Federal Deposit Ins. Corp. v. Willis

497 F. Supp. 272, 1980 U.S. Dist. LEXIS 17238
CourtDistrict Court, S.D. Georgia
DecidedAugust 11, 1980
DocketCiv. A. 179-63
StatusPublished
Cited by10 cases

This text of 497 F. Supp. 272 (Federal Deposit Ins. Corp. v. Willis) is published on Counsel Stack Legal Research, covering District Court, S.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Federal Deposit Ins. Corp. v. Willis, 497 F. Supp. 272, 1980 U.S. Dist. LEXIS 17238 (S.D. Ga. 1980).

Opinion

*274 ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

BOWEN, District Judge.

Presently before the Court is the motion of the plaintiff in the captioned case for summary judgment against the defendants. Summary judgment should be granted and is hereby ordered. Facts of moderate complexity combine with the applicable law to achieve an uncomplicated result. Under Fed.R.Civ.P. 52(a), an order granting summary judgment needs no accompanying elucidation. The Fifth Circuit, however, has noted that either the order or the record should afford sufficient grounds for effective review. See Stone v. Regents of University System, 620 F.2d 526 (5th Cir. 1980). An explanation of the processes which brought about this judgment follows.

UNDISPUTED FACTS

First Augusta Bank and Trust Company, hereinafter called First Augusta, was a banking corporation organized and existing under the laws of the state of Georgia. Its deposits were insured by the Federal Deposit Insurance Corporation, the plaintiff herein, hereinafter called FDIC. First Augusta closed on May 20, 1977, and FDIC eventually acquired some of the bank’s assets in its corporate capacity. Among the assets acquired were the note and guaranty upon which plaintiff has filed suit against these defendants.

The defendants are professional people who were interested in a real estate development investment in Columbia County, near Augusta, Georgia. Defendants Willis and Veenstra are architects, and defendants Still and Rowell are medical doctors. These defendants are sued by the plaintiff FDIC upon the note and guaranty agreement executed by them and appended hereto as Exhibits “A” and “B”. Willis is the maker of the promissory note and the remaining defendants signed the guaranty agreement.

After giving notice through its attorneys of the intention to proceed at law and to collect attorney’s fees as permitted by Ga. Code Section 20-506, plaintiff FDIC commenced this suit on March 17, 1979. The complaint alleges that the FDIC is the successor in interest to certain assets of the First Augusta. The complaint alleges that in September, 1976, defendant Willis executed and delivered a promissory note in the principal sum of $144,186.91 to First Augusta and that the note is in default. The complaint further alleges that defendants Still, Veenstra and Rowell are jointly and severally liable for the payment of the note made by defendant Willis by virtue of a written guaranty made in October, 1975. The plaintiff demands judgment for the principal amount of the note, together with interest and attorney’s fee§.

The defendants filed motions to dismiss the complaint on several grounds but the motions were denied by the order of the Honorable Anthony A. Alaimo, Chief Judge of this district. Subsequently, the defendants filed an answer to the complaint denying all of the material allegations including the allegation that they are liable to the FDIC. In their responsive pleadings, defendants raised the following affirmative defenses: (i) lack of personal jurisdiction (Veenstra and Still only), (ii) release, waiver and estoppel, (iii) limited liability (Veenstra, Still and Rowell, only), and (iv) fraudulent inducement.

In 1971, defendants formed a limited partnership known as Stevens Creek of Jacksonville, Ltd. These four parties will be referred to collectively as the Jacksonville Group. At the same time, C. E. Hodges, Jack Fink, Peter Menk, G. B. Hester, Jerry Dye and Mark Darnell formed a limited partnership known as Stevens Creek of Augusta, Ltd. These six persons will be referred to collectively as the Augusta Group. The two limited partnerships entered into a joint venture, the purpose of which was to develop approximately 20 acres of real property in Columbia County, Georgia, adjacent to a country club. The joint venture was to build residential units to be known as the Stevens Creek Townhouses. The Georgia Railroad Bank & Trust Company, hereinafter called “the Georgia”, made a construction loan to the *275 joint venture in May, 1971. At the time of the original loan, the Georgia took a security deed over the entire 20 acre tract owned by the joint venture. Funded by the loan from the Georgia and subsequent advances, the joint venture completed construction of Phases I and II of the project, consisting of 21 units.

By early 1974, all of the units in Phases I and II had been sold, and the debt owing to the Georgia stood at approximately $75,-000.00. At that time, the Georgia committed to make a construction loan to the joint venture in the amount of $750,000.00, the proceeds of which were to be used to construct Phase III, consisting of 19 units. The joint venture constructed the Phase III units but encountered difficulty in selling them.

In October, 1975, the total indebtedness owed by the joint venture to the Georgia was approximately $1,000,000.00. At that time, the loan was still secured by the original security deed to the 20 acres. The townhouse development is constructed on approximately 6 acres and the remaining 14 acres owned by the joint venture is undeveloped. Presumably the townhouses sold were released from the Georgia’s debt deed pro tanto.

In October, 1975, the Georgia and the individual members of the joint venture orally agreed to a modification of the loan. Under the modification, the overall loan was to be divided into 19 separate loans, each to be secured by one of the 19 units of Phase III of the project. The separate loans were to be made to the various individual members of the joint venture. This portion of the agreement resulted in a refinancing of approximately $900,000.00 of the total outstanding indebtedness. The remaining balance of approximately $100,-000.00 was to be paid in cash at the time of the modification.

In order to make their portion of the $100,000.00 cash payment to the Georgia, Willis of the Jacksonville Group was to borrow the amount required from First Augusta. At that time, Willis, the general partner of the Jacksonville group, was already indebted to the First Augusta, in the approximate amount of $80,000.00. For the purpose of this motion only, it is assumed arguendo that there is evidence showing that as a part of the modification transaction, the Georgia agreed to release the undeveloped approximately 14 acres, to which it held a security deed, so that the property could be used as security for the loan to be obtained by Willis at First Augusta.

In connection with the loan obtained by Willis from the First Augusta in October, 1975, an officer of the bank, Ronnie Bolton, prepared a document entitled “Offering Sheet.” The offering sheet is a regular business record of the First Augusta and is customarily prepared before a loan is submitted to the loan committee for approval. The particular offering sheet prepared in connection with the October, 1975, loan to Willis states that the proposed amount of the loan is $132,959.15 and that the loan is to be secured by a security deed to 15 acres of real estate. The variation in the number of acres is of no importance here.

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Cite This Page — Counsel Stack

Bluebook (online)
497 F. Supp. 272, 1980 U.S. Dist. LEXIS 17238, Counsel Stack Legal Research, https://law.counselstack.com/opinion/federal-deposit-ins-corp-v-willis-gasd-1980.