United States District Court, S.D. Georgia, Savannah Division
HONORABLE J. RANDAL HALL UNITED STATES DISTRICT JUDGE.
before the Court is Plaintiff s renewed motion for summary
judgment. (Doc. 137.) The Clerk of Court gave
Defendants timely notice of the summary judgment motion and
the summary judgment rules, of the right to file affidavits
or other materials in opposition, and the consequences of
default. (Doc.138.) Therefore, the notice requirements of
Griffith v. Wainwright, 772 F.2d 822, 825 (11th Cir.
1985) (per curiam), have been satisfied. Defendants Alvarez,
Beeler, Cook, and Tuttle filed response briefs, and Plaintiff
filed a reply brief.(Docs. 140, 141, 143, 144.) The time for
filing materials in opposition has expired, and the motion is
ripe for consideration. Upon consideration of the record
evidence, relevant law, and the parties' respective
briefs, Plaintiff's motion is GRANTED IN PART,
DENIED IN PART.
January 3, 2008, in exchange for a loan to form a bank in
Coral Gables, Florida, Defendant Cobalt Partners, LLC,
("Cobalt") executed a promissory note in favor of
First National Bank of Savannah, Georgia, ("FNB")
in the principal amount of $1, 000, 000.00. (Roberts Decl.,
Doc. 89-1, ¶ 2; Wheaton Aff., Doc. 128-7, Ex. 1.)
According to Plaintiff, as part of this financing
arrangement, Cobalt's members - Messrs. Allen Harper and
Michael Kistler as well as Defendants Alvarez, Beeler, Cook,
Tuttle, and Werk - each then executed an absolute,
unconditional, continuing unlimited personal guaranty of the
note. (Roberts Decl. ¶ 3; Wheaton Aff.,
Exs. 3-7; Kistler Dep., Doc. 89-8, at 21:4-25.) On January
20, 2009, Defendant Cobalt renewed the note. (Roberts Decl.
¶ 5; Wheaton Aff., Ex. 2.)
failed to make full payment by the renewed note's
maturity date of July 20, 2009, Defendant Cobalt defaulted
thereon and the other Defendants did not fulfill their
purported guaranties. (Roberts Decl. ¶¶ 6-7.)
Nevertheless, on September 16, 2009, after forcing an advance
of funds from Mr. Kistler's separate line of credit with
FNB ("Kistler's LOC") and applying those funds
to satisfy the amounts then-due under the renewed note, FNB
treated the renewed note as paid in full. (Id.
¶¶ 8-9 & Ex. 8; see also Docs. 89-2,
111-3.) FNB considered the renewed note paid off until May
27, 2010, when FNB reinstated the renewed note as it existed
prior to FNB having advanced funds from Kistler's LOC on
September 16, 2009. (Roberts Decl. ¶ 9; see also
Docs. 89-2, 111-3.)
payment for the renewed note, the Federal Deposit Insurance
Corporation ("FDIC-R"), appointed as FNB's
receiver on June 25, 2010, ultimately filed this action
against Defendants on April 19, 2013, alleging that Defendant
Cobalt and the other named Defendants were jointly and
severally liable for the notes' outstanding principal,
interest, and other amounts due thereon. (Compl., Doc. 1;
Roberts Decl. ¶ 10; see also Saville Decl.,
Doc. 128-6, ¶¶ 2-3.) The Clerk of this Court
subsequently entered default against Defendants Cobalt and
Werk for their respective failures to appear, plead or
otherwise defend against this action after having been
properly served. (Docs. 43, 93; see also Docs. 13,
42, 79, 92.)
1, 2015 the FDIOR filed its original motion for summary
judgment. (Doc. 89.) Just as Defendants began filing their
responses to that motion, Plaintiff Cadlerock III, LLC
acquired the FDIC-R's interest in the notes and the
relevant guaranties and subsequently replaced the FDIC-R in
this suit. (Docs. 105, 108.) On November 11, 2015, Plaintiff
submitted the unsworn declaration of its account officer,
Nick Davies, who attested that the rights to the notes and
the relevant guaranties were transferred from the FDIC-R to
The Cadle Company II, Inc. ("Cadle") and then from
Cadle to Plaintiff on August 27, 2015. (Davies 11/11/2015
Decl., Doc. 121-2, ¶¶ 1-7 & Exs. 1-4; see
also Davies 05/18/2016 Decl., Doc. 128-5, ¶¶
2-3; Wheaton Aff., Exs. 1-7.) On March 28, 2016, the Court
denied Plaintiff's original motion for summary
judgment. (Doc. 124.) On May 18, 2016, Plaintiff
filed a motion seeking leave to file its present renewed
motion for summary judgment,  which the Court subsequently
granted. (Docs. 128, 136.)
SUMMARY JUDGMENT STANDARD AND APPLICABLE LAW
Summary Judgment Standard
motion for summary judgment will be granted only if
"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). In this context, facts are
"material" if they could affect the outcome of the
suit under the governing substantive law. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) . In
evaluating the contentions of the parties, the Court must
view the facts in the light most favorable to the non-moving
party, Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986), and must draw "all
justifiable inferences in [its] favor, " United
States v. Four Parcels of Real Prop., 941 F.2d 1428,
1437 (11th Cir. 1991) (en banc) (internal punctuation and
the moving party bears the burden and must show the Court, by
reference to materials on file, the basis for the motion.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
How to carry this burden depends on who bears the burden of
proof at trial. Fitzpatrick v. City of Atlanta, 2
F.3d 1112, 1115 (11th Cir. 1993) . When the movant has the
burden of proof at trial, "that party must show
affirmatively the absence of a genuine issue of material
fact: it must support its motion with credible evidence . . .
that would entitle it to a directed verdict if not
controverted at trial." Id. (internal quotation
marks and citation omitted) . Put another way, the moving
party must show that no reasonable jury could find for the
non-moving party on any of the essential elements of the
and only if - the movant carries its initial burden, the
non-movant may avoid summary judgment by coming forward
"with significant, probative evidence demonstrating the
existence of a triable issue of fact."
Fitzpatrick, 2 F.3d at 1116 (internal quotation
marks and citation omitted). After the introduction of the
non-movant's evidence, summary judgment will be granted
for the moving party only if "the combined body of
evidence is still such that the movant would be entitled to a
directed verdict at trial - that is, such that no reasonable
jury could find for the non-movant." Id.
Importantly, however, the non-movant cannot carry its burden
by relying on the pleadings or by making conclusory
statements. See Morris v. Ross, 663 F.2d 1032,
1033-34 (11th Cir. 1981). Instead, the non-movant must
respond with affidavits or as otherwise provided by Federal
Rule of Civil Procedure 56.
noted in the Court's Order on Plaintiff's original
motion for summary judgment, the choice of law rules and the
substantive law of Georgia apply in this case. (See
Doc. 124, at 5-7.) The choice of law rules of the forum state
(here, Georgia) apply when deciding state law claims.
Benchmark Med.Holdings, Inc. v. Rehab Solutions,
LLC, 307 F.Supp.2d 1249, 1258-59 (N.D. Ala. 2004)
(citing Boardman Petroleum, Inc. v. Federated Mut. Ins.
Co., 135 F.3d 750, 752 (11th Cir. 1998)). Because the
notes each specifically state that "[t]he law of the
state of Georgia will govern this note, " (Wheaton Aff.,
Exs. 1- 2), Georgia law governs those instruments. See
Neibert v.Computer Scis. Corp., 621 F.App'x 585, 589
(11th Cir. 2015)("Absent a contrary public policy,
[Georgia courts] will normally enforce a contractual choice
of law clause." (quoting Carr v. Kupfer, 250
Ga. 106, 107 (Ga. 1982))). Because the guaranties indicate
that the applicable city is Savannah, Georgia and that the
lending institution is FNB,  (Doc. 128-7, Exs. 3-7),
Georgia substantive law appears to govern those instruments.
Convergys v. Keener, 582 S.E.2d 84, 86-87 n.l
(Ga.2003) (holding that Georgia continues to follow the
traditional rule of lexi loci contractus, whereby
contracts are governed "by the law of the place where
they were made, except where it appears from the contract
itself that it is to be performed in a State other than that
in which it was made, in which case the laws of that sister
State will be applied." (internal quotation marks,
citations, and formatting omitted)); but see
Neibert, 621 F.App'x at 589. Because Plaintiff has
not renewed its prior arguments that the laws of another
state should be applied to the guaranties,  the Court
will apply the background rule of lexi loci
contractus and, consequently, Georgia substantive law
for those instruments as well.
a suit to enforce a promissory note, a plaintiff establishes
a prima facie case by producing the note and showing that it
was executed." L.D.F. Family Farm, Inc. v.
Charterbank, 756 S.E.2d 593, 596 (Ga.Ct.App. 2014).
"Once that prima facie case has been made, the plaintiff
is entitled to judgment as a matter of law unless the
defendant can establish a defense." Id.
(internal quotation marks and citation omitted).
in a suit on a personal guaranty, when the signature is
admitted or established, production of the instrument
entitles the holder to recover on it unless the defendant
establishes a defense." Id.