Ameris Bank v. Alliance Investment & Management Company, LLC

CourtCourt of Appeals of Georgia
DecidedMarch 20, 2013
DocketA12A1721
StatusPublished

This text of Ameris Bank v. Alliance Investment & Management Company, LLC (Ameris Bank v. Alliance Investment & Management Company, LLC) 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 Company, LLC, (Ga. Ct. App. 2013).

Opinion

THIRD DIVISION MILLER, P. J., RAY and BRANCH, JJ.

NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. (Court of Appeals Rule 4 (b) and Rule 37 (b), February 21, 2008) http://www.gaappeals.us/rules/

March 20, 2013

In the Court of Appeals of Georgia A12A1721. AMERIS BANK v. ALLIANCE INVESTMENT & MANAGEMENT COM PANY, LLC et al.

B RANCH, 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, LLC 1

(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 Wilson2 (“Guarantors”), who collectively

1 Service Supply filed voluntary bankruptcy on December 30, 2009, and is not a named defendant in this action. 2 Wilson also signed the Note, Loan Agreement and Security Agreement on behalf of AIMCO.

2 own approximately 80% 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 $2,388,000.00 in unpaid principal, $798,173.14 in accrued interest and

$529,142.31 in statutory attorney fees, with interest accruing at $1,068.00 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

3 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

concluded 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.

4 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 Defendant 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.

5 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 Defendant’s Hunt’s counterclaim for invasion of

privacy.

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