United States District Court, W.D. Tennessee, Western Division
SYNOVUS BANK, formerly known as COLUMBUS BANK AND TRUST COMPANY, as successor in interest Through name change and by merger With TRUST ONE BANK, Plaintiff,
HIGHWAY SEVENTY PARTNERS, a Tennessee general partnership, and GLEN E. BASCOM, SR., GLEN E. BASCOM II, AND CHRISTOPHER D. MONTESI Defendants.
ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
THOMAS ANDERSON, District Judge.
Before the Court is Plaintiff Synovus Bank's Motion for Summary Judgment, filed April 8, 2015. (ECF No. 72). Defendants Glen E. Bascom, Sr., Glen E. Bascom II, and Highway Seventy Partners filed their Response in Opposition to the Motion on May 6, 2015. (ECF No. 73). Synovus filed its Reply on May 20, 2015. (ECF No. 75). For the reasons stated below, Synovus's Motion for Summary Judgment is GRANTED.
Each of the following facts is undisputed unless otherwise noted. Synovus filed its Complaint on May 8, 2014, alleging default of a loan agreement entered into on April 3, 2009, and seeking a judgment in the amount alleged. (Compl., ECF No. 1). Synovus provided a commercial loan to Highway Seventy in the amount of $400, 000 for the refinance of 17.939 acres on Highway 70 in Arlington, Tennessee. (Pl.'s Statement of Undisputed Facts ¶ 4, ECF No. 72-2). The three individual Defendants unconditionally guaranteed the loan. (Guaranty Agreements, ECF No. 1-5), The note was modified by a series of modification agreements, with the last modification dated September 20, 2013 (the "Final Modification"). (Pl.'s Statement of Undisputed Facts ¶ 6). On or about April 3, 2009, Synovus disbursed the amount of $400, 000 in accordance with the note and loan agreement. (Id. ¶ 7). Highway Seventy made interest payments in accordance with the note and modifications until October 18, 2013, at which time Highway Seventy Partners ceased to make payments. (Id. ¶ 8). The Final Modification required monthly interest payments, which Defendants failed to make. (Id. ¶ 9). By letter dated February 3, 2014, Synovus declared default for nonpayment and accelerated the indebtedness and the total principal and interest balance under the loan and note became due at that time. (Id. ¶ 10). Highway Seventy is in default under the terms of the Note for failing to make the payments required thereunder. (Id. ¶ 11).
The total amounts owed under the note are $389, 002.33 principal, $47, 011.54 interest through April 7, 2015 (plus additional accrued interest at the daily rate of $64.83 through the date of judgment), and $2, 823.90 late charges and fees. (Id. ¶ 12). The Defendants, experienced real-estate investors at the time, were given an opportunity to review the loan documents before signing, read the documents, and then entered into the loan voluntarily. (Id. ¶ 13-14). Furthermore, the Defendants were aware of what a nonrecourse loan was at the time of this loan, and they admit that they were fully aware that the loan was not nonrecourse. (Id. ¶ 15). Synovus did not misrepresent anything to the Defendants in connection with the loan or the loan documents. (Id. ¶ 16). Finally, the Defendants agree that the loan documents control the parties' rights and obligations in connection with the loan and admit that nothing in the loan documents requires the Synovus to foreclose on the collateral before pursuing a judgment for the amount due under the note. (Id. ¶ 17).
The relevant provision of the loan agreement provides the following:
9. REMEDIES UPON DEFAULT: In the event of the occurrence of any of the above listed events of default, then Bank after ten (10) days written notice of default to Borrower and failure of Borrower to cure the debt within that time, at any time thereafter, at its option, take any or all of the following actions, at the same or different times:
(a) Declare the balance of the Note to be forthwith due and payable; both as to principal and interest, without presentment, demand, protest, or other notice of any kind, all of which are hereby expressly waived by Borrower, anything contained herein or the Note to the contrary notwithstanding; and/or
(c) Take immediate possession of any or all collateral including real and personal property, which may be granted to the Bank as security for the obligations of Borrower under this Agreement; and/or
(d) Exercise such other rights and remedies as the Bank may be provided in the Note, Deed of Trust, Security Agreement, and any other documents executed pursuant to this Agreement, or as provided by law.
(Loan Agreement, ¶ 9, ECF No. 1-2). After admitting that the loan documents-the note, loan agreement, and guaranties-"control the parties' rights and obligations, " the Defendants simply assert that
they understood the language [in the section labeled "Remedies Upon Default"] to mean that upon default the total amount of the loan would become due and that the Plaintiff would take the property used as collateral upon default of the loan. The Plaintiff interpreted the language "Exercise such other rights and remedies" as to gives [sic] them the option to pursue means other than foreclosure against the Defendants. The Defendants took this section to mean that upon default the Plaintiff would take the property used as collateral to secure the loan.... Because both sides could reasonably interpret the same language differently, that is an ambiguity in the contract and because of that ambiguity, there was no meeting of the minds.
(Defs.' Resp. in Opp'n to Pl.'s Mot. Summ. J. 7, ECF No. 74). The Defendants have conflated a contract-formation question with a contract-interpretation question. They have admitted that they agreed to certain terms forming a contract; they only challenge the meaning and legal effect of the language in the loan agreement. Thus, the Court must interpret the contract to ...