FOURTH DIVISION

BARNES, P. J.,

RAY and MCMILLIAN, JJ.

NOTICE: Motions for reconsideration must be

physically received in our clerk’s office within ten

days of the date of decision to be deemed timely filed.

http://www.gaappeals.us/rules

October 2, 2015

In the Court of Appeals of Georgia

A15A1383. PATRICK MALLOY COMMUNITIES, LLC et al. v.

COMMUNITY & SOUTHERN BANK.

BARNES, Presiding Judge.

Patrick Malloy Communities, LLC (“PMC”) and J. Patrick Malloy, Jr. appeal

the trial court’s grant of summary judgment in favor of Community & Southern Bank

(“CSB”) on CSB’s claims for breach of a promissory note and guaranty. The appellants

contend that CSB failed to prove, through competent evidence, that CSB had been

assigned the rights to the note and guaranty by the Federal Deposit Insurance

Corporation (“FDIC”), as receiver for the failed bank that previously held those debt

instruments. Consequently, the appellants contend that CSB failed to demonstrate its

status as the real party in interest with authority to enforce the note and guaranty. The

appellants further argue that discrepancies between an affidavit submitted byCSB and

a payment history for the loan account precluded the grant of summary judgment as

to the amount of damages owed to CSB. 
Because the uncontroverted, competent evidence of record demonstrate that

CSB was the assignee of the note and guaranty, we affirm the trial court’s grant of

summary judgment to CSB on its claim that the appellants were liable for breach of

those debt instruments. However, becausematerial discrepancies between the affidavit

submitted by CSB and the payment history for the loan create a factual issue over the

amount of unpaid principal, interest, and contractual attorney fees owed on the note

and guaranty, we reverse the trial court’s grant of summary judgment to CSB as to the

amount of damages. 

“[S]ummary judgment is appropriate when themoving party can show that there

is no genuine issue of material fact and that the movant is entitled to judgment as a

matter of law.” (Punctuation and footnote omitted.) Citrus Tower Boulevard Imaging

Center v. David S. Owens, MD, PC, 325 Ga. App. 1, 1-2 (752 SE2d 74) (2013). See

OCGA § 9-11-56 (c). “On appeal from a trial court’s grant of summary judgment, we

conduct a de novo review, construing all reasonable inferences in the light most

favorable to the nonmoving party.” (Citation and punctuation omitted.) Bobick v.

Community & Southern Bank, 321 Ga. App. 855, 856 (743 SE2d 518) (2013).

So viewed, the records shows that PMC was a residential real estate developer.

On July 22, 2008, in connection with a loan for the purchase and development of a

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subdivision, PMCentered into a commercial promissory notewith First National Bank

of Georgia in the principal amount of $3,500,000, plus interest (the “Note”). Malloy,

the solemanager and member of PMC, had previously signed an unlimited commercial

guaranty in favor of West Georgia National Bank, which later merged into First

National Bank (the “Guaranty”). Under the Guaranty, Malloy was obligated to repay

all current or future debts owed by PMC to West Georgia National Bank and “its

successors and assigns.” Following execution of the Note and Guaranty, the loan

proceeds were released by First National Bank and properly disbursed. 

In January 2010, First National Bank failed and was closed by the Office of the

Comptroller of the Currency, and the FDIC was appointed as receiver. On January 29,

2010, theFDIC, acting asreceiver, entered into a Purchase and Assumption Agreement

under which it transferred assets of First National Bank to CSB, including “Loans”

owed to or held by the failed bank (the “P&A Agreement”). 

The FDIC as receiver later executed an “Assignment of Security Instruments

and other Loan Documents” that was recorded in the deed book records of Cherokee

County (the “Assignment Agreement”). Under the Assignment Agreement, the FDIC

assigned and transferred to CSB all

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rights, title, and interests in and to all those certain Mortgages, Security

Deeds, Deeds to Secure Debt, Deeds of Trust, Assignments of Rents and

Leases, UCC-1 financing statements, judgment liens, and all such other

instruments and security agreements securing loans owned by First

National Bank of Georgia and held of record by First National Bank of

Georgia or any of its predecessors (including West Georgia National

Bank which was merged into First National Bank of Georgia) as of

January 29, 2010 . . . and all modifications, extensions, amendments and

renewals thereto (collectively, the “Security Instruments”)[,]

TOGETHER with all of the underlying debts described in such Security

Instruments. 

The FDIC further assigned and transferred to CSB all

rights, title and interests in and to the promissory notes, loan documents

and all other indebtedness secured by the Security Instruments, as

evidenced by related promissory notes, any and all loan agreements,

pledges, security agreements and UCC financing statements and all

modifications, extensions, amendments and renewals to said documents

and instruments together with any and all other loan documents, title

policies and casualty insurance policies evidencing, securing or relating

to any of the foregoing all of which have been delivered to . . . [CSB]. 

In accordance with the P&A Agreement and the Assignment Agreement, CSB came

into possession of the Note and Guaranty. 

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PMC failed to pay all of the amounts due under the Note, and Malloy failed to

meet his repayment obligations under the Guaranty. CSBthen accelerated the amounts

due and sent a notice of default to PMC and Malloy (hereinafter, the “appellants”).

When the appellants failed to cure the default, CSB sued them for breach of the Note

and Guaranty,

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seeking to recover unpaid principal, interest, late fees, and attorney

fees. The appellants answered and alleged, among other things, that CSB was not the

real party in interest with authority to enforce the Note and Guaranty. 

Following discovery, CSB moved for summary judgment. CSB argued that it

had established its prima facie right to recover under the Note and Guaranty, and that

the appellants had failed to come forward with any evidence in support of their

affirmative defenses or to raise a question of fact challenging the bank’s right to

recover unpaid principal, interest, and attorney fees.2 The appellants opposed the

motion, arguing that CSB had not established that it was the assignee of the Note and

Guaranty or proven the amount of damages it was owed under the loan documents.

After conducting a hearing where the parties presented oral argument, the trial court

1 CSB sued PMC for breach of two additional promissory notes but did not

move for summary judgment with respect to them. 

2 CSB did not move for summary judgment on its claim for unpaid late fees

owed under the Note and Guaranty. 

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granted summary judgment in favor of CSB on its claims for breach of the Note and

Guaranty and awarded the amount of unpaid principal, interest, and contractual

attorney fees sought by CSB in its motion. This appeal followed. 

1. In two related enumerations of error, the appellants contend that CSB was not

entitled to summary judgment because it failed to establish, through admissible

evidence, that it had been assigned the Note and Guaranty by the FDIC as receiver for

First National Bank, and thus failed to demonstrate its status as the real party in

interest.3

 We disagree.

“Every action shall be prosecuted in the name of the real party in interest.”

OCGA § 9-11-17 (a). See Greenstein v. Bank of Ozarks, 326 Ga. App. 648, 650 (2)

(757 SE2d 254) (2014). And, under the law of contracts, 

the doctrine of privity of contract requires that only parties to a contract

may bring suit to enforce it. A party may assign to another a contractual

right to collect payment, including the right to sue to enforce the right,

3 Because CSB filed its motion for summary judgment in June 2013, Georgia’s

revised Evidence Code applies to the evidentiary issues raised in this case. See Ga.

Laws 2011, p. 99,§ 101 (revised Evidence Code “shall become effective on January

1, 2013, and shall apply to any motion made or hearing or trial commenced on or after

such date”); Roberts v. Community & Southern Bank, 331 Ga. App. 364, 369 (2), n.

2 (771 SE2d 68) (2015).

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and the assignment must be in writing in order for the contractual right

to be enforceable by the assignee.

(Citation and punctuation omitted.) Bobick, 321 Ga. App. at 859 (2).

In support of its motion for summary judgment, CSB submitted the amended

affidavit of John Harvey, a CSB employee who was appointed as an attorney in fact

by the FDIC, which authorized him to execute assignment documents that evidenced

the sale and transfer of assets of First National, including all loans held by the failed

bank, to CSB pursuant to the P&A Agreement. Harvey stated that the Note and

Guaranty had been assigned and transferred to CSB by the FDIC, in its capacity as

receiver, pursuant to the P&A Agreement and the Assignment Agreement. Attached

as exhibits to the affidavit were the Limited Power of Attorney granted to Harvey by

the FDIC as receiver, the P&A Agreement, and the Assignment Agreement. 

CSB also submitted the affidavit of Patrick Dowling, a “Senior Workout

Specialist for theResolution Workout Group” with CSB who was familiar with CSB’s

books and records and maintained its loan files related to the present case. Dowling

stated that all the business records associated with the Note and Guaranty had been

transferred and delivered to CSB by the FDIC, as receiver for First National Bank, and

had been obtained and maintained by CSB as part of the regular course of its business.

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Dowling further stated that the originals of the Note and Guaranty, copies of which

were attached to his affidavit, were currently in the possession of CSB. 

Contending that CSB failed to prove through competent evidence that it was the

assignee of the Note and Guaranty, the appellants maintain that the trial court should

have disregarded the P&A Agreement and the Assignment Agreement because those

documents constituted hearsay, and Harvey failed in his affidavit to lay a proper

foundation for their admission under the business record exception to hearsay. See

OCGA § 24-8-803 (6) (business record exception). We disagree. 

“Admissibilityof evidence on motion for summary judgment is governed by the

rules relating to form and admissibility of evidence generally.” (Citation and

punctuation omitted.) Maloof v. MARTA, 330 Ga. App. 763, 765 (1) (769 SE2d 174)

(2015). “All hearsay evidence, unsupported conclusions, and the like, must be stricken

or eliminated from consideration in a motion for summary judgment.” (Footnote

omitted.) Liles v. Innerwork, 279 Ga. App. 352, 353 (1) (631 SE2d 408) (2006). We

will not disturb a trial court’s ruling on the admissibility of an alleged hearsay

document absent an abuse of discretion. Maloof, 330 Ga. App. at 765 (1).

The trial court did not abuse its discretion in considering the P&A Agreement

and theAssignment Agreement because neither constituted hearsay. “‘Hearsay’means

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a statement, other than one made by the declarant while testifying at the trial or

hearing, offered in evidence to prove the truth of the matter asserted.” (Footnote

omitted.) Blue v. Hemmans, 327 Ga. App. 353, 358 (1) (759 SE2d 72) (2014) (quoting

OCGA § 24-8-801 (c)). But “[a]statement that has legal consequences independent of

its truth or falsity is considered a ‘verbal act’ and is not hearsay when those legal

consequences are relevant or material to the case. The simplest example is an

out-of-court statement establishing or defining the terms of a contract.” (Footnotes

omitted.) Paul S. Milich, Georgia Rules of Evidence § 17:6 at 620-621 (2014-2015

ed.). See Danes v. Rogers, 324 Ga. App. 504, 507-508 (3) (751 SE2d 135) (2013);

Hampton Island v. Asset Holding Co. 5, 320 Ga. App. 880, 882 (1) (a) (740 SE2d 859)

(2013); Stubbs v. Dubois, 306 Ga. App. 171, 173 & n. 5 (702 SE2d 32) (2010).

Because the P&A Agreement and the Assignment Agreement define the terms of the

contractual relationship between the FDIC as receiver and CSB, the documents

constitute “verbal acts” and are not hearsay. See id. The trial court thus committed no

error in considering those documents. 

The appellants also contend that the trial court erred in considering the

statements made by Harvey in his affidavit regarding the FDIC’s assignment of the

Note and Guaranty to CSB. The appellants emphasize that Harvey was not appointed

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as an attorney in fact for the FDIC until 2013, but the alleged assignment of the Note

and Guaranty occurred in 2010. Because Harvey was not appointed as an attorney in

fact for the FDIC until after the assignment, the appellants argue that he lacked

personal knowledge of the assignment and that the trial court thus should have

disregarded his statements regarding the assignment in his affidavit. 

[W]hile a statement in an affidavit that it is based upon personal

knowledge is generally sufficient to meet the requirement that affidavits

be made upon such knowledge, if it appears that any portion of the

affidavit was not made upon the affiant’s personal knowledge, or if it

does not affirmatively appear that it was so made, that portion is to be

disregarded in considering the affidavit in connection with themotion for

summary judgment.

(Citation and punctuation omitted). Greenstein, 326 Ga. App. at 651 (2). But even if

the trial court should have disregarded Harvey’s statements in his affidavit regarding

the assignment for lack of personal knowledge, see Thomas v. State Bank &Trust Co.,

330 Ga. App. 274, 276-277 (1) (765 SE2d 443) (2014) (physical precedent only), the

error was harmless because the other competent evidence of record demonstrated that

CSB was the assignee of the Note and Guaranty as a matter of law. See, e.g., Miller

Grading Contractors v. Ga. Federal Sav. & Loan Assoc., 247 Ga. 730, 734 (3) (279

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SE2d 442) (1981) (noting that, at summary judgment stage of the proceedings, “error

which is harmless will not be cause for reversal”). 

It is undisputed that First National Bank failed and that the FDIC was appointed

as receiver for the failed bank with authority to transfer and assign its assets to another

bank, including its loan portfolio. See 12 USC § 1821 (d) (2) (G) (i) (II) (granting

FDIC power as receiver to “transfer any asset or liability of the institution in default

(including assets and liabilities associated with any trust business) without any

approval, assignment, or consent with respect to such transfer.”). And CSB submitted

documents reflecting a complete chain of assignment for the transfer and assignment

at issue, including the Note, the Guaranty, the P&A Agreement, which listed the FDIC

as receiver for First National Bank and assigned “Loans” of First National Bank to

CSB, and the recorded Assignment Agreement in which the FDIC as receiver for First

National Bank assigned the promissory notes and all other loan-related documents of

First National Bank to CSB.

4

 Furthermore, CSB submitted the affidavit of Dowling,

4 The appellants argue that CSB has not shown a complete chain of title because

the Guaranty was executed by Malloy in favor of West Georgia National Bank rather

than First National Bank. The appellants’ argument is without merit. The “lender” on

the Guaranty is identified as West Georgia National Bank and “its successors and

assigns,” and the Assignment Agreement expressly transferred and assigned to CSB

all notes and other loan documents held by First National Bank “or any of its

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CSB’s custodian of the loan files at issue, who stated that CSB had acquired the Note

and Guaranty from the FDIC as receiver for First National Bank and currently had the

original loan documents in its possession. 

This combined evidence, which was uncontroverted by the appellants,

established a valid assignment of the Note and Guaranty to CSB as a matter of law. See

Bobick, 321 Ga. App. at 860 (2); Heritage Constr. Corp. v. State Bank & Trust Co.,

316 Ga. App. 25, 27 (728 SE2d 703) (2012); Kensington Partners v. Beal Bank

Nevada, 311 Ga. App. 196, 197 (1) (715 SE2d 491) (2011). Thus, even if the

statements regarding the assignment in Harvey’s affidavit should have been

disregarded, the trial court did not err in granting summary judgment to CSB on its

claims for breach of the Note and Guaranty. See id. Compare Thomas, 330 Ga. App.

at 276-278 (1) (reversing grant of summary judgment in favor of bank where affiant

lacked personal knowledge of the assignment, and the bank failed to submit documents

reflecting a complete chain of assignment for the note at issue, including the

assignment agreement).

predecessors (including West Georgia National Bank which was merged into First

National Bank of Georgia).”

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2. The appellants also argue that the trial court erred in granting summary

judgment to CSB as to the amount of damages due under the Note and Guaranty. We

agree.

“Where a party sues for damages, it has the burden of proof of showing the

amount of loss in a manner in which the trial judge can calculate the amount of the loss

with a reasonable degree of certainty.” Nelson v. Hamilton State Bank, 331 Ga. App.

419, 421 (2) (771 SE2d 113) (2015), quoting Myers v. First Citizens Bank&Trust Co.,

324 Ga. App. 293, 296 (2) (750 SE2d 378) (2013). Thus, in a suit to enforce a

promissory note or guaranty, “the plaintiff has the burden of proving that the defendant

is indebted to him in a definite and correct amount.” (Citation and punctuation

omitted.) Id.

To prove the amount of its damages, CSB relied upon the previously discussed

affidavit of Dowling, a bank employee who was familiar with CSB’s books and

records and maintained the relevant loan files. Dowling stated:

As of May 22, 2013, [the appellants] owe [CSB] the following amounts

of $1,485,845.67 in principal and $315,943.20 in interest. The interest

continues to accrue at the rate of $154.78 per day, additionally; [CSB] is

entitled to recover fifteen percent of the outstanding principal and interest

as attorneys’ fees, which equal []$270,268.33. 

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To support his damages calculations, Dowling relied upon the terms of the Note and

a payment history for the loan from July 11, 2006 to May 22, 2013,5both of which

were attached to his affidavit as exhibits. 

However, a review of the payment history attached to Dowling’s affidavit

reveals certain material discrepancies that are not explained. Specifically, Dowling in

his affidavit states that interest accrues on the Note at the rate of $154.78 per day, but

the payment history identifies the per diem interest rate as $163.68. Moreover, while

Dowling states in his affidavit that the principal balance is $1,485,845.67 as of May

22, 2013, the payment history of that date states that the principal balance is

$1,571,345.67. 

While there may be an explanation for these discrepancies, CSB does not offer

one, even though it bears the burden of proving its damages in a definite and certain

amount. Nelson, 331 Ga. App. at 421 (2). And because the discrepancies are material

to the amount of unpaid principal, interest, and contractual attorney fees (which are

calculated as a percentage of the principal and interest) owed by the appellants, we

conclude that material issues of fact exist as to the amount of damages. Consequently,

5 The Note indicates on its face that it was the renewal of a prior commercial

note. 

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the trial court’s grant of summary judgment to CSB as to the amount of damages owed

under the Note and Guarantymust be reversed. See Thomason v. FIA Card Svcs., N.A.,

330 Ga. App. 603, 605 (768 SE2d 785) (2015) (summary judgment inappropriate in

light of inconsistencies between affidavit and the exhibits attached thereto); Circle K

Stores, Inc. v. T. O. H. Assoc., 318 Ga. App. 753, 759 (3) (734 SE2d 752) (2012)

(discrepancies between figures shown on invoice and in lease created genuine issue of

material fact over amount due under lease); Jackson v. Cavalry Portfolio Svcs., 314

Ga. App. 175, 177 (723SE2d 475) (2012) (discrepancy between account statement and

affidavit over the amount of unpaid balance that was due precluded grant of summary

judgment to creditor).6

Judgment affirmed in part; reversed in part. Ray and McMillian, JJ., concur.

6 Compare Lockwood v. Fed. Deposit Ins. Corp., 330 Ga. App. 513, 517-518 (2)

(b) (767 SE2d 829) (2014) (reference to “unapplied payments” and “unapplied credits”

in payment records, without more, was insufficient to create genuine issue of material

fact as to amount of unpaid principal, where bank records otherwise showed “a definite

amount outstanding on the principal balance”); Bogart v. Wisconsin Institute for Torah

Study, 321 Ga. App. 492, 495-496 (3) (739 SE2d 465) (2013) (summary judgment

properly granted to creditor where the alleged inconsistencies in the pleadings and

evidence were not material to the amount due on the account). 

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