Ameris Bank v. Russack

Filing 61

ORDER overruling Defendant's 53 Objections to Magistrate Judge's 52 dated April 1, 2015; and affirming the Magistrate Judge's 52 Order dated April 1, 2015, which granted in part and denied in part Plaintiff's 41 motion for protective order and granted Defendant's 28 motion for protective order. Signed by Judge J. Randal Hall on 8/12/2015. (jah)

IN THE UNITED
FOR THE

STATES DISTRICT COURT

SOUTHERN DISTRICT OF GEORGIA
STATESBORO DIVISION

AMERIS BANK, as Assignee of
the Federal Deposit Insurance
Corporation, Receiver of
Darby Bank and Trust Co.,

*
*
*

Plaintiff,
*

Case No.

CV

614-002

*

v.

*

*

IRA RUSSACK,

*

Defendant,

ORDER

On April

1,

2015,

Magistrate

Judge

G.R.

Smith entered an

order, doc. 52, granting in part and denying in part Plaintiff's

motion for protective order, doc.

motion

for protective

order.

41,

Doc.

and granting Defendant's

28.

Defendant

has

since

filed objections to that Order, which the Court addresses below.
Doc.

53.

This

Order

assumes

familiarity

with

the

Magistrate

Judge's earlier order.

Federal

Rule

of

Civil

Procedure

72(a)

provides

that

for

non-dispositive pretrial matters decided by a magistrate judge:

"A party may serve and file objections to [a magistrate's] order
within

14

days

after

being

served

with

a

copy ....

The

district judge in the case must consider timely objections and

modify

or

set

aside

any part

of

the

order

that

is

clearly

erroneous

or

is

contrary

to

law."

The

Court

has

thoroughly

reviewed the Magistrate Judge's Order and Defendant's objections
and finds no clear error of

Defendant

topics 1,
notice

contests

2,

defenses

the

Magistrate

are

irrelevant

and thus

that

"if

discharged

even

4

if

not

He says those topics "seek[]

proven,

would

the

finding

prior

to

Guarantees

(emphasis

Ameris

obtaining

omitted).

are

deposition

discoverable.

his

that is

themselves

liability

Doc.

on

the

supposedly guaranteed
Darby

Bank's

enforceable."

Specifically,

that

evidence in support of"

limit

grounds that the underlying debt
was

Judge's

and 41 from Defendant's Rule 30(b) (6)

to Ameris

52 at 7-9.

fact or law.

Defendant

assets

Doc.

53

asserts

at

that

topic 1 "may lead to admissible evidence that would tend to show
that Ameris

was,

prior

to

acquisition

[of the

loans

Defendant

guaranteed] , unclear of or concerned with the status of some or
all

of

the

recovery."

. . . loans

Doc. 53 at 6.

the book value

time

of

it

of

purchase

irrelevant."

determination

Id.

by

a

at

the

8.

looks

to

[Defendant]

for

He says topic 2 is relevant because

loan "as

from

now

determined by Ameris

FDIC . . . cannot

Finally,

Ameris

that

Defendant

his

be

Bank at

said

contends

guaranties

to

the

be

that any

"lacked

1 Topic 1 sought information on "[d]ue diligence of Ameris Bank in purchasing
GTOT loans

from FDIC/Darby Bank;"

2 sought "[t]he book

value

of each GTOT

loan as determined by Ameris Bank at the time of the purchase from FDIC/Darby
Bank;" while 4 sought "[t]he valuation of the Russack Guaranties as
determined by Ameris Bank at the time of purchase of the GTOT loans from
FDIC/Darby Bank."

Doc.

52 at 6.

value . . . would undoubtedly tend to

support

[Defendant's]

and

Darby Bank's view of the enforceability of the underlying debt,"
Id.

at

8-9.

Defendant's

ascribed

to

objections

the

loans

and

lack

merit.

guaranties,

Darby discharged and closed those,

"do[]

less probable that the guarantees at
against

place,

[Defendant],"

or

that

Darby

take-over by the
why.

Assume that,

FDIC.

that

Ameris

discharged

Doc.

The

and

whether

it

Ameris

thought

not make it any more or

issue here are enforceable

acquired

them

52 at

value

9.

them

before

in

its

the

first

failure

and

An example illuminates

pre-purchase, Ameris found the GTOT loans and

Defendant's guaranties worthless

of Ameris pursuing this case).

would remain a product

of

(that seems farfetched in light

What then?

contract

Their enforceability

law unaffected by Ameris's

subjective impressions of loan values.

Ameris's

pre-purchase

due

diligence

and

loan

valuations

also do not bear on whether Ameris acquired the guaranties

attempts to enforce.

is answered by
FDIC.

As Ameris correctly notes,

it

that question

the Purchase and Assumption Agreement with the

Doc. 41-1 at 7.

Finally, Ameris's subjective beliefs are

not probative of whether Darby discharged the loans or "closed"
Defendant's guaranties prior to its failure.

See Doc.

44 at 6.

Darby either did or did not discharge loans and close guaranties

— what Ameris thought about the loan values cannot change that.2
Accordingly,

Defendant's

objections

are

hereby

OVERRULED

and the Magistrate Judge's prior order is AFFIRMED.

ORDER ENTERED at Augusta,
August,

Georgia,

this __j/_2^~day of

2015.

J.
STATES

RSeNDMj HALL
DISTRICT

JUDGE

SEN DISTRICT OF GEORGIA

As Ameris notes:

Russack is
entitled to
investigate whether GTOT's
debt
has
been
satisfied or discharged. Russack is also free to investigate whether
Darby has released him from any of his guaranties. Ameris has produced
the loan file for each loan described in the complaint. Russack is free
to ask the Darby loan officers who managed these loans whether they
obtained permission to forgive any debt. Russack has deposed Richard
Yates,
the manager of GTOT.
He was free to inquire whether GTOT
satisfied or obtained a
release
from any obligations under its

promissory notes. Lastly, Russack designated the identity of the GTOT
loans and their guaranties as topics for Ameris'ss Rule 30(b)(6)
deposition. Russack had ample opportunity to question Ameris about the
loan payment history, whether the loans had been satisfied or forgiven,
and whether Russack's guaranties had been cancelled or satisfied. He
does not complain that Ameris was unable or unwilling to testify on
these subjects. In short, Russack has been, and remains, free to review
the documents generated while Darby managed the loans and question the
loan officers who would have been involved in any debt forgiveness.
Doc. 46 at 2.
Those discovery topics and methods are "directly probative" of
whether Darby Bank discharged the loans or closed the guaranties, and thus
whether certain defenses Russack pled prevail (and certain claims by Ameris
fail).

Doc.

44 at 6.

What Ameris learned during its due diligence,

or what

it thought about the value of the loans and guaranties, on the other hand, do
nothing to show "whether Darby Bank's position regarding discharge of debt
and 'closing' of guaranty obligations is valid." Id.
Rather, they show what
Ameris thought about, at best, "Darby Bank's position," which in turn does
nothing to undermine Ameris's claims or enhance Russack's defenses. Id.