BARRY N. STRAUS v. RENASANT BANK

CourtCourt of Appeals of Georgia
DecidedMarch 14, 2014
DocketA13A2472
StatusPublished

This text of BARRY N. STRAUS v. RENASANT BANK (BARRY N. STRAUS v. RENASANT BANK) 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
BARRY N. STRAUS v. RENASANT BANK, (Ga. Ct. App. 2014).

Opinion

FOURTH DIVISION DOYLE, P. J., DILLARD and BOGGS, 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. http://www.gaappeals.us/rules/

March 14, 2014

In the Court of Appeals of Georgia A13A2472. STRAUS et al. v. RENASANT BANK et al.

BOGGS, Judge.

Barry and Denise Straus appeal from the trial court’s order granting summary

judgment in favor of Renasant Bank and Anthony Stancil in this case involving their

liability as guarantors of a real estate acquisition and development loan obtained by

Interstate South, LLC.1 They contend that the trial court erred because (1) the

D’Oench Duhme doctrine2 does not preclude their defenses and counterclaim; (2) the

1 We note that there are three additional cases pending in this court involving Renasant, Stancil, the Strauses, and other guarantors of a different loan obtained by a different LLC of which the Strauses were also members. See Court of Appeals Case Nos. A14A0395, A14A0396, and A14A0424. Many of the underlying facts in these cases differ from the present appeal. 2 See D’Oench, Duhme & Co. v. FDIC, 315 U. S. 447 (62 SCt 676; 86 LE 956) (1942). D’Oench Duhme doctrine does not preclude their tort claims against Stancil

individually; (3) genuine issues of material fact preclude the award of summary

judgment on the alternative grounds relied upon by the trial court; and (4) the trial

court lacked jurisdiction to enter a final money judgment in Renasant’s favor after the

Strauses filed a notice of appeal. For the reasons explained below, we affirm.

Summary judgment is proper when the record reveals no genuine issues of

material fact and the moving party is entitled to judgment as a matter of law. OCGA

§ 9-11-56 (c). “We review the trial court’s grant of summary judgment de novo,

construing the evidence and all reasonable inferences in favor of the nonmoving

party.” (Footnote omitted.) Melman v. FIA Card Svcs., 312 Ga. App. 270 (718 SE2d

107) (2011). So viewed, the record shows that Interstate South, LLC, had six

members, including the Strauses. Beginning in 2004, Interstate South borrowed funds

from Crescent Bank and Trust Company (“Crescent”) in order to purchase

undeveloped land in Pickens County, Georgia. On February 10, 2009, the loan was

renewed in the amount of $1.5 million with a maturity date of June 10, 2009.

Members of Interstate South, including the Strauses, were required to sign a personal

guaranty of the note at the time of this renewal. On February 25, 2009, Stancil, as the

executive vice-president of Crescent, notified Interstate South that the note would not

2 be renewed again unless Interstate South made a principal reduction of ten percent

at or before the date of maturity.

On February 2, 2010, Crescent filed suit against Interstate South and its six

members, including the Strauses, for breach of the note and the individual guaranties.

Based upon Interstate South’s failure to file an answer, the trial court entered a

default judgment against it on June 17, 2010, in the amount of $1.5 million plus

interest and attorney fees totaling over $370,440.

The Strauses filed a timely answer in which they asserted a counterclaim

against Crescent and a third-party complaint against Stancil. In their answer, they

admitted that they executed the guaranties attached to Crescent’s complaint. The

Strauses asserted the following defenses against Crescent: failure to state a claim;

promissory estoppel; condition precedent; breach of fiduciary duty; prior breach of

contract under which Crescent sought to recover; and fraud and deceit. The Strauses

asserted breach of contract and rescission in their counterclaim against Crescent, and

identical claims for breach of fiduciary duty, fraud and deceit, and attorney fees in

their counterclaim against Crescent and their third party complaint against Stancil.

On July 23, 2010, Crescent was closed by the Georgia Department of Banking

and the Federal Deposit Insurance Corporation (“FDIC”), with the FDIC appointed

3 as receiver. On the same day, Renasant Bank (“Renasant”) acquired some of the

assets of Crescent, including the loan at issue in this case.

Renasant later moved, as Crescent’s successor in interest, for summary

judgment in its favor based upon undisputed facts showing the maturity of the note,

the unpaid balance, and the execution of the guaranties by the Strauses. It also

contended that the counterclaim and defenses asserted by the Strauses were barred by

the D’Oench Duhme doctrine and 12 U.S.C. § 1823 (e), that the guaranties signed by

the Strauses waived their defenses and claims against Renasant based upon oral

agreements, that their fraud counterclaim was barred by their lack of diligence in

failing to determine the true interest rate for the promissory note as well as

ratification, that no fiduciary duty was owed, and that the Strauses’ rescission claim

fails because it was first asserted in their answer.

Stancil also moved for summary judgment in his favor, asserting that the

D’Oench Duhme doctrine prevents the Strauses’ claims against him based upon

unwritten side agreements, that the loan documents and guaranty preclude claims

based upon on oral side agreements, that their fraud claim is barred by their lack of

diligence in failing to ascertain the interest rate for the promissory note and by

ratification, and that he owed no fiduciary duty to the Strauses. In a 20-page order,

4 the trial court granted summary judgment in favor of Renasant for all relief sought in

its complaint as well as the Strauses’ counterclaim. It also granted Stancil’s motion

for summary judgment on the Strauses’ counterclaim and dismissed the counterclaim

against him with prejudice.

1. We find no merit in the Strauses’ contention that the trial court erred by

concluding that the D’Oench Duhme doctrine precluded their defenses and

counterclaim against Renasant. “Under the D’Oench Duhme doctrine, applied by the

trial court, oral agreements not recorded in bank documents between debtors and

failed banks will not be enforced against the FDIC or its successors.” (Citation,

punctuation and footnote omitted.) Kessler v. Multibank 2009-1 CRE Venture, LLC,

324 Ga. App. 474, 475 (751 SE2d 121) (2013). In this case, the Strauses’ defenses

and counterclaim are based upon allegations that they were fraudulently induced to

enter into the individual guaranties based upon their “banking relationship” with

Stancil dating back to the 1990s, their reliance upon Stancil’s business advice, an

alleged fiduciary relationship with Stancil, and their discussions with Stancil about

the terms of the underlying note before they signed the guaranties. The defenses and

5 claims relating to Stancil’s alleged misrepresentations about the interest rate for the

promissory note clearly fall within the scope of the D’Oench Duhme doctrine.3

We are not persuaded by the Strauses’ arguments that the doctrine should not

be applied based on their claim that they are innocent of any wrongful action and

fraud in the factum. The scope of the D’Oench Duhme doctrine is broad, Resiventure,

Inc. v. Nat. Loan Investors, 224 Ga. App.

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