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Branch Banking and Trust Co. v. Register

United States District Court, S.D. Georgia, Savannah Division

December 5, 2019

BRANCH BANKING AND TRUST COMPANY, Plaintiff,
v.
J. ANTHONY REGISTER and JOHN H. MEEKS, Defendants.

          ORDER

          WILLIAM T. MOORE, JR., UNITED STATES DISTRICT JUDGE

         Before the Court is Plaintiff Branch Banking and Trust Company's ("BB&T") Motion for Summary Judgment (Doc. 18), to which Defendants have responded (Doc. 22). For the following reasons, Plaintiff's motion is GRANTED.

         BACKGROUND[1]

         This case arises out of a series of promissory notes and guaranties entered into between BB&T and Highland Enterprises, Inc. ("Highland Enterprises"), a corporation owned by Defendants J. Anthony Register and John H. Meeks.[2] (Doc. 18, Attach. 2 at 1.) There are three notes at issue:

(1) Note-2 was executed by Highland Enterprises on November 26, 2003 for $772, 200.00. (Doc. 18, Attach. 2 at 1; Doc. 19, Attach. 2.) Defendants Register and Meeks signed Note-2 on behalf of Highland Enterprises. (Doc. 18, Attach. 2 at 2; Doc. 19, Attach. 2.) The interest rate on Note-2 was BB&T's prime rate plus 0.125% per annum. (Doc. 18, Attach. 2 at 1; Doc. 19, Attach. 2.) The interest rate was to be adjusted daily as BB&T's prime rate changed. (Doc. 18, Attach. 2 at 1; Doc. 19, Attach. 2.) On November 26, 2003, Defendants Register and Meeks both executed personal guaranties unconditionally guaranteeing the payment of "Note-2 and any and all debts then owing or thereafter incurred from Highland Enterprises to BB&T." (Doc. 18, Attach. 2 at 2; Doc. 19, Attach. 4, Attach. 5.) Highland Enterprises subsequently executed a series of note modification agreements that extended the maturity date of Note-2. (Doc. 18, Attach. 2 at 2; Doc. 19, Attach. 3.) These modification agreements were signed by Defendants Register and Meeks on behalf of Highland Enterprises. (Doc. 18, Attach. 2 at 2; Doc. 19, Attach. 3.) As security for Note-2, Highland Enterprises executed a Georgia Security Deed and Security Agreement ("Note-2 Security Agreement"), granting BB&T a security interest in certain real property. (Doc. 18, Attach. 2 at 3; Doc. 19, Attach. 6.) The Note-2 Security Agreement was signed by Defendants Register and Meeks. (Doc. 19, Attach. 6 at 7.)
(2) Note-6 was executed by Highland Enterprises on November 16, 2005 for $575, 000.00. (Doc. 18, Attach. 2 at 3; Doc. 19, Attach. 7.) Defendants Register and Meeks signed Note-6 on behalf of Highland Enterprises. (Doc. 18, Attach. 2 at 4; Doc. 19, Attach. 7.) The interest rate on Note-6 was BB&T's prime rate plus 0.125% per annum. (Doc. 18, Attach. 2 at 4; Doc. 19, Attach. 7.) The interest rate was to be adjusted daily as BB&T's prime rate changed. (Doc. 18, Attach. 2 at 4; Doc. 19, Attach. 7.) On November 25, 2008, Defendants Register and Meeks executed personal guaranties unconditionally guaranteeing the payment of "Note-6 and any and all debts then owing or thereafter incurred from Highland Enterprises to BB&T." (Doc. 18, Attach. 2 at 4-5; Doc. 19, Attach. 9, Attach. 10.) On the same day, Highland Enterprises executed a note modification agreement that extended the maturity date of Note-6. (Doc. 18, Attach. 2 at 4; Doc. 19, Attach. 8.) This modification agreement was signed by Defendant Register on behalf of Highland Enterprises. (Doc. 18, Attach. 2 at 4; Doc. 19, Attach. 8 at 5.) As security for Note-6, Highland Enterprises executed a Georgia Security Deed and Security Agreement ("Note-6 Security Agreement"), granting BB&T a security interest in certain real property. (Doc. 18, Attach. 2 at 5; Doc. 19, Attach. 11.) The Note-6 Security Agreement was signed by Defendants Register and Meeks. (Doc. 19, Attach. 11.)
(3) Note-9 was executed by Highland Enterprises on February 4, 2008 for $768, 000.00. (Doc. 18, Attach. 2 at 4; Doc. 19, Attach. 12.) Defendants Register and Meeks signed Note-9 on behalf of Highland Enterprises. (Doc. 18, Attach. 2 at 5-6; Doc. 19, Attach. 12.) The interest rate on Note-9 was BB&T's prime rate plus 0.000% per annum. (Doc. 18, Attach. 2 at 6.) On February 4, 2008, Register and Meeks executed personal guaranties unconditionally guaranteeing the payment of "Note-9 and any and all debts then owing or thereafter incurred from Highland Enterprises to BB&T." (Doc. 18, Attach. 2 at 6; Doc. 19, Attach. 13, Attach. 14.) As security for Note-9, Highland Enterprises executed a Georgia Security Deed and Security Agreement ("Note-9 Security Agreement"), granting BB&T a security interest in certain real property. (Doc. 18, Attach. 2 at 6-7; Doc. 19, Attach. 15.) The Note-9 Security Agreement was signed by Defendants Register and Meeks. (Doc. 18, Attach. 2 at 6-7; Doc. 19, Attach. 15.)

         Defendants Register and Meeks defaulted on all 3 notes. (Doc. 18, Attach. 2 at 7; Doc. 19, Attach. 16-18.) Consequently, on October 5, 2010, Plaintiff foreclosed on the properties secured by the Note-2 Security Agreement, Note-6 Security Agreement, and Note-9 Security Agreement. (Doc. 18, Attach. 2 at 7.) Prior to the foreclosure sale, the principal balances due on the notes were as follows: Note-2 had $761, 109.23 due (Doc. 16), Note-6 had $566, 741.65 due (Doc. 17), and Note-9 had $716, 472.94 due (Doc. 18) .

         At the foreclosure sale, each property was sold to Atlas GA II SPE, LLC, a subsidiary of BB&T, for the following amounts: the property secured by the Note-2 Security Agreement sold for $490, 000; the property secured by the Note-6 Security Agreement sold for $340, 000; and the property secured by the Note-9 Security Agreement sold for $440, 000. (Doc. 19, Attach. 2 at 9.) However, the foreclosure sale did not yield the full principal amounts remaining under the notes. (Doc. 18, Attach. 2 at 9.) As a result, BB&T filed suit in this Court seeking recovery of the remaining principal balances due under the notes, interest due under the notes, and statutory attorneys' fees. (Doc. 1.)

         In its complaint, Plaintiff BB&T declared the entire indebtedness immediately due and payable. (Doc. 1; Doc. 19, Attach. 1 at 26.) Defendants filed two separate answers and each answer asserted five defenses: (1) that Plaintiff fails to state a claim upon which relief can be granted; (2) that Plaintiff's allegations fall outside of the applicable statute of limitations; (3) that Plaintiff has unjustly enriched itself by taking advantage of the labor of Defendants; (4) that every allegation not expressly admitted to is denied; and (5) that the guaranties as to their design and language do not comply with the requirements of O.C.G.A. § 9-3-23 and are in part and in whole unenforceable. (Doc. 11, Attach. 1; Doc. 16.)

         On August 22, 2019, Plaintiff filed this Motion for Summary Judgment stating that Defendants are liabile as a matter of law because they admitted that they signed the notes and guaranties and then defaulted on the notes; that Defendants' admissions, BB&T's business records, and affidavit testimony establish damages as a matter of law; and that Defendants have no valid defenses. (Doc. 18, Attach. 1 at 7-24.) Defendants filed a response arguing only that summary judgment should not be granted because Plaintiff failed to account for approximately $30, 000 of work performed by Defendants on pieces of property belonging to Plaintiff. (Doc. 22 at 3.) Defendants claim that they performed this work without receiving compensation from Plaintiff and, therefore, Plaintiff would be unjustly enriched if Defendants were not paid. (Id.) In response, Plaintiff argues that Defendants' allegation of unjust enrichment is "unsupported and cursory," but nevertheless Plaintiff agrees to offset the total amount due on the notes by $30, 000 to "eliminate any potential issue of fact . . . ." (Doc. 24 at 5.)

         STANDARD OF REVIEW

         Summary judgment shall be rendered "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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." Fed.R.Civ.P. 56(c). The "purpose of summary judgment is to 'pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (citing Fed.R.Civ.P. 56 advisory committee notes). Summary judgment is appropriate when the nonmovant "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, ...


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