Feely v. First American Bank of Georgia, N.A.
| Decision Date | 29 October 1992 |
| Docket Number | No. A92A1604,A92A1604 |
| Citation | 206 Ga.App. 53,424 S.E.2d 345 |
| Parties | FEELY v. FIRST AMERICAN BANK OF GEORGIA, N.A. |
| Court | Georgia Court of Appeals |
Weener & Associates, Phillip H. Weener, William P. Mason, Dunwoody, for appellant.
Schwall & Ruff, Emory A. Schwall, Frederick B. Whittington, III, Atlanta, for appellee.
Suit was brought by appellee bank to obtain money claimed due and owing on certain notes and a guaranty agreement. Appellant James D. Feely filed a counterclaim averring fraud. Appellant appeals from the order of the state court granting summary judgment on behalf of appellee for $28,216.98, and denying appellant's motion for summary judgment.
Appellant Feely and Norman L. Heckert were the sole shareholders, officers, and directors of Aftersale Profit Concepts Corporation (APC). To establish a credit rating and to obtain a revolving line of credit for APC, Feely and Heckert in their capacity as corporate officers executed a six-month, unsecured, $50,000 promissory note with appellee bank on March 2, 1988. About that same date, Feely and Heckert in their individual capacities both executed guaranty agreements of this loan and of any extensions or renewals thereof. On September 1, 1988, Feely and Heckert in their respective corporate capacities executed a six-month, unsecured, $50,000 renewal note of the original revolving line of credit. On March 1, 1989, Feely and Heckert in their respective corporate capacities executed another six-month, unsecured, $50,000 renewal note of the revolving line of credit. Apparently by this time, the entire line of credit had been drawn down by APC. On September 1, 1989, Feely and Heckert executed yet another unsecured, $50,000 note renewing the revolving line of credit. Although this note reflects on its face that it was executed by Feely and Heckert in both their corporate and individual capacities, there is some testimony indicating the men may have erroneously signed the note in the wrong place, and that this was considered by the parties to be a corporate obligation. When this note was executed, the maturity date allegedly was left blank, and a bank employee subsequently filled in the maturity date as being 90 days hence. Appellant claims that it was intended that this note was to mature six months from date of execution as did all prior notes, and it is the conduct of the bank in fixing a shorter maturity date that in essence forms the basis for appellant's counterclaim for fraud. The branch manager of the bank disputes this contention and testified that the parties were aware of the terms of the note. The note of September 1, 1989 reflects on its face that, unlike the previous revolving line of credit notes, it was executed in the form of a term note.
After learning of the asserted maturity date of the September 1 note, Feely and Heckert negotiated with the bank to convert the loan obtained by the APC notes to individual loans secured by certain real estate, or the legal interest therein, owned respectively by Feely and Heckert. According to this negotiation, Feely was to execute a note for 60 percent of the obligation or $30,000, and Heckert was to execute a note for 40 percent of the obligation or $20,000. Additionally, each man was to cross-guaranty the other's obligation and to execute a guaranty agreement to that effect. As an alleged interim measure, a $50,000 note was to be jointly executed by them.
Thus, on December 28, 1989, Feely and Heckert executed yet another note in the form of a term note for an original loan. This note was not captioned as a renewal note. It was signed jointly by Feely and Heckert in their individual capacities, and bore on its face a maturity date of "2/1/90" (February 1, 1990).
Thereafter, Feely and Heckert were scheduled to go to the bank and execute the individual $30,000 and $20,000 notes, and their cross-guaranty agreements. On February 19, 1990, Feely appeared and executed his $30,000 note and guaranty agreement; Heckert did not appear and has never executed an individual note or cross-guaranty. Feely has remained current in the payments of his $30,000 note.
The note of September 1, 1989, reflects on its face that it was paid in full on December 29, 1989, the day after the execution of the note of December 28. The branch manager testified in his deposition that the note of September 1, 1989, "was paid in full by the proceeds of the joint note" of December 28, 1989. And Feely admits in his deposition that the note of September 1 has been "paid off."
The bank initiated suit against both Feely and Heckert for collection of the remaining outstanding obligation of $20,000, and obtained default judgment against Heckert. The bank asserts it is entitled to summary judgment against Feely based on either the unsatisfied $20,000 obligation of the joint note of December 28 or on the unsatisfied guaranty agreement executed by Feely on February 19. Held:
1. Appellant asserts the trial court erred in denying his counterclaim for fraud and by denying his motion for summary judgment and summarily dismissing said counterclaim. The counterclaim has two counts. The first count in essence avers a fraudulent misrepresentation by appellee that the note of December 28, 1989, was for a six-month term; the second count avers a fraudulent misrepresentation by appellee that said note and subsequent personal guarantee would lapse after defendants signed the new security and loan agreements. Questions of bad faith and fraud are ordinarily for the jury. Guillebeau v. Jenkins, 182 Ga.App. 225, 231(2), 355 S.E.2d 453. However, where there exists no evidence from which an inference of fraud may be reasonably drawn, the trial court properly may award summary judgment to the defendant-movant. Id. at 231-232, 355 S.E.2d 453; accord Leachman v. Cobb Dev. Co., 229 Ga. 207, 209, 190 S.E.2d 537.
As to the first count, the counterclaim on its face alleges a fraud as to the note captioned as "note 1" in plaintiff's complaint, that is, the note executed on December 28, 1989. Appellant clarified in his deposition that his claim of fraud, as to the subsequent addition of a three-month maturity date therein, was in regard to the note executed on September 1, 1989. Nevertheless, he failed, prior to the trial court's ruling on the motions for summary judgment, to move to amend the faulty averment in Count 1 of the counterclaim to conform to his deposition testimony. See, e.g., OCGA § 9-11-13(f). The provisions of OCGA § 9-11-15 will not operate to amend automatically Count 1 of the counterclaim to conform to evidence introduced in a deposition taken during the discovery process and prior to trial. Cf. Cross v Cross, 230 Ga. 91, 195 S.E.2d 439. Accordingly, the count of fraud averred in Count 1 of the counterclaim did not have to be submitted to the jury.
As to the second count of the counterclaim there exists but a shadowy semblance of an issue of fraud. Summary judgment law does not require the defending party to show that no issue of fact remains, but rather that no genuine issue of material fact remains; and while there may exist some shadowy semblance of an issue, the case may nevertheless be decided as a matter of law where, as here, the evidence shows clearly and palpably that the jury could reasonably draw but one conclusion. See generally Peterson v. Liberty Mut. Ins. Co., 188 Ga.App. 420, 424, 373 S.E.2d 515. Moreover, the alleged misrepresentation regarding the "vacation" of the note of December 28, 1989, concerns a question of law. " " Stephens v. C & S Nat. Bank, 170 Ga.App. 793, 794(2), 318 S.E.2d 216.
2. Appellant argues that the trial court erred in granting appellee's motion for summary judgment because appellant raised the defense of novation, and novation is a jury question. In essence, appellant claims that his execution of the $30,000 note, the terms of which he has not breached, constituted a novation of the $50,000 loan obligation.
(a) The $50,000 revolving line of credit obligation, originating on March 2, 1988, and subsequently renewed by execution of certain notes, was paid in full and satisfied on December 29, 1989, with the consent of the parties. Therefore, any issue regarding the continued validity of the original note and subsequent renewals of the original line of credit obligation has been rendered moot. In fact, appellant admits by way of deposition testimony that this note was "paid off," as he desired for tax purposes "to convert this to a personal note." As an integral part of this procedure, a new personal note of December 28, 1989, was executed by Feely and Heckert, which was signed in their individual capacities.
(b) Appellant's assertion that the note of December 28 was an interim note which remained in effect only until...
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