Shropshire v. Alostar Bank of Commerce
314 Ga. App. 310
| Ga. Ct. App. | 2012Background
- Bank Nexity Bank of Commerce made two loans to Milton Organizers, LLC: a Note for $2,100,000 and a line of credit (LOC) with initial $760,000 limit, later increased to $1,500,000.
- Guarantors including Shropshire, Lockwood, Howell, Baker, Wilson, Shultz, Klesko, and Spear guaranteed both the Note and the LOC.
- Note maturity originally October 19, 2008, extended to December 31, 2009; Milton LLC defaulted on the Note on December 31, 2009.
- LOC maturity December 29, 2007, later extended to 2009; Milton LLC defaulted on the LOC on December 31, 2009 with $1,480,000 outstanding at that time.
- On April 15, 2010, Bank filed two separate actions: one on the Note and one on the LOC; Bank moved for summary judgment in both actions; no hearings were requested.
- March 17, 2011, trial court granted summary judgment for the Bank on both Note and LOC; final judgments were entered but failed to state the dollar amounts owed; appeals followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of amended Sugg affidavits | Bank | Milton/Milton guarantors | Amended affidavits properly considered; waiver issues absent; time extensions permitted. |
| Sufficiency of amended affidavits to support variable interest | Bank | Milton/Milton guarantors | Amended affidavits established post-default 18% rate; pre-default interest supported by payment histories. |
| Liability sufficiency to support amounts owed | Bank | Milton/Milton guarantors | Bank established prima facie liability on Note and LOC; defenses did not negate liability. |
| Klesko's lack of personal jurisdiction | Bank | Klesko | Grant of summary judgment against Klesko reversed; remand for jurisdictional determination. |
| Scope of Spear's guaranty and consideration | Bank | Spear | Guaranty covers the Debt including future extensions; damages to be proven; liability affirmed. |
Key Cases Cited
- Hight v. Blankenship, 199 Ga.App. 744 (Ga. App. 1991) (jurisdiction and merits intertwined; when jurisdiction not waived, merits ruling premature)
- Riberglass, Inc. v. ECO Chemical Specialties, 194 Ga. App. 417 (Ga. App. 1990) (extension of time for filing and contemporaneous filings)
- Alcatraz Media v. Yahoo! Inc., 290 Ga.App. 882 (Ga. App. 2008) (contemporaneous filing and extension principles; evidentiary material)
- Garrett v. Atlantic Bank, etc. Co., 157 Ga.App. 103 (Ga. App. 1981) (fact issue remains where bank failed to establish prime-based rate evidence)
- Reid v. Whisenant, 161 Ga. 503 (Ga. 1926) (mitigation of damages; ancient rule; not overruled here)
- Dawson Pointe, LLC v. SunTrust Bank, 312 Ga.App. 338 (Ga. App. 2011) (distinguishing cases on interest and damages timeline)
- Foreman v. Chattooga Intl. Technologies, 289 Ga.App. 894 (Ga. App. 2008) (consideration issues in guaranty context; evidentiary conflicts preclude summary judgment)
- Hight v. Blankenship, 199 Ga.App. 744 (Ga. App. 1991) (reiterated above; jurisdiction vs merits)