Renasant Bank v. Lake Cyrus Dev. Co.

Decision Date20 August 2012
Docket NumberCase Number 2:11-CV-3924-SLB
PartiesRENASANT BANK, Plaintiff, v. LAKE CYRUS DEVELOPMENT COMPANY, INC.; CONCETTA S. GIVIANPOUR; SAEID C. GIVIANPOUR, aka Charles S. Givianpour; THE LAKE CYRUS MASTER OWNERS ASSOCIATION, INC., Defendants. LAKE CYRUS DEVELOPMENT COMPANY, INC., Counter Claimant, v. RENASANT BANK, Counter Defendant.
CourtU.S. District Court — Northern District of Alabama
MEMORANDUM OPINION

This case is presently pending before the court on plaintiff's Motion for Summary Judgment and Motion for Rule 54(b) Certification, (doc. 21),1 and Motion to Strike filed by defendants Lake Cyrus Development Company, Saeid "Charles" Givianpour, and ConcettaGivianpour, (doc. 39). Plaintiff Renasant Bank has sued defendantsLake Cyrus Development Company, Inc. [Lake Cyrus]; Concetta S. Givianpour; Saeid C. "Charles" Givianpour; the Lake Cyrus Master Owners Association, Inc. — to recover on unpaid loans and for a declaratory judgment regarding the ownership of the developer rights on foreclosed property. Upon consideration of the record, the submissions of the parties, the arguments of counsel, and the relevant law, the court is of the opinion that defendants' Motion to Strike, (doc. 39), is due to be denied, and plaintiff's Motion for Summary Judgment and Motion for Rule 54(b) Certification, (doc. 21), is due to be granted.

I. MOTION TO STRIKE

In their Motion to Strike and Response to Renasant Bank's Supplemental Submissions in Support of its Motion for Summary Judgment, (doc. 39), defendants contend:

Pursuant to Rule 56(c)(2) of the Federal Rules of Civil Procedure, Defendants object and move to strike the appraisal reports, as such documents are inadmissible hearsay and may not be considered for purposes of proving the truth of the matters asserted therein (i.e., the value of the subject properties). See Fed. R. Evid. 802. Defendants also object on grounds of lack of authentication and appropriate foundation for the proffered evidence.

(Doc. 39 at 2.) Rule 56(c)(2) states, "A party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence." Fed. R. Civ. P. 56(c)(2); see also Jones v. UPS Ground Freight (11th Cir. 2012)("The general rule is that inadmissible hearsay cannot be considered on a motion for summary judgment. Nevertheless, a district court may consider a hearsay statement in passing on a motion for summary judgment if the statement could be reduced to admissible evidence at trial orreduced to admissible form.")(quoting Macuba v. Deboer, 193 F.3d 1316, 1322, 1323 (1999)(internal quotations and citation omitted).

Defendants make no argument that the information contained in the appraisal could not "be presented in a form that would be admissible in evidence." Indeed, the court finds that J. Craig Stephens and Travis Brian Prewett, the appraisers, could testify as to their opinions as set forth in the written appraisal.

Because the court finds that the facts set forth in the written appraisals could be presented in an admissible form, defendants' Motion to Strike, (doc. 39), will be denied.

II. MOTION FOR SUMMARY JUDGMENT
A. SUMMARY JUDGMENT STANDARD

Pursuant to Fed. R. Civ. P. 56(a), summary judgment is appropriate "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); Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991); see Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). Once the moving party has met its burden, the non-moving party must go beyond the pleadings and show that there is a genuine issue of fact for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). A dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

A party asserting that a fact cannot be or is genuinely disputed must support the assertion by:
(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or
(B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.

Fed. R. Civ. P. 56(c)(1); see also Clark, 929 F.2d at 608 ("it is never enough simply to state that the non-moving party cannot meet its burden at trial").

In deciding a motion for summary judgment, the court's function is not to "weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. at 249. "[C]ourts are required to view the facts and draw reasonable inferences 'in the light most favorable to the party opposing the [summary judgment] motion.'" Scott v. Harris, 550 U.S. 372, 378 (2007)(quoting United States v. Diebold, Inc., 369 U.S. 654, 655(1962) (per curiam)). Nevertheless, the non-moving party "need not be given the benefit of every inference but only of every reasonable inference." Graham v. State Farm Mut. Ins. Co., 193 F.3d 1274, 1282 (11th Cir. 1999)(citing Brown v. City of Clewiston, 848 F.2d 1534, 1540 n.12 (11th Cir. 1988)); see also Scott, 550 U.S. at 380 ("When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment.").

B. STATEMENT OF FACTS

Plaintiff has moved for summary judgment as to its breach of contract claims against defendants - Lake Cyrus, Mr. Givianpour, and Ms. Givianpour — based on the notes and guaranties at issue. According to the Declaration of Jerry Harris, plaintiff's Vice President, plaintiff entered into three loan transactions with these three defendants. (Doc. 16-1 ¶¶ 2, 3, 8, 13.)

On or about November 8, 2004, plaintiff loaned Lake Cyrus $3.5 million. (Id. ¶ 3.) The loan, referred to by the parties as "Note 1," was guaranteed by Mr. Givianpour and secured by a mortgage. (Id. ¶¶ 3, 6.) The mortgage gave plaintiff the right to foreclose on the property securing the loan, 44 lots in the Lake Cyrus development, and to sell the property at a foreclosure sale. (Doc. 16-4 at 7; doc. 20-1 at 2, 15-17.) Lake Cyrus defaulted on the loan. (Doc. 16-1 ¶ 4.) According to plaintiff's Complaint, on July 25, 2011, the balance of Note 1 was $1,084,958.56. (Doc. 1 ¶ 13.)

On or about April 17, 2006, plaintiff loaned Lake Cyrus $3 million. (Doc. 16-1 ¶ 8.) This loan, Note 2, was guaranteed by Mr. Givianpour and secured. (Id. ¶¶ 3, 6.) The mortgage gave plaintiff the right to foreclose on the property securing the loan, 73 lots in the Lake Cyrus development, and to sell the property at a foreclosure sale. (Doc. 16-1 ¶ 11; doc. 5-2 at 7; doc. 20-2 at 2, 16, 18.) Lake Cyrus defaulted on the loan. (Doc. 16-1 ¶ 9.) According to plaintiff's Complaint, on July 25, 2011, the balance of Note 2 was $1,128,197.18. (Doc. 1 ¶ 20.)

On or about July 31, 2006, plaintiff loaned Lake Cyrus, Mr. Givianpour, and Ms. Givianpour $300,000. (Doc. 16-1 ¶ 13.) This loan, Note 3, was secured by a mortgage. (See doc. 16-10.) The mortgage gave plaintiff the right to foreclose on the property securing the loan, lots in the Grande View development and property at 4221 Caldwell Mill Road, and to sell the property at a foreclosure sale. (Id. at 2; doc. 16-11; doc. 38-1.) Defendants defaulted on the loan. (Doc. 16-1 ¶ 14.) According to plaintiff's Complaint, on July 25, 2011, the balance of Note 3 was $296,818.05. (Doc. 1 ¶ 26.)

On or about November 16, 2010, plaintiff received an appraisal on the 117 Lake Cyrus lots that secured Notes 1 and 2. (Doc. 36-1 at 2.) The appraisal found that the "As Is" market value for the 117 Lake Cyrus lots was $3,620,000, or approximately $30,940.17 each, on November 7, 2010, assuming a bulk sale of the lots and marketing for 6-12 months. (Id. at 3, 5; doc. 36-6 at 7.) Defendants contend that the market value of the lots was $70,000 per lot based on prior sales of 12 lots in 2010. (Doc. 39 at 2-3.) Plaintiff's appraisal considered $70,000 to be the "retail lot value" of each lot and the Aggregate Retail Value of the 117 lots to be $8,190,000. (Doc. 36-5 at 7.) However, the appraisal report noted:

The Aggregate Retail Value reflects only the sum of the retail lot values that could potentially be derived from the sale of the lots at the weighted average retail price of $70,000. It does not reflect the discounted bulk-sale value of the lots based on the projected sell-out period. Therefore, it is useful only in establishing lot sale prices and loan reduction amounts. Under no circumstances can it be considered to represent the market value of the 117 lots in a bulk-sale scenario.

(Id. [emphasis in original].) The appraisal applied a Discounted Cash Flow Analysis ["DCF"] to determine "the Discounted Value of subject lots to a Single Purchaser (Bulk Purchase.) That is, all of the lots [were] presumed to be purchased in bulk by one single purchaser. The Present Value obtained from the DCF analysis reflect[ed] the market value indication for the 117 lots under a bulk-sale scenario." (Doc. 36-6 at 3 [emphasis in original].) The DCF included the following variables:

• Lot Prices: 117 lots at an average price of $70,000 each. Lot prices are projected to remain stable over the sell-out period.
• Legal Expenses: Estimated at $150 per-lot.
• Sales/Marketing Expenses: Estimated at 5.0% of Aggregate Lot Sales Proceeds.
• Discount Rate Lots: Net Cash Flows discounted at 20.0%, with entrepreneurial profit included in the discount rate, . . . and is in the middle of the range of current required discount rates as indicated by RealtyRates.com.
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