Hampton Island, LLC v. Asset Holding Co. 5, LLC
320 Ga. App. 880
| Ga. Ct. App. | 2013Background
- Three consolidated appeals stem from United Community Bank (UCB) suing Hampton Island, LLC (Borrower) and guarantors for two 2009 promissory notes and related guaranties; underlying debt arose from 2008 loans that matured in 2009 and 2010 respectively.
- UCB transferred its interest to Asset Holding Company 5, LLC (AHC5) via asset purchase agreements and assignments; trial court granted substitution of party to AHC5.
- Borrower and guarantors contested substitution, asserted lack of standing and improper transfer; court held transfer sufficient to entitle substitution as real party in interest.
- Appellants sought to file a counterclaim for violations of 12 U.S.C. § 1972 and common law fraud; court denied permission to file the counterclaim.
- AHC5 moved for summary judgment on the underlying notes and guaranties; court granted summary judgment in AHC5’s favor.
- Judgments were affirmed on appeal, with the court addressing the sufficiency of the transfer, the counterclaim denial, and the propriety of summary judgment in favor of AHC5.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether substitution of party to AHC5 was proper | Borrower/guarantors contend AHC5 had no standing | AHC5 argued transfer made it real party in interest, enabling substitution | Yes; substitution proper as real party in interest under OCGA 9-11-25(c). |
| Whether the court correctly denied filing of a counterclaim | Appellants claimed delay justified by OCGA 9-11-13(e) or excusable neglect | UCB argued claims arose in 2008, before the notes; discretion to deny | Yes; denial affirmed; counterclaims time-barred and not timely under OCGA 9-11-13(e)/(f). |
| Whether summary judgment for AHC5 was proper | Appellants claimed triable issues exist regarding anti-tying and fraud | AHC5 showed prima facie case; no genuine issues to defeat summary judgment | Yes; summary judgment affirmed; no triable issues material to underlying notes and waivers. |
Key Cases Cited
- Goodyear v. Trust Co., Bank, 248 Ga. 407 (1981) (substitution mechanics; continuation of action under transfer of interest)
- Deleo v. Mid-Towne Home Infusion, 244 Ga. App. 683 (2000) (trial court’s discretion on adding parties; standard of review)
- Earthlink, Inc. v. Eaves, 293 Ga. App. 75 (2008) (discretion in leave to amend counterclaims; excusable neglect consideration)
- Core LaVista, LLC v. Cumming, 308 Ga. App. 791 (2011) (enforceability of guaranty waivers; defenses waived to extent permitted by law)
- 685 Penn, LLC v. Stabilis Fund I, L.P., 316 Ga. App. 210 (2012) (transfer of underlying obligation operates as assignment of guarantees)
- Williams v. Universal Decorators, 161 Ga. App. 165 (1982) (note transfer evidence; holder in due course analysis)