance of the terms of the agreement between Adams and Enterprise. Adams
admitted that he executed the Guaranty on behalf of Strong Rock, and that he was
authorized to do so. When the loan reached maturity, Adams and Strong Rock
renewed the loan and guaranty with Enterprise in September of 2007, and again in
September 2008. Adams admitted executing the 2007 and 2008 notes. He testified
that he renewed the Strong Rock guaranty on both of these occasions and that he
was authorized to do so.
To provide Enterprise with additional security and to induce Enterprise to
make the September 2008 renewal, Defendant DRA executed a Continuing
Guaranty that provided a guaranty of all present and future written agreements

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between Adams and Enterprise. Adams testified that he executed the Guaranty on
behalf of DRA, and that he was authorized to do so.
The loan and the Strong Rock and DRA guaranties were renewed for a third
time on December 23, 2008, and for a fourth time on April 27, 2010. Adams
testified that he signed the Multipurpose Note and Security Agreement on his own
behalf, that he executed the Guaranties on behalf of Strong Rock and DRA, and
that he was authorized to do so.
The April 27, 2010, renewal note reduced the principal amount of the loan to
$2,250,000 and bore a maturity date of May 1, 2011. It provided for quarterly
interest payments to be made during the term of the renewal note, and for payment
of the entire principal balance of the loan upon maturity. Adams failed to make the
quarterly interest payments required during the term of the final renewal note, and
he failed to make payment of the principal and interest at maturity or any time
thereafter. In deposition testimony, Adams admitted that there was nothing wrong
with the loan itself that would excuse him from his obligations to pay for the loan.
Neither DRA nor Strong Rock has made any payments to Enterprise or FDIC-R in
satisfaction of their Guaranties.
The total past due amount under the Note as of the date of this Order is
$2,250,000.00 in principal, plus $278,671.81 in interest, and $4300 in contractual

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fees and late charges. Additionally, the Note and Guaranty Agreement require
Defendants to pay attorney’s fees and court costs incurred in collecting amounts
due under those documents. The Note and Guaranty Agreement authorize
collection of attorney’s fees in an amount equal to fifteen percent (15%) of the
principal and interest pursuant to O.C.G.A § 13-1-11. Plaintiff argues it is entitled
to recover $379,300.77 as attorney’s fees plus the costs of this action.
II.

DISCUSSION
A.

Legal Standard

Summary judgment is appropriate only when the pleadings, depositions, and
affidavits submitted by the parties show that no genuine issue of material fact
exists and that the movant is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(c). The court should view the evidence and any inferences that may be
drawn in the light most favorable to the nonmovant. Adickes v. S.H. Kress & Co.,
398 U.S. 144, 158-59, 90 S. Ct. 1598, 26 L.Ed.2d 142 (1970). The party seeking
summary judgment must first identify grounds that show the absence of a genuine
issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S. Ct.
2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the non-movant, who must
go beyond the pleadings and present affirmative evidence to show that a genuine
issue of material fact does exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

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257, 106 S. Ct. 2505, 91 L.Ed.2d 202 (1986).
Even if a motion for summary judgment is unopposed, the movant must
nevertheless show it is entitled to judgment on the merits, based on evidentiary
materials in the record. See Dunlap v. Transam. Occidential Life Ins. Co., 858
F.2d 629, 632 (11th Cir.1988) (district court did not err in treating motion for
summary judgment as unopposed where it considered the merits of the motion).
The district court “need not sua sponte review all of the evidentiary materials on
file at the time the motion is granted,” but it must at least review all those
submitted in support of the summary judgment motion. United States v. 5800
S.W. 74th Ave., 363 F.3d 1099, 1101 (11th Cir.2004). A district court’s order
granting an unopposed motion for summary judgment must indicate that the merits
were considered. Id. at 1102.
B.

Analysis

The evidence is undisputed that Adams is in default on the Note and that
Strong Rock and DRA each are liable under the Guaranty Agreements. Neither
Defendant presented any defense to the claims asserted by Plaintiff and did not
respond to Plaintiff’s Motion for Summary Judgment. Under our Local Rule 7.1B,
failure to respond to a motion indicates the motion is unopposed. On the
undisputed facts here, and in view of the Defendants failure to oppose the motion,

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the Court finds that Plaintiff is entitled to summary judgment against Defendants.
III.

CONCLUSION
Accordingly, for the foregoing reasons,
IT IS HEREBY ORDERED that Plaintiff’s Motion for Summary

Judgment [16] is GRANTED. The Clerk shall enter judgment in favor of Plaintiff
and against Defendants for $2,250,000.00 in principal; $278,671.81 in interest;
$4300.00 in contractual fees and late charges; $379,300.77 as attorney’s fees; and
costs of this action. Defendants are jointly and severally liable for the judgment
entered in this action.

SO ORDERED this 3rd day of January 2014.

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