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River Forest, Inc. v. Multibank 2009-1 Res-ADC Venture, LLC

Court of Appeals of Georgia

March 20, 2015

RIVER FOREST, INC. et al.
v.
MULTIBANK 2009-1 RES-ADC VENTURE, LLC

Cert. applied for.

Note. Fulton Superior Court. Before Judge Dempsey.

Wilson Brock & Irby, Kyler L. Wise, for appellants.

Hartman, Simons & Wood, Samuel R. Arden, for appellee.

BARNES, Presiding Judge. Boggs and Branch, JJ., concur.

OPINION

Page 127

Barnes, Presiding Judge.

The trial court granted summary judgment in favor of Multibank 2009-1 Res-ADC Venture, LLC (" Multibank" ) on its claims for breach of a promissory note and guarantees and for attorney fees brought against River Forest, Inc. and David W. Aldridge (collectively, the " defendants" ). On appeal, the defendants contend tat the trial court must be reversed because Multibank (1) failed to show that it was the " holder" under the Uniform Commercial Code (" UCC" ) of a " note modification" entered into after the original note; (2) failed to establish a prima facie right to recover the underlying debt from the defendants by not producing the note modification; (3) failed to properly sue on, or move for summary judgment on, the note modification in addition to the original note; and (4) failed to pierce the defendants' affirmative defenses. For the reasons discussed below, we conclude that the trial court committed no error in granting summary judgment to Multibank and therefore affirm.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.

(Citation omitted.) Salahat v. Fed. Deposit Ins. Corp., 298 Ga.App. 624, 625 (680 S.E.2d 638) (2009).

So viewed, the record shows that on January 29, 2007, River Forest executed and delivered to FirstCity Bank a promissory note in the principal amount of $971,000 (the " Original Note" ). The Original Note provided that the principal balance would be due on February 1, 2009, and established a variable interest rate between 9.25 percent [331 Ga.App. 436] and 18 percent during the term of the loan. If collection efforts were instituted by FirstCity, the Original Note provided that River Forest would pay attorney fees in the amount of 15 percent of the unpaid principal and interest, plus court costs. The Original Note further provided that FirstCity " may at [its] option extend this note or the debt represented by this note ... without affecting [River Forest's] liability for payment of the note."

Page 128

On the same day that the Original Note was executed, Aldridge, the president of River Forest, executed and delivered to FirstCity a personal guaranty for the debt owed by River Forest (the " Original Guaranty" ). The Original Guaranty obligated Aldridge to repay the indebtedness evidenced by the Original Note and " any and all extensions, renewals, modifications, amendments, replacements and consolidations of such note."

On February 1, 2009, River Forest and FirstCity entered into a " Note Modification" that modified and extended the terms of the Original Note. Among other things, the Note Modification extended the maturity date of the Original Note to February 1, 2010, and lowered the interest rate on the Original Note to a fixed rate of 6 percent. The Note Modification also recited that upon an additional interest payment by River Forest on the date of the modification, " the principal balance of the indebtedness will be $693,900." Additionally, the Note Modification recited that ...


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