Olde Towne Tyrone, LLC v. Multibank 2009-1 Cre Venture, LLC.
Decision Date | 18 March 2014 |
Docket Number | No. A13A2086.,A13A2086. |
Citation | 756 S.E.2d 558,326 Ga.App. 322 |
Court | Georgia Court of Appeals |
Parties | OLDE TOWNE TYRONE, LLC et al. v. MULTIBANK 2009–1 CRE VENTURE, LLC. |
OPINION TEXT STARTS HERE
Rosenzweig, Jones, Horne & Griffis, George C. Rosenzweig, for Appellants.
Morris, Manning & Martin, Robert Wesley Hoskyn, John P. MacNaughton, Atlanta, for Appellee.
This appeal arises out of a dispute over a commercial promissory note executed by Appellant Olde Towne Tyrone, LLC (“Olde Towne”) in favor of Integrity Bank and personally guaranteed by Appellant Jeffery V. Curtis. 1 Following execution of the note and guaranty, Integrity failed, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver. The FDIC then assigned and transferred the loan documents to Appellee Multibank 2009–1 CRE Venture, LLC (“Multibank”). Contending that Olde Towne had defaulted on its loan obligations, Multibank filed the present action against the Appellants for breach of the note and guaranty. The trial court subsequently granted summary judgment in favor of Multibank, concluding that Appellants' affirmative defenses and proposed counterclaims were subject to dismissal under the administrative exhaustion provision of 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.
Summary judgment is proper where the pleadings and evidence demonstrate “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). We review a trial court's grant of summary judgment de novo and construe all inferences in the light most favorable to the nonmoving party. Home Builders Assn. of Savannah v. Chatham County, 276 Ga. 243, 245(1), 577 S.E.2d 564 (2003).
The record reflects that on January 5, 2007, Appellant Olde Towne entered into a commercial loan agreement with Integrity Bank to fund the purchase and development of approximately 54.6 acres of land in Fayette County, Georgia. Under the terms of the agreement, Integrity agreed to loan Olde Towne a total of $6,140,000, with $5,969,085 to be disbursed at the closing of the loan and the remaining $1,645,915 to be advanced in the future to fund the development.
Olde Towne executed a commercial promissory note for the loan. The note was set to mature on January 5, 2009, when the outstanding principal balance would become due. Before the maturity date, Olde Towne was required to make monthly interest payments on the note. The note was secured by a security deed on the property, and Appellant Curtis, a member and investor in Olde Towne, executed a guaranty for the indebtedness.
Olde Towne ceased making interest payments on the note beginning in January 2008. To date, Olde Towne has not paid the amounts owed on the note that have accrued since January 2008, including interest, late charges, and the outstanding principal balance. Nor has Curtis, the guarantor, paid the outstanding amounts owed on the note.
On August 29, 2008, Integrity was closed by the Georgia Department of Banking and Finance, and the FDIC was appointed as receiver. In January 2010, the FDIC, in its capacity as receiver, assigned and transferred a portfolio of loans of failed banks, including Integrity, to Multibank pursuant to a “Loan Contribution and Sale Agreement” (the “Loan Agreement”). The Olde Towne loan was among the loans of Integrity that were assigned and transferred to Multibank.
On May 11, 2011, Multibank filed the instant action against Appellants, contending that Olde Towne had breached the promissory note and that Curtis had breached the guaranty. Multibank sought damages representing the current outstanding balance due on the note of $7,290,550.64, which included unpaid principal, accrued interest, and late charges. Multibank also sought attorney fees under OCGA §§ 13–1–11 and 13–6–11.
Appellants thereafter filed their original answer, denying that they were obligated to pay the outstanding balance due on the note. After retaining new counsel, Appellants filed an amended answer that added multiple defenses, including anticipatory repudiation of contract, breach of a condition precedent, and breach of the duty of good faith and fair dealing, all of which were predicated on alleged wrongdoing by Integrity rather than Multibank. According to Appellants, in early 2008, Integrity had ceased providing the advances of loan proceeds to Olde Towne as required by the commercial loan agreement. Appellants alleged that as a result of Integrity's failure to make the advances, Olde Towne was entitled to suspend its performance under the note, including further note payments, beginning in January 2008. In addition to filing the amended answer with added defenses, Appellants filed a motion to add counterclaims and to withdraw admissions that had not been answered by previous counsel.
Multibank moved for summary judgment on its claims for breach of the promissory note and guaranty. Multibank also opposed Appellants' motion to add counterclaims and to withdraw admissions. Multibank argued that it had established its prima facie right to recover under the note and guaranty and that all of the Appellants' affirmative defenses and proposed counterclaims failed as a matter of law for several reasons. Among other things, Multibank argued that all of Appellants' affirmative defenses and proposed counterclaims arose from the activities of Integrity and thus should have been asserted in the administrative claims process established under FIRREA after Integrity was closed and the FDIC was appointed as receiver. Consequently, Multibank argued that Appellants' affirmative defenses and proposed counterclaims were barred under the administrative exhaustion provision of FIRREA, 12 USC § 1821(d)(13)(D).
Appellants responded that the administrative exhaustion provision did not apply to bar their affirmative defenses and proposed counterclaims because the FDIC never provided them with proper notice of the administrative claims process relating to Integrity. Appellants further responded that Multibank was prohibited from invoking the administrative exhaustion provision under the terms of the Loan Agreement between the FDIC and Multibank. As such, Appellants asserted that they were entitled to assert their affirmative defenses and proposed counterclaims in the instant litigation and that genuine issues of material fact existed as to whether Multibank was entitled to judgment on the note and guaranty.
The trial court thereafter entered its order denying Appellants' motion to add counterclaims and withdraw admissions and granting Multibank's motion for summary judgment. The trial court ruled that Multibank had established a prima facie right to recover under the note and guaranty, and that all of Appellants' affirmative defenses and proposed counterclaims arose out of actions by Integrity and were barred by FIRREA's administrative exhaustion provision. The trial court further ruled that even if the administrative exhaustion provision did not apply, all of Appellants' affirmative defenses failed as a matter of law “for either want of any evidence or argument presented in support thereof.” Appellants now appeal the trial court's ruling.2
1. Appellants contend that the trial court erred in concluding that their affirmative defenses and proposed counterclaims were barred by the administrative exhaustion provision of FIRREA, 12 USC § 1821(d)(13)(D). We disagree.
We recently discussed FIRREA's administrative exhaustion provision in Bobick v. Community & Southern Bank, 321 Ga.App. 855, 743 S.E.2d 518 (2013). As we explained in Bobick, Congress, in enacting FIRREA, established an administrative review process for claims against failed banks for which the FDIC had been appointed as receiver. Id. at 861(3), 743 S.E.2d 518. Furthermore, Congress “anticipated that, as a receiver for failed lending entities, the FDIC would face numerous claims from various parties,” and, as a result, “established limits on judicial review of such claims.” (Citations and punctuation omitted.) Id. Specifically, Congress enacted 12 USC § 1821(d)(13)(D), which provides:
Except as otherwise provided in this subsection, no court shall have jurisdiction over—
has been appointed receiver, including assets which the [FDIC] may acquire from itself as such receiver; or
We concluded in Bobick that the limitation on judicial review imposed by 12 USC § 1821(d)(13)(D) should be construed as an administrative exhaustion requirement such that if a claim falls within its provisions, “courts are divested of subject matter jurisdiction if the claimant failed to exhaust her administrative remedies before the FDIC.” Bobick, 321 Ga.App. at 863 (3), 743 S.E.2d 518. We further concluded that “an entity such as [Multibank] that purchases a failed lending institution's assets from the FDIC acquires the administrative review protections afforded by section 1821(d) and is entitled to seek dismissal of a claim for failure to exhaust administrative remedies.” (Citation and punctuation omitted.) Id. at 864(3)(a), 743 S.E.2d 518.
Against this backdrop, we turn to whether FIRREA's administrative exhaustion provision should be applied in the present case. In the trial court, Appellants raised two arguments for why the provision should not apply: (a) the FDIC never provided them with proper notice of the administrative claims process relating to Integrity; and (b) Multibank was prohibited from invoking the administrative exhaustion provision under the terms of the Loan Agreement.3 We will address...
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