Hanna v. First Citizens Bank & Trust Co.
323 Ga. App. 321
| Ga. Ct. App. | 2013Background
- Bank sued Southern Gentry, Donner, and Hanna for failure to pay a promissory note and personal guaranties totaling $12,231,000; Hanna’s 2006 guaranty covered that debt.
- 2006 Note for $12,231,000 was secured by deed to secure debt and used for Country Hills subdivision development.
- Hanna and Donner executed unconditional guaranties; guaranties contained broad waivers and continued for renewals, extensions, and modifications.
- September 5, 2007 document issued as a renewal/extension of the 2006 Note for the same principal sum and referenced the prior note; it did not expressly release Hanna.
- November 21, 2007 Southern Gentry signed a new $12,541,000 note with Donner guaranteeing it; Hanna did not sign a new guaranty; later notes referenced the prior note but did not release Hanna from 2006 guaranty.
- Trial court granted summary judgment against Hanna on liability, holding the 2007 note was a renewal; damages were later found insufficiently proven and were reversed on appeal; case remanded for damages consistent with opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the 2007 note a renewal of the 2006 note imposing Hanna’s guaranty liability? | Hanna liable under 2006 guaranty; 2007 note was renewal. | 2007 note is a new loan not a renewal and not guaranteed by Hanna. | 2007 note liability established under renewal theory; Hanna liable. |
| Did Hanna's waivers in the 2006 guaranty discharge him due to increased risk or novation? | Waivers prevent discharge; guaranteed reliability. | Waivers do not bar discharge if increased risk/novation occurred. | Waivers preclude discharge; no factual issue on discharge. |
| Was the Bank's damages proof sufficient to support the judgment? | Damages proven by bank records and affidavits. | Underlying records not all in record; summaries insufficient. | Damages judgment reversed; remand for proper damages proceedings. |
Key Cases Cited
- Core LaVista, LLC v. Cumming, 308 Ga. App. 791 (Ga. App. 2011) (summary business records admissible if records accessible to court)
- Upshaw v. First State Bank, 244 Ga. 433 (Ga. 1979) (novation can discharge sureties; new indebtedness notion)
- Fielbon Dev. Co. v. Colony Bank of Houston County, 290 Ga. App. 847 (Ga. App. 2008) (relevant to guaranty defenses and record-keeping)
- Hampton Island, LLC v. Asset Holding Co. 5, LLC, 320 Ga. App. 880 (Ga. App. 2013) (cites Core LaVista; discusses waiver as legal defense)
- Matjoulis v. Integon Gen. Ins. Corp., 226 Ga. App. 459 (Ga. App. 1997) (context for enforceability of promissory notes and guaranties)