Myers v. First Citizens Bank & Trust Co.
324 Ga. App. 293
| Ga. Ct. App. | 2013Background
- Gary and Toni Myers purchased two Currahee Club lots and refinanced via two promissory notes in favor of First Citizens Bank on April 24, 2009 (notes for $140,938.47 and $130,589.84).
- Bank sued the Myerses for nonpayment and sought principal, interest, and attorney fees; moved for summary judgment supported by an affidavit from a bank officer.
- Trial court granted summary judgment to the Bank, entering specific monetary judgments on each note; Myerses appealed.
- Myerses asserted an affirmative defense that the Bank negligently failed to comply with federal real-estate lending policy regulations (12 C.F.R. § 365.2), claiming that noncompliance could have revealed subdivision insolvency and sewer problems.
- Bank relied on an affidavit listing amounts due but provided no payment history or method for calculating interest and attorney fees.
- Appellate court reviewed de novo, affirming liability but vacating the damage awards and remanding for proper damage proof and calculation.
Issues
| Issue | Plaintiff's Argument (Bank) | Defendant's Argument (Myers) | Held |
|---|---|---|---|
| Whether alleged violation of 12 C.F.R. § 365.2 is an affirmative defense to enforcement of promissory notes | The Bank argued it had a prima facie case by producing executed notes and was entitled to judgment absent a valid defense | Myerses argued the Bank’s failure to maintain written lending policies under 12 C.F.R. § 365.2 constituted negligence and an affirmative defense defeating summary judgment | Court held the regulation’s violation is not an affirmative defense to note enforcement; liability for the notes was properly adjudicated for the Bank |
| Whether the Bank proved the amounts due (principal, interest, attorney fees) with sufficient evidentiary detail for summary judgment | Bank relied on officer affidavit stating lump-sum amounts due and attached the notes | Myerses pointed to lack of payment history and absence of calculations for interest and attorney fees | Court held the Bank failed to prove damages with the required certainty; amounts were unliquidated and the judgment as to damages was vacated and remanded for proper proof |
Key Cases Cited
- Capital City Developers v. Bank of North Ga., 316 Ga. App. 624 (2012) (establishes procedure for enforcing promissory notes and remedies on default)
- Trendmark Homes v. Bank of North Ga., 314 Ga. App. 886 (2012) (notes’ attorney-fee clause enforceability and contract remedies on default)
- Intervest Mortg. Investment Co. v. Skidmore, 655 F. Supp. 2d 1100 (E.D. Cal. 2009) (rejects characterization of 12 C.F.R. § 365.2 violation as an affirmative defense to contract enforcement)
- Alexander v. Wachovia Bank, N.A., 305 Ga. App. 641 (2010) (summary judgment standards and burden-shifting when plaintiff makes a prima facie case)