Branch Banking & Trust Co. v. Maclay Constr., Inc.
| Decision Date | 21 March 2016 |
| Docket Number | CIVIL ACTION NO. 15-00398-KD-N |
| Parties | BRANCH BANKING AND TRUST COMPANY, successor in interest to COLONIAL BANK, by asset acquisition from the FDIC, as Receiver for Colonial Bank, Plaintiff, v. MACLAY CONSTRUCTION, INC. and CHARLES A. MACLAY, Defendants. |
| Court | U.S. District Court — Southern District of Alabama |
This action is before the Court on plaintiff Branch Banking and Trust Company's (BBT) motion for summary judgment, brief, and evidentiary material in support. (Docs. 20, 21)1 Upon consideration, and for the reasons set forth herein, BBT's motion is GRANTED.
Defendants Maclay and Maclay Construction did not respond to the motion for summary judgment. Therefore, they did not dispute BBT's statement of undisputed facts. Accordingly, the "Court will deem uncontroverted material facts to be admitted solely for the purpose of deciding the motion for summary judgment." S. D. Ala. CivLR 56(d).
On August 13, 2008, Defendant Maclay Construction, Inc. executed and delivered to Colonial Bank a Commercial Promissory Note and Security Agreement (Note 1)2 in the principal amount of $250,000.00. (Doc. 1 at ¶ 6; Doc. 9, Defendants' Answer, at ¶ 6; Doc. 21-1, p. 16, Attachment 1 to Exhibit A, Affidavit of BBT Vice President Marya Ufen). Under the terms of Note 1, Maclay Construction agreed to make payments when due and "[i]f legal proceedings are instituted to enforce the terms of this Note," Maclay Construction agreed "to pay all costs of [Colonial Bank] in connection therewith, including reasonable attorney fees." (Id.)
Note 1 was secured by a Real Estate Mortgage executed by Maclay Construction, dated July 24, 2006, and re-recorded on March 6, 2009, in Mortgage Book 6502, Page 1226, in the Office of the Judge of Probate of Mobile County, Alabama. (Doc. 21-1, p. 4, Ufen Affidavit, ¶ 6; Doc. 21-1, p. 30-37)
Maclay Construction defaulted under the terms of Note 1 by failing to pay the full amount owed on the maturity date of August 11, 2009. (Doc. 21-1, p. 6, Ufen Affidavit, ¶ 13) By reason of the default, BBT became entitled to foreclose on the real property described in the Mortgage. The property securing Note 1 was sold at foreclosure sale on April 21, 2010, to BBT, the highest bidder, in the amount of $50,050.00. (Doc. 21-1, p. 6, Ufen Affidavit, ¶ 14)
At time of foreclosure, BBT was due $267,678.46 under Note 1. BBT credited the sale bid amount of $50,050.00 to the outstanding debt. After credit, BBT is owed $ 217,628.46 under Note 1 as of February 9, 2016 (excluding attorney fees, costs, and expenses). BBT is not seeking additional interest accrued since that time on the Note. (Doc. 21-1, p. 6, Ufen Affidavit, ¶ 17)
Previously on December 13, 2006, Maclay executed a Guarantee3 whereby he guaranteed all debts then owing to Colonial Bank by Maclay Construction, or any debts thereafter owed to Colonial Bank. (Doc. 21-1, p. 4, Ufen Affidavit, ¶ 8) Under the terms of the "continuing Guarantee", Maclay guaranteed payment of all debts "of every kind and description, whether now owing or hereinafter arising out of credit previously, contemporaneously, or hereinafter granted" by Colonial Bank to Maclay Construction. (Doc. 21-1, p. 27) Maclay waived "all notices hereunder, demand, presentation and any and all notices of protest, default, or nonpayment." (Id.) Maclay also agreed to pay all of Colonial's "costs incurred to enforce this Guarantee, including reasonable attorney fees." (Id.)
On October 23, 2008, Maclay Construction executed and delivered to Colonial a Commercial Promissory Note and Security Agreement ("Note 2") in the principal amount of $146,000.00. (Doc. 1 at ¶ 21; Doc. 9, Defendants' Answer, at ¶ 21; Doc. 21-1, p. 18-19, Attachment 1 to Exhibit A, Ufen Affidavit). Under the terms of Note 2, Maclay Construction agreed to make payments when due and "[i]f legal proceedings are instituted to enforce the terms of this Note," Maclay Construction agreed "to pay all costs of [Colonial Bank] in connection therewith, including reasonable attorney fees." (Id.)
Note 2 was secured by a Real Estate Mortgage executed by Maclay Construction, dated December 13, 2006, and recorded on December 14, 2006, in Mortgage Book 6096, Page 1714 in the Office of the Judge of Probate of Mobile County, Alabama. (Doc. 21-1, p. 4, Ufen Affidavit,¶ 7; Doc. 21-1, p. 38- 42)
Maclay Construction defaulted under the terms of Note 2 by failing to pay the full amounts owed on the maturity date of October 22, 2009. (Doc. 21-1, p. 6, Ufen Affidavit, ¶ 13) By reason of the default, BBT became entitled to foreclose on the real property described in the Mortgage. The property securing the loans was sold at the foreclosure sale on April 22, 2010, to the highest bidder, in the amount of $135,590.00. (Doc. 21-1, p. 6, Ufen Affidavit, ¶ 14)
At time of foreclosure, BBT was owed $153,772.70 for Note 2 and applied the sale bid amount of $135,590.00 to the outstanding balance. After giving credit for the foreclosure sale bid amount, BBT is owed $18,182.70 under Note 2 as of February 9, 2016 (excluding attorney fees, costs, and expenses). BBT is not seeking additional interest that has accrued since that time. (Doc. 21-1, p. 6, Ufen Affidavit, ¶ 17)
Also, on October 23, 2008, Maclay executed a Guarantee whereby he guaranteed all debts then owing to Colonial Bank by Maclay Construction, or any debts thereafter owed to Colonial Bank. (Doc. 21-1, p. 4-5, Ufen Affidavit, ¶ 9) Under the terms of the "continuing Guarantee," Maclay guaranteed payment of all debts "of every kind and description, whether now owing or hereinafter arising out of credit previously, contemporaneously, or hereinafter granted" by Colonial Bank to Maclay Construction. (Doc. 21-1, p. 29) Maclay waived "all notices hereunder, demand, presentation and any and all notices of protest, default, or nonpayment." (Id.) Maclay also agreed to pay all of Colonial's "costs incurred to enforce this Guarantee, including reasonable attorney fees." (Id..)
Initially, Colonial Bank owned and held the promissory notes and guarantee agreements. On August 14, 2009, Colonial Bank was closed by the Alabama State Banking Department andthe Federal Deposit Insurance Corporation was appointed Receiver. (Doc. 21-1, p. 52-58) BB&T purchased substantially all of the assets of Colonial Bank from the FDIC, including the Notes and Guarantees at issue.
BBT now owns and holds Note 1 and Note 2, all modifications and renewals, and the associated loan documents, including Maclay's Guarantees, by way of the Purchase and Assumption Agreement with the FDIC (see http:www.fdic.gov/bank/individual/failed/colonial-al_P_and_A.pdf), the Assignment of Security Instruments and Other Loan Documents, recorded in Book 6642, Page 1636, in the Office of the Judge of Probate of Mobile County, Alabama, (doc. 21-1, p. 50-51), and by virtue of the Allonges to Note 1 and Note 2. (Doc. 21-1, p. 11, 17).
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Rule 56(c) governs procedures and provides as follows:
BBT, as the party seeking summary judgment, bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). If the BBT as the moving party "fails to discharge the initial burden, then the motion must be denied and the court need not consider what, if any, showing the non-movant [Maclay and Maclay Construction] has made." Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993); Clark, 929 F.2d at 608.
If BBT carries its initial summary judgment burden, the responsibility shifts to Maclay and Maclay Construction "to show the existence of a genuine issue of material fact." Fitzpatrick v. City of Atlanta, 2 F.3d at 1115. If they fail to make a sufficient showing on an essential element of their case with respect to which they have the burden of proof, then BBT, the moving party, is entitled to summary judgment. Celotex, 477 U.S. at 323. In deciding whether the non-moving parties Maclay and Maclay Construction have met their burden, the evidence of the non-movant is to be believed and all justifiable inferences...
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