Secured Realty Investment, Inc. v. Bank of North Georgia
314 Ga. App. 628
| Ga. Ct. App. | 2012Background
- Bank of North Georgia sued Secured Realty Investments and Dennis McDowell on two promissory notes and guarantees.
- Note 20: $911,557 principal; Note 21: $3.8 million; both guaranteed by McDowell.
- Secured and McDowell defaulted, triggering the bank's suit for amounts due.
- Bank moved for summary judgment; trial court granted on Note 21 but not Note 20.
- Appeals: Secured/McDowell challenge Note 21 ruling; Bank challenges Note 20 ruling.
- Notes and guarantees were validly executed and in default, shifting the burden to defendants to show defenses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether estoppel defenses preclude summary judgment. | Secured and McDowell contend estoppel defenses raise triable issues. | Bank had no deceptive conduct or promised renewal; estoppel lacks proof. | Estoppel defenses fail; summary judgment appropriate. |
| Whether promissory estoppel applies to Note 21. | Plaintiff argues promissory estoppel based on conduct/promise. | No clear promise to renew; vague/uncertain terms void promissory estoppel. | Promissory estoppel not applicable. |
| Whether breach of the implied covenant of good faith and fair dealing exists regarding set-off. | BNG violated implied covenant by improper set-off against other debts. | Contract allows set-off; no independent breach without contractual prohibition. | No breach; set-off permitted by contract. |
| Whether bank's assignment of the mortgage defeats liability or creates double-payment risk. | Assignment could cause double payment concern for debtors. | Borrower must determine holder; assignment does not excuse liability. | Borrowers must pay the note; assignment does not bar liability. |
| Whether summary judgment on Note 20 was proper. | Note 20 establishes prima facie case; defenses fail. | Affirmative defenses lack evidence; potential set-off/assignment issues. | Bank entitled to summary judgment on Note 20. |
Key Cases Cited
- Griffin v. State Bank of Cochran, 312 Ga.App. 87 (Ga.App. 2011) (estoppel requires deception or constructive fraud)
- Georgia Investments Int'l. v. Branch Banking & Trust Co., 305 Ga.App. 673 (Ga.App. 2010) (promissory estoppel requires definite promise; vague promises fail)
- Onbrand Media v. Codex Consulting, 301 Ga.App. 141 (Ga.App. 2009) (implied covenant cannot create independent liability without contract obligation)
- REL Dev. v. Branch Banking & Trust Co., 305 Ga.App. 429 (Ga.App. 2010) (holder may pursue note or security; no exclusive right to one remedy)
- Groover v. Peters, 231 Ga. 531 (Ga. 1973) (borrower must determine holder or authorized agent to avoid double payment)
- Georgia Investments Int’l. v. Branch Banking & Trust Co., 305 Ga.App. 429 (Ga.App. 2010) (concerns remedies and security interest relationship)