Ameris Bank v. Alliance Investment & Management Co.
321 Ga. App. 228
Ga. Ct. App.2013Background
- On Oct. 31, 2007, four related entities (AIMCO and three operating companies) signed a promissory note for $5.9M, with Roberts signing for all Borrowers, and Guarantors separately guaranteeing the debt.
- The Note was renewed multiple times (Oct. 2008 to Mar. 2010); by trial start the indebtedness was $3,715,315.45 with accruing interest and attorney fees.
- In late 2007–early 2008 Roberts proposed liquidating assets to pay the debt; the bank did not respond to the proposal yet renewals continued.
- The Security and Loan Agreements barred asset transfers without prior bank consent; the Guaranties were unconditional and absolute.
- The bank claimed defenses included breach of good faith and fair dealing and failure to mitigate; the jury awarded $1.2M to the bank and $130K to Hunt on a counterclaim.
- The trial court denied directed verdicts; the court later reversed in part, granting judgment for Ameris Bank on all claims except Hunt’s counterclaim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court erred in denying directed verdict on the Note and Guarantees | Bank: prima facie case proven; defenses waived or unfounded | Borrowers/Guarantors: defenses valid; estoppel by silence and mitigation issues | Directed verdict for bank appropriate; judgment reversed and remanded |
| Whether borrowers were estopped by silence from asserting defenses | Estoppel by silence applies to renewals after failure to respond | Some guarantors lacked knowledge of the June 2008 proposal | Estoppel by silence applicable to Borrowers and Roberts; other guarantors unresolved |
| Whether Guarantors have viable defenses of good faith, fair dealing, or mitigation | Defense defeats; contract language governs; no independent breach | Guarantors rely on implied covenant and mitigation | Guarantors lacking viable defenses; no independent good faith breach; no mitigation duty due to absolute promises |
Key Cases Cited
- Nat. Duck Mills v. Catlin & Co., 10 Ga. App. 240 (Ga. App. 1912) (estoppel by silence in renewal contexts)
- Citizens & Southern Nat. Bank v. Yeager Enterprises, 247 Ga. 797 (1981) (extension of estoppel by silence to guarantors)
- NationsBank, N. A. v. Peavy, 227 Ga. App. 137 (1997) (renewal cuts off defenses known at time of renewal)
- Harris v. First Nat. Bank of Cartersville, 163 Ga. App. 49 (1982) (follow Yeager on estoppel effect of renewal)
- Kicklighter v. Woodward, 267 Ga. 157 (1996) (waiver principles after verdict/mootness principles)
- Trendmark Homes v. Bank of North Ga., 314 Ga. App. 886 (2012) (prima facie case on guarantees; defense analysis framework)
- Big Sandy Partnership v. Branch Banking & Trust Co., 313 Ga. App. 871 (2012) (mitigation duties with absolute promises)
- Myung Sung Presbyterian Church v. North American Assn. of Slavic Churches & Ministries, 291 Ga. App. 808 (2008) (implied covenant cannot breach independently)