Nationsbank, N.A. v. Southtrust Bank of Georgia, N.A.

487 S.E.2d 701, 226 Ga. App. 888, 97 Fulton County D. Rep. 2466, 1997 Ga. App. LEXIS 815
CourtCourt of Appeals of Georgia
DecidedJune 18, 1997
DocketA97A1381, A97A1382
StatusPublished
Cited by21 cases

This text of 487 S.E.2d 701 (Nationsbank, N.A. v. Southtrust Bank of Georgia, N.A.) 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
Nationsbank, N.A. v. Southtrust Bank of Georgia, N.A., 487 S.E.2d 701, 226 Ga. App. 888, 97 Fulton County D. Rep. 2466, 1997 Ga. App. LEXIS 815 (Ga. Ct. App. 1997).

Opinion

Eldridge, Judge.

Appellant NationsBank received a promissory note dated October 21,1991, from M.O.D.E., Inc., in the amount of $170,000 and subsequently received a second note, dated December 22, 1994, in the original amount of $800,000; this second note was modified on May *889 15, 1995', by written agreement. In the October 21, 1991 agreement and in a separate security agreement, M.O.D.E., Inc., gave appellant collateral in one Komo Router, type VR508, serial number 1573, pursuant to a security agreement of such date, as well as any funds, balance, or credits in the hands of the appellant. A security agreement, dated December 22, 1992, for a December 22, 1992 note and any renewals, extensions, or substitutions for such note, listed as collateral an “x” mark beside each printed category, with a strike through for inclusion of specific items: accounts receivable, contract rights, chattel paper, or other rights to payment of money, as well as cash, all goods and merchandise, all proceeds and products of inventory, all equipment, machinery, tools, motor vehicles, supplies, furniture, and general intangibles. A security agreement dated September 23,1994, was entered into by appellant and M.O.D.E., Inc., which covered accounts, inventory, and equipment. On January 14, 1993, appellant and Enterprise Financial Corporation (which received its financing from SouthTrust, was subordinated to SouthTrust, and loaned to the M.O.D.E. entities) entered into a debt subordination agreement with M.O.D.E., Inc., which M.O.D.E. Acquisition Corporation approved.

On January 13, 1993, appellant made a UCC filing to perfect its security interest against M.O.D.E., Inc., in Clayton County.

M.O.D.E., Inc. (borrower) and Burr Warne, H. Barton Hahn, John Patterson Raley, and Thomas Olmstead (guarantors) were given notices of default and demands that all checks, drafts, cash, and other remittances be deposited to an account with appellant and that the Komo Router, goods, merchandise, personalty, equipment, tools, motor vehicles, furniture, office supplies, and fixtures be turned over to appellant under the October 21, 1991, December 22, 1992, and September 23, 1994 security agreements; such demands were made by letters dated November 13, 1995 and April 24, 1996.

Three other related and intertwined corporate entities shared officers, directors, employees, and operated out of the same business premises as did M.O.D.E., Inc., which caused the assets of all corporations to be commingled. The parent corporation was M.O.D.E. Group, Inc., and the other corporations were S.P.W., Inc., and International Sign Acquisition Company, Inc. (“M.O.D.E., Sign”).

Appellee SouthTrust Bank of Georgia (“SouthTrust”) had outstanding loans and security agreements with M.O.D.E. Group, Inc., S.P.W., Inc., and M.O.D.E., Sign, which security interest covered substantially all of such corporations’ assets. As to M.O.D.E., Inc., appellee had priority over appellant as to the general intangibles, because general intangibles were not covered in any of appellant’s security agreements. Appellee filed its UCC financing statements. Appellant had a recorded priority as to all the assets of M.O.D.E., Inc. with the exception of general intangibles, while appellee had recorded priori *890 ties as to the assets of M.O.D.E. Group, Inc., S.P.W., Inc., and M.O.D.E., Sign. When Enterprise Financial Corporation got into financial difficulty, it turned over to SouthTrust all its rights against M.O.D.E., Inc.

On April 24, 1996, NationsBank discussed and entered into an arrangement with Burr Warne, M.O.D.E., Inc.’s president and guarantor, in which he would have M.O.D.E., Inc. surrender all of the commingled assets of all the corporations to appellant, and appellant would, in turn, sell the assets to Impact Fixtures Company (“Impact”), a newly formed corporation, which appellee believed was controlled by Mr. Warne, allowing such assets to escape security interests held by appellee. In consideration flowing to Mr. Warne, not to the corporations, NationsBank promised to forbear enforcement of a personal judgment against Mr. Warne.

SouthTrust became concerned that the commingled assets might be transferred without regard to its security interest in the assets of the other corporations and that it would not receive any surplus proceeds from any purported sale to Impact by appellant. Consequently, SouthTrust’s attorney, on April 25, 1996, informed Mr. Warne’s attorney that SouthTrust intended to assert its rights as a secured creditor and would carefully investigate any facts surrounding a voluntary surrender of assets. Mr. Warne’s attorneys, in turn, advised Mr. Warne and only then contacted NationsBank’s attorney and informed NationsBank’s counsel that Mr. Warne now refused to transfer the commingled assets. When asked why the refusal, Mr. Warne’s attorneys gave their impressions as to what Mr. Warne understood the position of SouthTrust to be: that at bankruptcy Mr. Warne’s discharge would be. opposed by SouthTrust. Subsequently, appellant’s counsel interpreted Mr. Warne’s refusal to transfer the assets to NationsBank: under this second interpretation, SouthTrust would oppose Mr. Warne’s discharge in bankruptcy based upon such possible grounds as “criminal conversion charges or something like that.”

On May 10, 1996, appellant filed a complaint against appellee, alleging tortious interference with the agreement of M.O.D.E., Inc., and Mr. Warne to surrender the assets of the corporation. Service was acknowledged on May 20, 1996. Appellee filed its answer on June 19, 1996.

On May 23, 1996, SouthTrust filed an involuntary petition in bankruptcy against M.O.D.E., Inc.

On October 24, 1996, SouthTrust filed its motion for summary judgment. On November 26, 1996, NationsBank filed an amendment to its complaint adding claims for tortious interference with business relations.

Appellant took the depositions of counsel for appellee, South- *891 Trust, who objected to certain questions as a violation of attorney-client privilege and refused to answer. On December 5, 1996, appellant moved to compel answers to the questions which were objected to and to strike the affidavits filed by appellee’s counsel. On December 13, 1996, appellant moved to extend discovery so that discovery could be completed in regard to the newly asserted claims; appellant’s counsel did not file their affidavit under OCGA § 9-11-56 (f) stating that they needed more time to obtain affidavits to oppose the motion for summary judgment.

On December 17, 1996, oral argument was held on the motion for summary judgment, and the trial court, from the bench, ruled in favor of the appellee. At no time during the oral argument on the motion for summary judgment did appellant’s counsel object to proceeding prior to the trial-court having ruled on its motion to compel and to extend discovery. On December 23, 1996, the trial court entered its written order granting summary judgment on the claim of tortious interference with contractual relations, as well as the claim of tortious interference with business relations, before ruling on appellant’s motion to compel and to extend discovery.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cobb Theatres III, LLC v. AMC Entertainment Holdings, Inc.
101 F. Supp. 3d 1319 (N.D. Georgia, 2015)
Hays v. Page Perry, LLC
92 F. Supp. 3d 1315 (N.D. Georgia, 2015)
Lockwood v. Federal Deposit Insurance Corporation
767 S.E.2d 829 (Court of Appeals of Georgia, 2015)
915 Indian Trail, LLC v. State Bank & Trust Co.
759 S.E.2d 654 (Court of Appeals of Georgia, 2014)
Meadow Springs, LLC v. Ih Riverdale, LLC
Court of Appeals of Georgia, 2013
Alston & Bird LLP v. Mellon Ventures II, L.P.
706 S.E.2d 652 (Court of Appeals of Georgia, 2010)
Gilco Investments, Inc. v. Stafford Cordele, LLC
598 S.E.2d 889 (Court of Appeals of Georgia, 2004)
Culpepper v. Thompson
562 S.E.2d 837 (Court of Appeals of Georgia, 2002)
BellSouth Mobility, Inc. v. Cellulink, Inc.
814 So. 2d 203 (Supreme Court of Alabama, 2001)
Metzler v. Rowell
547 S.E.2d 311 (Court of Appeals of Georgia, 2001)
Avery v. State
534 S.E.2d 897 (Court of Appeals of Georgia, 2000)
Griffin v. Associated Payphone
534 S.E.2d 540 (Court of Appeals of Georgia, 2000)
Lazar v. Mauney
192 F.R.D. 324 (N.D. Georgia, 2000)
JarAllah v. Schoen
531 S.E.2d 778 (Court of Appeals of Georgia, 2000)
In Re Burton
521 S.E.2d 568 (Supreme Court of Georgia, 1999)
Second Continental, Inc. v. Atlanta E-Z Builders, Inc.
514 S.E.2d 846 (Court of Appeals of Georgia, 1999)
Brewer v. Schacht
509 S.E.2d 378 (Court of Appeals of Georgia, 1998)
Kitfield v. Henderson, Black & Greene
498 S.E.2d 537 (Court of Appeals of Georgia, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
487 S.E.2d 701, 226 Ga. App. 888, 97 Fulton County D. Rep. 2466, 1997 Ga. App. LEXIS 815, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nationsbank-na-v-southtrust-bank-of-georgia-na-gactapp-1997.