FAS Capital, LLC v. Carr
7 F. Supp. 3d 1259
N.D. Ga.2014Background
- June 2005 promissory note to Silverton Bank for $250,150; September 2008 second promissory note for $358,000; FDIC became receiver after bank failure in 2009; defendant defaulted on both notes; FDIC sued September 2011 and later sold/ transferred notes to FAS Capital; court allowed substitution of FAS Capital as plaintiff June 26, 2012; plaintiff moves for summary judgment but defendant challenges federal jurisdiction post‑FDIC dismissal and evidence of holder and balances; court denied summary judgment without prejudice to cure the balance history and affidavits; court also addressed attorney’s fees under OCGA § 13‑1‑11.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction after FDIC dismissal | FDIC–as original plaintiff–established federal question jurisdiction under § 1819; jurisdiction remains after substitution. | Jurisdiction ends when FDIC is dismissed and only private party remains. | Court held original jurisdiction under § 1819 remains; alternatively exercised supplemental jurisdiction under § 1367. |
| FDIC acquisition and transfer of notes | FDIC acquired Silverton Bank’s assets as receiver under 12 U.S.C. § 1821 and transferred notes to FAS Capital. | Insufficient evidence that FDIC actually held the notes or validly transferred them. | Court found FDIC held notes and valid transfer to FAS Capital established; judicial notice of receivership facts allowed. |
| Holder of the notes and standing to sue | FAS Capital current holder evidenced by Bill of Sale/Assignment and affidavits; notes in possession of FAS Capital. | Documents unauthenticated; insufficient proof of current holder. | Court found FAS Capital is the current holder based on competent evidence of possession and authentication. |
| Amount due on the notes | History statements and deposition evidence establish principal and amounts due; plaintiff to cure deficiencies. | Notes’ terms and evidence create genuine issues of material fact as to exact balances and fees. | Court denied summary judgment without prejudice for resubmission of accurate history statements and affidavits; if cured, may grant summary judgment. |
| Attorney’s fees under OCGA § 13-1-11 | Notice to pay attorney’s fees satisfied; complaint provides notice; demand letters indicate maturity. | Disputed whether notice met statutory requirements for second note. | Court found notice sufficient under Georgia law and awarded fees for second note; but overall outcome contingent on cure of other issues. |
Key Cases Cited
- Pollard v. First Nat'l Bank of Albany, 169 Ga.App. 598, 313 S.E.2d 785 (1984) (Ga. App. 1984) (debt default establishes prima facie case for recovery)
- Shropshire v. Alostar Bank, of Commerce, 314 Ga.App. 310, 724 S.E.2d 33 (2012) (Ga. App. 2012) (liability on a note established by execution; burden shifts to debtor to raise defenses)
- Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548 (1986) (U.S. 1986) (summary judgment standard; burden on movant to show absence of evidence)
- Neivman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826 (1989) (U.S. 1989) (jurisdictional principles in federal courts)
- Four Star Holding Corp., 178 F.3d 97 (2d Cir. 1999) (2d Cir. 1999) (continuation of federal jurisdiction after FDIC dismissal under § 1819; policy reasons)
- Lindley v. FDIC, 733 F.3d 1043 (11th Cir. 2013) (11th Cir. 2013) ( Eleventh Circuit: jurisdiction not lost if FDIC is later dismissed; maintains original jurisdiction for related claims)
- Kroger Co. v. U.S. Foodservice of Atlanta, Inc., 270 Ga.App. 525, 607 S.E.2d 177 (2004) (Ga. App. 2004) (notice under § 13-1-11 may be satisfied by multiple documents; material misstatement not fatal)
- Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 108 S. Ct. 614 (1988) (U.S. 1988) (federal-question jurisdiction; discretionary dismissal when state claims predominate)
- Hardy v. Birmingham Bd. of Educ., 954 F.2d 1546 (11th Cir. 1992) (11th Cir. 1992) (factors for declining jurisdiction under supplemental jurisdiction)