Ameris Bank v. Alliance Investment & Management Co.

739 S.E.2d 481, 321 Ga. App. 228, 203 Fulton County D. Rep. 921, 2013 WL 1137009, 2013 Ga. App. LEXIS 232
CourtCourt of Appeals of Georgia
DecidedMarch 20, 2013
DocketA12A1721
StatusPublished
Cited by15 cases

This text of 739 S.E.2d 481 (Ameris Bank v. Alliance Investment & Management Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ameris Bank v. Alliance Investment & Management Co., 739 S.E.2d 481, 321 Ga. App. 228, 203 Fulton County D. Rep. 921, 2013 WL 1137009, 2013 Ga. App. LEXIS 232 (Ga. Ct. App. 2013).

Opinion

Branch, Judge.

In this suit on a note and accompanying guarantees, the trial court determined that the defendants had raised issues of fact about certain defenses, and it therefore allowed the case to go to trial. A jury returned an award in favor of the bank but for significantly less than the total amount due. The jury also found in favor of one defendant on his counterclaim. The bank appeals and primarily contends the trial court erred by denying its motions for directed verdict on the note and guarantees. We agree and reverse.

The appellees do not dispute the basic facts regarding the loan and the related agreements set out in the appellant’s brief, many of which were stipulated at trial. In accordance with Rule 25 (b) (1) of this Court, we therefore accept them as true and reproduce an abbreviated and edited version below.

On October 31, 2007, four companies with common ownership — Alliance Investment and Management Company, LLC (“AIMCO”) and its three operating companies: Ameridoor Cabinetry Components, LLC; Classic Surrounds, LLC (collectively “Defendant Borrowers”); and Service Supply Distribution, LLC1 (collectively “Borrowers”) — signed a promissory note in the original principal amount of $5,900,000 (the “Note”) with a maturity date of October 1, 2008. With authority from all of the Borrowers (as is admitted by appellees), J. Wayne Roberts signed the Note on behalf of all four LLCs. At that time, Roberts was in charge of the financial side of the businesses, and he was the official liaison between the LLCs and the bank. On the same date and again on behalf of all four Borrowers, Roberts signed a related Commercial Loan Agreement and a Security Agreement. In addition, Defendants Roberts, Monroe Hunt, Jerry Hunt, and Brad [229]*229Wilson2 (“Guarantors”), who collectively own approximately 80 percent of the companies, each signed a separate written Guaranty of the debt as evidenced by the Note.

The Note was renewed and the maturity date extended multiple times from October 1, 2008 through March 15, 2010. But the balance due on the Note was not paid in full on or after that day, and the parties did not agree to further renew the debt. In May 2010, Ameris Bank sent and Defendants each received a written notice and demand for payment of the debt, attorney fees and interest. The parties' stipulated that, as of the beginning of trial, the total amount of the indebtedness was $3,715,315.45, consisting of $2,388,000 in unpaid principal, $798,173.14 in accrued interest and $529,142.31 in statutory attorney fees, with interest accruing at $1,068 per day thereafter.

In addition to these undisputed facts and construed in favor of the verdict, the evidence shows that in late 2007 and early 2008, more than two years before the final maturity date of the loan, Roberts concluded that the long-term outlook for the Borrowers’ businesses (manufacturing and providing components for the manufactured housing industry) was not good, and he conceived a plan of liquidating the Borrowers’ assets to pay off the loan. But according to the Security Agreement, the Borrowers were not permitted to “sell, offer to sell, lease, or otherwise transfer or encumber” any assets without “prior written permission” of Ameris Bank, and the Loan Agreement has a similar provision.

Accordingly, in June 2008, three to four months prior to the original loan maturity date and almost two years prior to the final maturity date, Roberts met with officials of Ameris Bank, including a vice president, to propose liquidating or selling enough of the Borrowers’ ongoing businesses to pay off the indebtedness to the bank. Roberts hoped “to liquidate the debt, [and] keep jobs for the [employees] by selling the companies as a whole if possible.” Roberts had performed some research and concluded that he might be able to raise $6 million, which would be enough to pay the then-balance on the loan of $4.8 million, leaving $1.2 million for the companies. One bank representative who attended that meeting confirmed that Roberts “felt that at the time that he could liquidate the companies and pay the debt. And he was willing to help the Bank to do that and there would not be any type of shortfall or anything.” Within the following year, Ameris Bank prepared an internal report in which it [230]*230concluded that it was sufficiently collateralized to cover the loan based on “orderly liquidation margins,” which a bank official explained means the collateral was sufficient to cover the debt.

Roberts expected to hear back from the bank on his proposal, and he called the bank three or four times over the next two months to follow up. The bank, however, never responded to the offer, and Roberts, in his own words, “just gave up. Gave up on asking.” Yet during a deposition, an executive vice president with the bank was surprised to learn that the bank had not responded or accepted the offer; he stated, “if a proposal had been presented where we would have been paid in full,... I don’t know why any bank would turn away a proposal to be paid in full.” Despite the bank’s failure to respond, as shown above the Borrowers thereafter agreed to renew the Note and extend the maturity date a number of times. These extensions of the Note were signed by Roberts, Jerry Hunt, and Monroe Hunt on behalf of all four borrowers.

Based on the bank’s failure to respond to the June 2008 proposal, the Defendant Borrowers and Guarantors raised as a defense to the bank’s claims under the Note and the Guarantees that the bank breached its covenant of good faith and fair dealing and that the bank failed to mitigate damages. At trial, the jury returned a verdict in favor of the Bank in the amount of $ 1,200,000, significantly less than the amount due, and returned a verdict in favor of Monroe Hunt on a counterclaim for invasion of privacy in the amount of $130,000. Judgment was entered in these amounts together with statutory attorney fees to the Bank.

1. The appellees argue that Ameris Bank failed to preserve any of its enumerated errors for appeal. The bank argues that the trial court erred (1) by denying its motion for summary judgment on the Guarantees because they are unconditional; (2) by denying its motion for summary judgment on the Note and Guarantees because the Defendant Borrowers and Guarantors failed to present evidence of a viable defense; (3) by denying its multiple motions for directed verdict for the same reasons stated in Enumeration No. 2; (4) by denying its motion for directed verdict because the defendants were estopped from raising any defenses; and (5) by denying its motion for summary judgment on Monroe Hunt’s counterclaim for invasion of privacy.

It is true that the bank asserts as error the denial of its motions for summary judgment on the Guarantees, the Note, and the counterclaim and that in general, “[a]fter verdict and judgment, it is too late to review a judgment denying a summary judgment, for that judgment becomes moot when the court reviews the evidence upon the trial of the case.” (Citations and punctuation omitted.) Kicklighter v. Woodward, 267 Ga. 157, 162 (5) (476 SE2d 248) (1996). Accordingly, [231]*231Enumerations No. 1 and No. 2 are moot. But the bank also moved for directed verdicts at the close of the appellees’ case on the Note and the Guarantees (and later renewed those motions at the close of all evidence), arguing that it had shown a prima facie case on both the Note and the Guarantees, established that the Guarantors had no viable defenses, and shown that all defendants were estopped from raising any defenses.

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739 S.E.2d 481, 321 Ga. App. 228, 203 Fulton County D. Rep. 921, 2013 WL 1137009, 2013 Ga. App. LEXIS 232, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ameris-bank-v-alliance-investment-management-co-gactapp-2013.