FOURTH D I VI SI ON

BA RNES, P. J.

, B RA NCH and M CM ILLI A N, JJ.

N O T IC E : M otions for r e c ons i de r a tion m us t be

ph y sic a l ly r e ce iv ed i n our c le r k ’s offic e w ithin te n

da y s of the da te of de c is ion to be de e m ed tim e ly file d.

http://w w w .ga a ppe a ls .us /r ule s /

Jul y 16, 2015



# I n th e Co u r t o f

A p p eals o f

G eo r g ia

A1 5 A0 45 8

. RES-GA SCL, LLC. v

. STONECREST LAND, LLC et

al

.

A1 5 A1 43 8

. STONECREST L AND, LLC et al

. v

. RES-GA SCL,

LLC.

B R A N C H , J u d g e.

In t h i s s u i t o n a l oan ag reem en t

, i n cl u d i n g a p ro m i s s o ry n o t e an d as s o ci at ed

p ers o n al g u aran t i es

, t h e t ri al co u rt g ran t ed s u m m ary ju d g m en t in fav or o f t he cred i t o r,

RES-GA SCL, LLC. Th e deb t o r an d a g u aran t o r ap p eal ; RES-GA cro s s -ap p eal s

. Fo r

t h e reas o n s s t at ed b el o w, we affi rm s u m m ary ju dg m en t i n fav or o f RES

- G A b u t

rev ers e t he t ri al co u rt ’ s d eci s io n n o t t o award at t o rn ey fees i n fav o r o f RES-GA

ag ai n s t o n e o f t h e g u aran to rs

.

S u m m a r y ju d g m en t i s p ro p er wh en t h ere is no g en u i n e i s s u e o f m at eri al fa c t

an d t h e m o v an t is en ti t l ed t o ju d g m en t as a m at ter o f l aw. OCGA § 9 -1 1 -5 6 (c). W erev i ew a g ran t o r d en i al of s u m m ary ju d g m en t d e n o vo an d co n s t ru e t h e ev i d en ce in

t h e l i g h t m o s t fav o rab l e t o th e n o n m o v a n t

. Ho m e Bu i l d er s As sn

. o f S a va n n a h v.

Ch a t ha m Co u n ty , 2 7 6 Ga. 2 4 3 , 2 4 5 (1 ) (5 7 7 SE2 d 5 6 4 ) (2 0 0 3 ).

So co n s t ru ed

, t h e r eco rd s h ows t h at i n M arch 20 0 7

, St o n ecres t Lan d

, LLC

en t ered i n t o a co m

m erci al p ro m i s s o ry n ot e wi th In t eg ri t y Ban k in t h e o ri g i n al

p ri n ci p al am o u n t o f $ 1 5 ,9 3 7 ,0 00 (wi t h fu n d s t o b e ad v an ced as n eces s ary ) an d t h at

Th o m as Bro ck an d W ay

n e H. M as o n ag reed t o g uaran t ee St o n ecres t ’s o b li g at i on s

u n d er t h e n o te. St o n ecres t ob t ai n ed t h e t wo -y ear-t e r m l o an i n o rd er t o ad d

i n fras t ru ct ure an d ot h er i m p ro v em en t s t o a 63 -acre t ract o f r a w l an d i n DeKal b

Co u n t y n ear St o n ecres t M al l s o t h at a res i d en t i al co m m un i t y co u l d b e d ev el o p ed o n

t h e s i t e. Un d er t h e “ b al l o o n ” n o t e, St o n ecres t w as req u i red t o m ak e o n l y m o n t h l y

i n t eres t p ay m en ts u n t i l M a r c h 3 0

, 2 0 0 9

, at wh i ch t i m e a b al l o o n p ay m en t o f al l

ad v an ced p ri n ci p al

, i n t eres t

, an d o t h e r l o a n o bl i g at i o ns was d u e. Bu t b ecau s e t h e

p ro ject w as n o t d es ig n ed t o b e i n co m e p ro d u ci ng d u ri n g co n s tru ct i on

, In t eg ri t y

ag reed i n t h e l o an d o cu m en t s 1 t o m ak e ad v an ces u n d er t he l oan t o fu n d t h e i n t eres t

p ay m en t s; t h e l o an h ad a p re-fu n d ed “ i n t eres t carry ” o f $1 .5 m i l l i o n earm ark ed fo r

1 Th e l o an d o cu m en t s are t h e p ro m i s s o ry n o t e, l oan ag reem en t, d eed t o s ecu re

d eb t, an d t h ei r s ub s eq u en t am en d m en t s an d m o d i fi cat i o ns

.

2t h i s p u rp o s e. D u ri n g t h e t erm o f t h e l o an

, In t eg ri t y ad v an ced $ 1 1 ,9 37 ,6 9 0 .5 8 o f

p ri n ci p al t o St o n ecres t

, an d In t eg ri t y m ad e m o nt h l y in t er e s t a dva nc e m e n t s fo r t h e fi rs t

y ear o f t h e l o an

.

By earl y 2 0 0 8

, In t eg ri t y ap p aren t l y was ex p eri en ci n g so m e fi n an ci al d i s t res s

,

an d b y M ay 2 0 0 8

, it m ay h av e h ad co n cern s ab o u t St o nec r e s t ’s p ro g res s wi t h t h e

d ev el o p m en t

. Ul t i m at el y

, In teg ri t y d eci d ed t o rev ers e t h e in t eres t ad v an cem en t t h at

i t m ad e i n Ap ri l 2 0 08 an d n o t t o m ak e an y fu rt h er i n t ere s t ad v an cem en t s t h ereaft er

ev en t ho u g h s u ffi ci en t fu nd s rem ai ned i n th e p re-fu n d ed “ i n t eres t carry .” Aft er

In t eg ri t y ceas ed m ak in g i n t eres t ad v an cem en t s, St o n ecres t fai l ed t o m ak e an y i n t eres t

p ay m en t s req u ired b y th e p ro m i s s o ry n o te. An d u l t i m at el y

, n ei th er St o n ecres t n o r t h e

g u aran to rs m ad e a s i n g l e p ay m en t t o an y o f t h e h o l d ers o f t h e l o an d o cu m en t s

.

In Au g u st 2 0 0 8

, In t eg ri t y was p l aced i nt o r e c e ive r ship w i t h t h e Fed eral Dep o s i t

In s u ran ce Co rp o rat io n (FDIC). On Sep t em ber 2 5

, 2 0 0 8

, in a l et t er t o St o n ecres t

, t h e

FDIC accel erat ed t h e n ot e “ b ecau s e o f [St o n ecres t ’ s ] fai l ure t o m ak e t i m el y

p ay m en t s.” FDIC al s o p u bl is h ed n o t i ce o f th e In teg ri t y cl os u re i n t h e At l an t a J o u rn al

Co n s t i t u t i o n o n Sep t em

b e r 5

, 2 0 0 8

, Oct o b er 6

, 2 0 0 8

, an d No vem b er 4

, 2 0 0 8

. Th e

n o t i ces are t i tl ed “ FDIC NOTICE TO CREDITO R S A ND DEPOSITORS OF

INTEGRITY BA NK ALPHARETTA, GA,” an d th ey p ro v id e t h at “ Al l cred i t o rs

3h av in g cl ai m s ag ai n st t h e Fai l ed In s t i t u t i o n m u s t s u b m i t t h ei r cl ai m s i n w ri t i n g,

t o g et h er wi t h p ro o f o f t h e cl ai m s

, t o t h e [FDIC] b y Decem b er 04

, 2 0 0 8 (t h e ‘ b ar

d at e’ ).” As fu rt h er ex p l ai n ed b el o w, St o n ecres t d id n o t m ak e a s u ch a cl ai m

. FDIC

l at er as si g n ed a l l i t s ri g ht s i n t h e l o an d o cu m en t s t o Mu l t ib an k 20 0 9 -1 RES-ADC

Ven tu re, LLC, an d o n M ay 1 0 , 2 0 1 0 , M u l ti b an k s en t a d em an d l et t er t o St on ecres t

,

Bro ck an d M as o n i n an at t em p t t o co l l ect o n t h e d eb t. M ul t ib an k l at er as s i g ned al l i t s

ri gh t s i n t h e l o an d o cu m en t s t o ap p el l ee RES-GA.

In Feb ru ary 2 0 1 2, RES-GA fi l ed su i t ag ai ns t St o n ecres t an d th e g u aran t o rs fo r

b reach o f t h e l o an d ocu m en ts an d g u aran t i es

. Bo t h St o n ecres t an d Bro ck (h erei n aft er

“ t h e defen dan t s ”) an swered an d rai s ed cert ai n d efen ses ; th e cl ai m s ag ai n st M as o n

were t ran s ferred t o Gwi n n et t Co u n t y an d are t h erefo re n o t b efo re u s

. Fo l l o wi n g

d i s co v ery , RES-GA an d t he d efen d an ts fi l ed cro s s m ot i o n s fo r s u m m ary ju d g m en t ;

fo l l o w i n g a h eari n g

, t h e t ri al co u rt d en i ed b ot h m o t i o ns

. Aft er ad d i t io n al d i s co v ery

,

RES-GA ren ewed i t s m o t io n fo r s u m m ary ju d g m en t an d arg u ed t h at t h e d efen d an t s ’

d efen s es t o t h e s u i t w ere b arred b y f e d e r a l l aw, nam el y t he Fi n an ci al In st i t u t i on s

Refo rm

, Reco v ery

, an d En fo rcem en t Act o f 1 9 89 (“ FIRREA”), 1 2 USC § 1 8 2 1

. RESGA al s o arg u ed t h a t t he d efen d an ts fai l ed t o rai s e an i s su e o f fact reg ard i n g t h ei r

d efen s es ev en i f t h ey w ere n ot s o b arred

. O n J u l y 2 3

, 2 0 14

, t h e t ri al co u rt g ran t ed

4s u m

m ary ju d g m en t wi t h o u t p ro v i d i n g s p eci fi c gro u n d s an d en t ered fi n al ju d g m en t

i n fav o r o f RES-GA. Th e co u rt en t ered ju d g m en t “ i n th e am ou n t o f $ 1 8 ,2 4 5 ,1 1 5 .2 1,

p l u s per d i em i n t eres t in t he am o u n t o f $ 2 ,6 5 2 .8 2 an d

, i f ap pro p ri at e, p o s t -ju d g m en t

i n t e r e s t i n acco rd an ce wi t h t h e ap p l i cab l e s t at u t es .” 2 In Cas e No

. A1 5 A1 4 3 8,

St o n ecres t an d Bro ck ap p eal t h e ju d g m en t e n t e red ag ai n s t t hem

. In Cas e No

.

A1 5 A0 45 8

, RES-GA ap p eal s t h e t ri al co u rt ’ s fai l u re t o award at t o rn ey fees ag ai n s t

2 T h e ju d g m en t am o u n t was co m p ri sed o f t h e u n p ai d p ri n ci p al b al an c e o f

$ 1 1 ,9 3 7 ,6 9 0 .5 8

, i n t eres t of $3 6 0

, 7 0 0 .6 4

, “ d efau l t i n t eres t ” o f $ 5,4 1 3 ,8 2 5.5 8

, an d

es cro w ad v an ces of $ 5 3 2,8 9 8 .4 1

. Th e t erm “ d efau l t i n teres t ” i s d efi n ed i n t h e M arch

2 0 0 7 co m m erci al p ro m i s s o ry no t e, wh erei n St o n ecres t ag reed t h at i n t h e ev en t o f a

d efau l t

, s u ch as fai l u re t o p ay i n t eres t d u e u n d er t h e n o t e, i t w o u l d p ay an ad d i t i o n al

4 % i n t eres t o n o u ts t an d i n g p ri nci p al b al an ce o f t h e n o te:

In t eres t (h erei n aft er referred t o as “ Defau l t In t eres t ”) s h al l accru e o n th e

o u t s t an d i n g pri nci p al b al an ce o f t h i s No te fro m m at u r i t y, o r s o on er

fo l l o wi ng t he o ccu rren ce o f a d efau l t h ereu nd er an d aft er t h e ex p irat i o n

d at e o f an y p eri o d p ro v i d ed fo r t h e cu ri ng o f s u c h d efau l t an d fo r s o

l o n g as su ch d efau l t co n t i n u es

, reg ard les s of wh et h er o r n o t t h ere h as

b een an accel erat i o n o f t h e i n d eb t ed n es s ev i d en ced h ereb y as s et fo rt h

h erei n

, at t h e rat e eq u al t o t h e l es s er o f (i ) fo u r percen t (4 %) p er an n um

i n ex ces s o f t h e ap p l i cab l e i n t e r e s t r a t e i n effect at t h e t im e o f s u ch

d efau l t

, o r (i i ) t h e h i g hes t rat e o f i n t eres t al l owab l e u n d er ap p l i cab l e l aw

p er an n u m

.

5Bro ck

b as ed o n h is g u aran t y . Th es e t wo cas es h av e b een co n s o l i dat ed i n t h i s Co u rt

fo r p u rp o s es o f ap p eal

.

Ca s e No . A1 5 A1 4 3 8

1

. On ap p eal

, t h e defen d an t s d o n o t di s p u t e t h at RES-GA es t ab l i sh ed a p ri m a

faci e ri g h t t o reco v er un der t h e l o an d o cu m en t s an d g u aran ty

. In s t ead t hey co n t en d

t h e t ri al co u rt erred b y g ran t i n g s u m m ary ju d g m en t i n fav o r of RES-GA b ecau s e t h at

co u rt fai l ed t o co n s i d er t h ei r “ affi rm at i v e d efen s es ” t o RES-GA’ s s u i t

. Becau s e t h ey

are c h al l en g i n g t h e g ran t o f s u m m ary j u d gm en t

, we i n t erp ret t h e d efen d an t s ’

arg u m en t t o be t hat t h ei r d efen ses are n o t b arred b y FIRREA an d t hat t h ere are i s s u es

o f f a ct reg ard i n g t h es e d efen s es

. W e co n cl u d e t hat t h e d efen d an t s h av e ab an d o n e d

m an y of t h ei r d efen ses o n ap p eal an d t h a t F I R REA b ars th e rem ai n i n g defen s es

.

Acco rd in g ly , we affi rm

.

(a) Th e d efen d a n t s h a v e ab an d o n ed co n s id erat i o n o f m an y o f t h ei r defen s es

.

In t h ei r s ep arat e an s wers t o t he co m p l ai n t

, t h e t wo d e fen d an t s rai s e t h e s am e 1 6

d efen s es

. 3 In t h ei r ap p el l at e bri efs

, t he d efen d an ts d o n o t s p eci fi cal l y refer t o t h es e

3 B r o ck rai ses o n e d efen s e

— h i s “ Seco n d Defen s e”

— no t as s er t e d a s a

d efen s e b y St o n ecres t

. Th i s d efen s e, i n wh ich Bro ck as s ert s t h at RES-GA’ s cl ai m s

are barred by a p ri o r p en d i n g act i o n

, is no t m en t i on ed i n t h e d efen dan t s ’ ap p el l at e

b ri ef, an d t herefo re an y cl ai m o f erro r b as ed o n t h at d efen s e h as b een ab an d on ed

. See

Co u rt o f Ap p eal s Ru l e 2 5 (c) (2 ).

6n u m

b ered d efen s es

, m ak i n g i t d i ffi cu l t fo r t h i s co u rt t o det erm in e wh i c h s p e c i f i c

d e f e n s es t h e t ri al co urt al l eg ed l y o v erl oo k ed

. Co n st ru i n g t h es e arg um en t s i n t h e i r

fav o r, we fi n d t h at t h e d efen d an ts m en ti o n

, at m o s t

, ten o f t h e si xt een defen s e s

as s ert ed i n t h ei r an s wers

. As nu m b ered in St o n ecres t ’ s an s wer, t hes e are defen s e No s

.

3

, 4, 7 t hro ug h 1 3

, an d 1 5

. Th u s

, an y arg u m en t reg ard i n g defen s e N o s

. 1

, 2

, 5

, 6

, 1 4,

an d 1 6 h av e b een ab an d o n ed

. See Co u rt o f Ap peal s Ru le 2 5 (c) (2 ).

Nex t

, s ev eral o f t h e ten d efen s es t h at w ere referred to i n St on ecres t an d Bro ck ’ s

i n i t i al b ri ef are red u n d an t o r s o s i m i l ar t h at t hey can b e co m b in ed an d t reat ed as o ne.

Fo r t he p u rp o s es o f t h i s o p i n i o n

, we fi n d t hat t he d efen s es arg u ab l y bei n g p u rs u ed o n

ap p eal can b e s u m

m ari zed as fo l lo ws : (1 ) fai l u re o f In t eg ri t y t o fu n d t h e i n t eres t

ad v an cem en t s un der th e t erm s o f t h e l o a n d o c u m en t s

, co n s t i t u t i n g a fai l u re o f

co n si d erat io n an d a b r e a ch o f t h e t erm s o f th o s e d ocu m en t s t hereb y cau s i n g t h e

d efen d an t s t o d efau l t o n t h ei r o b l i g at i o n t o m ak e p ay m en ts o n t h e n ot e (h erei n aft er

t h e breach o f co n t ract / fai l u re of co n s i d erat i o n d efen s e); (2 ) fai l u re o f I n t e g ri t y to

p erfo rm i t s o b l i g at i on s u n d er t h e l o an d ocu m en t s i n g o o d fai t h, as wel l as b reach by

In t eg ri t y o f an i m

p l ied co v en an t o f g o o d fai t h an d fai r d eal i ng

, b y p rev en t i n g

St o n ecres t fro m p erfo rm i ng u n der t h e l o an d o cu m en t s (h erei naft er t h e breach o f d u t y

o f g o o d fai t h d efen se); an d (3 ) fai lu re t o m i t i g at e d am ag es

. W it h reg ard t o fai l u re to

7m i t i gat e d am ag es

, h owev er, t h e d efen dan t s h av e n o t a t t e m p t ed t o s h o w t h at t h ey

rai s ed an i s s u e o f fact i n th e t ri al co u rt

, an d acco rd i n g l y, a n y as s ert i o n o f erro r

reg ard i n g t h at d efen s e i s al s o wai v ed . Ru l e 2 5 (c) (2 ).

T h u s

, as th e d efen d an t s es s en t i al l y ad m i t i n t h ei r b ri ef, t h e o n l y rem ai n i n g

d efen s es are b reach of co n t ract / fai l ure o f co ns i d erat i o n an d b reach o f t h e d u t y o f

g o o d fai t h. As th e d efen d an t s fu rt h er ad m i t

, m oreo v er, “ [s ] u ch d efen s es al l s t em fro m

t h e fai l u re t o fu n d t h e i nt eres t res erv e.” Acco rd i ng l y

, wh at rem ai n s fo r co n s i d erat i o n

a r e t h e d efen d an t s ’ as s ert i o n s th at In t eg ri ty b reach ed t h e lo an d o cu m en t s

, fai l ed t o

p ro v id e co n s i d erat i on

, o r breach ed a du t y o f g oo d fai t h i n p erfo rm i n g u n d er t h e l o an

d o cu m en t s , al l b y

fai l in g t o fu nd t h e i n t eres t ad v an cem en t s . Co ns t ru i n g t h e fact s i n

fav o r o f t h e d efen d an t s

, we al s o co n cl ud e t h at th e d efen d an ts hav e rai s ed an i s s u e o f

fact reg ard i n g t h es e p res erv ed d efen s es

.

(b ) Th e p ri m ary i ss u e p res en t ed in t h i s ap peal i s w h e t h e r th e t ri al co u rt was

p ro h ib i t ed fro m as s ert i n g ju ri s d i ct i o n o v e r t h e p res erv ed d efen s es b as ed o n t h e

d efen d an t s ’ fai l u re t o ex hau s t ad m i n i s t rat i v e r e m e d i es un d er FIRREA. Th e

d efen d an t s arg u e t h a t t h ei r p res erv ed d efen s es are n o t s u b ject t o t h e FIRREA

8ex h au s t i o n req u irem en t b ecau s e t h ei r d e f en s es are p ro p erl y ch aract eri zed as

“ affi rm at i v e” d efen s es , wh ich are n o t s o b arred

. 4

“ F I R R E A ‘ was en act ed t o s t ren g t h en reg u l at io n o f t h e na tion’ s f ina nc ia l sy ste m

i n t he wak e o f t h e s av i n g s an d l o an cri s i s o f t h e 19 8 0 s

, an d ‘ i t g ran t s t h e FDIC b ro ad

p o wers un d er 1 2 U .S.C. § 1 8 2 1 t o m an ag e t he affai rs o f i n s o l v en t b an k s as recei v er

o r co n s erv at o r.’ ” 5 Bo b ick v. Co mmu ni t y a n d S o ut h er n Ba n k

, 3 2 1 Ga. Ap p

. 8 5 5

, 8 6 1

(3 ) (7 4 3 SE2 d 5 1 8 ) ( 2 0 1 3 )

, q u o t i n g Ib er i a b a n k v. Ben eva 4 1 -I, LLC

, 7 0 1 F3 d 9 1 6,

4 Th e d efen d an t s ’ arg u m en t th at t h ey i n fact fi l ed an ad m i n is t rat i v e cl ai m u n d er

FIRREA i s b el i ed b y t h e reco rd

. Th e d efen d an ts w ere req u i red t o fi l e a cl ai m wi t h t h e

recei v er b y Decem

b er 4

, 2 0 0 8, t h e b ar d at e. 1 2 U .S.C. § 1 8 2 1 (d ) (3 ) (B) (i ); 1 2 CFR

§ § 3 8 0.3 4

. Th e d efen d an t s h av e o n ly ci t ed o n e l et t er s en t to In t eg ri t y

, n o t t h e FDIC

as req u ired

, an d a s eco n d l et t er s en t aft er th e bar d at e. “ [C] l ai m s fi l ed aft er t h e [cl ai m s

b ar d at e] s h al l b e d i s al l o wed an d s u ch d is al lo wan ce sh al l b e fi nal .” 12 U.S.C. § 1 8 2 1

(d ) (5 ) (C) (i ). Th e o n l y ex cep t i o n t o t h e ti m el i nes s req u i rem en t i s wh en “ t he cl ai m an t

d i d n o t recei ve no t i ce o f t h e ap p o i nt m en t of recei v er i n t i m e to fi l e s u ch a cl ai m

b efo re s u ch d at e.” 1 2 U .S.C. § 1 8 2 1(d ) (5 )(C)(i i )(I); s ee al s o Ru nd g r en v. W a sh i n g t o n

Mu t

. Ba nk, FA

, 7 6 0 F3 d 1 0 5 6, 1 0 6 0 (II) (9 t h Ci r. 20 1 4 ). Here, S t o necres t recei v ed

n o t i ce o f t h e ap p o i nt m en t o f t h e recei v er o n Sep t em b er 2 5, 20 0 8

, wel l b efo re t h e b ar

d at e.

5 Th e FDIC a s r ecei ver i s g iv en t he au th o ri t y t o “ p l ace t h e in s u red dep o s i t o ry

i n s t i t u t i o n i n l i q u i dat i o n an d p ro ceed to r e a l i ze u p o n t h e as s et s o f t h e in s t i t u t i o n,

h av in g d ue reg ard t o th e co n d i t i o n s o f cred i t i n t h e l o cal i t y .” 1 2 U.S.C. § 1 8 21 (d ) (2 )

(E) (2 0 0 0 ). Th e FDIC as co n s er va t o r m ay t ak e s u ch act i o n as m ay b e “ (i ) n eces s ary

t o p u t t h e i n s u r e d d ep o s i t o ry i n s t i t u t i o n i n a so u nd an d s o l v en t co n d i t i o n ; an d (i i )

ap p ro p ri at e t o carry o n t he bu s in es s o f th e i n s t i tu t i o n an d p res erv e an d co n s erv e t h e

as s et s an d p ro p ert y

o f t h e i n s t i tu t i o n .” 1 2 U.S.C. § 1 8 2 1 (d ) (2 ) (D) (2 0 0 0 ).

99 2 1 (II) (A) (1 1 t h Ci r. 20 1 2 ). FIRREA h as i ts o wn ad m i n i s t rat iv e cl ai m s p ro ces s fo r

cl ai m s ag ai n s t fai led b an k s :

Th e Act al s o creat ed an ad m i n is t rat i v e p ro ces s fo r a d d res s i n g cl ai m s

ag ai ns t fai l ed b an k s fo r w h i ch t h e FDIC h as b een ap p o i n t ed as recei v er.

Pu rs uan t t o t h at p ro ces s, t h e F D IC i s au t h ori zed t o d et erm i n e cl ai m s

ag ai ns t a fai l ed b an k u nd er p ro ced u res es t ab l is h ed b y t h e Act

.

Gr a vi t t v

. B an k o

f t h e Oz ar ks

, 3 2 6 Ga. Ap p

. 4 6 1

, 46 6 (2 ) (7 5 6 SE2 d 6 9 5) (2 0 1 4 )

(ci t at i o n s o m i t ted ). FIRREA al so es t ab l i s h ed l i m i t s o n j u d ici al rev i ew o f s u ch cl ai m s

.

Id

. In t h i s reg ard

, FIRREA el i m i n at es ju ri s di ct i o n i n al l co u rt s o v er s p eci fi ed t y p es

o f cl ai m s an d act i o ns :

E xcep t as o t h erwi s e p ro v i d ed i n t h i s s u b s ect i o n

, n o co u rt s h al l h a v e

ju ri s di ct i o n o v er —

(i ) an y cl ai m o r act i o n fo r p ay m en t fro m

, o r an y act i o n s eek i ng a

d et erm i n a t i o n o f ri g h t s wi t h res p ect t o

, t h e as s et s 6 o f an y dep o s i t o ry

i n s t i t u t i o n fo r wh i ch t h e [FDIC] h as b een ap p oi n t ed recei v er, i n cl u d i n g

as s et s wh i ch t h e [FDIC] m ay acq u ire fro m i ts el f as s u ch recei v er; o r

(i i ) an y cl ai m rel at i n g to an y act or o m i ss i o n o f s u ch i n s ti t u t io n o r

t h e [FDIC] as recei v er.

6 An o ut st an d i n g l o an i s an as s et o f a b an k. F reema n v. F.D.I.C.

, 5 6 F3 d 1 3 9 4,

1 4 0 0 (II) (B) (D.C. Ci r. 1 9 9 5 ) (l o an i s s ued b y fai l ed in s t i t ut i o n t o d eb t ors was an

as s et o f t h at b an k ).

101 2 U SC § 1 8 2 1 (d ) (1 3) (D). Th e o n l y ex cep t i on p ro v id ed i n t h e s u bs ect i o n i s t h a t

co u rt s h av e j u ri s d i ct io n t o rev i ew cl ai m s t h a t h a v e b een p res en t ed i n t h e FIRREA

cl ai m s pro ces s

. 1 2 USC § 1 8 2 1 (d ) (6 ) (A); Pl a ci d a Pr of es s io n a l Ct r

. v. F.D.I.C.

, 5 1 2

F. Ap p x

. 9 3 8, 9 4 5 (1 1t h Ci r. 2 0 1 3 ). Ou r Co u rt h as ad op t ed t h e reas o n i n g o f t h e

E l ev en t h Ci rcu i t, wh i ch i s s h ared b y ot h er ci rcu i t co u rt s, t h at “ t h e l i m i t at i o n o n

ju d i ci al rev i ew i m

po s ed b y 1 2 U.S.C. § 1 82 1 (d ) (1 3 ) ( D ) [ ] es t ab l i s h [es ] an

ad m i n is t rat i v e ex h au s t i on r e quir e m e nt.” Bo b i ck

, 3 2 1 Ga. Ap p

. at 8 6 2

, ci t i n g In t er f ace

Ka n n er

, LLC v. JPMo r

ga n Ch a s e Ba n k, N.A.

, 7 0 4 F3 d 9 2 7

, 9 3 4 ( I II) (B) (1 1 th

Ci r.2 0 13 ); s ee al s o Tr i -S t a t e Ho t el s v. F.D.I.C.

, 7 9 F3 d 70 7

, 7 1 5 (B) (8 t h Ci r. 1 9 9 6 );

Fr eema n v. FDIC

, 5 6 F3 d 1 3 94

, 1 40 0 (II) (B) (D. C. Ci r. 1 9 9 5 ); Na t

. Un i o n Fi r e In s

.

Co

. o f Pi t t s b u rg h

, Pa

. v. Ci ty S

a v

. , F

. S

. B.

, 2 8 F3 d 3 7 6

, 3 83 (B) (3 d Ci r. 1 9 9 4 ).

“ Acco rd in g l y

, i f a cl ai m o r co u n t ercl ai m fal l s wi th i n t h e s co p e o f 1 2 USC § 1 8 2 1 (d )

(1 3 ) (D), co u rt s are d i ves ted o f s u bject m at ter ju ri s d ict i on i f th e cl ai m an t fai l e d to

ex h au s t h i s o r h er ad m i n i s t rat i v e rem ed i es b efo re t h e FDIC.” Gr avi t t

, 3 2 6 Ga. Ap p.

at 4 67 (2 ) (ci t at i o n an d fo o t n o t e o m i t t ed ). Fi n al ly, t he El ev en th Ci rcu i t an d o t h er

ci rcu i t s h av e h el d t h at an en t i t y s u ch a s RES-GA t h at p u rch as es a fai l ed l en d i n g

i n s t i t u t i o n ’ s p ro m is s o ry n o t e o r o t h er as s et s fro m t h e recei v er “ st an d s i n t he s h o es o f

t h e [recei v er] an d acq ui res i t s p ro t ect ed s t a t u s u n der FIRREA,” at l eas t fo r cl ai m s

11a r i s i n g o ut o f th e act i o n s o f t h e fai l ed in s t i t u t i o n o r t h e FDIC. Amer i ca n Fi r s t Fe d

.

v. La ke Fo r es t Pa r

k

, 1 9 8 F3 d 12 5 9

, 1 2 6 3 (B), n

. 3 (1 1t h Ci r.1 9 9 9 ) (ci tai t on o m i t t ed );

s ee al s o Ben s o n v. JPMo r g a n Ch a s e Ba n k, N.A.

, 6 7 3 F3 d 1 2 0 7

, 1 2 0 9 (9 t h Ci r. 2 0 1 2 );

Vi l l ag e of O a kwo o d v. S ta t e Ba n k a nd Tr u s t Co

. , 5 39 F3 d 3 7 3

, 3 8 6 (III) (C) (2 ) (6 th

Ci r. 2 00 8 ). Th u s

, RES-GA i s au t h o ri zed t o arg u e t h at i t i s p ro t ect e d b y F I R R E A’ s

ad m i n is t rat i v e ex h au s t i o n req u i rem en t

. 7

Bas ed o n t h e l an gu ag e o f 1 2 U SC § 1 8 2 1 (d ) (1 3) (D), q u o t ed ab o v e, t h e

El e v en t h Ci rcu i t an d ot her ci rcu i t co u rt s h av e h el d

, “ affi rm at i v e d efen s es are n ot

s u b ject to t h e req u irem en ts o f ex h au s t i o n u n d e r [ U S C § ] 1 8 2 1 (d ) (1 3 ) (D).” La ke

Fo r es t

, 1 9 8 F3 d at 1 2 6 4 (B), an d cas es ci t ed t h erei n

. In L a k e F o r e s t

, th e El ev en th

Ci rcu i t q u o t ed t h e Th i rd Ci rcu i t wh o p ars ed t h e p l ai n l an gu ag e o f USC § 1 8 2 1 (d )

(1 3 ) (D) t o co n cl ud e t h at i t d i ves t s co urt s o f ju ri s d i ct io n “ o v er req u es t s fo r rel i ef” t h at

can b e ch aract eri zed as :

7 In t h ei r i n i t i al ap p el lat e b ri ef, St on ecres t an d Bro ck d o n o t di s p ut e t hat RESGA i s In t eg ri t y ’ s s u cces s o r-i n -i n t eres t t o t h e l o an d o cu m en t s at i ss u e i n t h i s act i o n.

Bu t i n t h ei r r e pl y b ri ef, t h e d efen d an t s at t em p t t o arg u e t h at RES-GA i s n ot

au t h o ri zed to as s ert t h e r ecei v er’ s d efen se o f fai l u re t o ex hau s t FIRREA

ad m i n is t rat i v e rem ed i es

. T h i s arg u m en t i s n ot ti m el y

. “ [T] h i s Co u rt wi l l n o t co n s i d er

arg u m en t s rai s ed fo r t h e fi rs t t i m e i n a rep l y b ri ef.” Ba r r o n v. W el ls Fa r g o Ba n k, N.A.

, 3 3 2 Ga. Ap p . 1 8 0 , 1 8 7 (4 ) (7 69 SE2 d 8 3 0 ) (2 0 1 5) (ci t at i o n o m i t t ed ).

12(1 ) cl ai m s f o r p ay m en t fro m as s et s o f an y d ep o s i t o ry i n s t i t u t i o n

fo r wh i ch t h e RTC h as b een ap p o in t ed Recei v er;

(2 ) act io ns fo r p ay m en t fro m as s et s o f s u ch dep o s i t o ry

i n s t i t u t i o n s ;

(3 ) act i o n s s eek in g a d et erm i n at i o n o f ri g ht s wi t h res pect t o th e

as s et s o f s u ch d ep o s i t o ry i n s t i t u t io n s ; an d

(4 ) a cl ai m rel at i n g t o an y act o r o m i s s i o n o f s u ch i n s t i t u t i on o r

t h e RTC as recei v er.

Id . at 1 2 6 3

, q u o ti n g Na t io n a l Un i on

, 2 8 F3 d at 3 9 3 (II) (B) (3 ). Aft er ag reei n g wi th

o t h er ci rcu i t s t h at co ncl u d e t h at al l req u es t s fo r rel i e f f a l l i n g i n t o t hes e cat eg o ri es

,

wh et h er as s ert ed as cl ai m s o r co u nt ercl ai m s

, are s u b j ect to t h e ex h au s t i o n

req u i rem en t

, t h e El ev en t h Ci rcu i t ag ai n ad o p t ed t he Th i rd Ci rcu i t ’ s reas o n i n g t h at t h e

s t at u te’ s u s e of t h e t erm s “ cl ai m s ” an d “ act i o ns ” precl u d ed ap p l icat i o n o f t h e

ju ri s d i ct i o n al b ar t o “ t ru e affi rm at i v e d efen s es ,” i.e., “ ‘ a res p o n se t o a p l ai n t i ff’ s cl ai m

wh i ch at t ack s t h e p l ai n t i ff’ s l eg a l ri g h t t o bri n g an act io n

. ’ ” Id

. at 1 2 6 4 (B), q u o t i n g

Bl ack ’ s Law Di ct i o n ary (6 th ed

. 1 9 9 1) (em p h as i s i n o ri g i n al ). Fo ll o wi n g t h i s

reas on i n g

, St o n ecres t an d Bro ck arg u e t h at t h ei r p res erv ed d efen ses are t ru e

affi rm at i v e d efen s es n o t s u b j ect t o FIRREA’ s ex h au s t i o n req u i rem en t

.

Ev en if t ru e affi rm at i v e d efen s es are n o t b arred b y t he FIRREA ex h au s t i o n

d o ct ri n e, h o wev er, as ex p l ai n ed b y t h e El ev en t h Ci rcu i t

, si m p l y n a m i n g s o m et h i n g

13an affi rm a t i v e d e fen s e d o es n o t d et erm i ne wh et h er a req ues t fo r rel i ef i s a t ru e

affi rm at i v e d efen s e o r i s , i n fact , a cl ai m o r act i o n en co m

p as s ed b y FIRREA:

a co urt m u s t l oo k b ey o nd t he no m en cl at ure o f a req u e s t f o r rel i ef t o

as cert ai n w h e th er i t i s a t ru e affi rm at i v e d efen s e o r i s

, i n act u al i ty

, a

cl ai m req u i ri n g ex h au st i o n as a p rereq u i s i t e t o ju ri s d i ct io n

. W h et her a

req u es t fo r rel i ef i s t i t l ed an affi rm at i v e d efen s e o r a co u n tercl ai m i s n o t

d i s p o s i t i v e t o th e q u es t i o n of s ub ject m at t er ju ri s d i ct i o n

. Th e g erm an e

q u es t i o n i s w h et h er t h e rem ed y so u gh t b y a p art y

, reg ard l es s o f i t s l ab el

,

i s en co m p as s ed b y S e c t i o n 1 8 2 1 (d ) (1 3 ) (D), t h at i s

, wh et h er th e

a s s er t i on i s i n r ea l i t

y a cl a i m a g ai n s t t h e a ss et s o r a ct i on s of t h e f

a i led

i n s t i t u t i o n o r

t he [ FDIC] a s r ecei ver

.

La ke F o r es t

, 1 9 8 F3 d at 1 26 4 -1 2 6 5 (B) (em p h as i s s u p p l ied ). Fo r e x am p l e, La ke

F o r e s t i n v o l v ed a $ 9 m i l l i o n co n s t ru ct i o n /d ev el o p m en t l o an

, t h e t erm s o f wh i ch

req u i red Lak e Fo res t t o o b t ai n a l et t er o f cred i t t o en s u re th e av ai l ab i l i t y of fu n d s fo r

cert ai n ex p en s es rel at ed t o t h e d ev el o pm en t. Id

. at 1 2 6 1

. In ex ch an g e fo r t h e l et t er o f

cred i t

, L ak e Fo res t s i gn ed a pro m i s s o ry n o t e p a ya b l e o n d em an d t o Pro fes s i o n al

Sav in g s Ban k ; t wo i n d i v i d ual s g u aran t eed t h e n o t e. Id

. Aft er t h e en t i re l i n e o f cred i t

h ad b e e n e x h au s t ed t h ereb y cau s i n g an i n s urer t o refu s e t o i ns u re t h e co ns t ru ct i o n

l o an

, Pro fes s i o nal

, t h e s u cces s o r-i n -i n t eres t t o t h e o ri g in al l en d er o n t h e co ns t ru ct i o n

l o an

, refu s ed t o fu n d t h e rem ai n i n g $ 79 3 ,3 2 5 b al an ce o f th at l o an

. Id

. a t 1 2 6 3 (B).

14Pro fes s i on al l at er wen t i n t o recei v ers h ip an d t h e Res o l u t i o n T ru s t Co rp o rat i o n (RTC)

was ap p o i n t e d r e cei v er. Th e RTC t h en s o l d t h e n o t e an d ri g h ts t h ereu n d er to

Am eri can Fi rs t Fed eral (AFF). Id

. at 12 6 1

. W h en AFF l at er b ro ug h t s ui t ag ai n s t Lak e

Fo res t on t h e p ro m i s s o ry n ot e, L ak e Fo res t co u n t ercl ai m ed

, “ as s e r t i n g t h at

P r o fes s i o n al h ad w ro n g fu l ly fai l ed t o rel eas e t h e bal an ce o f t h e co n s tru ct i o n l o an

p ro ceed s, t h ereb y

cau s i n g La k e Fo res t t o d efau l t on t h e p ro m i s so ry n ot e.” Id

. Lak e

Fo res t s o u g h t to o ffs et an y reco v ery award ed to AFF o n t h e n o t e wi t h t h e d am ag es

fl owi n g fro m Pro fes s io n al ’ s fai l u re t o fu n d th e l o an

. Id

. Th e di s t ri ct co u rt refu s ed to

co n si d er t h e s et -o ff cl ai m b ecau s e Lak e Fo res t h ad n o t ex h au s t ed i t s ad m in i s t rat i v e

rem ed ies u n d er FIRREA. Id

.

On ap p eal

, t h e El e v e n t h Ci rcu i t affi rm ed t h e t ri al co u rt ’ s d eci s i on t o al l o w

Lak e Fo res t t o re-d es i g n at e i ts co u n t ercl ai m as an “ affi rm at i v e d efen s e.” Id

. at 1 2 6 3

(B). Nev ert h el es s

, t h e ci rcu i t co u rt p ro ceed ed t o ex am i n e Lak e Fo res t’ s “ affi rm at i v e

d efen s e” t o d et erm i ne wh et her i t s h o u l d b e d is al l o wed b ecau s e Lak e Fo res t fai l ed to

p u rs u e t h e m at ter u n d er FIRREA’ s ad m i n i st rat i v e pro ces s

. Id . Th e co u rt co n cl u d ed

t h at “ Lak e Fo res t ’ s cl ai m fo r d am ag es s t em m i n g fro m Pro fes s i o nal ’ s refu s al t o fu n d

t h e b al an ce o f t he co ns t ru ct i o n l o an is cl earl y a cl ai m ag ai n s t t h e as s et s o f t h e fai l ed

i n s t i t u t i o n rat h er t h an a d efen s e wh i ch at t ack s AFF’ s l eg al ri g h t t o b ri n g t h e act i o n.”

15Id

. at 1 2 6 5 (B). Th us

, b ecau s e Lak e Fo res t d i d n o t p urs u e i t s s et -o ff c l a i m u n d er

FIRREA, t h e t ri al co u rt d i d n o t h av e ju ri s d ict i o n t o co n s i d er L ak e Fo res t ’ s s o -cal l ed

“ affi rm at i v e d efen s e.” Id

.

(c) Here, t h e d efen d an t s ’ p res erv ed d efen s es are n o t t ru e affi rm at i v e d efen s es

u n d er La ke Fo r es t

. In t h e p re-t ri al o rd er, t h e d efen d an t s as s ert th at as a res u l t o f

In t eg ri t y ’ s b reach o f co n tract

, fai l u re o f co n s i derat io n, an d b reach o f t h e d ut y o f g o o d

fai t h i n p erfo rm i n g t h e co n t ract t h e d e f e n d an t s are en t i tl ed ei t her (i ) t o o ffs et t h ei r

d am ag es ag ai n s t t h e p l ai n t i ff’ s d am ag es o r (i i ) t o co m p l et e rel i e f fro m t h ei r

o b l i g at i o ns u n d er t he n o t e an d g u aran t y

.

(i ) Th e d efen s e cl ai m s t hat s eek a det erm i n at io n o f d am ag es cau sed by In t eg ri t y

as a m ean s o f o ffs et t i n g t he d efen d an t s ’ o wn d am ag es co n s t i t u t e cl ai m s fo r

reco u p m en t

. “ Reco u p m en t i s a ri g h t o f t h e d efen d an t t o hav e a d e d u c t i o n f r o m t h e

am ou n t o f th e pl ai n t iff’ s d a m a g e s f o r t h e reas o n t h at t h e p l ai n t iff h as n o t co m p l i ed

wi t h t h e cro s s -o b l i g at i on s o r i n d ep en d en t co v en an t s ari s i ng u n d er th e co n t ract u p o n

wh i ch s u i t i s b ro u g h t

. ” OCGA § 1 3 -7 -2

. “ Reco u p m en t m ay be pl ead ed i n al l act i on s

ex co n t ract u w h ere t h e p l ai n t i ff i s l i ab l e t o t h e d efen dan t u n der t h e s am e co n t ract

. If

t h e d am a g e s o f t h e d efen d an t ex ceed th o s e o f t h e pl ai n ti ff, t h e defen d an t s h al l b e

award ed th e am o u n t o f s uch ex ces s fro m t h e pl ai n t i ff.” OCGA § 13 -7 -1 3. A cl ai m o f

16s et o ff i s s i m i l ar b u t i n v ol ves t w o s e p a r at e t ran s act i o n s

. 8 Un der Geo rg i a l aw, “ b o th

s et o ff an d reco u pm en t are co n s i d ered co un t ercl ai m s.” Hi l l v. Gr een Tr ee S er vi ci n g

,

2 8 0 Ga

. Ap p

. 1 5 1

, 15 4 (2 ) (6 3 3 SE2 d 45 1 ) (2 0 0 6) (fo ot n o t e om i t t ed ); Ba xt er v.

Fa i r f i el d Fi n

. S

vcs

. , 3 0 7 Ga. Ap p

. 2 8 6

, 2 9 5 (4 ) (7 0 4 SE2 d 4 23 ) (2 0 1 0) (p u n ct u at i o n

an d fo ot n o t e o m i t t ed ); Fr en ch Qu a r t e r

, I n c

. v. Pet er

s o n Y o u ng S el f & As s el i n

, 2 2 0

Ga. Ap p. 8 5 2

, 8 5 4 (3 ) (4 7 1 SE2 d 9 ) (1 9 9 6 ). An d “ [w] h en a p a r t y has m i s t ak en l y

d es i g n at ed a d efen se as a co u n t ercl ai m o r a co un t ercl ai m as a d efen se, t h e co u rt o n

t e r m s

, i f j u s ti ce s o req u i res

, s h al l t reat t h e p lead i n g s as i f t h ere h ad b een a p ro p er

d es i g n at i o n .” OCGA § 9 -1 1 -8 (c). Becau s e t h e d efen d an t s ’ defen s es s eek

, at l eas t in

p art

, a d et erm in at i o n o f d am ag es cau s ed b y In t eg ri t y as a m ean s o f o ffs et t i n g t h e

d efen d an t s ’ o wn d am ag es

, t h ey are p ro p erl y d es i gn at ed as co u n tercl ai m s o f

reco u p m en t

.

8 “ Set off do es no t o p erat e as a d en i al o f th e p l ai nt i ff’s c l a i m ; r a t h er i t al l o ws

t h e defen d an t t o set off a d eb t o wed h i m b y t h e p l a i n t i f f a g a i n s t t h e cl ai m o f t h e

p l ai n t i ff.” OCGA § 1 3 -7 -1

. “ Reco u p m en t di ffers fro m set o ff i n t h i s r es p ect : An y

cl ai m o r d em an d th e d efen d an t m ay h av e ag ai n s t t h e p lai n t i ff m ay b e u s ed as a s et o ff,

wh i le o n ly a cl ai m or d em an d ari s i n g o ut o f t h e s am e t ran s act i on as th at s u ed o n by

t h e p l ai n t i ff m ay b e u s ed as a reco u p m en t .” OCGA § 1 3 -7 -3

. “ Al t h ou g h t h ere a r e

d i s t i n ct i o n s b et ween t h e t wo t erm s, t h ey are freq u en t l y u s e d i n t erch an g eab l y .”

Gwi nn et t Co mmer ci a l Ba nk v. Fl a ke

, 1 5 1 Ga. Ap p

. 5 7 8

, 5 8 0 ( 1 ) (2 6 0 SE2 d 5 2 3 )

(1 9 7 9) (ci t at i o n o m i t t ed ).

17T he d e f e nda n t s ’ reco u pm en t co u n tercl ai m s are b arred b y fai l u re t o p u rsue the m

u n d er FIRREA’ s ad m in is t rat i v e cl ai m s p ro ces s

. As al read y s h o wn

, FIRREA b ars a

co u rt fro m t ak i n g j u ri s d i c t io n o v er “ an y cl ai m o r act i o n fo r p ay m en t fro m

. . . t h e

as s et s of an y d ep os i t ory i n s t i t u t i o n fo r wh ich t h e [FDIC] has been ap p o i n t ed

recei v er.” 1 2 USC § 1 8 21 (d ) (1 3 ) (D). Becau s e t h e d efen d an t s ’ s o -cal l ed affi rm at i v e

d efen s es are, at l eas t i n part

, p ro p erl y ch aract eri zed as co u n t ercl ai m s i n wh i ch t h ey

s eek p ay m en t fro m th e as s et s o f In t eg ri t y

, t hey are cl ai m s t hat are s u b ject t o t h e

FIRREA a d m i n i s trat iv e cl ai m s p ro ces s

. See In t er f a ce Ka nn er

, 7 0 4 F3 d at 9 3 4 (III)

(B); La ke Fo res t

, 1 9 8 F3 d at 1 26 3 -1 2 6 4 ; Tr i -S t a t e

, 79 F3 d at 7 1 3 (III) (B); F.D.I.C.

v. S to va ll

,

_

_ FSu p p

__ , 2 0 14 W L 8 2 51 4 6 5

, at * 9 (N.D. Ga. Oct

. 2

, 2 0 1 4 ); Bo b i ck

,

3 2 1 G a

. A p p

. 8 55

, 8 6 4 (3 ) (a). Th u s

, St o n ecres t an d Bro ck ’ s d efen si v e cl ai m s o f

reco u p m en t are barred b y t h e d efen d an t s’ fai l u re t o ex h au s t ad m i n i s t rat i ve rem ed i es

u n d er FIRREA.

(i i) Th e d efen dan t s al s o co n t en d th ey h av e as sert ed an affi rm at iv e d efen s e by

arg u i n g t h at In t eg ri t y ’ s al l eg ed b reach o f t h e l o an d o cu m en t en t i t l es t h e d efen d an t s

t o b e ex cu s ed fro m l i ab i l i t y u n der t h e n o t e. Th i s as sert i o n i s ei th er al s o b arred b y 1 2

USC § 1 8 2 1 (d ) (1 3) (D) o r al t o g et h er wi t h o u t m eri t. Fi rs t

, i t i s u n d i s p ut ed t h at t h e

ag reem en t b et ween th e p art i es was p art i al ly p erfo rm e d

. In t eg ri t y d i s b u rs ed

18ap p ro x i m at el y $ 1 2 ,0 00 ,0 00 i n p ri n ci p al t o St o n ecre s t a n d m ad e m o n th l y i n t eres t

ad v an cem en t s fo r t h e fi rs t y ear of t h e l oan

, n o n e of wh i ch has b een rep ai d by

St o n ecres t

. Fu rt h erm o re, St o n ecres t n ev er s o u gh t t o res ci n d t h e ag reem en t as a res u l t

o f In teg ri t y ’ s al l eg ed b reach

. Th u s

, t h e al l eg ed b reach o f t h e ag reem en t o r fai l u re o f

co n si d erat io n b y In t eg ri t y was

, at m os t

, p art ial

. Th e rem ed y fo r an y p u rp o rt ed p art i al

fai l u r e o f c o n s i derat i o n o r p art i al b reach o f co n t ract i s an o ffs et o f d am ag es an d i s

t h erefo re p ro perl y ch aract eri zed as a cl ai m fo r reco u pm en t an d b arred by FIRREA as

s h o wn ab o v e. Seco n d , ev en i f t h e d efen d an t s ’ arg um en t i s o t h erwi s e l eg al l y s o u n d,

wh i ch we d o n o t d eci d e, 9 “ [b ] efo re p art i al fai lu re of p erfo rm an ce o f o n e p art y wi l l

ex cu se t h e o t h er fro m p erfo rm in g h i s co n t rac t o r g i v e h im a ri g h t of res ci s s i o n

, t h e

act fai l ed t o be p erfo rm ed m u s t g o t o t h e ro ot o f t h e co n tract .” Ch a mb er l in v. Bo o th

9 S e e M c I n t o s h v. McLen d

o n

, 1 6 2 Ga. Ap p. 2 2 0 (2 ) (2 9 0 SE2 d 1 5 7 ) (1 9 8 2 )

(“ Al t h ou g h t h e f

a c t s a l l e g ed b y t h e defen d an t i n h i s an s wer m i g ht s u p p o rt a

co u nt ercl ai m fo r b reach o f co n t ract

, t h ey d o n ot s et fo rt h a d efen se t o t h e n o t e, wh i ch

co n st i t u t es b y i t s t erm s an u n co n d it i on al p ro m i s e t o p ay t he i n s t ru m en t acco rd i n g to

i t s t en o r.”); Pa r

k v. Fo r t u n e P a r t n er

, In c.

, 2 7 9 Ga. A p p

. 2 6 8

, 2 7 2 n

. 1 (6 3 0 SE2 d 8 7 1 )

(2 0 0 6) (“ Th e d efen d an t s ch aract eri ze Fo rt u n e’ s al l eg ed b reach of t h e s al es co n t ract

as a ‘ d efen s e’ t o p ay m en t on t h e n o t e, b u t t h e al l eg ed b reach m ay b e m o re accu rat el y

as s ert ed as t h e b as i s fo r a cl ai m o f reco up m en t o r co u n t ercl ai m

. ”); bu t s ee Lo wer y v.

Da l li s

, 2 3 7 Ga

. A p p. 3 0 9

, 31 1 (2 ) (5 1 3 SE2 d 7 4 0) (1 9 9 9 ) (t reat i n g b reach o f as s et

p u rch as e ag reem en t as a d efen s e t o s u i t o n p ro m i s s ory n o t e g iv e n i n e x c h a n g e fo r

p u rch as ed as s et s ).

19& McLer o

y

, 1 3 5 G a

. 7 1 9 (7 0 SE 5 6 9 ) (1 9 1 1). Here, In t eg ri t y ’ s fai l ure t o m ak e

i n t eres t ad v an cem en t s u n der t h e l o an ag reem en t d o es n o t go to t h e ro o t o f t h e co n t ract

b ei n g en fo rced i n t h i s act i o n

, i .e., t h e p ro m i s s ory n ot e. Rat her, i t p ert ai n s t o t h e l o an

ag reem en t an d o n l y

t o t h at p art o f t h e l o an ag reem en t u n d er wh i ch In t eg ri t y ag reed

t o m ak e i n t eres t ad v an cem en t s

. In d eed

, t h e n o t e p ro v i d es t h at n o p ro v i s i o n s o f t h e

l o an ag reem en t “ sh al l in an y m an n er affect o r im p ai r t h e ab s o l u t e an d u n co nd i t i o n al

o b l i g at i o n o f M ak er to p ay t h e o u t s t an d i n g p ri n ci p al b al a n c e h e r eo f an d u n p ai d

accru ed in t eres t h ereo n as t h e s am e s h al l b eco m e d ue an d p ay ab l e

. ” Th u s

, t h i s

arg u m en t b y

t h e d efen d an t s i s wi t h o u t m eri t

.

Acco rd i ng l y

, al l o f t h e d efen d an t s’ p res erv ed d efen s es are b arred b y 1 2 USC

§ 1 82 1 (d ) (1 3 ) (D) o r wh o ll y wi t h o u t m eri t

.

(d ) Th e d efen d an t s co n ten d t h at an y bar o f t h ei r d efen s es wo u l d v io l at e t h e Du e

Pro ces s cl au s e o f t h e U n it ed St at es Co ns t i t u ti o n

. Th ey rai s e sev eral arg u m en t s i n t h i s

reg ard

.

(i ) Th ey fi rs t arg u e b ri efl y t h at b ecau se FIRREA p r o v i d es th at no t i ce o f t h e

cl ai m s p ro ces s s h al l b e p ro v i d ed t o “ cre d i t o r s ,” i t wo u ld v i o l at e du e p ro ces s to

en fo rce th e ju ri s d i ct i on al b ar ag ai n s t d eb t o rs

, su ch as t h e defen d an t s, t o wh o m n o t i ce

i s n o t req u i red u n d er FIRREA. Bu t a rev i ew o f t h e l aw s h o ws t h at t hi s p o s i t i o n h as

20b een reject ed b a s ed o n t h e l an gu ag e o f t h e s t at u t e i ts el f. See M cCa rt hy v. F.D.I.C.

,

3 4 8 F3 d 1 0 7 5

, 10 7 7 (2 ) (9 t h Ci r. 2 0 0 3 ); Tr i

- S t a t e

, 7 9 F3 d at 7 1 4 (D); Fr eema n v.

F.D.I.C.

, 5 6 F3 d 1 3 9 4, 1 4 0 0 (DC Ci r. 1 9 9 5 ); Na ti o n a l Un i o n

, 2 8 F3 d at 3 8 5 -3 8 9 (B)

(2 ). FIRREA p ro v i d es an ex cep t i o n t o ti m el y ex h au s t i o n o n l y wh ere t h e cl ai m an t can

s h o w t h at i t d i d no t “ recei v e n o t i ce o f t h e ap p o i nt m en t o f t h e recei v er i n t i m e t o fi l e

[a] cl ai m .” 12 USC § 1 8 2 1 (d ) (5 ) (C) (i i ) (I); s ee al s o Ol d e To wn e Tyr o n e v.

Mu l ti b a nk 2 0 0 9 -1 CRE Ven t u re

, 3 2 6 Ga. Ap p. 3 2 2

, 3 2 7-3 2 8 (1 ) (a) (7 5 6 SE2 d 5 5 8 )

( 2 014 ) (ci t at i o n o m i t t ed ); F r eema n

, 5 6 F3 d at 1 4 0 1 -1 4 0 3 (II) (B). Here, o n Sep t em b er

2 5

, 2 0 0 8

, t h e FDIC s en t a l et ter t o t h e d efen dan t s i n fo rm i ng t h em t h at t h e FDIC was

t h e “ Recei v er o f In t eg ri t y B a n k .” Th e d efen d an t s t h erefo re h av e n ot s h o wn a

v i o l at i o n o f d u e p ro ces s o n t h i s g ro u n d

.

(i i) Th e d efen d an t s ar gue that t h e an t i -i n ju n ct i o n p ro v i s i o n of FIRREA m ay b ar

t h e ty p e o f rel i ef

— d ecl arat o ry

— t h a t t h e y w o u l d hav e to s eek b y way o f an

ad m i n is t rat i v e cl ai m u n d er FIRREA fo r t h e t y p es o f r e l i ef t h ey seek i n t h i s s u i t. In

o t h er wo rd s

, t h ey arg u e t hat RES-GA’ s i nt erp re t a t i on o f FIRREA v i ol at es d u e

p ro ces s b ecau s e i t m i gh t b ar t h e v ery t y pe o f ad m i n i st rat i v e cl ai m t h at t h e d efen d an t s

wo u l d h a v e t o b r i n g i f t h ey had ch o s en t o do s o

. Bu t

, as t h e d efen d an ts ad m i t

, t h e

El ev en th Ci rcu i t has recen t l y ru l ed t h at ev e n i f a c l ai m an t fi l es an ad m in i s t rat i v e

21cl ai m t h at is b arred b y FIRREA’ s an t i-i n

j u n ct io n p ro vi s i o n

, h av i n g t h en e x h a u s t ed

ad m i n is t rat i v e rem ed i es u n d er FIRREA, t h e cl ai m an t i s free t o fi le a s u it i n co u rt an d

rai s e t h e i s s u e b arred i n t h e ad m i n i st rat i v e p ro ceed i n g

. Pl a ci d a

, 5 1 2 F. Ap p ’ x at 9 4 5.

M o reo v er, i n t hi s cas e t h e d efen d an t s d i d n o t fi l e a d ecl arat o ry ju dg m en t cl ai m u n d er

t h e FIRREA cl ai m s p ro ces s , an d t h erefo re t h is i s su e i s n o t p res en t l y b efo re u s

.

(i ii ) Th e d efen d an t s fu rt her arg u e t h at en fo rcem en t of FIRREA’ s ex h au s t i o n

req u i rem en t ag ai n st t h em wo u l d lead to “ pat en t l y ab s u rd co n s eq uen ces ” l i k e

req u i ri n g t h em t o fi l e d efen s es b efo re h av i n g n o t i ce of t h e cl ai m s b ei ng as s ert ed

ag ai n s t t h em . Fi rs t , as s h o wn ab o v e, t ru e affi rm at i v e d efen s es are n o t b arred b y t h e

FIRREA ex h au s t i o n req u i rem en t

. Seco n d

, b y t h e t i m e t h at t h e FDIC was ap p o i n t ed

as a r e c e i v er, t he d efen d an t s were fu l l y aware t h at In t eg ri t y h ad ceas ed m ak i n g

i n t eres t ad v an cem en ts u n d er t h e l o an

, wh ich i s wh at t h ey co n t en d t r i g g ered t h ei r

d efen s es . Th u s n o p at en t l y ab s u rd co n s eq u en ces res u l t fro m t hi s o pi n i o n

.

In s u m , t h e d efen d an ts ’ at t em p t t o rai se a d u e p ro ces s v i o l at i o n fai l s

.

2

. Th e d efen d an t s al s o co n t en d t he t ri al co u r t e r r ed as a m at ter o f l aw by

award i n g d efau l t i nt eres t o n t h e j u d g m en t i n fav o r o f RES-GA b ecau s e In t eg ri t y

fai l ed t o g i v e n ot i ce o f no n -m on et ary d efau l t wh en it d eci d ed t o ceas e m ak i n g i n t eres t

ad v an cem en t s an d

, as a res u l t

, t h e FDIC im pro p erl y accel erat ed t h e n o t e. Fo r t h e

22s am e reas o n s s t at ed ab o v e, t hes e as s ert i o n s o f i m p ro p er act i o n s b y In t eg ri ty an d t h e

FDIC are b arred b y t h e FIRREA ex h au s t i o n d o ct ri n e. Th ey s eek a d et erm i nat i o n o f

ri gh t s w i t h res p ect t o an a s s e t ( t h e l o an ) o f a fai l ed ban k fo r wh i ch t h e FDIC was

ap p oi n t ed as a recei v er, wh i ch i s en co m p as s ed i n O CGA § 1 8 2 1 (d ) (1 3 ) (D), an d t h i s

d efen s e n o t a t ru e affi rm at i v e d efen s e.

3

. Fi n al l y

, we affi rm t h e t ri al co u rt ’ s g ran t o f s u m m ary ju d g m en t ag ai ns t Bro ck

fo r t h e s ep arat e reas o n t h at in h i s g uaran ty

, h e cl earl y w ai v ed al l defen s es t o t h i s s u i t

.

Th e g uaran t y

p ro vi d es t h at :

No act

, fai l u re t o act

, o r o m i s s i o n o f a n y k i n d o n t h e p art of th e

Un d ers i g n ed

, t he Pri n ci p al

, t h e Ban k o r an y o th er p ers o n s h al l b e a l eg al

o r eq u i t ab l e di s ch arg e o r rel eas e o f th e U n d ers i g n e d f ro m t h ei r

o b l i gat i o n h ereu n der u n les s ag reed t o h ereaft er i n wri t i n g b y t h e Ban k

.

In t he g u aran ty

, Bro ck al so wai v ed an d ren o u nced “ an y d efen s e t o an y o f t h e

l i ab i l i t i es wh i ch m ay b e av ai l ab l e t o o r co u l d b e as sert ed b y t h e Pri nci p al

, ex cep t fo r

p ay m en t

. ” Bro ck ’ s wai v er o f d efen s es i s en fo rceab l e. Ro ber t s v. C o m m u n i t

y &

S o u t h er n Ba n k

, 33 1 Ga. Ap p

. 3 6 4

, 3 6 7 (1 ) (7 7 1 SE2 d 6 8 ) (2 01 5 ); s ee al s o Co mmu n i t y

& S ou t h er n Ba n k v. DCB In ves t men t s

, 3 28 Ga. Ap p

. 6 0 5, 6 1 0 (2 )(7 6 0 SE2 d 2 1 0 )

(2 0 1 4) (“ [A] g u aran t or m ay co n s en t i n ad v an ce t o a co u rs e of co n d u ct w h i ch wo u ld

23o t h erwi s e res u l t i n h i s d i s ch arg e, an d th i s i n cl ud es t he w ai v er o f d efen s es o t h erwi s e

av ai l ab l e t o a g uaran to r.”) (ci t at i o n an d fo o t n o t e o m i tt ed ).

A1 5 A 0 4 5 8

4

. In t h e cro s s -ap p eal

, RES-GA co nt en d s th e t ri al co urt erred b y fai l i n g to

award i t at t o rn ey

fees ag ai n s t Bro ck

u n d er t h e t erm s o f h is g u aran t y . W e ag ree.

Bro ck ’ s g u aran t y

p ro v i d es :

If an y l eg al a c t i o n o r a c t i o n s are i n st it u t ed by t h e Ban k t o en fo rce an y

o f i t s ri g h t s ag ai n s t t h e Un d ers ig n ed h ereu n der, t h en t h e Un d ers i g n ed

,

jo i n t l y an d s ev eral l y

, ag ree t o p ay t h e Ban k al l ex p en s es i n cu rred b y th e

Ban k rel at i v e to s u ch l eg al act i o n o r act i o n s

, i n cl u d i n g

, b u t n o t li m i ted

t o

, co u rt co st s p l us 1 5 % o f t h e t o t al am o u n t of t h e p ri n ci p al an d accru ed

i n t eres t t h en d u e t he Ban k h ereu n der as at t o rn ey ’ s fees

.

On Sep t em

b er 2 5

, 2 0 0 8

, aft er In t eg ri t y was p laced i n t o recei v ers h ip wi t h t h e FDIC,

t h e FDIC s en t a let t er t o Bro ck s t at i n g t hat i t h el d t h e n o t e an d t h at u n les s Bro ck p ai d

i n fu l l wi t h i n t en d ay s o f recei p t o f t h e l et t er, t he FDIC in t en d ed t o s eek at t o rn ey fees

an d co s t s o f co l l ect i o n :

As y o u k n o w, t h e FDIC i s t h e h o l d er of t h e N o t e.

. . . Un les s th e

Am o u n t s Du e [d efi n ed t o i n cl ud e p ri n ci p al

, i n t eres t an d o t h er am o u n t s

o wed o n t h e l o an ] are p ai d i n fu l l wi t h i n 1 0 d ay s o f y o u r recei p t o f t h i s

l et t er t h e FDIC m ay t u rn t h i s m at t er ov er t o co un s el t o i n it i at e co l l ect i o n

24act i v i t i es an d y o u wi l l al s o b eco m e l i ab l e fo r at t o rn ey fees an d co s t s o f

co l l ect i o n

. 1 0

An d o n M ay 1 0

, 2 0 1 0

, M u l t ib an k s en t a l et t er t o Bro ck

, wh ich Bro ck recei v ed , t h at

p ro v id ed es s en t i al l y

t h e s am e n o t i ce:

[M u lt i ban k ] i s t h e o wn er o f t he Lo an an d al l of t he d ocu m en t s t hat

ev i d en ce an d s ecu re t h e Lo an

. . . . [P] urs u an t to O .C.G.A. Sect i o n

1 3 -1 -1 1

, y o u are h ereb y n o t i fi ed o f Len der’ s i nt en t i o n t o reco v er

at t o rn ey s ’ fees an d co s t s o f co l l ect i o n

. Yo u ar e a l s o n o t i fi ed th at y o u

h av e t h e o p p o rt u ni ty t o p ay t h e i nd eb t ed n es s wi t h i n t en (1 0) d ay s o f

y o u r recei p t ( w h e t h er act u al o r co n s t ru ct i ve) o f t h i s let t er t o av o i d th e

ad d i ti o n al l i ab il it y

o f at t o rn ey s ’ fees an d co s t s o f co l l ect i o n

.

In i t s c o m

p l ai n t

, RES-GA d em an d ed reco v ery o f t h e at t orn ey fees p ro v i d ed i n t h e

g u aran ty

, b u t i t d i d n o t i n fo rm Bro ck t h at h e h a d t e n d a y s fro m t h e recei p t o f t h e

co m p l ai n t to p ay th e p ri n ci p al an d i n t eres t t o av o i d at to rn ey fees

. In it s o rd er g ran t i n g

s u m m ary ju d g m en t i n fav or o f RES-GA, t h e t ri al co u rt d i d n o t award at t o rn ey fees

.

In ad d res s in g t h i s as p ect o f t h e t ri al co u rt ’ s o rd er g ran ti n g s um m ary ju d g m en t

, we

ag ai n ap p l y t h e d e n o v o s t an dard o f rev i ew. Lo n g v. Ho ga n

, 2 8 9 G a. Ap p

. 34 7 (6 5 6

SE2 d 8 6 8) (2 0 0 8).

1 0 O n J an u ary 8

, 2 0 09

, t h e FDIC sen t a s eco nd d em an d let t er t o Bro ck

, b u t t h e

co p y i n t h e reco rd d o es n o t s h ow t he co m pl et e l an g u ag e o f t h e at t o rn ey fee d em an d.

25RES-GA t rav el s u n d er OCGA § 1 3 -1 -1 1 (a) wh i ch p ro v id es :

Ob l i gat i o n s t o p ay at t o r n e y’ s fees u p o n an y n o t e o r o t h er ev i d en ce o f

i n d eb t ed n es s

, in ad d i ti o n t o t he rat e o f i n t eres t s p eci fi ed t h erei n

, s h al l be

v al i d an d en fo rceab l e an d co l l ect ab l e as a p art of s u ch d eb t i f su ch n ot e

o r o t h er ev i d en ce o f i n d eb t ed n es s is co l l ect ed by o r t h ro ug h an at t o rn ey

aft er m at u ri t y

.

An d “ [a] g u aran ty co n t ract i s an ‘ ev i d e n c e o f i n d eb t ed n es s ’ wi t h in t h e m ean i n g o f

[t he s t at ut e] .” Ra d i o S

h ack Co r p

. v. Ca s ca d

e Cr os s i n g II

, 2 8 2 Ga. 8 4 1

, 8 4 5 (6 5 3 SE2 d

6 8 0 ) (2 0 07 ) (c i t at i on o m it t ed ). If t he s t at u t o ry p rereq u is i t es are m et

, an award i s

m an d at o ry :

wh ere a p art y co m

p l i es w i t h t h e req ui rem en t s o f OCGA § 1 3 -1 -1 1

, th e

p art y i s en t it l ed t o recei v e s t at ut o ry at t orn ey fees

. Becau se t h e l an g u ag e

o f t h e s t at u t e i s m an d at o ry rat h er t h an p erm i s s i ve, we fu rt her h o ld t hat

t h e t ri al co u rt i s wi t h o u t d i s cret i o n t o d en y fees u nd er s e c t i o n 13 -1 -1 1

wh en al l t h e co n d i ti o ns o f t h at s t at u te are u n q ues t i o n ab l y s at i s fi ed

.

Ter m Net Mer ch

. S

vcs

. v. P h i l li

p s

, 2 7 7 Ga. 3 4 2

, 3 4 4 -3 4 5 (1 ) (5 8 8 SE2 d 7 4 5 ) (2 0 0 3 )

(fo o t no t e o m i t t ed ).

(a) Bro ck co n t en ds t hat t h e n o t i ces s et f o rt h ab o v e do n ot co m

p ly wi t h t h e

s t at u te b ecau s e n o t ice m

u s t b e g i v en “ aft er m at uri t y of t h e o b li g at i on ,” OCGA § 1 3 -1

-

1 1 ; Bro ck arg u es t h at RES-GA’ s cal cu l at i o n o f t h e m at u ri t y d at e i n t h i s cas e i s fl awed

26b ecau s e In t eg ri t y fai l ed t o g i v e n o t i ce o f n o n -m o n et ary defau l t i n M ay 2 0 0 8 an d

t h erefo re t h e d ecl arat i o n of d efau l t an d accel erat io n o f t h e d eb t i n Sep t em b er 2 0 0 8

was n o t p ro p er. Bu t ag ai n

, t h i s arg u m en t i s b as ed o n St o n ecres t ’ s d efen s e t h at

Inte gri t y b reach ed t h e l o an d o cu m en t s

, w hi ch i s b arred b y FIRREA. Mo reo v er, Bro ck

wai v ed al l d efen s es th at St on ecre s t c o u l d as s ert ex cep t p ay m en t

. Here, o n M ay 1 0,

2 0 1 0 , M u l ti b an k d em an d ed p ay m en t o n t h e n ot e an d g av e s t at u t ory no t i ce o f i n t en t

t o co l l ect at t o rn ey

fees , al l aft er t h e n o te m at u red

, y et Bro ck h as fai l ed t o m ak e an y

p ay m en t on h i s u n co n d i t i o n al g u aran t y

. “ [N] o t ice u n d er t h is s t at u t e m ay b e g i v en an y

t i m e b e t we e n t he m at u ri t y o f t h e o b l i g at i o n an d t en d ay s p ri or to j u d g m en t .”

Lo ckwo o d v. Fed

. Dep o si t In s

. Co r p

. , 3 3 0 Ga. Ap p

. 5 1 3, 5 1 5 -5 1 6 (1 ) (7 6 7 SE2 d 8 2 9 )

(2 0 1 4). W e fi n d n o erro r o n t hi s g ro u n d

.

(b ) Bro ck co n t en d s t hat RES-GA i s n o t en t i t l ed t o t h e am o u n t o f fees i t s eek s

b ecau s e i t i s n o t en ti t l ed t o d efau l t i n t eres t b ecau s e o f In te g r i t y’s i m p ro p er

accel erat i o n o f t he n o t e. Bu t as s h o wn ab o ve, t he t ri al co u rt d id n o t err b y award i n g

d efau l t i n t eres t u n der t he n o t e, Bro ck h as wai v ed al l d efen s es

, an d th e s p eci fi c

d efen s es as s ert ed are b arred b y FIRREA.

(c) Fi n al l y

, Bro ck co n t en d s t h at t h e t ri al co u rt d i d n o t err b ecau s e n ei t h er t h e

M ay 1 0

, 20 1 0 d em an d l et t er f r o m M u l t i b an k n o r t h e earl i er dem an d l et t er fro m t h e

27FDIC i d en t i fy RES-GA as t h e p art y w h o wo u l d b e s eek i ng at t o rn ey fees

, i .e., t h e

p art y fi l i n g s u i t

. RES-GA arg u es t h at t h e FDIC an d Mu l t ib an k no t i ces m et t h e

s t at u to ry req u i rem en t s

. 1 1

Th e n o t i ce cl au s e o f OCGA § 1 3 -1 -1 1 p ro v i d es

,

Th e h o l d er o f t h e n o te o r o t h er ev i d en ce of i n d e b t e d n es s o r h i s o r h er

at t o r n e y at l aw s h al l

, aft er m at u ri t y o f th e o b l i g at i o n

, no t i fy in wri t i n g

t h e m ak er, en d o rs er, o r p a r t y s o u g h t t o be h el d o n sai d ob l i g at io n t hat

t h e p ro v i s i o n s r e l at i v e t o p ay m en t o f at t orn ey ’ s fees i n ad d i ti o n t o th e

p ri n ci p al an d i n t eres t s h a l l b e en fo rced an d t h at s u ch m ak er, en d o rs er,

o r p art y s o u g h t t o b e h el d o n s ai d o b li gat i o n h as ten day s fro m th e

recei p t o f su ch n o ti ce to p ay t h e p ri n ci p al an d i n teres t wi t h o u t t h e

at t o rn ey ’ s fees

. If t h e m ak er, en d o rs er, o r p art y s o u g h t t o be h el d o n an y

s u ch o b l i gat i o n s hal l p ay t h e p r i n ci p al an d i nt eres t i n fu l l b efo re th e

ex p i rat i o n o f s u ch t i m e, t h en t h e o b li g at i o n t o p ay th e at t o rn ey ’ s fees

s h al l b e v oi d an d n o co u rt s h al l en fo rce t he ag reem en t

.

OCGA § 1 3-1 -1 1 (a) (3 ). Th u s

, as t h i s Co u rt has ex p l ai n ed

, a p ro p er d em an d n o t i ce

“ m u s t as a m at t er o f s u bs t an ce: (1 ) b e i n wri t i n g ; (2 ) t o t h e part y s o u g h t t o b e h el d o n

1 1 RES-GA d o es n o t arg u e t h at i t p ro v i d ed p ro p er n o t i ce i n i t s co m p l ai n t ; n o r

can i t

. See S

h i er v. P r i ce

, 1 5 2 Ga. Ap p

. 5 9 3

, 5 9 5 (2 ) (2 6 3 SE2 d 4 6 6) (1 97 9 ) (n o t i ce

i n co m p l ai n t in a c co rd an ce wi t h OCGA § 1 3-1 -1 1 “ th at th e pro v i si o n fo r 10 %

at t o rn ey fees i n t h e n o t e w o ul d b e en fo rced i f t he p ri nci p al an d in t eres t o w i n g t h ereo n

were n o t recei ved wi t h i n t en d ay s

. . . i s a pro p er n o t i ce.”); s ee al s o Lo ckwo o d v. Fed

. Dep os i t In s

. Co r

p

. , 3 3 0 Ga. Ap p

. 5 1 3

, 5 1 5 (1 ) n

. 7 (7 6 7 SE2 d 8 29 ) (2 0 1 4 ), an d cas es

ci t ed t herei n

.

28t h e ob l i g at i o n ; (3 ) aft er m at u ri ty ; (4 ) [ ] s t at e t h at t h e p ro v i s io n s rel at i v e to p ay m en t

o f at t o rn ey fees i n ad d i t i on t o p ri n ci p al an d i n t eres t wi l l b e en fo rced ; an d (5 ) [ ] s t at e

t h at t h e p art y h as t en day s fro m t h e recei pt o f s u ch no t i c e t o p a y t h e pri n ci p al an d

i n t eres t w i t h o ut t he at t orn ey fees .” Tr u s t A s s o c. v. S n ea d

, 2 5 3 Ga. Ap p. 47 5

, 4 7 6 (1 )

(5 5 9 SE2 d 5 0 2 ) (2 0 0 2) (ci t at i o ns o m i t t ed ). Al s o, t he n o t i ce m us t b e s en t b y t h e h o l d er

o f t h e n ot e. Kr a

p f v. W i l es

, 2 5 2 Ga. 4 5 2

, 4 5 3 (3 1 4 SE2 d 6 5 6) (1 98 4 ). On l y s u b s t an t i al

co m p l ian ce w i t h OCGA § 13 -1 -1 1 (a) (3 ) i s req u i red fo r m o s t o f t h es e el em en t s

,

Br z o w s k i v

. Q u a nt u m Na t

. Ba n k

, 3 1 1 Ga. Ap p

. 7 6 9

, 7 7 4 (3 ) (a) (7 1 7 SE2 d 2 9 0 )

(2 0 1 1), b ut s t ri ct co m

p l i an ce ap p l i es t o t h e req u i rem en t t hat t h e n o t e h o l d er m u s t s en d

t h e n o t ice, Kr a

p f

, 2 5 2 G a. at 4 5 3

, wh i ch req u i rem en t i s s at is fi ed in th i s cas e b ecau s e

t h e FDIC an d M u l t i b an k b o t h h el d t h e n o t e at t h e t im e t h ey p ro v id ed t h e rel ev an t

n o t i ce.

As can be s een

, n o t h i n g i n t h e p l ai n lan g u ag e o f t h e s t at u t e r e qu i res t h at t h e

n o t i ce i n di cat e th e n am e of th e p art y t h at wo u l d b e fi li n g s u i t i f t h e d efen d an t fai l ed

t o pay t h e p ri n ci p al an d in t eres t wi t h i n t h e t en -d ay peri o d p ro v i d ed i n t h e n o t i ce. In

o t h er w o rd s

, t h e st at u t e d o es n ot ad d res s w h et her an as si g n ee o f t h e n ot e m ay reco v er

a tt o rn ey fees wh ere th e as s i g n ee’ s p red eces so r i n i n t eres t p ro v i d ed t h e n o ti ce r e quir e d

b y OCGA § 1 3 -1 -1 1 b ut t h e as s i g n ee fi l ed s u i t

.

29In 1 9 84 an d 2 0 02

, res p ect i v el y

, th e Su prem e Co u r t a n d t h i s Co urt q u o t ed

earl ier cas e l aw fo r t he p ro p o s i t i o n t h at t h e n o t i ce m u s t i n d i cat e wh o i n t en d s t o fi l e

s u i t :

“ ‘ St at ut o ry n o t i ce fo r t h e p u rp o s e o f fi x i n g l i ab i l it y fo r at t o rn ey ’ s fees

s h o u l d d i s cl o s e wh o i s t h e h o l d er of t h e n o te, an d wh o i t i s t h a t i nt en d s

t o b r i n g s u i t

, an d to wh o m t h e p ay m en t s h ou l d b e m ad e; an d i f n ot i ce i s

s o wo rd ed as t o m i sl ead o r as t o be l i k el y t o m i s l ead t h e d efen d an t i n

m at eri al res p ect s as t o t h es e feat u res , i t i s i n ad eq u at e.’ ”

See Kr a p f

, 2 5 2 Ga. at 4 5 3

, q u o t i n g Gel der s v. Ken ned

y

, 9 Ga. A p p

. 3 8 9

, 39 0 (7 1 SE

5 0 3 ) (1 9 1 1 ) (em

p has is s u pp l i ed ); S

n ea d

, 2 53 G a. A p p

. a t 4 7 6 (1 ) (a) (s am e

q u o t a t i o n ). Th e q uo t at i o n s i n b o t h Kr a p f an d S n ea d are d i ct a, 1 2 h owev er, an d b o t h

rel y o n m u ch earl i er cas es t h at were d eci d ed wh en t h e n ot i ce p ro v i si o n of t h e s t at u t e

req u i red th at t h e h o l d er of t h e n o t e p ro vi d e n o t ice “ o f h i s in t en ti o n t o b ri n g s u i t .” See

Ci v il Co d e 1 9 1 0

, § 4 25 2 ; Mi l l er v. Ro b er t s

, 9 Ga. Ap p. 5 1 1, 5 14 (7 1 SE 9 27 ) (1 9 1 1 ).

See, e.g

., Ba s ki n s v. V

a l d o s t a Ba n k & Tr u s t Co

. , 5 Ga. A p p

. 60 0

, 60 1 (6 3 SE 6 4 8 )

(1 9 0 9) (n o t i ce i ns u ffi ci en t wh ere i t fai l e d

, a m o n g o t h er t h in g s

, to i n d i cat e t h at an

1 2 Kr a p f ad d res s ed wh et h er n o t i ce o f i n t en t t o en fo rce an at t o rn ey fees

p r o v i s io n m

u s t b e s en t b y t he h o l d er o f t h e n o t e. Kr a p f

, 2 5 2 Ga. at 4 53

. S

n e a d

ad d res s ed a n o t ice th at fai l ed t o i d en t i fy t he n o t es an d t h e n ot e h o l d er an d fai l ed to

s p eci fy t h at t h e m ak er co u l d m ak e p ay m en t wi th i n 1 0 d ay s to av o i d p ay m en t

. S n ea d

, 2 5 3 Ga. Ap p . at 4 76

.

30as s i g n ee wo u l d b e fi l i n g s u i t ). Th e q u o t at i o n s i n Kr a p f an d S n ea d

, t h erefo re, are n ot

co n tro l l in g

. A n d we h av e n o t fo u n d an y o t h er cas e l aw ad d res si n g t he q ues t i o n b efo re

u s u n d er t h e cu rren t s t at u te.

Becau s e t h e n ot i ce p ro v i s i o n o f OCGA § 1 3 -1 -1 1 d o es n o t p r o vi d e t h at t h e

req u i red n o t i ce i nd i c a t e wh o wi l l b e fi li ng s u i t

, we co n cl u d e t h at a s u b s eq u en t

as s i g n ee o f t he n o t e m ay fi l e s u i t an d co ll ect at t o rn ey fees i f a p red eces s or i n i n t eres t

h as p ro v i d ed p ro p er n o ti ce. Lo o k i n g b ack t o t h e n ot i ce p ro v i s i o n o f t h e s tat u t e an d

t h e n o t ices p ro v id ed i n t h i s cas e, we co n cl u de t hat p ro p er s t at u t o ry no t i ce was g i v en

t wi ce, t h at Bro ck fai l ed t o p ay w i th i n t en d ay s o f ei th er p ro p er n o t i ce, an d t h at RESGA i s t h e r e f

o r e a u t h o ri zed t o co l lect at t o rn ey fees

. W e t h erefo re rev ers e t h e t ri al

co u rt ’ s d eci s i o n n ot t o award fees an d rem an d fo r en t ry o f a fee award i n acco rd an ce

wi t h t h e t erm s o f t h e p ro m i ss o ry n o t e as g o vern ed b y

OCGA § 1 3 -1 -1 1

.

In co n cl u s i o n , we affi rm s u m m ary j u d gm en t i n fav or of RES-GA b u t rev ers e

t h e t ri al co u rt ’ s d eci s i o n n o t t o award at t o rn ey fees in fav o r o f RES-GA an d ag ai n s t

Bro ck

.

Ju d g men t a f f i rmed in ca s e No

. A1 5

A1 4 3 8

. Ju d

g men t r ever

s ed i n c a s e No

.

A1 5 A 0 4 5 8

. McMi ll i a n , J., co ncu r s . Ba r n es , P. J., co n cu r ri ng s p eci a l l y.

31B A R N E S , Pres i d i n g J ud g e, co n cu rri n g s p eci al l y

.

W h i l e I co ncu r fu l l y i n Di v i s i on s 1

, 3, an d 4 o f th e m ajo ri t y o p i n io n an d wi th

t h e j u d gm en t

, I do n o t ag ree wi t h t h e m ajo ri t y ’ s an al y s is an d co n cl u s i o n i n Di v i s i o n

2 reg ard i n g t h e ap p l i cat i on o f t h e Fi n an ci al In s ti t u t i o n s R efo rm

, Reco v ery

, an d

En fo rcem en t Act o f 1 9 8 9 (“ FIRREA”), 1 2 U.S.C. § 1 8 2 1

. 1 In m y vi ew, t h e

d efen d an t ’ s ch al l en g e t o th e p l ai n t i ff b an k ’ s en t i t l em en t t o “ d efau l t in t eres t” is a b as i c

d efen s e t h at i s not subj e c t to F I R R E A ’ s ad m i n i s t rat i v e ex h au s t i o n req u i rem en t

. Th u s

,

i n co nt r a s t t o t h e m ajo ri t y

, I wo u l d co n cl u d e t h at t h e defen d an t s ’ ch al l en g e t o a

“ d efau l t i n t eres t ” award can b e as s ert ed i n t h i s l i t i g at i o n

, al th o u g h I w o u l d co n cl u d e

t h at s u ch a ch al l en g e fai l s o n t h e m eri t s as a m at t er o f l aw.

As t h e m ajo ri t y n o t es

, FIRREA i m p o ses an ad m i ni s t rat i v e ex h au s t i o n

req u i rem en t o n al l cl ai m s an d act i o n s t h at fal l wi t h i n t h e am b i t o f 1 2 U.S.C. § 1 8 2 1

(d ) (1 3 ) (D). See Gr a vi t t v. Ba n k o f t h e Oz a r

ks

, 3 2 6 Ga. Ap p

. 4 6 1, 4 6 6 (2 ) (7 5 6 SE2 d

1 Co n s eq u en t l y

, D i v i s i o n 2 o f t h e m ajo ri t y o p i n i o n m ay no t b e ci ted as b i n d i n g

p reced en t . See Co u rt o f Ap p eal s Ru l e 3 3 (a).6 9 5 ) (2 01 4 ); Ol d e To wn e Tyr o n e, LLC v. Mu l t i b an k 2 00 9 -1 CRE Ven tu r e, LLC

, 3 2 6

Ga. Ap p

. 3 22

, 32 5 -3 2 6 (1 ) (7 56 SE2 d 5 5 8 ) (2 0 14 ); Bo bi ck v. C. & S

. Ba n k

, 3 2 1 Ga.

Ap p

. 8 5 5

, 8 6 2 (3 ) (7 4 3 SE2 d 5 1 8 ) (2 0 1 3). See al s o Amer i ca n Fi r s t Fed

., In c. v. La ke

F o r es t Pa r k, In c.

, 19 8 F3 d 1 25 9

, 12 6 3 -1 2 6 4 (1 1 t h Ci r. 1 9 99 ). Th e ex h au s t i o n

req u i rem en t ap p li es t o req u es t s fo r rel i ef p ro p erl y ch aract eri zed as :

(1 ) cl ai m s fo r p ay m en t fro m as s et s o f an y d ep o s i t o ry i n s ti t u t io n fo r

wh i ch t h e FDIC h as b een ap p o i n t ed Recei v er;

(2 ) act io n s fo r p ay m en t fro m as s et s o f s u ch d ep o s it o ry i n s t i t ut i o ns ;

(3 ) act i o n s seek i n g a d et erm i n at i o n o f ri gh t s wi t h res p e c t t o t h e as s et s

o f s u ch d ep o si t o ry

i n s t i t u t i o ns ; an d

(4 ) cl ai m s rel at i n g to an y act o r o m i s s i o n o f s u ch i n st i tu t i o n o r t h e FDIC

as recei v er.

(Pu n ct u at i on om i tt ed .) Bo b i ck

, 3 2 1 Ga. A p p

. at 8 6 2 (3 ) (q u o ti n g Amer i ca n Fi r s t

Fed

. ,1 9 8 F3 d at 1 2 63 ). “ M o reo v er, al l cl ai m s f a l l i n g w it hi n 1 2 U.S.C. § 1 8 2 1 (d )

(1 3 ) (D) are su b

ject t o t h e ex hau s t i o n req u i rem en t reg ard l es s o f wh et her t h ey are

as s ert ed as i n i t i al cl ai m s o r as co u n tercl ai m s ,” an d

, t herefo re, “ i f a c l a i m o r

co u nt ercl ai m fal l s wi t h i n t h e s co p e of [t h e s t at u t e]

, co u rt s are d i v es t e d o f s u b ject

m at t er ju ri s d i ct i o n i f th e cl ai m an t fai l ed t o ex h au s t h i s o r h er ad m i n i s t rat i v e rem ed i es

2b efo re t h e FDIC.” (Ci t at i o n an d p u n ct u at io n o m i t ted .) Gr a vi t t

, 3 26 Ga. Ap p

. at 4 6 7

(2 ). See Bo b i ck , 3 21 Ga. Ap p . at 8 6 2 -8 6 3 (3 ).

Un l i ke co u n t ercl ai m s

, affi rm at i v e d efen s es g en eral l y are n o t s u b ject t o t h e

ad m i n is t rat i v e ex hau s t io n req u i rem en t

. See Bo b i ck

, 3 21 Ga. Ap p

. at 8 67 (3 ) (e). “ An

affi rm at i v e d efen s e i s a res p on s e t o a p l a i n ti ff’ s cl ai m wh i ch at t ack s t h e p l ai n t i ff’ s

l eg al ri g ht t o b ri n g an act io n

. A co u nt ercl ai m

, i n co n t ras t

, s eek s s o m e t y p e o f

affi rm at i v e rel i ef ag ai n s t t h e p lai n t i ff.” (Ci t at i o n s an d p u n ct u at i o n o m i t t ed .) Id

.

Ad d it i on al l y

, al t h o ug h we h av e n o t b een cal l ed u p o n to ad d res s t h e i s s u e, b as i c

d efen s es t o a l aws u i t

, ev en i f t h ey d o n o t t ech n i cal l y co n s ti t u t e affi rm at i v e defen s es

,

fal l ou t s i d e t h e ex h au s ti o n req u i rem en t im p o s ed b y 1 2 U.S.C. § 1 8 2 1 (d ) (1 3 ) (D).

In Na ti o n a l Un i o n F

i r e In s

. Co

. o

f Pi t t s b u r g h

, Pa

. v. Ci t

y S a vi n g s

, 2 8 F3 d 3 7 6

, 3 9 3

(3 d C i r

. 1 9 9 4 ), t h e Th i rd Ci rcu i t Co u rt o f Ap p eal s ad d res sed t h e s co p e o f t h e

ex h au s t i o n req u irem en t an d

, i n d o in g s o

, ex p l ai n ed th e d i fferen ce b et ween a b as i c

d efen s e an d an affi rm at i v e d efen s e:

Bl ack ’ s Law Di ct i o n ary

d efi n es “ d efen s e,” i n rel ev an t p art

, as fo l l o ws :

Th at w h ich i s o ffered an d al l eg ed by t he p art y p ro ceed ed ag ai n s t

i n an act i o n or s u i t

, as a rea s o n i n l aw o r fact wh y t h e p l ai n ti ff

s h o u l d n o t reco v er o r es t ab l i s h wh at h e s eek s . Th at wh i ch i s p u t

3fo rward t o d im i n i s h p l ai n t i ff’ s cau s e o f act i o n o r d efeat reco v ery

.

. . .

. . . .

A res p o n se t o t h e cl ai m s o f t h e o th er p art y

, s et t i n g fo rt h reas o n s

wh y th e cl ai m s s h o u ld n o t b e g ran t e d

. Th e d efen s e m ay b e as

s i m p l e as a fl at d en i al of t he o t h er p a r t y’ s fact u al al l eg at i on s o r

m ay i n v o l ve en t i rel y n ew fact ual al l e g a t i o n s

. In t he l at t er

s i t u at i on , t h e d efen s e i s an affi rm at i v e d efen s e.

“ Affi rm at iv e d efen s e” i s d efi n ed i n m o re d et ai l as fo l l o ws :

In p l ead i n g

, m a t t er as s ert ed b y d efen d an t wh i ch

, as s u m i n g th e

co m p l ai n t t o b e t ru e, co n s t i tu t es a defen s e t o i t

. A res p o n s e t o a

p lai n t i ff’ s cl ai m wh i ch at tack s t h e p l ai n t i ff’ s [l eg al ] ri g h t t o b ri n g

an a c t i o n

, as o p p o s ed to at t ack i n g t h e t ru t h of cl ai m

. Un d er th e

[Fed eral ] Ru l es o f Ci v i l Pro ced ure, an d al s o u nd er m o s t s t at e

Ru l es

, al l affi rm at i v e d efen s es m u s t b e r ai s ed i n t h e res p on s iv e

p lead i n g (an s wer).

(Em p h as i s o m i t t ed .) Id

. at 3 9 3 (q u o t i n g Bl ack ’ s Law Di c t i o n ary 6 0

, 4 1 9 (6 t h ed

.

1 9 9 0 )). Th e Th i rd Ci rcu i t reas o n e d “ t h at a d efen s e o r affi rm at i ve defen s e i s n ot

p ro p e r l y cal l ed an ‘ act io n’ o r a ‘ cl ai m ’ b u t i s rat h er a r es p o n s e t o an act i o n o r a

cl ai m ,” an d t h at

, as a res u l t

, n ei t h er b as i c d efen s es n o r affi rm at iv e d efen s es are

4s u b

ject t o t h e ex h au s t i o n req u i r e m e n t i m p o s ed b y 1 2 U.S.C. § 18 2 1 (d ) (1 3 ) (D).

(Em p h as i s i n o ri g i n al .) Na t io n a l Un io n Fi r e In s . Co

. , 2 8 F3 d at 3 9 3

.

Bo t h t h i s Co urt an d t he El ev en t h Ci rcu i t h av e p rev i o u s l y rel i ed u po n t h e Th i rd

Ci rcu i t ’ s reas o n i n g in Na t i o n al Un io n Fi r e In s

. Co

. t o as cert a i n t h e m ean i n g o f

“ cl ai m ” an d “ act i o n ” u n d er 12 U.S.C. § 1 8 2 1 (d ) (1 3 ) (D), an d w e s h o u l d d o s o ag ai n

h ere an d reco gn i z e t h a t b ot h b as is an d affi rm at i ve d efen s es are n o t s u b ject to

ad m i n is t rat i v e ex h au s t i o n

. See Amer i ca n Fi r s t Fed

. , 1 9 8 F.3 d at 1 26 3 ; Bo b i ck

, 3 2 1

Ga. A p p. at 8 6 2 (3 ). T h e p ert i n en t q u es t i o n in th i s cas e t h u s i s wh et h er t h e

d efen d an t s ’ co n t en t i o ns are p ro p erl y ch aract eri zed as co u n t ercl ai m s (wh i ch are

s u b ject t o ad m i n i s t rat i v e ex h au s t i o n ), o r as b as i c o r affi rm at i v e d efen s es (wh i ch are

n o t s u b ject t o ad m i ni s trat i v e ex h au s t i o n).

In o u t l in i n g t hei r co n ten t i o n s i n t h e co n s o l i d at ed pret ri al ord er, t h e d efen d an t s

co n ten d t h at In t eg ri ty fai l ed t o p ro v i d e t h e m wi t h p ro p er n o t i ce o f t h ei r al l eg ed

d efau l t o n t h e l o an

, el i m in at i n g o r red u ci n g an y award o f “ d efau l t i n t eres t ” t o RESGA SCL, LLC. In m

y vi ew, th e defen dan t s ’ co n t e n t i o n t hat RES-GA s h o u l d b e

d en ied al l o r p art o f i t s r e qu es t fo r “ d efau l t i n t eres t ” s h ou l d b e ch aract eri zed as a

b as i c defen s e rat h er t h an as a co u n t ercl ai m

. Th e d efen d an t s ’ co n t en t i o n i s m erel y an

arg u m en t o v er t h e am o u n t an d t y p e o f d am ag es RES-GA s h o u l d b e en t i t l ed to reco v er

5o n i t s cl ai m s fo r b reach of t h e n ot e an d g u aran t y

. In o th er wo rd s

, i t i s s i m p l y an effo rt

b y t h e d efen d an ts t o ex p l ai n “ wh y [RES-GA] sh o ul d n ot reco v er o r es t ab l i s h wh at [i t ]

s eek s ” an d t o “ d i m i n i s h [RES-GA’ s ] cau se o f act i o n ,” an d t hu s s h o u ld be co n s t ru ed

as a b as i c d efen s e fal li n g o u t s i d e t h e s co p e o f t h e ex h au s ti o n req u i rem en t

. (Ci t at i o n

an d p u n ct u at i o n o m i t t ed .) Na t i o n a l Un i o n Fi r e In s . Co

. , 2 8 F3 d at 3 9 3

.

Fo r t h i s reas o n

, t h e t ri al co u rt erred t o t h e ex t en t t hat it g ran t ed s u m m ary

ju d g m en t t o RES-GA o n t h e g ro u n d t h at t he d efen d an t s ’ b as i c d efen s e t o t h e am o u nt

an d t y p e o f d am ag es RES-GA s o u g h t t o reco v er w a s b a rred b y FIRREA’ s

ad m i n is t ra t i v e ex h au st i on req u i rem en t i m p o s ed b y 12 U.S.C. § 1 8 2 1 (d ) (1 3 ) (D).

Nev ert h el es s

, i t i s wel l -es t ab l is h ed th at a t ri al co u rt ’ s g ran t o f s u m m ary ju d g m en t wi l l

b e affi rm ed i f ri g h t fo r an y reas o n

. See Da n J. S h eeh a n Co

. v. Fa i r l a wn o n Jo n es

Ho meo wn er

s ’ As s n

. , 3 1 2 Ga. Ap p

. 7 8 7

, 7 9 0 (1 ), n

. 1 1 (7 2 0 SE2 d 25 9 ) (2 0 1 1 ). RESGA al s o m o v ed fo r s u m

m ary ju dg m en t o n t h e al t ern at i v e g ro un d t h at t h e d efen d an t s ’

d efen s es

, i ncl u d i n g t hei r ch al l en g e t o an award o f “ d e f a u l t i n t eres t ,” fai l ed o n t h e

m eri t s as a m at ter o f l aw. M y rev i ew o f t h e reco rd l ead s m e t o co n cl u d e t h at RES-GA

i s ri g h t i n t h i s res p ect an d

, t h erefo re, I b el iev e t hat t h e t ri al co urt ’ s gran t o f s u m m ary

ju d g m en t t o RES-GA s h o u l d b e affi rm ed

, as t h e m ajo ri t y u l t i m at el y

co n cl u d es

.

6