Ameris Bank v. Russack
Filing
23
ORDER denying 12 Motion to Stay. Signed by Magistrate Judge G. R. Smith on 5/29/2014. (loh)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
STATE SBORO DIVISION
AMERIS BANK,
as assignee of the Federal Deposit
Insurance Corporation, receiver of
Darby Bank and Trust Co.,
Plaintiffs,
Case No. CV614-002
IRA RUSSACK,
Defendant.
ORDER
Before the Court in this collection case is the motion of Ameris
Bank to stay discovery until the district judge rules on its partial
summary judgment motion. Doc. 12. Ameris made five loans to GTOT,
LLC ("GTOT") and GTOT defaulted, so Ameris now pursues payment
from the loans' guarantor, defendant Ira Russack. (Does. 12 & 15; doe. 1
(complaint).) Russack, who opposes the stay motion, doe. 15, is invoking
defenses like novation.' Ameris says he's waived that particular defense,
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O.C.G.A. § 10-7-21 states that any contract novation without the consent of
the surety discharges him. Id. O.C.G.A. § 10-7-22 states that any act of a creditor
so it is entitled to summary judgment and to be spared discovery on that
score. Ameris concedes the district judge's summary judgment ruling
won't dispose of the entire case, but will resolve "much of it." Doc. 12 at
6. The number of depositions on things like defendant's negligent loan
administration allegations "may be reduced since it will not be necessary
to depose witnesses based only on their involvement in making credit
decisions or administering the GTOT loans long after the guaranties
were executed." Id.
Under Fed. R. Civ. P. 26(c), this Court has "broad inherent power
to stay discovery until preliminary issues can be settled which may be
dispositive of some important aspect of the case."
Petrus v. Bowen, 833
F.2d 581, 583 (5th Cir. 1987). The clear case for granting a stay is found
where all discovery may be mooted by ruling on a legal issue.
See
Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982) ("Until this threshold
immunity question is resolved, discovery should not be allowed."). A stay
"is rarely appropriate where resolution of the motion will not dispose of
the entire case." Corbin v. Affiliated Computer Services, Inc., 2013 WL
3322650 at *1 (M.D. Fla. July 1, 2013). Ameris, the moving party, bears
injuring a surety or exposing him to increased risk or liability shall discharge him.
Id.
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the burden of showing good cause and reasonableness.
Id. To resolve
the motion, the Court may take a "preliminary peek" at the merits of
the dispositive motion to assess the likelihood that it will be granted.
Feldman v. Flood, 176 F.R.D. 651, 652 (M.D. Fla. 1997).
From the stay and summary judgment filings thus far (does. 11, 12,
15 ) 17, 19 & 21) the most salient issues on what amounts to 24 loan
transactions are (1) novation, upon which novation-discovery can be
mooted by a summary judgment ruling on Ameris' waiver argument; (2)
ambiguity, failure of consideration, and mutual assent, which may well
be resolved by examining the face of the closing documents but could
require a jury determination, see, e.g., L.D.F. Family Farm, Inc. v.
Charterbank, - Ga. App. -, 756 S.E.2d 593, 597 (Mar. 19, 2014); and
(3) finally, whether Russack's signature was fraudulently obtained -something Ameris agrees he is entitled to raise and develop and in fact is
not reached by its summary judgment motion. Doe. 19 at 2.
The fraudulent signature issue may likely entail relatively quick
and limited discovery (did he sign or not?), while expensive discovery
seems certain short of a ruling on the novation waiver. But in Russack's
summary judgment opposition brief he argues: "Even if Russack did sign
all of the subject Guaranties (which he denies to the best of his
knowledge), there is obviously a material issue of fact as to when they
were executed in relation to the twenty-four (24) different loan
transactions; and if they were signed after the loans were closed, the
loans themselves cannot be the consideration for the Guaranties." Doc.
17 at 14 (emphasis added). Ameris impliedly acknowledges this issue in
its stay motion reply brief, when it emphasizes that a lot of discovery will
be spared on its novation-waiver defense, but more or less concedes that
Russack's temporality and ambiguity issues remain to be resolved
through litigation. Doc. 21 at 1-3. To that must be added plaintiffs
actual concession that the fraudulent signature defense warrants
discovery. Suffice it to say that discovery here faces no "knock-outpunch" by a dispositive issue.
To be sure, this is a reasonably close call. There is no suggestion
that time-sensitive evidence will be lost (at least not in the sense that a
few more months will matter) 2 and there is some indication that costly
discovery can be avoided on (if the waiver defense is upheld) "negligent"
loan administration claims. The Court also has the benefit of the parties'
The instant motion is before the undersigned, while the summary judgment motion
is before the district judge. It is reasonable to assume that the district judge will
reach the latter within the coming months.
2
summary judgment filings, which indicate that the issues on which
discovery is warranted stand to be narrowed, as assisted by Fed. R. Civ.
P. 56(d) contentions (i.e., show what discovery, if any, is actually needed
on the issue in question). But granting Ameris its stay is, on balance, not
warranted for the simple reason that Ameris has failed to show that its
pending partial summary judgment motion will spare the parties undue
discovery expense, and that is the standard applicable here.
Accordingly, the Court DENIES plaintiff Ameris Bank's stay
motion. Doc. 12.
SO ORDERED this
day of May, 2014.
UNI'UED 'STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF GEORGIA
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