The full text of the decision follows:

Case: Shropshire v. Alostar Bank of Commerce
Case Numbers: A11A1770; A11A1795; A11A1771; A11A1796; A11A2005; A11A2006; A11A1772; A11A1797 (civil case)
Decision Date: February 23, 2012
Decision Author: Mikell, Presiding Judge.
Text: Mikell, Presiding Judge.

In these related cases, the maker and certain individual guarantors of two promissory notes appeal the trial court’s orders granting summary judgment and final judgment in favor of lender Nexity Bank (the “Bank”).1 The two loans at issue were made in connection with appellants’ efforts, ultimately unsuccessful, to form a new bank in Georgia. Because the underlying documents in these cases are the same, and because the appellants have raised some identical arguments, we have consolidated these cases for disposition. In Case Nos. A11A1770, A11A1771, A11A1795, and A11A1796, we affirm the trial court’s grant of summary judgment to the Bank; in Case Nos. A11A2005 and A11A2006, we vacate the final judgment orders; and we remand these cases for further proceedings consistent with this opinion. In Case Nos. A11A1772 and A11A1797, we reverse the trial court’s grant of summary judgment in favor of the Bank and against appellant Ryan Klesko, and remand for consideration of the pending jurisdictional issues; and we affirm the grant of summary judgment in favor of the Bank against appellant Richard Spear and remand for further proceedings consistent with this opinion.
On appeal from a trial court’s grant of summary judgment, this Court conducts a de novo review of the evidence. On summary judgment, after the movant makes a prima facie showing of its entitlement to judgment as a matter of law, the burden then shifts to the respondent to come forward with rebuttal evidence. To do so, the respondent must set forth specific facts showing the existence of a genuine issue of disputed fact.2
Viewing the evidence in the light most favorable to the non-moving party, as we must,3 the record reflects that the Bank made two loans to the borrower, Milton Organizers, LLC (“Milton LLC”): one was evidenced by a Commercial Promissory Note (the “Note”), executed by Milton LLC on October 19, 2007; the other was evidenced by a Commercial Line of Credit Agreement and Note (the “LOC”), executed by Milton LLC on December 29, 2006. Payment of both loans was guaranteed by appellants George Shropshire, Joseph Lockwood, John Howell, Brent Baker, Orlando Wilson, Charles Shultz, Klesko, and Spear.4
The Note, in the principal amount of $2,100,000, contemplated payments of interest only until the maturity date, at which time the principal and any accrued and unpaid interest became due. Until the maturity date, the Note provided for a variable interest rate based on “Wall Street Journal Prime.” After default, however, the Note provided for interest on the unpaid balance at 18% per annum. The maturity date, originally October 19, 2008, was eventually extended to December 31, 2009. On that date, appellants defaulted and failed to pay off the principal due under the Note ($2,099,996.20).

The LOC had an initial credit limit of $750,000; an interest rate of 6.750 % per annum, to be adjusted daily based on “Wall Street Journal Prime”; and a maturity date of December 29, 2007. Like the Note, the LOC contemplated payments of interest only until the maturity date, when principal and any accrued and unpaid interest became due; and the interest rate after default was a flat 18% per annum. The Bank and Milton LLC later modified the LOC on several occasions, to increase the credit limit to $1,500,000; to adjust the pre-maturity interest rate; and to extend the maturity date, eventually, to December 31, 2009. On that date, the outstanding principal under the LOC was $1,480,000. Milton LLC and the guarantors failed to make this payment and defaulted on the LOC.

On April 15, 2010, the Bank filed two separate actions against appellants: one seeking recovery under the Note, and the other seeking recovery under the LOC. The Bank subsequently moved for summary judgment in both actions, first against Milton LLC and guarantors Shropshire, Lockwood, Howell, Baker, Wilson, and Shultz; and later against guarantors Klesko and Spear. In neither lawsuit did the defendants request a hearing on the Bank’s summary judgment motions, and no hearing was held.

On March 17, 2011, in the Bank’s action on the Note, the trial court granted summary judgment in favor of the Bank and against defendants Milton LLC, Shropshire, Lockwood, Howell, Baker, Wilson, and Shultz. On the same day, in the Bank’s action on the LOC, the trial court entered an identical order granting summary judgment to the Bank against the same defendants (these orders hereinafter sometimes collectively referred to as the “Milton Orders”). In a separate order entered in each lawsuit, the court granted summary judgment against defendants Klesko and Spear on the Note and on the LOC. In none of these orders, however, did the court set forth the dollar amounts owing and awarded to the Bank under the Note or the LOC. From these orders the defendants appeal.

After appellants filed notices of appeal as to the Milton Orders, the trial court entered a final judgment order in each action, in which the court set forth the amounts awarded to the Bank under the Note and the LOC, respectively. Appellants appeal from these orders as well.

A11A2005 and A11A2006

1. In Case Nos. A11A2005 and A11A2006, appellants Milton LLC, Lockwood, Howell, Wilson, Shropshire, and Shultz appeal from the final judgment orders entered by the trial court.5 Appellants contend, and appellee Bank concedes, that the trial court was without jurisdiction to enter these orders, because they were entered after notices of appeal as to the summary judgment orders had already been filed. We agree. “OCGA § 5-6-46 (a) provides that the filing of a notice of appeal serves as supersedeas when all costs in the trial court are paid. This automatic supersedeas deprives the trial court of jurisdiction to modify or alter the judgment in the case pending the appeal.”6 Accordingly, we vacate both final judgment orders entered by the trial court and remand for further proceedings consistent with this opinion.

A11A1770, A11A1771, A11A1795, A11A1796

2. In Case Nos. A11A1770, A11A1771, A11A1795, and A11A1796, borrower Milton LLC and guarantors Shropshire, Lockwood, Howell, Baker, Wilson, and Shultz appeal the Milton Orders, in which the trial court granted summary judgment to the Bank on the Note and the LOC. We first address appellants’ contention that the trial court erred in considering the amended affidavits filed by the Bank in support of its motion for summary judgment. We find no error.

In support of its motions for summary judgment, the Bank submitted the affidavits of its employee Joseph Sugg. The affidavits were filed on July 26, 2010, contemporaneously with the filing of the Bank’s summary judgment motions; and in each affidavit, Sugg referred to an attached Exhibit A, a ledger recording the payment history of the loan at issue. Subsequently, on September 3, 2010, the Bank filed summary judgment reply briefs in each lawsuit, attaching to each an amended Sugg affidavit. In the action on the Note, the Bank explained that the wrong Exhibit A had been attached to Sugg’s original affidavit; and that, in order to correct this clerical error, Sugg’s amended affidavit had been filed with the correct exhibit attached. In the action on the LOC, the Bank explained that the amended Sugg affidavit was filed in answer to appellants’ response to the Bank’s summary judgment motion; and that the amended affidavit contained updated information as to principal payments on the Note made by other guarantors (who are not parties to these appeals).

Defendants moved to strike the amended affidavits in both lawsuits on September 16, 2010; and on September 21, 2010, the Bank moved for leave of court to consider the amended affidavit in both lawsuits. The trial court did not rule on any of these motions.

(a) Appellants assert that the trial court erred in not granting their motions to strike Sugg’s amended affidavits from the record, on the ground that these amended affidavits were not filed contemporaneously with the Bank’s motions for summary judgment in each action.7 However, the trial court failed to rule on appellants’ motions to strike, nor did appellants seek a ruling in either lawsuit. “It is the duty of a litigant to obtain a ruling on his motions or objections.”8 Appellants’ failure to obtain rulings on their motions to strike Sugg’s amended affidavits resulted in a waiver of appellate review of that issue.9

Even had this issue not been waived, however, it is without merit. Appellants cite OCGA § 9-11-56 (c), which provides that motions for summary judgment “shall be served at least 30 days before the time fixed for the hearing.” We note that in both the underlying lawsuits, no hearing was requested or held. Thus, the 30-day period never applied in these cases. Appellants also rely on OCGA § 9-11-6 (d), which provides that “[w]hen a motion is supported by an affidavit, the affidavit shall be served with the motion.” As this Court has explained, the purpose of this contemporaneous filing requirement “is to ensure that the other side has adequate notice of and opportunity to respond to such evidence.”10 The Bank submitted Sugg’s amended affidavits more than six months before the entry of the orders granting summary judgment, thus obviating any surprise to appellants.11 “Moreover, the requirement of simultaneous filing [found] in OCGA § 9-11-6 (d) is not absolute, and the trial court is authorized to extend the period for filing the movant’s affidavits.”12 In this case, it is apparent that the trial court so extended the time for filing the amended affidavits, as both Milton Orders recite that the court considered the pleadings, evidence, and all other materials in the record in each case. Because the amended affidavits were filed far in advance of the trial court’s summary judgment rulings, and because the Bank explained its reasons for filing the amended affidavits, and “because, in the absence of evidence in the record to the contrary, we must presume the trial court acted correctly,”13 we decline to find that the trial court acted improperly in considering the amended affidavits.

(b) Appellants contend that Sugg’s amended affidavits fail to show any basis for the loan instruments’ variable interest based on Wall Street Prime Rate. Contrary to appellants’ contention, however, the amended Sugg affidavits are sufficient to support the Bank’s allegations as to the interest charges on the loans.

It is true that, absent evidence to establish the variable interest rate, defined in the debt instrument as a fixed percentage above a particular prime rate, summary judgment for the lender would be improper in the face of the debtor’s denial of the interest amount sought.14 As to the Note, however, the Note loan payment history attached to Sugg’s amended affidavit showed that the interest on that loan was paid through the date of default; and the Bank did not seek to recover any pre-default interest, but only post-default interest at the flat 18% default interest rate. As to the LOC, to the extent the Bank sought pre-default interest, the LOC loan payment history attached to Sugg’s amended affidavit set forth the specific variable interest rates charged over time, from the LOC’s inception through its maturity date.15 As this Court has held, “a bank employee’s uncontested affidavit setting forth the amount of interest that had accrued authorized an award of interest as a matter of law, where, as here, the defendant never came forward with contrary evidence.”16 Appellants have not come forward with contrary evidence in this case. Further, Sugg’s amended affidavits in both lawsuits, attesting to a post-default interest rate of 18% per annum, provided a sufficient basis for computing the interest rate from the date through which interest is calculated in the affidavit (August 31, 2010) to the date that judgment is entered.17

3. Appellants contend that the trial court erred in granting summary judgment to the Bank because the evidence submitted by the Bank was insufficient to prove the amounts owed under the Note or under the LOC. However, the trial court ruled for the Bank in each of the challenged summary judgment orders on the issue of liability only. As to liability, “[a] plaintiff seeking to enforce a promissory note establishes a prima facie case by producing the note and showing that it was executed. Once that prima facie case has been made, the plaintiff is entitled to judgment as a matter of law unless the defendant can establish a defense.”18 It is undisputed that Milton LLC executed the Note and the LOC; that the appellant guarantors executed the guaranty agreements as to both the Note and the LOC; and that Milton LLC defaulted under the Note and the LOC. Thus, the Bank established a prima facie right to recover against appellants on both of the loan instruments at issue. Moreover, appellants have failed to raise a defense. Their argument goes to the issue of the amount of money owed, not to liability vel non.

Therefore, we affirm the trial court’s orders granting summary judgment in favor of the Bank and against appellants Milton LLC, Shropshire, Lockwood, Howell, Baker, Wilson, and Shultz; and we remand for further proceedings proving the damages to be awarded to the Bank and entering judgment in a sum certain.

A11A1772 and A11A1797

4. In Case Nos. A11A1772 and A11A1797, appellant Klesko raised the affirmative defense of lack of personal jurisdiction, both in his answer and again in his response to the Bank’s motion for summary judgment; thus, Klesko has preserved this issue for adjudication.19 But the trial court did not address Klesko’s defense of lack of personal jurisdiction, either in its orders granting summary judgment to the Bank or otherwise. The trial court’s ruling granting summary judgment on the merits of the Bank’s claim against Klesko was therefore premature.20 Because “OCGA § 9-11-56 contemplates a judgment on the merits, and a motion for summary judgment is designed to test the merits of a claim[,] . . . a defense such as lack of personal jurisdiction is generally not a proper subject for summary judgment.”21

Klesko’s liability under his guaranties of the Note and the LLC, as well as his defense of failure of consideration, are matters to be considered by a court having proper jurisdiction of the merits.22 Thus, the trial court in this case was first required to rule on whether the Bank’s complaints against Klesko should be dismissed for lack of personal jurisdiction under OCGA § 9-11-12 (b) (2).23 Accordingly, we reverse the grant of summary judgment against Klesko in Case Nos. A11A1772 and A11A1797, and remand these cases for consideration of the pending jurisdictional issue.24 In light of the foregoing, we do not address Klesko’s remaining enumerations of error.

5. In Case No. A11A1772, appellant Spear contends that the Bank failed to mitigate its damages, as required by OCGA § 13-6-5,25 by electing to sue on the LOC and the guaranties instead of pursuing a nonjudicial foreclosure on the real property given as security for the LOC. This issue was addressed in our recent decision of REL Dev. v. Branch Banking &c. Co. ,26 which is on all fours with the case before us and which is controlling as to this issue. We decline to revisit this issue.

Appellant further invites us to overturn our Supreme Court’s 1926 decision in Reid v. Whisenant .27 This we are powerless to do.28 This enumeration fails.

6. In Case No. A11A1797, Spear contends that an issue of fact exists as to whether his guaranty of the LOC was supported only by past consideration, because the guaranty in question was not dated. It is true that
[a] promise to pay the pre-existing debt of another, without any detriment or inconvenience to the creditor or any benefit secured to the debtor in consequence of the undertaking, is a mere nudum pactum. . . . Past consideration —one which has already served its purpose in a former transaction [ —] will not support a contract of guaranty.29
But Spear has not raised a genuine issue of fact as to the consideration for this guaranty. Spear has admitted that he executed the guaranty of the LOC, but he has submitted no evidence that the consideration given for the LOC was only “past” consideration. In particular, he has submitted no evidence, by affidavit or otherwise, that his guaranty of the LOC was executed after the LOC had already been executed. The cases cited by Spear are distinguishable from the case at bar on this ground.30 This enumeration fails.
7. In Case No. A11A1797, Spear contends that his guaranty of the LOC was limited to the principal amount of $750,000. This contention is without merit.

The guaranty defined the term “Debt” to include: “debts, liabilities, and obligations of the Borrower [Milton LLC] . . . and all extensions, renewals, refinancings and modifications of these debts whether now existing or created or incurred in the future.” Under the guaranty, Spear specifically agreed to guaranty the $750,000 loan set forth in the original LOC executed on December 29, 2006, as well as those amounts incurred from all future extensions, modifications, and renewals of the loan:
I absolutely and unconditionally agree to all terms of and guaranty to you the payment and performance of each and every Debt . . . that the Borrower . . . may now or at any time in the future owe you, including, but not limited to the following described Debt(s): Promissory Note in the amount of $750,000.00 dated December 29, 2006 . I guaranty the Debt up to the principal amount of $750,000.00 plus accrued interest, attorney’s fees and collection costs, when allowed by law, and all other amounts agreed to be paid under all agreements evidencing the Debt and securing the payment of the Debt. You may, without notice, apply this Guaranty to such Debt of the Borrower as you may select from time to time.
(Emphasis supplied.) Thus, the plain language of the guaranty includes amounts beyond the initial $750,000 loan. As the trial court has ruled only on the issue of liability, as discussed in Division 3 above, we affirm the grant of summary judgment in favor of the Bank and against Spear, and we remand for further proceedings proving the damages to be awarded to the Bank and entering judgment in a sum certain.
Judgment affirmed in A11A1770, A11A1771, A11A1795, A11A1796 and cases remanded with direction.

Judgment affirmed in part and reversed in part in A11A1772 and A11A1797 and cases remanded with direction.

Judgment vacated in A11A2005 and A11A2006 and cases remanded with direction. Dillard and Boggs, JJ., concur .
1Nexity Bank was the predecessor in interest to appellee Alostar Bank of Commerce.

2(Citations omitted.) Oasis Goodtime Emporium I v. Crossroads Consulting Group , 255 Ga. App. 375, 376 (565 SE2d 573) (2002). See OCGA § 9-11-56 (e).

3Lawyers Title Ins. Corp. v. Griffin , 302 Ga. App. 726, 727 (691 SE2d 633) (2010).

4The other individuals who executed guaranties of the Note are not parties to the appeals in these cases.

5In Case Nos. A11A1770, A11A1771, A11A1795, and A11A1796, appellants challenge the entry of the final judgment orders in their third enumeration of error, on the same grounds.

6(Citations and punctuation omitted.) In re Estate of Zeigler , 259 Ga. App. 807, 808 (1) (578 SE2d 519) (2003). Accord Lawyers Title Ins. Corp. , supra at 729 (1).

7See OCGA § § 9-11-6 (b), (d); 9-11-56 (c).

8(Punctuation and footnote omitted.) Leone v. Green Tree Servicing , 311 Ga. App. 702, 705 (3) (716 SE2d 720) (2011).

9See id. (no ruling on motion to strike affidavit waived appellate review).

10(Citation and punctuation omitted.) Alcatraz Media v. Yahoo! Inc. , 290 Ga. App. 882, 884-885 (1) (b) (660 SE2d 797) (2008).

11See id. at 885 (1) (b); Riberglass, Inc. v. ECO Chemical Specialties , 194 Ga. App. 417, 419 (1) (a) (390 SE2d 616) (1990).

12(Citation omitted.) Riberglass , supra. Accord Alcatraz , supra. See OCGA § 9-11-6 (b) (2) (providing for an extension of time for filing by order of court).

13(Citation omitted.) Riberglass , supra.

14See Garrett v. Atlantic Bank &c. Co. , 157 Ga. App. 103-104 (1) (276 SE2d 152) (1981) (fact issue remained where bank failed to introduce any evidence to establish interest rate based on bank’s prime rate, and debtor denied liability), citing Moore v. Wachovia Mtg. Co. , 138 Ga. App. 646, 647 (1) (226 SE2d 812) (1976) (where bank offered no evidence by way of stipulation, deposition, or admission to establish variable interest rate based on bank’s prime rate during life of note, summary judgment was improper in the face of debtor’s denial of interest due).

15See Dawson Pointe, LLC v. SunTrust Bank , 312 Ga. App. 338, 339 (718 SE2d 570) (2011), distinguishing on this ground Garrett and Moore , supra.

16(Citation omitted.) Id.

17Id.

18(Punctuation and footnote omitted.) Core LaVista, LLC v. Cumming , 308 Ga. App. 791, 795 (1) (b) (709 SE2d 336) (2011).

19See OCGA § § 9-11-12 (b) (2), (h) (1) (B).

20See Hight v. Blankenship , 199 Ga. App. 744, 745 (406 SE2d 241) (1991) (“Since the . . . jurisdictional issues have not been waived, nor have they been addressed in the lower court, the trial court’s ruling on the merits of the case was premature”). Accord Baiye v. Gober , 254 Ga. App. 288, 290 (2) (562 SE2d 249) (2002).

21(Punctuation and footnotes omitted.) Scanlan v. Tate Supply Co. , 303 Ga. App. 9, 10 (a) (692 SE2d 684) (2010), citing Ogden Equip. Co. v. Talmadge Farms , 232 Ga. 614, 615 (208 SE2d 459) (1974).

22See Hight , supra (defendant’s statute of limitation defense was matter for consideration by court with proper jurisdiction of merits of case).

23See id. Accord Smith v. Atlantic Mut. Cos. , 283 Ga. App. 349, 351-352 (2) (641 SE2d 586) (2007).

24See Hight , supra.

25OCGA § 13-6-5 (“Where by a breach of contract a party is injured, he is bound to lessen the damages as far as is practicable by the use of ordinary care and diligence”).

26305 Ga. App. 429, 431-432 (1) (699 SE2d 779) (2010).

27161 Ga. 503, 510 (131 SE 904) (1926) (rule requiring plaintiff to mitigate damages “is not applicable where there is an absolute promise to pay”) (citation omitted).

28See Sumitomo Corp. v. Deal , 256 Ga. App. 703, 705 (1) (569 SE2d 608) (2002) (“Even if we were convinced that a more enlightened rule should replace the current ancient law, this [C]ourt has no authority to overrule or modify a decision of the Supreme Court of Georgia as the decisions of the Supreme Court of Georgia shall bind all other courts as precedents”) (citation and punctuation omitted).

29(Citations and punctuation omitted.) Gwinnett Commercial Bank v. Flake , 151 Ga. App. 578, 582-583 (8) (260 SE2d 523) (1979).

30See, e.g., Helton v. Jasper Banking Co. , 311 Ga. App. 363, 365-366 (715 SE2d 765) (2011) (guarantor’s affidavit that wrong date had been typed on guaranty and that it had in fact been executed after the note had already been renewed raised fact issue as to whether guaranty was supported by consideration); Foreman v. Chattooga Intl. Technologies , 289 Ga. App. 894, 896 (658 SE2d 470) (2008) (conflicting affidavits between debtor and creditor as to failure of consideration precluded grant of summary judgment to either party); Jackson v. First Bank of Clayton County , 150 Ga. App. 182, 184 (256 SE2d 923) (1979) (fact that guaranty was executed one day after making and funding of loan was immaterial where loan and guaranty were one transaction).

Trial Judge: Henry M. Newkirk, Fulton Superior Court.

Attorneys: Philip R. Green (King & Spalding LLP), Arthur B. Baer (Kalka & Baer LLC), John A. Christy (Schreeder, Wheeler & Flint), and Jared W. Heald, Atlanta, for Shropshire and Milton Organizers LLC. Christopher W. Terry and Matthew S. Cathey (Stone & Baxter LLP), Macon, for Klesko. Matthew T. Covell (Arnall Golden Gregory LLP), Atlanta, for appellee. Other party representation: William A. Rountree and Joshua M. Katz (Macey Wilensky Kessler & Hennings LLC), Atlanta.

In REL Development, the Court of Appeals noted that the note and guaranty at issue provided that the bank need not foreclose first, and held that this provision was not unconscionable.

The full text of the 2010 REL Development case follows:

 Citation: 305 Ga.App. 429, 699 S.E.2d 779 (2010)
Case: REL DEVELOPMENT, INC. et al. v. BRANCH BANKING & TRUST COMPANY.
Case Nos. A10A1686, A10A1691.
Court: Court of Appeals of Georgia.
Decision Date: July 29, 2010

[699 S.E.2d 780]           McKenna, Long & Aldridge, Gary W. Marsh, David E. Gordon, Atlanta, for appellants.

          Quirk & Quirk, Joseph P. Quirk, Atlanta, Debra E. Baker; Smith, Welch & Brittain, A.J. Welch, Jr., McDonough, for appellee.

          BLACKBURN, Senior Appellate Judge.

          In these two actions to collect on unpaid promissory notes, the debtors and guarantors appeal the summary judgments awarded to
——————————————————————————–
Page 430

Branch Banking & Trust Company (the ” Bank” ), arguing evidence showed (i) the Bank failed to mitigate damages, and (ii) the Bank failed to re-accelerate the notes after foreclosure proceedings were cancelled. We agree with the trial court that neither argument has merit, and we therefore affirm in both cases.

         Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56(c). A de novo standard of review applies to an appeal from a grant or denial of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant. Matjoulis v. Integon Gen. Ins. Corp. [1]

         So viewed, the evidence shows that two entities (REL Development, Inc. and I-20 East, Inc.) managed by Robert Lanier borrowed money from the Bank in three transactions. REL Development borrowed over $3.5 million in December 2004 and an additional $562,500 in March 2005, with each debt secured by separate tracts of real property and guaranteed by another Lanier entity (REL Properties, Inc.) and by Lanier personally. I-20 East, Inc. borrowed $120,000 in June 2005, which debt was also secured by a tract of land but was only guaranteed by Lanier personally. When the three debts went into default due to nonpayment, the Bank in June 2008 gave written notice of acceleration to the respective debtors and guarantors and also began foreclosure proceedings scheduled for August 2008.

         At Lanier’s request, the Bank cancelled the foreclosure proceedings to allow the debtors to sell the properties, but no sales occurred. Instead of reinitiating foreclosure proceedings, the Bank simply sued the debtors and guarantors for the debts, filing on September 17, 2008 an action against REL Development, REL Properties, and Lanier to recover on the $3.5 million and $562,500 debts, and filing on that same date a separate action against I-20 East and Lanier to recover on the $120,000 debt. The trial court granted the Bank summary judgment in both actions. The debtors and guarantors appeal: Case No. A10A1686 is the appeal of REL Development, REL Properties, and Lanier from the summary judgment awarded on the $3.5 million and $562,500 debts, and Case No. A10A1691 is the appeal of I-20 East and Lanier from the summary judgment on the $120,000 debt. Because the appellants in both cases have raised the identical arguments challenging the summary judgments awarded to the Bank, and because the key provisions of the relevant documents are the same, we have consolidated the cases for review.
——————————————————————————–
Page 431

1. Citing OCGA § 13-6-5, the appellants first urge that the Bank failed to mitigate its damages. Specifically, noting that the real estate market dropped dramatically soon after August 2008, the appellants argue that the Bank should have completed the foreclosure proceedings scheduled for [699 S.E.2d 781] that month so as to have maximized the money to be received from a sale of the properties.[2]

          The fatal flaw in this argument is that the Bank had no obligation to pursue foreclosure proceedings but was fully authorized by both the law and the debt instruments to pursue only lawsuits against the debtors and guarantors to recover the debts. As stated by the Supreme Court of Georgia in Oliver v. Slack, [3] ” [a] creditor who holds a promissory note secured by a deed is not put to an election of remedies as to whether he shall sue upon the note or exercise a power of sale contained in the deed, but he may do either, or pursue both remedies concurrently until the debt is satisfied.” (Punctuation omitted.) See Taylor v. Thompson. [4] In other words, ” [t]he holder of a note who is also the grantee in a deed to secure the indebtedness of the note is not forced to exercise the power of sale in the deed. He may sue on the note or exercise the power of sale.” Trust Investment, etc., Co. v. First Ga. Bank. [5] See Vandegriff v. Hamilton; [6] Jamison v. Button Gwinnett Sav. Bank [7] (the law in this regard is ” well-settled” ).

         The debt instruments here expressly confirm that the Bank could pursue either or both remedies, concurrently or consecutively. The respective notes each provided:

No delay or failure on the part of the Holder in the exercise of any right or remedy hereunder or under any of the other Loan Documents shall operate as a waiver thereof, and no single or partial exercise by the Holder of any such right or remedy shall preclude or estop another or further exercise thereof or the exercise of any other right or remedy. The Holder shall be under no duty to exercise any or all of the rights and remedies given by the Note or under any of the other Loan Documents.
         Similarly, the respective security deeds each provided that upon default, the Bank could foreclose or ” [e]xercise any and all rights accruing to a secured party under this Deed, the Code and any
——————————————————————————–
Page 432

applicable law.” These deeds further provided:

The rights of Grantee, granted and arising under the clauses and covenants contained in this Deed and the other Loan Documents, shall be separate, distinct and cumulative of other powers and rights herein granted and all other rights which Grantee may have at law or in equity, and none of them shall be in exclusion of the others; and all of them are cumulative to the remedies for collection of indebtedness, enforcement of rights under security deeds, and preservation of security as provided at law. No act of Grantee shall be construed as an election to proceed under any one provision herein or under the Note or any of the other Loan Documents to the exclusion of any other provision, or an election of remedies to the bar of any other remedy allowed at law or in equity, anything herein or otherwise to the contrary notwithstanding.
         The guaranty documents were even more explicit.

          Such provisions reflect that the debtors and guarantors specifically agreed that the Bank was not required to pursue foreclosure before pursuing a suit to collect on the debts. Interpreting similar provisions, Sadler v. Trust Co. Bank of South Ga. [8] held that ” the [699 S.E.2d 782] bank was under no duty to appellant to proceed against the collateral to collect payment on the note. It thus can be fairly inferred that the bank had no obligation to mitigate its damages in relation to the collateral.” (Emphasis supplied.) See Ewald v. Security Pacific Credit Corp. [9] (no duty to mitigate existed where secured creditor had option to foreclose or to sue on debt). See also Cleveland Motor Cars v. Bank of America. [10] Appellants’ argument that such creditor options, whether allowed by law or by agreement, are somehow unfair or unconscionable is better directed to the legislature; the Supreme Court of Georgia declared such options constitutional in Brown v. Rooks. [11]

         This first argument of appellants fails and is not a ground for
——————————————————————————–
Page 433

finding summary judgment improper. See Stewart v. Diehl. [12]

          2. Appellants’ second argument claims that summary judgment was improper because the Bank failed to re-accelerate its notes after cancelling the proposed foreclosure. Specifically, appellants point to OCGA § 44-14-85(a), which provides that if foreclosure proceedings are withdrawn prior to their completion by sale or otherwise, ” [s]uch withdrawal shall operate to rescind the acceleration of the maturity of the indebtedness and to reinstate the indebtedness upon the terms and conditions existing prior to the acceleration.” The statute then emphasizes:

Such withdrawal shall not prejudice the right of the holder of the indebtedness and deed securing same to exercise any and all rights to accelerate the maturity of the indebtedness and to exercise any right or power contained in the deed or the evidence of the indebtedness secured thereby or conferred by law should a subsequent default occur.
Id.

         A subsequent default did occur, and the Bank again exercised its right to accelerate the debts. Appellants’ contention that they did not receive proper notice of this re-acceleration of the debts fails for at least two reasons.

         First, no notice of any acceleration was required. Each note specifically provided:

The Holder shall have the right to declare the total amount of the unpaid principal balance plus accrued interest thereon to be due and immediately payable in advance of the maturity date of any installments as fixed herein, upon the failure of the Maker to pay, when due, any of the installments hereon, or upon the occurrence of any event of default in the Security Deed, or under the Loan Agreement. Upon the exercise of this option by the Holder, the entire unpaid principal balance and all accrued and unpaid interest shall immediately and without notice become due and payable.
(Emphasis supplied.) Thus, as held in Fulton Nat. Bank v. Horn, [13] ” where the parties agree that in the event of default the creditor ‘ may declare’ acceleration ‘ without notice’ to the debtor, … notice of the declaration of acceleration need not be communicated to the
——————————————————————————–
Page 434

debtor.” See Oak Mountain Dev. Corp. v. Harrell. [14] The Bank owed no duty to the appellants to notify them of the original acceleration or of the re-acceleration.

          Second, even if such a duty were owed, the Bank gave the appellants notice of re-acceleration in the text of the complaints and amended complaints served upon appellants in their respective cases. Just as a party may give notice of an intent to seek contractually-agreed-for attorney fees in the text of the complaint, see New House Products v. Commercial Plastics, etc., Corp., [15] so [699 S.E.2d 783] a party may give notice of acceleration or re-acceleration in the text of the complaint (unless the parties’ agreements provide otherwise). Cf. Menke v. First Nat. Bank of Atlanta. [16]

         We discern no error in the grant of summary judgment to the Bank.

          Judgment affirmed in both cases.

          BARNES, P.J., and ELLINGTON, J., concur.

———

Notes:

[1] Matjoulis v. Integon Gen. Ins. Corp., 226 Ga.App. 459, 459(1), 486 S.E.2d 684 (1997).

[2] Of course, appellants can hardly ignore the irony of this argument in that it was they who requested that the foreclosure proceedings be cancelled.

[3] Oliver v. Slack, 192 Ga. 7, 8(2), 14 S.E.2d 593 (1941).

[4] Taylor v. Thompson, 158 Ga.App. 671, 672, 282 S.E.2d 157 (1981).

[5] Trust Investment, etc., Co. v. First Ga. Bank, 238 Ga. 309, 310(1), 232 S.E.2d 828 (1977).

[6] Vandegriff v. Hamilton, 238 Ga.App. 603, 604, 519 S.E.2d 702 (1999).

[7] Jamison v. Button Gwinnett Sav. Bank, 204 Ga.App. 341, 342(1), 419 S.E.2d 91 (1992).

[8] Sadler v. Trust Co. Bank of South Ga., 178 Ga.App. 871, 873(2), 344 S.E.2d 694 (1986). Notably, the federal case cited by appellants ( Gen. Elec. Capital Corp. v. Nucor Drilling, 551 F.Supp.2d 1375 (M.D.Ga.2008)) is not only nonbinding on us but makes no mention of such provisions in the debt instruments at issue in that case.

[9] Ewald v. Security Pacific Credit Corp., 190 Ga.App. 615, 617(2), 379 S.E.2d 569 (1989).

[10] Cleveland Motor Cars v. Bank of America, 295 Ga.App. 100, 101-102, 670 S.E.2d 892 (2008).

[11] Brown v. Rooks, 240 Ga. 674, 674-675, 242 S.E.2d 128 (1978).

[12] Stewart v. Diehl, 219 Ga.App. 821, 822-823, 466 S.E.2d 913 (1996).

[13] Fulton Nat. Bank v. Horn, 239 Ga. 648, 650, 238 S.E.2d 358 (1977).

[14] Oak Mountain Dev. Corp. v. Harrell, 162 Ga.App. 186, 186-187(1), 290 S.E.2d 177 (1982).

[15] New House Products v. Commercial Plastics, etc., Corp., 141 Ga.App. 199, 200-201(3), 233 S.E.2d 45 (1977).

[16] Menke v. First Nat. Bank of Atlanta, 168 Ga.App. 495, 499(1), 309 S.E.2d 835 (1983).

(1) there was no need for a jury to determine whether the guaranties were cumulative (unlike the distinguishable situation where the same guarantor has executed multiple independnet guarantees over time), and

(2) it was permissible to enter a judgment which exceeded the ‘cap’ in the guaranty, because the agreement to pay attorney fees was deemed in addition to the guarantee of the underlying obligation.

The full text of the decision follows:

Case: Boat Ramp Rd. Partners LLC v. First State Bank Inc.
Case Number: A11A2231
Decision Date: February 29, 2012
Decision Author: Adams, Judge.
Text: Adams, Judge.

First State Bank, Inc., Glandon Capital Group, LLC and Corner Bank, N. A. (appellees) brought suit to recover the outstanding balance on a note executed by Boat Ramp Road Partners, LLC and guaranteed by Gregory Lorenzetti,1 Eric J. Nathan, Gregory Greenstein, Jeffrey Goldstein and Philip Weener. The loan to Boat Ramp was in the original principal amount of $2,665,000 and Nathan, Greenstein, Goldstein and Weener had each executed separate Limited Guaranty Agreements pursuant to which they had personally and unconditionally guaranteed “all principal, interest, . . . prepayment premiums, fees, late charges, costs, [and] expenses” but “not to exceed the amount of . . . (443,000.00).” Lorenzetti signed an identical agreement, except the amount he guaranteed was not to exceed $1,559,200.00. Paragraph 16 of the Guaranty set forth the terms of the Guaranty, and provided that it “shall continue in effect until all the Guaranteed Obligations and all of the obligations of the Guarantor . . . under this Guaranty are fully and finally paid, . . . .” Paragraph Six of each agreement additionally stated that the “Guaranty is independent of (and shall not be limited by) any other guaranty now existing or hereafter given.” Further, the Guaranty agreements provided that “suit may be brought or demand may be made against . . . any or all parties who have signed this Guaranty or any other guaranty covering all or any part of the Guaranteed Obligations, or against any one or more of them, separately or together.” And, lastly, the Guaranty contained a provision for the payment of court costs and attorneys fees incurred by the appellees in seeking to enforce the guaranty.

The appellees moved for summary judgment seeking a judgment against Boat Ramp for $1,736,032.40, which was the outstanding indebtedness due under the note, and a judgment against the guarantors, jointly and severally, up to the amount of their respective guaranties. Additionally, appellees requested an award of attorney fees and expenses of litigation from all the guarantors. Following a hearing, the trial court granted appellees’ motion for summary judgment, and entered judgment against Boat Ramp in the principal amount of $1,736,032.40, past due interest through the specified date of $240, 059.57, late fees of $73,380.72, court costs of $388.40 and attorneys’ fees in the amount of $17,006.58, for a total judgment amount of $2,066,867.77. As to the guarantors, the court entered judgment against Nathan, Greenstein, Goldstein and Weener in the principal amount of $443,000.00, plus attorneys’ fees of $17,006.58 and court costs of $388.50, for a total judgment amount of $460,395.08, and against Lorenzetti for the same amount of court costs and attorney fees and the principal amount of $1,559,200.00, for a total judgment amount of $1, 576,595.08.

The guarantors filed the present appeal, arguing that the Guaranties are ambiguous as to their intent and that ambiguity should be resolved by a trial court, and additionally that the trial court erred by awarding judgments against them which exceeded the limits of liability set forth in the Guaranties.

1. Citing Rohm & Haas Co. v. Gainesville Paint &c. Co., 255 Ga. App. 441, 443-444 (2) (b) (483 SE2d 888) (1997), the guarantors first argue that the Guaranties are ambiguous as to whether the Guaranties are cumulative such that the total amount of the guarantors’ combined liability may exceed the amount of liability under the note. In Rohm & Haas , the same guarantor had executed a series of guaranties which limited his liability for the debt to $30,000, $50,000 and $100,000, respectively. Each guaranty also provided that it was independent of any other guaranties given for the debt. After first determining that the $100,000 guaranty was barred by the Equal Dignity Rule, id. at 442 (2) (a), this Court then held that “the absolute limit of liability for payment of goods sold in each guaranty creates an ambiguity as to whether they are cumulative,” and, after considering evidence from both parties that the $50,000 guaranty was meant to replace the $30,000 guaranty, upheld the trial court’s determination that the guaranties were not cumulative. Id. at 444 (2) (b).

The guarantors argue the same reasoning applies here and that a jury should determine whether they intended for the cumulative total of the Guaranties to exceed the amount of liability under the note. However, we think that Rohm & Haas is readily distinguishable from the case at hand. In that case, the ambiguity resulted from the fact that the same guarantor executed a series of guaranties in increasing amounts over a period of years to guarantee the amount owed for goods purchased from the plaintiff. Each guaranty put a cap on the amount the guarantor would be liable for but also provided that the executed guaranty was independent from any other guaranties given for the debt, with the effect that if all the guaranties were enforced, the guarantor’s liability would exceed the maximum amount of liability stated in any one of the Guaranties. In the case at bar, multiple guarantors executed separate Guaranties, each of which provided for a maximum amount of liability from that guarantor,2 and the fact that the Guaranties were independent of each other did not result in an increase of liability beyond the limitation stated. Further, as the appellees point out, the Guaranties provided for termination upon satisfaction of the guaranteed obligation, up to the limits of each Guaranty agreement, plus attorney fees and costs. Thus, once the underlying debt was satisfied, the Guaranties could no longer be enforced. This enumeration thus presents no basis for reversal.

2. The guarantors also argue that the trial court erred by awarding judgments against them for amounts that exceeded the limits of liability set forth in the Guaranties. However, the guarantors’ agreement to pay attorney fees and court costs was in addition to their guarantee of the underlying obligation, and the trial court did not err by entering judgment accordingly. Rohm & Haas , 225 Ga. App. at 445 (4); Sheppard v. Daniel Miller Co. , 7 Ga. App. 760, 763 (68 SE 451) (1910).

Judgment affirmed in part and remanded in part. Barnes, P.J., and Blackwell, J., concur .
1Although originally a party to this appeal, Lorenzetti has notified this Court that he has filed a Chapter 7 Bankruptcy Petition in the United States Bankruptcy Court for the Northern District of Georgia, Atlanta Division, Case Number 11-77404-JEM and any and all further proceedings in this matter have been stayed pursuant to 11 USC § 362 as to that appellant. Thus, as it pertains to him, we hereby remand this appeal to the trial court, with leave to Lorenzetti to re-instate this appeal by filing another notice of appeal within 30 days after the lifting of the stay, if that occurs. E.g., Payless Car Rental Systems v. Elkik, 306 Ga. App. 389, 390 n. 1 (702 SE2d 697) (2010). However, because the other guarantors have not suggested that the protection of the stay extends to them, we will address the issues raised in this appeal as those issues pertain to the remaining parties. Id.

2The trial court specifically enforced these provisions by stating in its order that “the individual guarantors are only personally liable for the amounts set out by the limitations explicit in each guarantee.”

Trial Judge: Jay Roth, Fulton State Court.

Attorneys: Nicholas J. Pieschel (Moorman Pieschel LLC), Atlanta, for appellants. A. J. Welch Jr., William A. White and Timothy W. Haley (Smith Welch Webb & White LLC), McDonough, for appellees.

First, though it involves time and expense, an action to “quiet title” (a/k/a “quia timet”) is the statutory process  to remove a cloud on title.  O.C.G.A. § 23-3-40 and following is a procedure for “Conventional Quia Timet” which is intended to cause a party to deliver a specific instrument, or to cancel a specific instrument which “casts a cloud over the complainant’s title or otherwise subjects him to future liability or present annoyance, and the cancellation of which is necessary to his perfect protection.”  In contrast, O.C.G.A. § 23-3-60 and following is a procedure for “Quia Timet Against All the World” which is intended to remove any cloud upon the title to land.

Additionally, if a party wrongfully records an instrument which not only clouds title but causes the landowner to incur “special damages” (e.g. the loss of a profitable sale), then the landowner can file a lawsuit and make a claim for “slander of title.”  O.C.G.A. § 51-9-11 provides that the owner of property may bring an action for “libelous or slanderous words which falsely or maliciously impugn his title if any damage accrues to him therefrom.”

In the case of Giles v. Swimmer, Case No. S11A1371 (Ga. March 5, 2012), the Georgia Supreme Court reiterated the rule that a plaintiff claiming slander of title must produce specific evidence of special damages, with specific figures,  in order to avoid summary judgment against the claim.

I have represented both plaintiffs and defendants in slander of title claims.  In my experience, it can be very difficult to prove damages for a slander of title claim, especially if no specific sale was lost. 

The full text of the decision follows:

Case: Giles v. Swimmer
Case Number: S11A1371
Decision Date: March 5, 2012
Decision Author: BENHAM, Justice.
Text: BENHAM, Justice.
This case involves an underlying action for quiet title and comes to us from the trial court’s grant of appellee Branch Banking & Trust’s (BB&T) motion for summary judgment. The facts show that in December 1988, William K. Folds executed a promissory note (the “Note”) to Adolph Swimmer for a loan of $128,000. As collateral, two security deeds were executed from Folds to Swimmer for (i) two four-acre tracts of land and (ii) a one-acre tract of land. The deeds were recorded in Towns County in February 1991. Because Folds was president of Inter-American Construction Company (“Inter-American”), two other security deeds were recorded in March 1991 to “correct” the original security deeds to reflect Inter-American as the entity pledging the tracts of land. In March 1997, Swimmer assigned the Note and the security deeds for the properties to Gwinnett National Bank (GNB). The collateral assignment was made to secure a master note with GNB and was scheduled to terminate upon Swimmer’s repayment of the loan. Two years later, in February 1999, Folds used the one-acre tract of land as collateral to secure a mortgage from Sunshine Mortgage. A security deed reflecting the mortgage loan and a quit claim deed from Inter-American were recorded on June 14, 1999. Also on June 14, 1999, a quit claim deed (“the 1999 quit claim deed”) was recorded releasing “described property” from GNB to Folds and Inter-American; however, the deed failed to attach the description of the property. BB&T became the successor to GNB in November 2001. By that time, Swimmer had satisfied his GNB loan and the collateral assignment of the one-acre tract of land to GNB had terminated. Four years later, in November 2005, a Satisfaction of Mortgage from Countrywide Home Loans was recorded showing that Folds’ 1999 mortgage with Sunshine Mortgage was satisfied. The Satisfaction that was recorded, however, did not reference the security deed from Folds to Sunshine Mortgage, but rather the 1999 quit claim deed from GNB to Folds. On November 7, 2005, Folds transferred approximately seven acres of the two four-acre tracts of property (the “seven acres”) to Keith Holcomb and Eugene McClure by warranty deed. About a month later, on December 12, 2005, the Towns County court clerk stamped the security deed between Folds and Swimmer for the two four-acre tracts as “satisfied.”
In early 2006, Holcomb and McClure transferred the seven acres to appellants Steve Giles, Ronnie Stroud, and Jackie Greg Taylor by warranty deed. In December 2006, appellants Giles, Stroud, and Taylor subdivided the seven acres into six lots as part of the Hickory Hollow subdivision and then conveyed, by warranty deed, two of the lots to grantees who later intervened as plaintiffs in the quiet title action.
In May 2007, Swimmer submitted to BB&T an “Affidavit of Correction of Termination of Collateral Assignment of Loan Documents and Satisfaction of Promissory Note” (“Affidavit”) and a “Termination of Collateral Assignment of Loan Documents and Satisfaction of Promissory Note and Security Deed.” (“Termination”). At Swimmer’s lawyer’s request, BB&T executed and recorded these documents in June 2007. The Affidavit and Termination essentially provided that the 1999 quit claim deed from GNB to Folds was incorrectly signed by the bank and was not the correct document to terminate the collateral assignment. In November 2010, while the underlying litigation was pending, the trial court ordered the Affidavit and Termination to be stricken from the county’s deed records.

In late December 2008 and early January 2009, Swimmer foreclosed on the original 1991 security deeds from Folds and purchased the property at the foreclosure sale. The appellants and interveners, who purportedly had an interest in the property, were never provided notice of the foreclosure and sale. Appellants filed a complaint against Swimmer and BB&T seeking quiet title and asserting claims of personal injury, slander of title, actual damages, punitive damages, and attorneys’ fees. BB&T moved for summary judgment and the trial court granted the motion.1 We affirm.

1. As their first enumeration of error, appellants allege that the trial court erred when it granted summary judgment to BB&T because they argue that genuine issues of material fact remain for resolution by a fact finder. ” ‘On appeal from the grant of summary judgment this Court conducts a de novo review of the evidence to determine whether there is a genuine issue of material fact and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.’ [Cits.]” Campbell v. The Landings Ass’n, Inc. , 289 Ga. 617, 618 (713 SE2d 860) (2011). Since the trial court struck the Affidavit and Termination executed by BB&T in 2007 from the county’s deed records, the trial court determined there was no basis for BB&T to be a part of the quiet title action and granted summary judgment. Our de novo review of the appellate record confirms that there is no evidence that BB&T had title or other interest in the land at issue at the time of its motion for summary judgment, and, as such, there were no genuine issues of material fact remaining for review by a fact-finder as to BB&T and appellants’ quiet title claim. Accordingly, this allegation of error cannot be sustained.

2. Appellants allege that the trial court erred when it did not sustain their claim of slander of title. Specifically, appellants argued that BB&T slandered their title to the property at issue when BB&T executed, at Swimmer’s behest, the Affidavit and Termination which purportedly retracted the 1999 quit claim deed between Folds and BB&T’s predecessor GNB. The trial court found that there was no evidence the documents were false and malicious on the part of BB&T and that there was no evidence of special damages to sustain a slander of title claim.

The elements of proof for a slander of title claim are as follows:
The owner of property may bring an action for “libelous or slanderous words which falsely or maliciously impugn his title if any damage accrues to him therefrom.” OCGA § 51-9-11. “In order to sustain an action of this kind, the plaintiff must allege and prove the uttering and publishing of the slanderous words; that they were false; that they were malicious; that he sustained special damage thereby; and that he possessed an estate in the property slandered.” (Citation and punctuation omitted.)
Latson v. Boaz , 278 Ga. 113, 114 (598 SE2d 485) (2004). In their complaint, appellants sought special damages, but did not carry their burden of proffering specific evidence of special damages once BB&T pointed out the absence of such evidence in support of appellants’ case. Lau’s Corp. v. Haskins , 261 Ga. 491 (405 SE2d 474) (1991). Indeed, to maintain an action for slander of title, evidence of special damages must be specific. Latson v. Boaz , supra, 278 Ga. at 114-115. See also Harmon v. Cunard , 190 Ga.App. 19 (378 SE2d 351) (1989) (insufficient proof of special damages where no specific figures offered for the damage allegedly suffered). It appearing that appellants failed show specific damages in support of their claim of slander of title, the trial court did not err when it granted BB&T’s motion for summary judgment.
Judgment affirmed. All the Justices concur, except Hines, J., who is not participating.
1Swimmer’s motion for summary judgment is still pending below.

Trial Judge: Murphy C. Miller, Towns Superior Court.

Attorneys: Tom W. Daniel (Daniel, Lawson, Tuggle & Jerles LLP), Hiawassee, for appellants. Richard W. Calhoun (Brock, Clay, Calhoun & Rogers LLC), Marietta, Harold D. Ehrman, Tucker, Constance M. Ewing and Nancy H. Baughan (Parker, Hudson, Rainer & Dobbs LLP), Atlanta, for appellees.

The decision reiterated the principle that when “[f]irms that have negotiated contracts are entitled to enforce them to the letter, even to the great discomfort of their trading partners, without being mulcted for lack of ‘good faith.’” 

Similarly, when”[t]he express terms of the note identify the remedies available to the [lender] in the event of a default” then the lender is ”entitled to choose whichever remedy it prefer[s].”

The full text of the decision follows:

Case: Martin v. Hamilton State Bank
Case Number: A11A1588 (civil case)
Decision Date: February 24, 2012
Decision Author: Blackwell, Judge.

Text: Blackwell, Judge.

Bartow County Bank1 loaned more than $2.7 million to Larry Martin, and Martin gave four promissory notes to the Bank in connection with these loans. When Martin failed to make several payments required under the terms of these notes, the Bank declared a default for nonpayment and accelerated the debt due under the notes.2 Martin and the Bank then discussed whether the indebtedness might be restructured, but they were unable to come to an agreement, and the Bank later sued Martin on the four notes. The court below entered summary judgment for the Bank, and Martin appeals, contending that the Bank breached the implied duty of good faith and fair dealing when it declared a default and refused to restructure his debt. Martin also argues that the court below should have permitted him to take discovery on the question of good faith before entering summary judgment. We see no error and affirm.

Generally speaking, “every contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement.” Hunting Aircraft, Inc. v. Peachtree City Airport Auth. , 281 Ga. App. 450, 451 (1) (636 SE2d 139) (2006) (citation and punctuation omitted). But “[t]here can be no breach of an implied covenant of good faith where a party to a contract has done what the provisions of the contract expressly give him the right to do.”3 Automatic Sprinkler Corp. of America v. Anderson , 243 Ga. 867, 868 (257 SE2d 283) (1979). See also Marathon U. S. Realties v. Kalb , 244 Ga. 390, 392 (260 SE2d 85) (1979); Cox v. Athens Regional Med. Center , 279 Ga. App. 586, 591 (1) (b) (631 SE2d 792) (2006); Nobel Lodging, Inc. v. Holiday Hospitality Franchising, Inc. , 249 Ga. App. 497, 500 (3) (548 SE2d 481) (2001); Williams v. South Central Farm Credit , 215 Ga. App. 740, 741 (2) (452 SE2d 148) (1994). Put another way:
Firms that have negotiated contracts are entitled to enforce them to the letter, even to the great discomfort of their trading partners, without being mulcted for lack of ‘good faith.’ Although courts often refer to the obligation of good faith that exists in every contractual relation, this is not an invitation to the court to decide whether one party ought to have exercised privileges expressly reserved in the document. ‘Good faith’ is a compact reference to an implied undertaking not to take opportunistic advantage in a way that could not have been contemplated at the time of drafting, and which therefore was not resolved explicitly by the parties. When the contract is silent, principles of good faith . . . fill the gap. They do not block use of terms that actually appear in the contract.
Kham & Nate’s Shoes No. 2, Inc. v. First Bank of Whiting , 908 F.2d 1351, 1357 (III) (7th Cir. 1990) (citations omitted). See also Westinghouse Credit Corp. v. Hall , 144 Bankr. Rep. 568, 576 (II) (S.D. Ga. 1992). Consistent with this principle, we recently held that, when a debt instrument explicitly confirms the right of the creditor to pursue one or more specified remedies for default, the creditor owes no duty to the debtor to pursue any particular remedy and may pursue whatever contractual remedy it chooses. See REL Development, Inc. v. Branch Banking & Trust Co. , 305 Ga. App. 429, 431-432 (1) (699 SE2d 779) (2010) (lender was not required to pursue foreclosure before commencing suit to collect indebtedness).
In this case, the occurrence of default is undisputed.4 In the event of default, the notes expressly authorize the Bank to demand immediate payment of the entire amount owed under the notes and to pursue its legal remedies, among other things. And the notes explicitly provide that, if the Bank elects to pursue a specific remedy, it does not thereby waive its right to pursue other remedies. The express terms of the note identify the remedies available to the Bank in the event of a default, and the Bank was entitled to choose whichever remedy it preferred. So, although the Bank was perfectly free to negotiate an agreement to restructure the debt that Martin owed if it wished, it also was free to forego restructuring and instead declare default, accelerate the debt, and pursue collection of the debt in court.5

When the Bank filed its motion for summary judgment, Martin sought discovery from the Bank, in hopes of finding evidence of its “motivation” in declaring a default and ultimately refusing to restructure his debt. And when the Bank refused to produce all of the discovery he requested, Martin moved to compel discovery and moved for a continuance of the motion for summary judgment. The court effectively denied both motions, finding that the “motivation” of the Bank was immaterial because Martin could not properly contend that the decision to declare a default and pursue collection of the debt amounts to a breach of the duty of good faith and fair dealing. About this, the court was exactly right, and the denial of the motion to compel discovery and the motion for a continuance was, therefore, no abuse of discretion. See Pointer v. Roberts , 288 Ga. 150, 152 (702 SE2d 130) (2010) (“[t]he trial court’s discretion in granting or refusing a continuance will not be interfered with by the appellate courts unless it clearly appears that the judge abused his discretion.”) (citation and punctuation omitted); McMillan v. McMillan , 310 Ga. App. 735, 737 (713 SE2d 920) (2011) (“[a]s a general rule, we review the denial of a motion to compel discovery only for an abuse of discretion.”) (citation omitted). And because the notes explicitly authorized the Bank to declare a default, accelerate the debt, and sue to collect it, the court below properly entered summary judgment for the Bank. Accordingly, we affirm the judgment below.

Judgment affirmed. Barnes, P.J., and Adams, J., concur .
1After the notice of appeal was filed below, the assets of Bartow County Bank apparently were assigned to Hamilton State Bank, and we allowed Hamilton State Bank to substitute as a party for Bartow County Bank. Because it is unnecessary to distinguish between Bartow County Bank and Hamilton State Bank for the purposes of this appeal, however, we simply refer in our opinion to the “Bank,” meaning Bartow County Bank as the predecessor-in-interest of Hamilton State Bank.

2It is undisputed that Martin failed to make required payments on three of the notes, which amounts to a default on those notes. Although Martin apparently was current on his payments on the fourth note, the fourth note contains a cross-default provision, under which a default on any other note that Martin had given to the Bank also amounts to a default on the fourth note.

3The Georgia Commercial Code recognizes an implied duty of good faith in the performance and enforcement of contracts within its scope, see OCGA § 11-1-203, but this duty is implied only with respect to matters “not regulated by the contract.” Fulton Nat. Bank v. Willis Denney Ford, Inc. , 154 Ga. App. 846, 848-849 (269 SE2d 916) (1980).

4Although Martin does not dispute the occurrence of default, he says that the Bank waived his default by accepting partial payments after its declaration of default. We have held before, however, that the mere acceptance of partial payments after a declaration of default and acceleration of a debt “does not amount to a waiver of the prior default or undo the maturity of the remainder of the indebtedness.” Chapman v. Nation , 193 Ga. App. 632, 634 (2) (388 SE2d 744) (1989) (citation omitted).

5Martin points to our decisions in Fulton v. Anchor Savings Bank , 215 Ga. App. 456 (452 SE2d 208) (1994), and Crosson v. Lancaster , 207 Ga. App. 404 (427 SE2d 864) (1993), in support of his contention that the implied duty of good faith attaches to a decision to declare a default. Those decisions are, however, distinguishable because they involved a lender accelerating a debt based on the lender having deemed itself insecure, not accelerating a debt based on a default for nonpayment. See Fulton , 215 Ga. App. at 467 (4); Crosson , 207 Ga. App. at 405 (4). Under OCGA § 11-1-208, “[a] term providing that one party . . . may accelerate payment or performance or require collateral or additional collateral ‘at will’ or ‘when he deems himself insecure’ or in words of similar import” implies an obligation to exercise the power to do so only in good faith. But in this case, the Bank did not exercise any power at will, or based on a determination that it was insecure, to accelerate payment. Its authority to declare a default and accelerate the debt was triggered instead by the occurrence of default for nonpayment, an occurrence that is, as we have said, undisputed. OCGA § 11-1-208 simply has no application in this case.

Trial Judge: Jon B. Wood, Floyd Superior Court.

Attorneys: Virginia B. Harman (McRae, Stegall, Peek, Harman, Smith & Manning LLP), and Jackson B. Harris, Rome, for appellant. Edward Hine Jr., Rome, for appellee.

Super Lawyers states that lawyers they have named “have attained a high-degree of peer recognition and professional achievement” and that no more than 2.5 percent of attorneys are named to the “Rising Stars” list.  Super Lawyers uses a multi-phase selection process, which includes independent research, peer nominations and peer evaluations.

First Laurens Bank

The Georgia Court of Appeals held that the State Bank of Cochran (First Laurens Bank) was entitled to collect on a promissory note, because the Defendants admitted to having failed to repay the bank despite having entered into the note and guaranty.  The Court rejected the Defendants’ primary defenses to the suit, finding that there was no fraud, and that there was no promissory estoppel defense.

Court Rejects Fraud Defense

Defendant Griffin defended the suit against her on the Guaranty based upon alleged fraud.  Griffin claimed that she took out an initial loan in order to purchase additional shares of stock in Community Bank of West Georgia, because she had been informed by a consultant to Community Bank (Mr. Stevens) that a sale of Community Bank was “imminent.”  Griffin would later claim that Stevens knew this to be false, but offered no evidence of this beyond speculation.

First Laurens Bank then agreed to refinance the first loan, which Griffin personally guaranteed.

The Court of Appeals did not reach the issue of whether the statement by a consultant to Community Bank could be attributed to First Laurens Bank.  Instead, it held that the statement was not fraudulent as a matter of law, noting:

“It is axiomatic that a false representation made by a defendant, to be actionable, must relate to an existing fact or a past event. Fraud cannot consist of mere broken promises, unfilled predictions or erroneous conjecture as to future events. Representations concerning expectations and hopes are not actionable.”

Here, the statement that a sale of Community Bank was “imminent” was clearly a prediction of a future event and not actionable as fraud.

Griffin’s allegation of a violation of the Georgia Securities Act of 1973 failed for the same reason, because securities fraud requires the “same elements” as common law fraud.

Court Rejects Promissory Estoppel Defense

Judge M. Yvette Miller

Additionally, to establish a defense of promissory estoppel, Griffin needed to show that she reasonably relied upon any statements made to her.  But the Court of Appeals rejected the defense because it held that Griffin could not show reasonable reliance as a matter of law.

The Court observed that the Note and Guaranty contained “Integration,” or entire agreement clauses, providing that the respective Note, loan documents, and Guaranty “[were] the complete and final expression of the agreement” between the parties.

Because the Note and Guaranty did not contain the alleged representations or promises that Community Bank would sell or condition repayment of the loan upon a prospective sale, then Griffin was barred from claiming reliance.

Observations

The debtors in this case raised serious allegations of fraud, promissory estoppel, violations of the Georgia Securities Act of 1973, violations of the duty of good faith and fair dealing, failure of consideration and illegality.  Indeed, the Carroll County Superior Court denied summary judgment to the Bank.

The Georgia Court of Appeals did not break new ground or establish any significant new rules of law in this case.  But the decision is a reminder that creditors need knowledgeable counsel, because defendant debtors may raise serious and complicated defenses.

Jim Fletcher is an attorney at the Geheren Firm P.C. His practice focuses on business litigation and real estate litigation throughout Georgia, including representation of lenders in actions upon notes and guarantees.

Web: http://www.JimFletcher.net | Phone: (678) 607-6053 | Email: jim@JimFletcher.net

The Full Decision Follows:

Decision: Griffin v. State Bank of Cochran
Case Number: A11A1466; A11A1467
Decision Date: October 17, 2011
Judge: Miller, Presiding Judge.
Text:

Miller, Presiding Judge.

State Bank of Cochran d/b/a First Laurens Bank (“FLB”) filed suit against MAL Rentals, LLC and Loretta M. Griffin to collect on a promissory note. In their answers to the complaint, MAL Rentals and Griffin raised several defenses, including estoppel. Griffin also asserted a counterclaim, alleging fraudulent inducement and securities fraud in violation of former Georgia Securities Act of 1973. FLB filed a motion for summary judgment as to its collection claims and the counterclaim. The trial court denied FLB’s motion as to its collection claims, but granted the motion as to the counterclaim. These cross-appeals then ensued.

In Case No. A11A1466, Griffin contends that the trial court erred in granting FLB’s motion for summary judgment as to her counterclaim. In Case No. A11A1467, FLB contends that the trial court erred in denying its motion for summary judgment as to its collection claims alleging breach of the promissory note and guaranty and entitlement to attorney fees. For the reasons that follow, we affirm the grant of summary judgment in FLB’s favor as to the counterclaim in Case No. A11A1466; we reverse the denial of summary judgment in FLB’s favor as to its collection claims in Case No. A11A1467.
Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56(c). A de novo standard of review applies to an appeal from a grant or denial of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.
(Footnote omitted.) Baxter v. Fairfield Financial Svcs., Inc. , 307 Ga. App. 286, 287 (704 SE2d 423) (2010).
So viewed, the record evidence shows that in 2002, Griffin began serving as a member of the Board of Directors of Community Bank of West Georgia (“CBWG” or “the bank”) and its holding company, Community Bancshares of West Georgia, Inc. (“Community Bancshares”) (collectively, “the boards”). Griffin regularly attended the board meetings, served as the chairperson of several of the board’s committees, and made it a practice to know about the financial positions of CBWG and Community Bancshares. While serving on the boards in 2003, Griffin made an investment by purchasing common stock in Community Bancshares.

In 2006, the boards decided to hire a consultant, Charles Stevens, to advise them regarding CBWG and Community Bancshares operations and to assist in their efforts to sell the CBWG bank. Stevens provided consultancy services to the boards through his company, Stevens & Company. In addition to operating his consulting company, Stevens also served as a member of the advisory board of FLB.

At some point while Stevens was serving as the boards’ consultant, Stevens informed the boards’ members that a sale of CBWG was imminent and that interested purchasers had been performing due diligence in anticipation of buying CBWG. Pending a potential sale, however, additional capital was necessary to fund CBWG’s continuing operations. According to Griffin, Stevens advised the boards’ members to purchase additional shares of stock in order to generate the necessary capital. Griffin followed Stevens’s recommendation and purchased additional Community Bancshares stock in 2007 and 2008.

Griffin gave deposition testimony that she obtained a loan from FLB in order to make her 2007 and 2008 stock purchases.1 Thereafter, Griffin transferred the stock into the name of MAL Rentals, a company that she owned and operated.

In May 2009, FLB agreed to refinance Griffin’s original loan. The refinanced loan was placed in the name of MAL Rental as the debtor. On behalf of MAL Rental, Griffin executed a promissory note (“the Note”) that set forth the terms of the refinanced loan. Griffin also executed a security agreement that pledged the stock as collateral securing the refinanced loan. In addition, Griffin signed a personal guaranty (“the Guaranty”) accepting unconditional liability for repayment of the loan, including “all principal, accrued interest, attorneys’ fees and collection costs[.]”

Pursuant to the terms of the Note, FLB made MAL Rentals a loan in the amount of $249,542. 50. The loan was to be repaid on May 11, 2010, with interest accruing at a rate of 6.000 percent per annum. “After maturity or acceleration [of the Note], interest . . . accrue[d] on the unpaid [p]rincipal balance . . . at 18.000 percent until paid in full.” The Note further defined several conditions of default, including in pertinent part, MAL Rental’s “fail[ure] to make a payment in full when due” and FLB’s “determin[ation] in good faith that the value of the [collateral] has declined or is impaired.” In the event of a default, the Note authorized FLB to accelerate the Note, making all or any part of the amount owed immediately due. Upon default, FLB was also authorized to recover all expenses related to collection of the debt, including “attorneys’ fees, court costs, and other legal expenses.” The Note specified that the amount of attorney fees owed would be “15 percent of the [p]rincipal and interest owing[.]” The Note further contained an “Integration” clause, stating that “th[e] Note and the other Loan Documents [were] the complete and final expression of the agreement” between the parties. The Guaranty contained a similar “Integration” clause.

In June 2009, CBWG was closed by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation was named as receiver. In light of CBWG’s closure, FLB determined that the stock collateral securing the debt was rendered worthless, and thus, a condition of default had occurred pursuant to the terms of the Note. On July 28, 2009, FLB sent Griffin a letter notifying her that a default had occurred since the “the collateral decline[d] in value.” The letter required Griffin to provide substitute collateral within 10 days and advised her that FLB would honor the repayment terms of the Note, conditioned upon her substitution of collateral meeting the margin requirements of the security agreement. Griffin and MAL Rentals failed to provide substituted collateral, as requested. On September 1, 2009, FLB sent Griffin a second letter, again requesting that MAL Rentals cure the default within ten days by substituting adequate collateral. The second letter further advised that the debt had been accelerated so as to render the debt immediately due and payable and that upon failure to cure the default or to pay the accelerated balance, FLB would pursue its legal remedies, including collection of the unpaid balance, late fees, attorney fees, collection costs, and interest.

When MAL Rentals and Griffin still failed to provide substitute collateral or repay the indebtedness, FLB filed the instant collection lawsuit to enforce the terms of the Note and the Guaranty. FLB’s complaint alleged claims for breach of the Note, breach of the Guaranty, and entitlement to attorney fees. MAL Rentals and Griffin raised several defenses, including estoppel. Griffin also asserted a counterclaim, alleging fraudulent inducement and securities fraud in violation of the former Georgia Securities Act of 1973. FLB filed a motion for summary judgment. The trial court denied FLB’s motion as to its collection claims, but granted the motion as to Griffin’s counterclaim.

A11A1466

1. Griffin contends that the trial court erred in granting summary judgment in FLB’s favor as to her counterclaim for fraudulent inducement and securities fraud. We discern no error.

(a) “The tort of fraud has five elements: a false representation by a defendant, scienter, intention to induce the plaintiff to act or refrain from acting, justifiable reliance by plaintiff, and damage to plaintiff.” (Citations and punctuation omitted.) Fuller v. Perry , 223 Ga. App. 129, 131 (1) (476 SE2d 793) (1996). To survive a motion for summary judgment, Griffin was required to present some evidence of each element of the fraud tort. See id. The grant of summary judgment was proper if one essential element of the claim was eliminated. See id.

Here, Griffin’s fraud claim was based, in part, upon Stevens’s alleged misrepresentation that CBWG was going to sell, which purportedly induced Griffin to obtain the loan for her purchase of additional stock used to fund CBWG’s continued operations pending a potential sale. Griffin’s claim in this regard, however, was legally inactionable.

Regardless of whether Stevens’s alleged misrepresentation could be attributed to FLB,2 “[i]t is axiomatic that a false representation made by a defendant, to be actionable, must relate to an existing fact or a past event. Fraud cannot consist of mere broken promises, unfilled predictions or erroneous conjecture as to future events. Representations concerning expectations and hopes are not actionable.” (Citations and punctuation omitted.) Fuller , supra, 223 Ga. App. at 131 (1). Griffin’s deposition testimony acknowledged that she was aware that no final sale of CBWG had occurred at the time of the alleged misrepresentation and when she obtained the loan. The evidence reflected that Stevens’s alleged prediction that CBWG was going to sell amounted to mere prospect, expectation or erroneous conjecture. As such, the representation was not actionable. See id.

“It is true that claims of fraud arising from a representation of a future event made with knowledge that it is false or intention not to perform may be actionable.” (Citation omitted.) Fuller , supra, 223 Ga. App. at 131-132 (1). Griffin, however, has pointed to no evidence showing that Stevens made the alleged representation with knowledge that a sale would not occur or intention that a sale would not be finalized. “Bare conclusions and contentions unsupported by an evidentiary basis in fact are insufficient to oppose a motion for summary judgment.” (Footnote omitted.) Johnson v. First Union Nat. Bank , 255 Ga. App. 819, 823 (6) (567 SE2d 44) (2002).

Griffin also characterizes Stevens’s recommendation to invest more capital in CBWG as a misrepresentation. Griffin, however, has not presented any evidence that Stevens’s recommendation amounted to a false representation. Indeed, Griffin has neither asserted nor pointed to any evidence indicating that Stevens misrepresented or falsely informed Griffin about CBWG’s financial condition. Rather, consistent with Stevens’s alleged representation, Griffin’s deposition testimony acknowledged that additional capital was necessary in order to continue CBWG’s operations and that it was up to the boards’ members to generate the funds needed.

Moreover, Griffin has not shown that she justifiably relied upon the representation. “Misrepresentations are not actionable unless the complaining party was justified in relying thereon in the exercise of common prudence and diligence.” GCA Strategic Investment Fund, Ltd. v. Joseph Charles & Assocs., Inc. , 245 Ga. App. 460, 464 (3) (537 SE2d 677) (2000). We have held that
as a matter of economic and social policy, third parties should be encouraged to rely on their own prudence, diligence, and contracting power, as well as other informational tools. This kind of self-reliance promotes sound investment and credit practices and discourages the careless use of monetary resources.
(Citation and punctuation omitted.) White v. BDO Seidman, LLP , 249 Ga. App. 668, 672 (1) (549 SE2d 490) (2001). The evidence shows that as a member of the boards, Griffin had knowledge and access to information about CBGW’s and Community Bancshares’s financial positions. Griffin conceded that she was privy to all information necessary to make the stock investment decision. “Therefore, [Griffin] [was] in at least as good a position as the [FLB] to analyze [CBWG’s and Community Bancshares’s] financial condition, and [her] failure to investigate the matter showed a lack of due diligence.” (Punctuation and footnote omitted.) Baxter , supra, 307 Ga. App. at 294 (4). See also Bogle v. Bragg , 248 Ga. App. 632, 636 (1) (548 SE2d 396) (2001) (in light of the investor’s knowledge about the operational history of the company, he did not show that he justifiably relied upon alleged misrepresentations in connection with his purchase of the company’s stock).
Griffin’s attempt to implicate FLB in her investment decision also fails since “no confidential relationship exists between a bank and its customers or others with whom the bank deals.” (Citations omitted.) Lilliston v. Regions Bank , 288 Ga. App. 241, 244 (1) (653 SE2d 306) (2007). “[W]e have held that a bank has no duty to advise a party who is contemplating serving as the guarantor for a bank loan about problems with the viability of the business venture financed by the loan.” (Citations and punctuation omitted.) Id.

For each of these reasons, Griffin’s fraud claim was unsubstantiated, and FLB was entitled to the grant of summary judgment on the claim.

(b) Likewise, we conclude that summary judgment was properly granted in favor of FLB as to Griffin’s securities fraud claim. Griffin’s counterclaim alleged that FLB’s actions in the loan transaction violated the provisions of the former Georgia Securities Act of 1973.3 She cited to OCGA § 10-5-12 (a) (2) of the former Act, which provided as follows:
It shall be unlawful for any person . . . [i]n connection with an offer to sell, sale, offer to purchase, or purchase of any security, directly or indirectly: (A) To employ a device, scheme, or artifice to defraud; (B) To make an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading; or (C) To engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon a person.
Fernandez v. WebSingularity, Inc. , 299 Ga. App. 11, 17 (5) (681 SE2d 717) (2009) (quoting provisions of former statute).
Regardless of the propriety of Griffin’s argument that the events surrounding her loan transaction fell within the purview of the Act,4 her claims lacked merit for the same reasons that her common law fraud claim failed. Significantly, “common law and securities fraud [under former OCGA § 10-5-12 (a)] require the same elements[.]” (Citations, punctuation, and footnotes omitted.) Keogler v. Krasnoff , 268 Ga. App. 250, 254 (1) (601 SE2d 788) (2004). As explained in Division 1 (a) above, Griffin failed to produce any evidence of either actionable misrepresentations or justifiable reliance, which were elements required to support her claim. The trial court’s decision granting FLB’s motion for summary judgment as to Griffin’s counterclaim for securities fraud was proper.

Case No. A11A1467

2. In its cross-appeal, FLB contends that the trial court erred in denying its motion for summary judgment as to the claims in its complaint. We agree.

FLB’s complaint alleged that MAL Rentals breached the Note and that Griffin breached the Guaranty. FLB claimed entitlement to be repaid in accordance with the terms of the loan, including the payment of attorney fees.

“A creditor in possession of a valid and signed promissory note has a prima facie right to repayment, unless the debtor can establish a valid defense. A debtor cannot defeat this prima facie right of repayment by denying the debt for general reasons; it must assert a valid affirmative defense, such as estoppel or illegality.” (Footnotes omitted.) City of Bremen v. Regions Bank , 274 Ga. 733, 740 (5) (559 SE2d 440) (2002). Under OCGA § 13-1-11 (a) (1), the provisions of a promissory note authorizing the collection of attorney fees “shall be valid and enforceable up to but not in excess of 15 percent of the principal and interest owing on said note or other evidence of indebtedness[.]”

MAL Rentals and Griffin admitted that they entered the Note and the Guaranty at issue and that they failed to pay their respective financial obligations. Based upon these admissions, FLB established a prima facie right to repayment. See City of Bremen , supra, 274 Ga. at 740 (5).

MAL Rentals and Griffin nonetheless raised the defenses of estoppel and breach of an implied duty of good faith and fair dealing in opposition to FLB’s motion for summary judgment.5 The evidence, however, failed to support either of the alleged defenses.

(a) MAL Rentals and Griffin based their estoppel defense on Stevens’s alleged misrepresentation that CBWG would sell. They further alleged that FLB had previously represented that it would continue to honor the terms of the Note, but failed to do so when it accelerated the Note and declared the Note to be in default.

“In order for an equitable estoppel to arise, there must generally be some intended deception in the conduct or declarations of the party to be estopped, or such gross negligence as to amount to constructive fraud, by which another has been misled to his injury.” OCGA § 24-4-27. Similarly, promissory estoppel, codified at OCGA § 13-3-446 requires proof that
(1) the defendant made a promise or promises; (2) the defendant should have reasonably expected the plaintiff to rely on such promise; (3) the plaintiff relied on such promise to [her] detriment; and (4) an injustice can only be avoided by the enforcement of the promise, because as a result of the reliance, plaintiff changed [her] position to [her] detriment by surrendering, forgoing, or rendering a valuable right.
(Punctuation and footnotes omitted.) Hendon Properties, LLC v. Cinema Dev., LLC , 275 Ga. App. 434, 438-439 (2) (620 SE2d 644) (2005). Notably, “[e]stoppels are not favored by our law.” (Citation and punctuation omitted.) Cobb County Rural Elec. &c. Corp. v. Bd. of Lights &c. of Marietta , 211 Ga. 535, 539 (2) (87 SE2d 80) (1955).
To survive FLB’s motion for summary judgment as to the promissory estoppel defense, MAL Rentals and Griffin were required to show that they reasonably relied upon Stevens’s alleged representations regarding the prospects of CBWG’s sale. See generally Tampa Bay Financial v. Nordeen , 272 Ga. App. 529, 535 (2) (612 SE2d 856) (2005) (recognizing that a claimant cannot establish a case for promissory estoppel without proving that he justifiably relied upon the promises). Significantly, the Note and Guaranty contained “Integration,” or entire agreement clauses, providing that the respective Note, loan documents, and Guaranty “[were] the complete and final expression of the agreement” between the parties. “The entire agreement clause operates as a disclaimer, establishing that the written agreement completely and comprehensively represents all the parties’ agreement. The [debtor] is, therefore, barred from claiming that he or she relied on an alleged misrepresentation not contained within the agreement.”7 (Punctuation and footnotes omitted.) Herman Homes v. Smith , 249 Ga. App. 131, 132-133 (1) (547 SE2d 591) (2001). See also Tampa Bay Financial , supra, 272 Ga. App. at 533-535 (2) (concluding that the merger clause in the parties’ contract prevented the claimant from justifiably relying upon any promises made prior to execution of the contract, and thus, the claimant could not prevail on his promissory estoppel claim). The Note, loan documents, and Guaranty did not contain the alleged representations or promises that CBWG would sell or condition repayment of the loan upon a prospective sale. In light of the entire agreement clauses, MAL Rentals and Griffin could not show that they reasonably relied upon the alleged representations in support of their promissory estoppel defense to avoid repayment of the loan. See id.

Moreover, as previously explained in Division 1 (a) above, FLB had no duty to advise MAL Rentals and Griffin regarding the viability of the business venture financed by the loan. See Lilliston , supra, 288 Ga. App. at 244 (1). Consequently, Stevens’s alleged misrepresentations could not serve as a basis to preclude repayment of the loan under the terms of the Note and guaranty. In addition, MAL Rentals and Griffin failed to show that FLB intended to deceive them in making the loan. Significantly, Griffin’s deposition testimony expressed a belief that FLB also likely thought that CBWG was going to sell, which is the reason that it agreed to provide the loan.

Contrary to MAL Rentals’s and Griffin’s claims otherwise, FLB did honor the terms of the Note. Griffin acknowledged that the plain terms of the Note provided that a decline in stock value was a condition that gave FLB the right to accelerate the Note. MAL Rentals and Griffin have failed to point to any evidence showing that FLB’s actions to enforce the provisions of the loan were deceptive or fraudulent.

Griffin, however, claims that FLB told her that it would continue to renew the Note, although its purported promise was not reflected in the loan. “Promissory estoppel does not, however, apply to vague or indefinite promises, or promises of uncertain duration.” (Citation omitted.) Georgia Investments Intl. v. Branch Banking &c. Co. , 305 Ga. App. 673, 675 (1) (700 SE2d 662) (2010). While Griffin claimed that FLB promised to renew the loan, she failed to present any evidence that FLB promised to renew the loan based on all pre-existing material terms or any other specific terms and conditions of any purported loan renewal. Since the alleged promise supporting the promissory estoppel claim was vague and indefinite, it was inactionable. See id. at 675-676 (1). FLB satisfied its burden of showing the lack of a genuine issue of fact as to MAL Rentals’s and Griffin’s estoppel defense. See id. at 676 (1).

(b) The evidence also fails to support MAL Rentals’s and Griffin’s defense of breach of an implied duty of good faith and fair dealing. “Every contract implies a covenant of good faith and fair dealing in the contract’s performance and enforcement. . . . [B]ut the covenant cannot be breached apart from the contract provisions it modifies and therefore cannot provide an independent basis for liability.” (Citations and punctuation omitted.) Myung Sung Presbyterian Church v. North American Assn. of Slavic Churches &c., Inc. , 291 Ga. App. 808, 810 (2) (662 SE2d 745) (2008). “There can be no breach of an implied covenant of good faith where a party to a contract has done what the provisions of the contract expressly give him the right to do.” (Citation and footnote omitted.) Cox v. Athens Regional Medical Center , 279 Ga. App. 586, 591 (1) (b) (631 SE2d 792) (2006). MAL Rentals and Griffin have failed to point to any provision of the Note or the Guaranty that FLB failed to perform in good faith. As previously stated, the express terms of the Note authorized FLB to accelerate the Note upon the occurrence of a default, which included the devaluation of the collateral. Accordingly, FLB did not breach the implied covenant by enforcing the express terms of the Note and guaranty. See id.

There being no disputed material facts regarding the issues presented, FLB was entitled to recover on the Note and the Guaranty as a matter of law. See City of Bremen , supra, 274 Ga. at 740 (5). We therefore reverse the trial court’s denial of FLB’s motion for summary judgment.

Judgment affirmed in Case No. A11A1466; reversed in Case No. A11A1467. Ellington, C.J., and Doyle, J., concur .

1The record contains contradictory evidence as to which banking entity financed Griffin’s 2007 and 2008 stock purchases. Contrary to Griffin’s deposition testimony, FLB submitted an affidavit from its Assistant Vice President indicating that Griffin’s original loan for the stock purchases was made by another entity, Bankers Bank (Silverton). In light of the summary judgment standard, however, we view the evidence in the light most favorable to Griffin, the non-movant. See Baxter , supra, 307 Ga. App. at 287.

2The undisputed direct evidence established that Stevens was not acting on behalf of, or as an agent of, FLB when he provided consultancy services to the boards. Stevens attested that during his provision of services to the boards, he was working solely in his capacity as a representative of his company, Stevens & Company. Griffin similarly testified that when Stevens was serving as a consultant, he was acting alone in his own company. Griffin nevertheless argues that FLB is liable for Stevens’s misrepresentations to the extent that it subsequently ratified Stevens’s actions in making the loan. See OCGA § 10-6-1 (“The relation of principal and agent arises wherever one person, expressly or by implication, authorizes another to act for him or subsequently ratifies the acts of another in his behalf.”); Multi-Media Holdings v. Piedmont Center , 15 LLC , 262 Ga. App. 283, 284 (1) (583 SE2d 262) (2003) (“Whether a ratification occurred is generally a question of fact for the jury. Ratification may occur if a business entity accepts the benefits of an act done by another on its behalf, although that person had no actual or apparent authority to act for the business.”) (citation and punctuation omitted). A determination of this issue, however, is unnecessary to resolve this appeal.

3Effective July 1, 2009, this chapter was amended and became known as the “Georgia Uniform Securities Act of 2008.” See OCGA § 10-5-1; Ga. L. 2008, § 1. Since the transactions forming the basis of the counterclaim occurred prior to July 1, 2009, Griffin relies upon the provisions of the former Georgia Securities Act of 1973.

4Griffin’s counterclaim appears to assert that FLB is liable for securities fraud to the extent that it acted jointly and in concert with Stevens, who represented that CBWG would sell and recommended that she make the 1997 and 1998 stock purchases. FLB, however, claims that the stock purchase transactions were between Griffin and Community Bancshares. FLB disclaims any involvement in the stock purchases, except for the fact that it loaned Griffin the funds to pay for the 1997 and 1998 stock purchases. See Plunkett v. Francisco , 430 F. Supp. 235, 240 (N. D. Ga. 1977) (concluding that the evidence failed to show that defendant violated the former Georgia Securities Act since he clearly was not the person making the sale or contract for sale in the securities transaction).

5MAL Rentals and Griffin also raised the defenses of failure of consideration and illegality. However, they did not present any argument as to those claims in the trial court below or in this appeal. As such, these defenses have been abandoned. We do not address grounds that were neither argued on appeal nor ruled upon by the trial court below. See Mandato & Assocs., Inc. v. Sepulveda Masonry , 303 Ga. App. 438, 439, n.5 (693 SE2d 620) (2010).

6OCGA § 13-3-44 (a) provides that “[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.”

7We note that although a merger clause in a contract being attacked and rescinded for fraud does not preclude proof that the contract was fraudulently induced, see City Dodge v. Gardner , 232 Ga. 766, 770 (208 SE2d 794) 91974); Crews v. Cisco Bros. Ford-Mercury , 201 Ga. App. 589, 591 (2) (411 SE2d 518) (1991), a merger clause may preclude a claimant from showing that he or she reasonably relied upon prior representations outside of the contract in support of a promissory estoppel claim to enforce the promise as binding, see Tampa Bay Financial , supra, 272 Ga. App. at 533-534 (2).

Trial Judge: John Simpson, Carroll Superior Court.

Attorneys: Charles S. Conerly and Randall C. Parian (Smith Conerly LLP), Carrollton, for Griffin and MAL Rentals LLC. Burleigh L. Singleton and John R. Gibson (Kilpatrick Townsend & Stockton LLP), Atlanta, for State Bank of Cochran.

Mobile phones generate an enormous amount of data about their users.  This includes data you would expect, such as the numbers you called and the length of telephone calls.

But the information stored also includes data you might not expect, such as the particular cell phone tower to which you were connected during a call, which can help someone prove your location at a given time.

For example, I once had a case where the Defendant argued that he could not possibly have been personally served with a Complaint in Georgia on a given day, because he claimed to have been in Florida at the time.

But when the attorneys requested the cell phone tower data for the Defendant’s cell phone on that day, the data showed multiple calls made on the cell phone from the very area where service was made.  Needless to say, the judge’s view of the “alibi” was severely impacted !

The ACLU has obtained a chart called Retention Periods of Major Cellular Providers from the Justice Department through a Freedom of Information Act (FOIA) request.  It includes the retention periods for Verizon, T-Mobile, AT&T / Cingular, Sprint, Nextel, and Virgin Mobile.

It is possible to obtain these types of records from the phone companies during discovery.  But, as the chart indicates, you probably need to act quickly to preserve some types of data.

On February 7, 2012, Governor Nathan Deal signed into law HB 683, which among other things, permits a company to file its own answers to garnishments without being deemed to be engaged in the unlicensed practice of law.  This essentially means that companies may answer garnishments without an attorney under the law.  However, they will still need an attorney if a traverse or claim is filed.  See O.C.G.A 18-4-8(b), (c).

It remains uncertain, however, whether this law is constitutional.  The Supreme Court of Georgia had previously approved an Advisory Opinion (below) which concluded that “a nonlawyer who answers for a garnishee other than himself in a proceeding pending in a Georgia court of record is engaged in the unlicensed practice of law.”  Thus, the Supreme Court held that companies may not answer garnishmentswithout an attorney.

This creates a tension between the Judicial Branch, and the Legislative & Executive Branches of the government. 

The meaning of this tension is uncertain.  Until the issue is resolved, the safest course of action is for companies to continue to use attorneys to answer garnishments.  Companies will receive the additional benefit of receiving improved advice in special and tricky situations.

Therefore, if a garnishment summons is served upon your company, and you do not have an in-house attorney who is experienced in garnishments, consider consulting with an attorney to assist you in responding to the garnishment action.

Jim Fletcher is a Georgia attorney who is experienced in garnishment proceedings, and can assist your company.

The State Bar of Georgia’s Standing Committee on the Unlicensed Practice of Law issued UPL Advisory Opinion 2010-1:

QUESTION PRESENTED
Assuming no traverse has been filed by any party in a garnishment action, is the completion, execution and filing of an answer in the garnishment action by a non-attorney employee of the garnishee considered the unlicensed practice of law?

SUMMARY ANSWER
A nonlawyer who answers for a garnishee other than himself in a legal proceeding pending with a Georgia court of record is engaged in the unlicensed practice of law.

OPINION
“The summons of garnishment shall be directed to the garnishee, commanding him to file an answer stating what money or other property is subject to garnishment.” O.C.G.A. § 18-4-62(a). The “answer must be filed with the court issuing the summons,” and “if the garnishee fails to answer the summons, a judgment by default will be entered against the garnishee for the amount claimed by plaintiff against the defendant.” Id.

The summons of garnishment form set out in O.C.G.A. § 18-4-66(2) states that the garnishee is to file an “answer in writing with the clerk of this court….” The garnishee is warned that “[s]hould you fail to answer this summons, a judgment will be rendered against you for the amount the plaintiff claims due by the defendant.” Id. O.C.G.A. § 18-4-82 refers to the document prepared by the garnishee as an “answer,” as does O.C.G.A. § 18-4-97(a): “The garnishee shall be entitled to his actual reasonable expenses, including attorney’s fees, in making a true answer of garnishment.”

A properly served garnishee is bound to file an answer with the appropriate court. If the answer is not filed, the garnishee faces a default judgment. The inescapable conclusion is that a garnishment action is a legal proceeding. That being the case, the Committee examines who is permitted to file an answer to a legal proceeding that is pending with a Georgia court.

“Georgia’s citizens, of course, have a constitutionally protected right of self-representation.” In re UPL Advisory Opinion 2002-1, 277 Ga. 521, 522 n.3 (2004). A party to a legal action can also be represented by a duly licensed attorney at law. Ga. Const. (1983), Art. I, Sec. 1, Para. XII. As far as corporate self-representation, “[i]n this state, only a licensed attorney is authorized to represent a corporation in a proceeding in a court of record, including any proceeding that may be transferred to a court of record from a court not of record.” Eckles v. Atlanta Technology Group, 267 Ga. 801, 805 (1997). The Georgia Court of Appeals concluded “that the rationale and holding of Eckles should, and does, apply to limited liability companies.” Winzer v. EHCA Dunwoody, LLC, 277 Ga. App 710, 713 (2006). See also Sterling, Winchester & Long, LLC v. Loyd, 280 Ga. App. 416, 417 (2006).

The Committee concludes that a nonlawyer who answers for a garnishee other than himself in a proceeding pending in a Georgia court of record is engaged in the unlicensed practice of law.

– END OF OPINION–

Source:  http://gabar.org/programs/unlicensed_practice_of_law/upl_advisory_opinions/#2010-1

The Georgia Supreme Court has approved the Opinion in the matter of IN RE: UPL ADVISORY OPINION NO. 2010-1, Case No. S11U0028 (Ga. 2011).  The approval reads:

Atlanta September 12, 2011
The Honorable Supreme Court met pursuant to adjournment.
The following order was passed.
IN RE: UPL ADVISORY OPINION NO. 2010-1
This Court granted review of UPL Advisory Opinion No. 2010-1, issued by the Standing Committee on the Unlicensed Practice of Law on June 4, 2010. With this order, we hereby approve UPL Advisory Opinion No. 2010-1 pursuant to State Bar Rule 14-9.1 (g) (4).

– End of Order–

Additionally, Justice Nahmias wrote a concurring opinion:

NAHMIAS, Justice, concurring.
I agree with the Court that, under existing law, we must approve UPL Advisory Opinion No. 2010-1, which concludes that a nonlawyer, such as a clerical employee of a corporation, who answers for a garnishee other than himself in a legal proceeding pending with a Georgia court of record is engaged in the unlicensed practice of law. I think it is important to note, however, the suggestion made by the State Bar of Georgia in its reply brief that a new court rule, similar to Uniform Superior Court Rule 15.1, be adopted to allow nonlawyer employees and agents of corporations and other entities to file garnishment answers, in order to alleviate the negative effects this UPL opinion may have on businesses dealing with routine garnishment proceedings. I am not sure a rule change would be sufficient; a statute similar to OCGA § 18-4-61, which underlies Rule 15.1, may be required. But the State Bar and the businesses and business associations that submitted briefs raising these concerns should understand that today’s decision leaves them free to seek such a remedy from the Judicial Council or the General Assembly.

– End of Concurring Opinion–

On September 30, 2011, the Fulton County Daily Report published an article: “New Garnishment Rule Criticized”.  The article makes clear that the issue has the attention of the bar, and interested parties may try to change this result.

On February 3, 2012, the Daily Report published an article: “Bill allowing garnishments by non-lawyers would infringe on Georgia Supreme Court’s power” which argued that the revisions to the law might not be valid.  The article cited the case of Wallace v. Wallace, 225 Ga. 102, 109 (1969), and argued that because the Supreme Court “has the inherent and exclusive authority to govern the practice of law in Georgia, including jurisdiction over the unlicensed practice of law” that the revisions to the law would violate the separation of powers between the branches.