Bobick v. Cmty.
| Decision Date | 07 October 2013 |
| Docket Number | No. A13A0175.,A13A0175. |
| Citation | 321 Ga.App. 855,743 S.E.2d 518 |
| Court | Georgia Court of Appeals |
| Parties | BOBICK v. COMMUNITY & SOUTHERN BANK. |
OPINION TEXT STARTS HERE
Randall Cade Parian, Carrollton, Smith Conerly, Charles Samuel Conerly, for Appellant.
Busch, Slipakoff & Schuh, Bryan Edward Busch, Shane Patton Stogner, Tawana Blocker Johnson, Atlanta, for Appellee.
This appeal arises out of a dispute over a promissory note executed by appellant Sally Bobick in favor of First National Bank of Georgia (“First National”). Contending that Bobick had defaulted on her loan obligations, First National filed the present action against her for breach of the note, and she answered and asserted several counterclaims against the bank and its CEO. First National failed while the litigation was pending, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver for the bank. The FDIC assigned and transferred certain assets of First National to appellee Community & Southern Bank (“CSB”). The trial court subsequently granted summary judgment to CSB on the claims for breach of the note, dismissed Bobick's counterclaims, and entered final judgment in favor of CSB.
On appeal, Bobick contends that the trial court erred in granting CSB's motions to dismiss and for summary judgment because CSB was never properly substituted as the plaintiff and thus was never made a proper party to the suit. Bobick further contends that the trial court erred in granting CSB's motion for summary judgment on the claim for breach of the promissory note because CSB was not a party to or an assignee of the note. Lastly, Bobick contends that the trial court erred in dismissing her counterclaims pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”), Pub. L. No. 101–73, 103 Stat. 183 (). For the reasons discussed below, we affirm the trial court's rulings.
Summary judgment is appropriate if the pleadings and evidence “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” OCGA § 9–11–56(c). On appeal from a trial court's grant of summary judgment, we “conduct a de novo review, construing all reasonable inferences in the light most favorable to the nonmoving party.” Bank of North Ga. v. Windermere Dev., 316 Ga.App. 33, 34, 728 S.E.2d 714 (2012).
We also review de novo a trial court's grant of a motion to dismiss. Ga. Dept. of Community Health v. Data Inquiry, 313 Ga.App. 683, 722 S.E.2d 403 (2012). We construe the pleadings in the light most favorable to the non-moving party with any doubts resolved in that party's favor. Id.
The record reflects that on January 15, 2008, First National made a loan to Bobick in the principal amount of $2,200,250. Bobick signed a promissory note for the principal sum of the loan plus interest with a maturity date of January 15, 2009. The note was secured by property that “include[d], but [was] not limited to,” 185,394 shares of stock that Bobick owned in WGNB Corporation, as reflected in a security agreement included with the note.
Bobick failed to fully pay the amount owed on the promissory note by the maturity date. On July 22, 2009, First National filed the present suit against Bobick for breach of the note in the State Court of Carroll County. First National sought to recover unpaid principal, interest, late fees, and attorney fees.
In January 2010, First National failed and was closed by the Office of the Comptroller of the Currency, and the FDIC was appointed as receiver for the failed bank. On January 29, 2010, the FDIC in its capacity as receiver transferred certain categories of assets of First National, including “Loans” owed to or held by the bank, to CSB pursuant to a “Purchase and Assumption Agreement.” The FDIC as receiver later executed an “Assignment of Security Instruments and other Loan Documents” (the “Assignment Agreement”) under which it assigned and transferred to CSB all
rights, title, and interests in and to all those certain Mortgages, Security Deeds, Deeds to Secure Debt, Deeds of Trust, Assignments of Rents and Leases, UCC–1 financing statements, judgment liens, and all such other instruments and security agreements securing loans owned by First National ... and held of record by First National ... as of January 29, 2010 ... and all modifications, extensions, amendments and renewals thereto (collectively, the “Security Instruments”)[,] TOGETHER with all of the underlying debts described in such Security Instruments.
The FDIC further assigned and transferred to CSB all
rights, title and interests in and to the promissory notes, loan documents and all other indebtedness secured by the Security Instruments, as evidenced by related promissory notes, any and all loan agreements, pledges, security agreements and UCC financing statements and all modifications, extensions, amendments and renewals to said documents and instruments together with any and all other loan documents, title policies and casualty insurance policies evidencing, securing or relating to any of the foregoing all of which have been delivered to ... [CSB].
Based on these agreements that it had entered into with the FDIC, CSB came into possession of the promissory note and security agreement that had been executed by Bobick in favor of First National.
On March 8, 2010, Bobick answered the complaint filed by First National, 1 raised several affirmative defenses, and asserted counterclaims for declaratory judgment, breach of contract, breach of fiduciary duty, fraud, attorney fees, and punitive damages. Bobick also successfully moved to add as a counterclaim defendant H.B. “Rocky” Lipham III, who had served as a director of First National and its CEO and president.
Bobick alleged in her counterclaims that First National's failure was a direct and proximate result of mismanagement by Lipham and other bank officials, and that, as a result of the failure of the bank, her stock in WGNB Corporation, which she alleged was the “holding company” of First National, had been rendered worthless. Bobick further alleged that Lipham and other bank officials had represented to her that the promissory note would continue to be renewed in one-year increments until she was able to repay her loan to First National, and that her stock in WGNB Corporation would be sufficient collateral and would be adequate by itself to secure the loan's repayment. Bobick alleged that despite these representations, when the note matured on January 15, 2009, First National requested additional collateral for the loan and refused to renew the note without additional collateral.
According to CSB, after Bobick filed her answer and counterclaims, First National filed a motion to substitute CSB as the plaintiff on March 25, 2011, but the state court did not rule on the motion.2 On November 10, 2011, the case was transferred to the Superior Court of Carroll County with the case style of the transfer order still listing First National as the plaintiff.
On May 25, 2012, CSB moved for summary judgment on the claim for breach of the promissory note. CSB argued that it had established its prima facie right to recover and that the burden then had shifted to Bobick to establish any affirmative defenses. CSB further argued that Bobick had failed to come forward with any evidence in support of her affirmative defenses or to raise a question of fact challenging the bank's right to recover unpaid principal, interest, late fees, and attorney fees under the promissory note.
On May 30, 2012, CSB filed a motion to dismiss Bobick's counterclaims for lack of subject matter jurisdiction on the ground that Bobick had failed to exhaust her administrative remedies before the FDIC as required by FIRREA. CSB also argued that Bobick's counterclaim seeking a declaratory judgment should be dismissed on the additional ground that it would improperly restrain the exercise of the powers of the FDIC as receiver under FIRREA. Furthermore, CSB argued that Bobick's counterclaim for breach of fiduciary duty should be dismissed on the additional ground that it was a shareholder derivative claim that could only be asserted by the FDIC as receiver for First National under FIRREA.
After Bobick filed her responses opposing the two motions, the superior court heard oral argument. Following the hearing, the trial court entered its Final Judgment and Order granting summary judgment to “Plaintiff Community & Southern Bank” and entered judgment in favor of the bank for the unpaid principal due on the promissory note, interest, late fees, and contractual attorney fees. The superior court dismissed Bobick's counterclaims in the same order. This appeal followed.
1. Bobick first contends that the superior court erred in granting CSB's motions to dismiss and for summary judgment because CSB was never substituted as the plaintiff and thus was never made a proper party to the case. We disagree.
Neither the state court nor the superior court entered a separate order that expressly substituted CSB as the plaintiff in this suit. But in its Final Judgment and Order, the superior court identified the plaintiff in the style of the case as “First National Bank of Georgia now known as Community & Southern Bank,” referred to the plaintiff as “Plaintiff Community & Southern Bank” throughout the order, and specifically stated that the court was entering judgment in favor of “Plaintiff Community & Southern Bank.” (Emphasis supplied.)
Superior court orders “are construed according to their substance and function and not merely by nomenclature,” and “[t]he goal is to give full effect to the totality of the [ruling that was] rendered rather than to read words in a vacuum.” (Citations and punctuation omitted.) Hedquist v. Merrill Lynch, Pierce, Fenner & Smith, 284 Ga.App. 387, 391(1), 643 S.E.2d 864 (2007). The wording of...
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