Henderson v. Cmty. Bank of Mississippi (In re Evans)

• Decision Date: 15 December 2011
• Docket Number: Bankruptcy No. 09–03763–NPO.,Adversary No. 10–00005–NPO.
• Citation: 464 B.R. 272
• Parties: In re Jon Christopher EVANS, Debtor.Derek A. Henderson, Trustee for the Bankruptcy Estate of Jon Christopher Evans and Jointly Administered Related Cases, Plaintiff v. Community Bank of Mississippi, BancorpSouth Bank, First Bank, State Bank & Trust Company, Bank of Yazoo City, Bank of the South, Citizens National Bank of Meridian, Holmes County Bank & Trust Company, Bank First Financial Services, Renasant Bank, Metropolitan Bank, First Commercial Bank, National Bank of Commerce, Guaranty Bank & Trust Company, Cadence Bank, Britton & Koontz National Bank, Wachovia Bank, South Trust Bank, Omni Bank, Merchants & Planters Bank, First Bank of McComb, Heritage Banking Group, The Carthage Bank, Bankplus, Union Planters Bank, Peoples Bank & Trust Company, First Trust Bank for Savings, First Alliance Bank, First State Bank, First Security Bank, Patriot Bank, Trust One Bank, First Tennessee Bank, Bank of Bartlett, Bank of America, Merchants & Farmers Bank, Bank of Forest, Copiah Bank, Consumer National Bank, Regions Bank, Mississippi Valley Title Insurance Company and Old Republic National Title Insurance Company, Defendants.
• Court: U.S. Bankruptcy Court — Southern District of Mississippi

464 B.R. 272

In re Jon Christopher EVANS, Debtor.Derek A. Henderson, Trustee for the Bankruptcy Estate of Jon Christopher Evans and Jointly Administered Related Cases, Plaintiff

v.Community Bank of Mississippi, BancorpSouth Bank, First Bank, State Bank & Trust Company, Bank of Yazoo City, Bank of the South, Citizens National Bank of Meridian, Holmes County Bank & Trust Company, Bank First Financial Services, Renasant Bank, Metropolitan Bank, First Commercial Bank, National Bank of Commerce, Guaranty Bank & Trust Company, Cadence Bank, Britton & Koontz National Bank, Wachovia Bank, South Trust Bank, Omni Bank, Merchants & Planters Bank, First Bank of McComb, Heritage Banking Group, The Carthage Bank, Bankplus, Union Planters Bank, Peoples Bank & Trust Company, First Trust Bank for Savings, First Alliance Bank, First State Bank, First Security Bank, Patriot Bank, Trust One Bank, First Tennessee Bank, Bank of Bartlett, Bank of America, Merchants & Farmers Bank, Bank of Forest, Copiah Bank, Consumer National Bank, Regions Bank, Mississippi Valley Title Insurance Company and Old Republic National Title Insurance Company, Defendants.

Bankruptcy No. 09–03763–NPO.

Adversary No. 10–00005–NPO.

United States Bankruptcy Court, S.D. Mississippi.

Dec. 15, 2011.

Derek A. Henderson, Jackson, MS, pro se.

Kristina M. Johnson, Watkins Ludlam Winter & Stennis, P.A., William C. Brabec, Adams and Reese LLP, Mary Clay Morgan, Mason E. Lowe, Bradley Arant Boult Cummings LLP, William Liston, III, Gene D. Berry, Jackson, MS, W. Lawrence Deas, Deas & Deas LLC, Tupelo, MS, Marshall H. Smith, Jr., Holmes County Bank & Trust Company, Lexington, MS, Michael Scott Jones, Adams & Reese LLP, J. Mark Franklin, III, Thomas R. Hudson, Ridgeland, MS, Barrett Blake Teller, Teller, Chaney, Hassell & Hopson LLP, Vicksburg, MS, Richard T. Phillips, Robert Ryan Revere, Smith Phillips Mitchell Scott & Nowak LL, Batesville, MS, Michael S. MacInnis, Rawlings & MacInnis, PA, Madison, MS, for Defendants.

MEMORANDUM OPINION AND ORDER ON MISSISSIPPI VALLEY TITLE INSURANCE COMPANY AND OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY'S MOTION FOR PARTIAL SUMMARY JUDGMENT

NEIL P. OLACK, Bankruptcy Judge.

There came on for consideration (1) Mississippi Valley Title Insurance Company and Old Republic National Title Insurance Company's Motion for Partial Summary Judgment (the “Motion”) (Adv. Dkt. 301) ¹ and Mississippi Valley Title Insurance Company and Old Republic National Title Insurance Company's Memorandum Brief in Support of Motion for Partial Summary Judgment (the “Title Companies Brief”) (Adv. Dkt. 302) filed by Mississippi Valley Title Insurance Company and Old Republic National Title Insurance Company (“Title Companies”); (2) Response of First Alliance Bank, Patriot Bank, First State Bank, Holmes County Bank, and State Bank & Trust Company to Title Companies' Motion for Partial Summary Judgment (the “First Alliance Response”) (Adv. Dkts. 308 & 309) and Brief of First Alliance Bank, Patriot Bank, First State Bank, Holmes County Bank, and State Bank & Trust Company in Response to Title Companies' Motion for Partial Summary Judgment (the “First Alliance Response Brief”) (Adv. Dkt. 310) filed by First Alliance Bank (“First Alliance”), Patriot Bank (“Patriot”), First State Bank (“First State”), Holmes County Bank (“Holmes”), and State Bank & Trust Company (“State Bank”); (3) First Security Bank's Response to the Title Insurance Companies' Motion for Partial Summary Judgment (the “FSB Response”) (Adv. Dkt. 312) and Memorandum in Support of First Security Bank's Response to the Title Insurance Companies' Motion for Partial Summary Judgment (the “FSB Response Brief”) (Adv. Dkt. 313) filed by First Security Bank (“FSB”); (4) Title Companies' Reply Brief in Support of Motion for Partial Summary Judgment (the “Title Companies Reply Brief”) (Adv. Dkt. 331) filed by the Title Companies; (5) Title Companies' Reply Brief in Support of Motion for Partial Summary Judgment (Adv. Dkt. 337) filed by the Title Companies; (6) Response of OmniBank to Mississippi Valley Title Insurance Company and Old Republic National Title Insurance Company's Motion for Partial Summary Judgment [Dkt. 301] (the “OmniBank Response”) (Adv. Dkt. 338) and Brief of OmniBank in Response to Mississippi Valley Title Insurance Company and Old Republic National Title Insurance Company's Motion for Partial Summary Judgment [Dkt. 303] (the “OmniBank Response Brief”) (Adv. Dkt. 339) filed by OmniBank; and (7) Title Companies' Reply Brief in Support of Motion for Partial Summary Judgment (Adv. Dkt. 361) filed by the Title Companies in the above-referenced adversary proceeding (the “Adversary”).

Having reviewed the pleadings and all the exhibits attached thereto, together with other pleadings on file and the briefs submitted by the parties, the Court finds that partial summary judgment should be granted in favor of the Title Companies on the tort claims of FSB, Patriot, First Alliance, Holmes, First State, and OmniBank (the “Banks”), as set forth below.²

Jurisdiction

This Court has jurisdiction over the subject matter of and the parties to this proceeding pursuant to 28 U.S.C. § 1334. This matter is a core proceeding as defined in 28 U.S.C. § 157(b)(2)(K).³ Notice of the Motion was proper under the circumstances.

Facts

In making its determination of facts on the Motion, this Court must view the evidence submitted by the parties in the light most favorable to the non-moving party. McPherson v. Rankin, 736 F.2d 175, 178 (5th Cir.1984). With that standard in mind, the Court finds that there are no genuine issues with respect to the following facts set forth in the briefs submitted to the Court:

Snowden Policies and First Alliance

1. In 2004, Jon Christopher Evans (“Chris Evans”) approached First Alliance about obtaining a loan secured by two parcels of land, Tracts 10E and 10F, in Southaven, DeSoto County, Mississippi.

2. Charles H. Evans (“Charles Evans”) and Chris Evans are brothers (the “Evans Brothers”).

3. Charles Evans served as the “approved attorney” for the Title Companies in this transaction.

4. On November 11, 2004, the Title Companies issued two title commitments, bearing commitment numbers M–306425 and M–306426 (the “First Alliance Title Commitments”) to First Alliance. (First Alliance Crossclaim Ex. 1).⁴ The First Alliance Title Commitments stated that Tracts 10E and 10F were owned by James C. Hensen and Cassandra E. Hensen (the “Hensens”). On the date the First Alliance Title Commitments were issued, however, Tracts 10E and 10F were owned by Woodgreen Development Corporation (“Woodgreen”), an entity controlled by Chris Evans. In addition, there were numerous deeds of trust and other liens on the properties in favor of other banks from whom the Evans Brothers had borrowed funds.

5. On November 22, 2004, First Alliance loaned $760,000.00 to Snowden Grove Investors, LLC (“Snowden”), an entity controlled by Chris Evans. (First Alliance Crossclaim Ex. 2). To secure the loan, Snowden executed a deed of trust in favor of First Alliance on Tracts 10E and 10F.

6. On December 2, 2004, the Title Companies issued First Alliance two title insurance policies, bearing policy numbers M–306425 and M–306426, on Tracts 10E and 10F. (First Alliance Crossclaim Ex. 3). Loan policy numbers M–306425 and M–306426 are hereinafter referred to as the Snowden Policies.

7. The Snowden Policies insured First Alliance against loss or damage sustained by certain conditions, including title to the estate or interest not being vested in Snowden and any defect in, or lien or encumbrance on the title. (First Alliance Crossclaim Ex. 3).

Cedar Lake Policy I and First State

8. In 2005, Chris Evans approached First State about obtaining a loan secured by two parcels of land, Tracts 10G and 10H, in Southaven, DeSoto County, Mississippi.

9. Charles Evans served as the “approved attorney” for the Title Companies in this transaction.

10. On or about June 10, 2005, the Title Companies issued a title commitment, bearing commitment number M–306506 (the “First State Title Commitment”), to First State. (First State Crossclaim Ex. 1). The First State Title Commitment stated that Tracts 10G and 10H were owned by Woodgreen. Additionally, the First State Title Commitment stated that Tracts 10G and 10H were free of any liens or encumbrances. On the date the First State Title Commitment was issued, however, there were numerous deeds of trust and other liens on the properties in favor of other banks from whom the Evans Brothers had borrowed funds.

11. On June 17, 2005, First State loaned approximately $420,000.00 to Cedar Lake Investors, LLC (“Cedar Lake”), an entity controlled by Chris Evans. The loan was secured by a first lien position on Tracts 10G and 10H. (First State Crossclaim Ex. 2)

12. On June 23, 2005, the Title Companies issued First State a title insurance policy, bearing policy number M–306506, on Tracts 10G and 10H. (First State Crossclaim Ex. 3). Loan policy number M–306506 is hereinafter referred to as the Cedar Lake Policy I.

13. The Cedar Lake Policy I insured First State against loss or damage sustained by the occurrence of certain conditions, including title to the estate or interest not being vested in Cedar Lake and any defect in, or lien or encumbrance on the title. (First State Crossclaim Ex. 3).

Cedar Lake Policy II and Patriot

14. In 2005, Chris Evans approached Patriot about obtaining a loan on two parcels of land, Tracts 10J and 10K, in Southaven, DeSoto County, Mississippi.

15. Charles Evans served as the “approved attorney” for the Title Companies in this transaction.

16. On or about July 7, 2005, the Title Companies issued a title commitment, bearing commitment number M–306520 (the “Patriot Title Commitment”), to Patriot. (Patriot Crossclaim Ex. 1). The Patriot Title Commitment stated that Tracts 10J and 10K were owned by Woodgreen. Additionally, the Patriot Title Commitment stated that Tracts 10J and...