Title: FNB Bank v. Marine Park, LLC, et al.
Citation: N/A
Docket Number: 1190251
State: Alabama
Issuer: Alabama Supreme Court
Date: December 31, 2020

Rel: December 31, 2020
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. 
Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue,
Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections
may be made before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2020-2021
____________________
1190205
____________________
SE Property Holdings, LLC, successor by merger to Vision Bank
v.
Bama Bayou, LLC, f/k/a Riverwalk, LLC, et al.
____________________
1190251
____________________
FNB Bank
v.
Marine Park, LLC, et al.
Appeals from Mobile Circuit Court
(CV-09-900085)
BOLIN, Justice.
SE Property Holdings, LLC ("SEPH"),  the successor by merger to
Vision Bank, and FNB Bank ("FNB") separately appeal from the Mobile
Circuit Court's judgments on their breach-of-contract claims against Bama
Bayou, LLC, formerly known as Riverwalk, LLC ("Bama Bayou"), and
Marine Park, LLC ("Marine Park"),1 and the individuals and entities
guaranteeing Bama Bayou's and Marine Park's contract obligations,
challenging the trial court's damages awards.  See Ex parte Weyerhaeuser
Co., 702 So. 2d 1227, 1228 (Ala. 1996) ("Alabama caselaw is clear that a
party who prevailed in the trial court can appeal only on the issue of
adequacy of damages awarded."). 
Facts
1Marine Park is a wholly owned subsidiary of Bama Bayou.
2
1190205, 1190251
Bama Bayou and Marine Park were the developers of a planned
mixed-use development in Orange Beach consisting of a marine park,
residential condominiums, retail shops, hotels, and commercial
entertainment venues. Marine Park specifically intended to develop a
special-use facility for the exhibition of marine animals. Vision Bank made
four loans to Bama Bayou and Marine Park related to the development
project:
(1) The "West loan" is a loan in the amount of $6,000,000 made on
March 24, 2005,  evidenced by a promissory note and a loan agreement
and secured by a mortgage and security agreement encumbering real
property referred to by the parties as the "West parcel";
(2) The "East loan" is a loan in the amount of $5,000,000 made on
June 12, 2006, evidenced by a promissory note and a loan agreement and
secured by a mortgage and security agreement encumbering real property
referred to by the parties as the "East parcel";
(3) The "North loan" is a loan in the amount of $5,000,000 made on
September 27, 2007, evidenced by a promissory note and a loan agreement
3
1190205, 1190251
and secured by a mortgage and security agreement encumbering real
property referred to by the parties as the "North parcel"; and
(4) The "Marine Park loan" is a loan in the amount of $5,000,000
made on March 2, 2007, evidenced by a promissory note and a loan
agreement and secured by a mortgage and security agreement
encumbering real property referred to by the parties as the "Marine Park
parcel."  The Marine Park loan was fully funded by FNB pursuant to a
participation agreement with Vision Bank.2  The participation agreement
provided that the Marine Park parcel would be owned by FNB in the
event it was acquired by foreclosure.
The promissory notes executed in relation to each of the loans made
to Bama Bayou and Marine Park required Bama Bayou and Marine Park
to pay to Vision Bank the principal amount of the loans plus interest as 
calculated in the manner provided in the promissory notes. The
promissory notes also provided that Bama Bayou and Marine Park were
2A number of banks participated in making these loans to Bama
Bayou and Marine Park pursuant to participation agreements with Vision
Bank. FNB participated in only the Marine Park loan. 
4
1190205, 1190251
obligated to pay reasonable attorney's fees and costs incurred by Vision
Bank  in collecting on the promissory notes in the event of a default.  The
promissory notes stated that they were being guaranteed by certain
guarantors and that the indebtedness described in the notes was secured
by the mortgages and security agreements executed in conjunction with
the promissory notes. 
The mortgages and security agreements executed by the parties also
required Bama Bayou and Marine Park to pay to Vision Bank the
principal amount of the loans, plus interest, and all reasonable attorney's
fees and costs incurred by Vision Bank in the event of the foreclosure of
any of the mortgages. The mortgages also provided that Bama Bayou and
Marine Park were responsible for the payment of all property-
preservation costs, including taxes, insurance premiums, the costs of
maintenance and repairs, the costs of security and protection, liens, utility
charges, and assessments. In the event of a default by Bama Bayou and
Marine Park, the mortgages allowed Vision Bank  to pay the property-
preservation costs and to obtain reimbursement of those costs from Bama
Bayou and Marine Park, plus interest at a rate of 10%.
5
1190205, 1190251
Section 2.14 of the mortgages provides the following remedy in case
of a wrongful foreclosure:
"Discontinuance of Proceedings - Position of parties, Restored.
In case the Lender shall have proceeded to enforce any right
or remedy under this Mortgage by foreclosure, entry or
otherwise, and such proceedings shall have been discontinued
or abandoned for any reason, or shall have been determined
adversely to the Lender, then and in every such case the
Borrower and the Lender shall be restored to their former
positions and rights hereunder, and all rights powers and
remedies of the Lender shall continue as if no such proceeding
had been taken." 
(Emphasis added.)  Section 2.15 of the mortgages provides:
"Remedies Cumulative. No right, power, or remedy conferred
upon or reserved to the Lender by this Mortgage is intended to
be exclusive of any other right, power, or remedy, but each and
every such right, power and remedy shall be cumulative and
concurrent and shall be in addition to any other right, power,
and remedy given hereunder, or under the Note, or under the
Loan Documents, or now or hereafter existing at law or in
equity or by statute."
Each of the four loans to Bama Bayou and Marine Park were
guaranteed by a number of individuals and entities that were investors in
the project.  Pursuant to the guaranty agreements, the guarantors, among
other things, waived any rights they had regarding the collateral, i.e., the
West parcel, the East parcel, the North parcel, and the Marine Park
6
1190205, 1190251
parcel; waived any defenses Bama Bayou and Marine Park may have had;
and agreed to be unconditionally liable for the debts until they were paid
in full. The guaranty agreements provide, in part:
"1. Guaranty. ... [T]he undersigned ... jointly and
severally unconditionally guarantees and promises to pay
Vision Bank (hereinafter called 'Bank') ... any and all
indebtedness, as hereinafter defined, of [Bama Bayou and
Marine Park] .... The word 'indebtedness' is used herein in its
most comprehensive sense and includes a loan to be made by
Bank to Borrower ... (the 'Loan') and any and all advances,
debts, obligations and liabilities of Borrower to Bank
heretofore, now, or hereafter existing, made, incurred, or
created, whether voluntary or involuntary, and whether or not
arising under, pursuant to or in connection with the Loan
Agreement (as hereinafter defined) the Note (as hereinafter
defined) and/or any and all other Loan Documents (as
hereinafter defined), whether due or not due ... not limited to
but including principal, interest, costs of collection, attorney's
fees and all other lawful charges ....
"....
"3. Guarantor's Obligations Independent: Statute of
Limitations. The obligations of the Guarantor hereunder are
independent of the obligations of Borrower, and a separate
action or actions may be brought and prosecuted against the
Guarantor ... and the Guarantor waives the benefit of any
statute of limitations or other defenses affecting its liability
hereunder or the enforcement thereof.
"....
7
1190205, 1190251
"6. Waivers.  Guarantor waives any right to require Bank
to (A) proceed against Borrower or any other Guarantor; (B)
proceed against or exhaust any security held from Borrower;
or (C) pursue any other remedy in Bank's power whatsoever.
Guarantor waives any defense arising by reason or any
disability or other defense of Borrower .... Until the
Indebtedness of Borrower to Bank shall have been paid in full,
even though such Indebtedness is in excess of Guarantor's
liability hereunder, Guarantor ... waives any benefit of, and
any right to participate in any security now or hereafter held
by Bank ....
"....
"10. Expenses of Collection: Waiver of Right of
Exemption. Guarantor agrees to pay reasonable actual
attorney's fees and all other costs and expenses which may be
incurred by Bank in the enforcement of this Guaranty ....
"....
"14.  Limitations of Liability. The limitations  of liability
under this Guaranty set forth in this Section 14 do not apply
to the Borrower or to any other guarantor of Borrower's
Indebtedness to the Bank. Guarantor shall be liable for ... (i)
an amount equal to Guarantor's Specified Portion of the
principal of the Note ... (ii) 100% of all interest on the Loan
accrued or accruing at any time ... (iii) 100% of all costs and
expenses (including reasonable actual attorney's fees) of
collection related or attributable, directly or indirectly, to the
enforcement of Guarantor's obligations under this Guaranty,
and (iv) 100% of all other costs and expenses (including
reasonable actual attorney's fees) of collection relating to all
principal, interest, and other charges under the Note and/or
relating to any other Indebtedness."
8
1190205, 1190251
Bama Bayou and Marine Park were having financial problems with
regard to the project by August 2007.  The maturity dates of the
promissory notes were extended several times to give Bama Bayou and
Marine Park time to secure other financing. The notes finally matured in
late 2008, and Vision Bank refused to further extend their maturity dates. 
Vision Bank demanded payment at that time, and Bama Bayou, Marine
Park, and the guarantors failed and/or refused to pay the indebtedness
owed on the loans. On March 20, 2009, Vision Bank conducted a public
auction to separately foreclose the mortgages on the West parcel, the East
parcel, the North parcel, and the Marine Park parcel. There were no bids
submitted at the public auction. Thus, Vision Bank purchased the
properties through the following individual credit bids:
(A) $2,000,000 for the West parcel;
(B) $5,181,682.48 for the East parcel;
(C) $383,500 for the North parcel; and           
(D) $2,750,000 for the Marine Park parcel.
9
1190205, 1190251
Neither Bama Bayou, nor Marine Park, nor the guarantors exercised their
rights to redeem the properties. 
Procedural History3
On January 16, 2009, Vision Bank sued Bama Bayou and its
guarantors ("the Bama Bayou guarantors"), alleging that Bama Bayou
was indebted to Vision Bank on the loan for the West parcel, the loan for
the East parcel, and the loan for the North parcel, as evidenced by the
respective promissory note and loan agreement for each parcel. Vision
Bank further alleged that the Bama Bayou guarantors had guaranteed
payment of each of those loans, as evidenced by their guaranty
agreements. Vision Bank sought a judgment against Bama Bayou for all
amounts owed under those loans, including all principal, accrued interest,
late charges, attorney's fees, and collection costs.  Vision Bank further
sought a judgment against each of the Bama Bayou guarantors, jointly
3The underlying litigation involved numerous  parties in addition to
the parties involved in these appeals, lasted over 10 years, and amassed
a record of over 26,000 pages. This Court has tailored its statement
regarding the procedural history of the litigation to address only the
procedural history relevant to the issues and the parties before this Court
in these appeals.     
10
1190205, 1190251
and severally, for all sums owed under their guaranty agreements, 
including all principal, accrued interest, late charges, attorney's fees, and
collection costs.  
Also on January 16, 2009, Vision Bank separately sued Marine Park 
and its guarantors ("the Marine Park guarantors"), alleging that Marine
Park was indebted to Vision Bank on the loan for the Marine Park parcel,
as evidenced by the Marine Park promissory note and loan agreement for
that parcel.  Vision Bank further alleged that the Marine Park guarantors
had guaranteed payment of that loan, as evidenced by their guaranty
agreements. Vision Bank sought a judgment against Marine Park for all
amounts owed under the Marine Park loan, including all principal,
accrued interest, late charges, attorney's fees, and collection costs.  Vision
Bank further sought a judgment against each of the Marine Park
guarantors, jointly and severally, for all sums owed under their  guarantee
agreements,  including all principal, accrued interest, late charges,
attorney's fees, and collection costs.  The two cases were later consolidated
by the trial court. 
11
1190205, 1190251
Bama Bayou, Marine Park, and their guarantors (hereinafter
referred to collectively as "the borrowers and the guarantors") answered
the complaints, generally denying the allegations and asserting a number
of affirmative defenses.   The borrowers and the guarantors also asserted
counterclaims against Vision Bank, alleging, among other things, that
Vision Bank had breached a promise to provide additional financing for
the project; that Vision Bank had assumed a duty to provide the financing
required to develop the project; that certain female guarantors had been
required to sign guaranty agreements, based solely on their status as
spouses of other guarantors, in violation of the Equal Credit Opportunity
Act, 15 U.S.C. § 1691; and that Vision Bank had wrongfully foreclosed on
the four parcels by bidding a grossly inadequate amount at the foreclosure
sales. 
On October 15, 2010, the Federal Deposit Insurance Corporation
("FDIC"), a counterclaim defendant based on its status as receiver for two
of the participating banks that had advanced funds to Bama Bayou
pursuant to participating agreements with Vision Bank, see note 2, supra,
removed the consolidated cases to the United States District Court for the
12
1190205, 1190251
Southern District of Alabama. On February 11, 2011, the federal district
court remanded the consolidated cases  back to the trial court.
On August 30, 2011, the trial court, in an effort to move the
litigation along, scheduled for October 5, 2011, an evidentiary hearing on
the issues of (1) wrongful foreclosure and (2) whether the guarantors had
"standing" to challenge the foreclosure process.4 The parties had identified
those issues to the trial court as being "potentially dispositive or
particularly helpful in refining the causes of action" in the consolidated
cases. However, the FDIC, on October 5, 2011, again removed the cases
to the federal district court. On August 21, 2013, the consolidated cases
were once again remanded back to the trial court.
4Although the trial court and the parties referred to this issue as an
issue of "standing," this Court has explained that "the concept [of
standing] appears to have no necessary role to play in respect to private-
law actions."  Ex parte BAC Home Loans Servicing, LP, 159 So. 3d 31, 41
(Ala. 2013).  "We have observed that in such actions 'our courts too often
have fallen into the trap of treating as an issue of "standing" that which
is merely a failure to state a cognizable cause of action or legal theory ....' " 
Ex parte State Farm Fire & Cas. Co., 300 So. 3d 562, 568 (Ala.
2020)(quoting Wyeth, Inc. v. Blue Cross & Blue Shield of Alabama,42 So.
3d 1216, 1219 (Ala. 2010)).
13
1190205, 1190251
On December 19, 2013, the trial court entered an order setting for
an evidentiary hearing on June 16, 2014, the counterclaim asserted by the
borrowers and the guarantors alleging wrongful foreclosure. The trial
court expressly limited the scope of the hearing to the "very narrow issue
of the unconscionability of the foreclosure bid figures" made by Vision
Bank.  On June 5, 2014, the trial court amended its December 19, 2013,
order, stating:
"The parties in these actions have divergent views as to what
remedies are available should the Court determine the bid
prices to be unconscionable. After consulting with the Special
Master, who has been supervising discovery leading to the
June 16th hearing, the Court is of the opinion that it would be
in the best interests of judicial economy and efficiency for the
Court to first determine the extent of any remedies available
to the Counterclaim Plaintiffs should they meet their burden
of proof on the unconscionability issue and whether all
Counterclaim Plaintiffs have standing to contest the
foreclosure bid prices."
Thus, the trial court continued the evidentiary hearing scheduled for June
16, 2014, and ordered all parties to submit briefs on the issues of what
remedies would be available should the trial court determine that the
foreclosures were, in fact, wrongful and of whether the guarantors had
"standing" to assert a wrongful-foreclosure counterclaim by June 16, 2014. 
14
1190205, 1190251
On June 16, 2014, SEPH5 and FNB submitted motions "for partial
summary judgment" as to the issues of what remedies should be available
upon a finding of wrongful foreclosure and of whether the guarantors had
"standing" to assert a wrongful-foreclosure counterclaim contesting the
foreclosure bid prices. SEPH and FNB argued in their motions that, under
Alabama law, the only remedy available in a wrongful-foreclosure
proceeding based on the inadequacy of bid prices is to set aside the
foreclosure. SEPH and FNB further argued that not only is setting aside
5Vision Bank became known as SEPH when the two entities merged.
On June 10, 2014, SEPH was substituted for Vision Bank as the real
party in interest. Subsequently, SEPH assigned to FNB the promissory
note and loan agreement associated with the Marine Park loan and the
various guaranty agreements associated with that loan. The trial court
granted leave to SEPH and FNB to file an amended complaint in order to
substitute FNB for SEPH on the counts specifically related to the Marine
Park loan. Thus, on March 12, 2015, SEPH and FNB filed a third
amended complaint substituting FNB for SEPH on the counts contained
in the complaint specifically relating to the Marine Park loan and
guaranty agreements. In sum, after the merger of Vision Bank and SEPH
and the subsequent assignments by SEPH to FNB, SEPH  holds all the
promissory notes, loan agreements, mortgages, and guaranty agreements
associated with  the West parcel, the East parcel, and the North parcel. 
SEPH also is the current holder of the mortgage on the Marine Park
parcel. FNB is the current holder of the promissory note, the loan
agreement, and the guaranty agreements associated with the Marine Park
parcel.
15
1190205, 1190251
the foreclosure the only remedy available under Alabama law, but that
Bama Bayou and Marine Park expressly agreed in their mortgage
documents that the sole remedy available to them in the event of a
wrongful foreclosure was to have the foreclosures set aside and the parties
returned to their former positions "as if no such [foreclosure] proceeding
had been taken."  As for the issue whether the guarantors had "standing"
to contest the foreclosures based on the alleged inadequacy of the bid
prices, SEPH and FNB argued that, under Alabama law, only Bama
Bayou and Marine Park had "standing" to contest the bid prices because,
in the guaranty agreements, the guarantors had expressly waived all
defenses available to Bama Bayou and Marine Park and all claims
regarding the collateral. 
On June 16, 2014, the borrowers and the guarantors submitted their
brief on the issues of what remedies should be available upon a finding of 
wrongful foreclosure and of whether the guarantors had "standing" to
contest the foreclosures. The borrowers and the guarantors argued that
the parcels were not stand-alone, independent parcels but, rather, were
inextricably intertwined and interlocked by infrastructure consisting of
16
1190205, 1190251
underground water, sewer, power,  and gas lines and aboveground streets,
bridges, and parking lots, all of which were designed to operate as a single
unit.  The borrowers and the guarantors contended that each parcel
needed access to all the infrastructure -- both above and below ground --
and that no parcel could support development without physically
accessing the infrastructure on the other parcels that would have been
available to each parcel had Vision Bank not shattered the integrity of the
whole unit. The borrowers and the guarantors further argued that Vision
Bank's decision to foreclose and bid on the interdependent parcels
separately essentially broke up the unit and drove the fair market value
of the parcels down because the individual parcels were not as valuable
as the whole unit.  The borrowers and the guarantors argued that the trial
court had the authority to determine whether the method of the
foreclosures and the amounts of the bids were unconscionable and then to
fashion its own equitable remedy upon a finding of wrongful foreclosure.
As for the "standing" issue, the borrowers and the guarantors argued that
the guarantors had "standing" to sue Vision Bank alleging wrongful
foreclosure because, they said, the guarantors had been injured as the
17
1190205, 1190251
result of Vision Bank's tortious misconduct surrounding the foreclosure
sale.
On October 5, 2015, the trial court entered an order finding (1) that
under both Alabama law and the agreements between the parties the
appropriate remedies in these cases would be to judicially set aside the
foreclosures and to return the parties to their original positions and
rights, as if the foreclosure proceedings had not taken place, and (2) that
the guarantors did not have "standing" to assert a counterclaim alleging
wrongful foreclosure against Vision Bank because, the court determined,
they had no legally protected interest in the properties foreclosed upon by
Vision Bank.
Having determined the remedy available upon a finding of wrongful
foreclosure, the trial court, on January 6, 2016, entered an order setting
the date for an evidentiary hearing on the adequacy of the credit bids
made by Vision Bank -- i.e., to determine whether, in fact, the foreclosures
had been wrongful. The trial court expressly limited the scope of that
hearing "to the very narrow issue of the unconscionability of the
foreclosure bid figures, where the [trial court] will be focusing on the
18
1190205, 1190251
stated bid amounts and evidence of the values of the properties in
question." 
Following that evidentiary hearing, the trial court, on October 26,
2016, entered an order that provides,  in part:
"After seven years of litigation, extensive briefing,
arguments of counsel, and a thorough evidentiary hearing, the
Court holds as follows:
"The seminal case setting forth the general rule
applicable in this case states:
" 'Where the price realized at the [foreclosure] sale
is so inadequate as to shock the conscience, it may
itself raise a presumption of fraud, trickery,
unfairness, or culpable mismanagement, and
therefore be sufficient ground for setting the sale
aside.'
"Hayden v. Smith, 216 Ala. 428, [430,] 113 So. 293[, 295]
(1927).
"Although both the Lenders and the Borrowers rely on
Hayden, each point to a different aspect of the holding, which
admittedly appear contradictory. As the Lenders contend,
Hayden appears to state that inadequacy of price is not
sufficient to set aside the sale unless 'coupled with any other
circumstances showing unfairness, misconduct, fraud, or even
stupid management, resulting in the sacrifice of the property.'
See also CS Assets, LLC v. West Beach LLC, 370 Fed. Appx.
45 (11th Cir. March 16, 2010).
19
1190205, 1190251
"However, as the Borrowers assert, the Hayden Court
stated it found the foreclosure price 'upon its face so grossly
inadequate as to shock the judicial conscience and justifie[d]
the setting aside of the sale,' giving rise to the assumption that
in certain cases the inadequate price itself can be sufficient.
Hayden[, 216 Ala. at 430, 113 So.] at 295.
"The Borrowers have the burden of proving by
substantial evidence the elements of their [counterclaim].
"In view of the evidence presented, the Court finds the
bids on their face so grossly inadequate as to shock the judicial
conscience. Further, the Court finds the Borrowers have met
any additional burden of showing unfairness, misconduct,
fraud, or even 'stupid management.' Lenders contend that they
want the opportunity to show there was no misconduct. The
burden is on the Borrowers, however, to present substantial
evidence of misconduct, not on the Lenders to show there is no
misconduct. The record is replete with evidence that would
meet the burden of 'any other circumstance' of misconduct
coupled with the inadequate foreclosure prices.
"For these reasons, the Court finds the extremely low
bids at the foreclosure sale raise the presumption of
unconscionableness and the grossly inadequate prices coupled
with substantial evidence of misconduct justifies setting aside
the foreclosure sale. The Court hereby sets aside the
foreclosure sale and declares the foreclosure deeds null, void
and of no force and effect."
On March 7, 2017, FNB moved the trial court for a partial summary
judgment against some of the Marine Park guarantors on its claim
asserted in the third amended complaint alleging breach of the promissory
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1190205, 1190251
note and the guaranty agreements associated with the Marine Park loan,
see note 5, supra,  seeking an award of principal, interest, late charges,
attorney's fees, and collection costs accrued up to the date of any order
granting the motion.
  
On  July 10, 2017, the borrowers and the guarantors moved the trial
court to enter a partial summary judgment in their favor on SEPH's and
FNB's breach-of-contract claims seeking the payment of interest,
attorney's fees, and expenses incurred after the foreclosures on March 20,
2009. The borrowers and the guarantors conceded that Bama Bayou and
Marine Park were liable for the principal amount of each loan as of March
20, 2009. However, the borrowers and the guarantors contended that,
because the trial court's October 26, 2016, order found the foreclosures to
be wrongful and set aside the foreclosure deeds as "null, void and of no
force and effect," Bama Bayou's and Marine Park's liability should be
limited to principal amounts owed on the loans as of March 20, 2009, and
that they should not be held liable for any interest, late charges,
attorney's fees, or collection  costs incurred after that date.  The borrowers
and the guarantors argued that "[p]rinciples of equity underlie the [trial
21
1190205, 1190251
court's] order that set aside the foreclosures [and that] those same
principles must now operate to shield the borrowers and guarantors from
having [SEPH's and FNB's] post foreclosure interest, costs, and expenses
visited upon them as a consequence of the wrongful foreclosures."  The
borrowers and the guarantors specifically sought a judgment dismissing
all claims against the guarantors and limiting the liability of Bama Bayou
and Marine Park to the principal amounts owed on the loans as of March
20, 2009. Further, the borrowers and the guarantors moved the trial court
for a judgment requiring SEPH and FNB to pay their attorney's fees and
litigation expenses incurred after the March 20, 2009, foreclosures. 
On August 15, 2017, SEPH moved the trial court for a partial
summary judgment as to its claims against Bama Bayou and the Bama
Bayou guarantors alleging a breach of the promissory notes and the
guaranty agreements  associated with the West loan, the East loan, and
the North loan, see note 5, supra, and seeking an award of principal,
interest, late charges, attorney's fees, and collection costs accrued up to
the date of any order granting the motion.  SEPH also sought a summary
judgment as to all of the borrowers' and the guarantors' counterclaims
22
1190205, 1190251
against it, including the claims alleging breach of a promise to provide
additional financing for the project and the violation of the Equal Credit
Opportunity Act.  
On September 1, 2017, SEPH filed its opposition to the borrowers'
and the guarantors' motion for a partial summary judgment seeking relief
from liability for interest and litigation expenses incurred following the
wrongful foreclosures and seeking reimbursement for their attorney's fees
and litigation expenses. SEPH noted that the trial court had already
determined in its October 5, 2015, order that the sole remedy available for
a wrongful foreclosure was to set the foreclosure aside. SEPH argued that
Vision Bank, its predecessor, and Bama Bayou and Marine Park had
agreed in the mortgages associated with the loans that if a foreclosure was 
set aside, the parties would be restored to their former positions under the
mortgages as if the foreclosure had not occurred. SEPH further argued
that the mortgages also clarified that all rights, powers, and remedies of
the lender would continue if a foreclosure was set aside "as if no such
proceeding had been taken." SEPH also argued that the law in Alabama
is consistent with the parties' agreements contained in the mortgage
23
1190205, 1190251
documents, asserting that Alabama law provides that setting aside a
foreclosure -- not the release from, or reduction of, any indebtedness on
the loans -- is the single appropriate remedy in a wrongful-foreclosure
proceeding.  
Regarding the guarantors' claim that they were free from liability,
SEPH argued that the guarantors had agreed in their guaranty
agreements  that they had no interest in the collateral; that foreclosure
was not a condition of recovery against them; that they had waived all
defenses available to Bama Bayou and Marine Park; and that they had
agreed to be liable for the debts until they were paid.           
On August 31, 2018, the trial court entered an order  granting in
part FNB's motion for a partial summary judgment against some of the
Marine Park guarantors on its claim asserting a breach of the promissory
note and guaranty agreements; granting in part the borrowers' and
guarantors' motion for a partial summary judgment in their favor as to
SEPH's and FNB's breach-of-contract claims seeking the payment of
interest, late charges,  attorney's fees, and collection costs incurred after
the foreclosures on March 20, 2009; denying the borrowers' and the
24
1190205, 1190251
guarantors' motion seeking payment of their own attorney's fees and
litigation expenses; granting in part SEPH's motion for a partial summary
judgment as to its claims against Bama Bayou and the Bama Bayou
guarantors alleging a breach of the promissory notes and guaranty
agreements  associated with the West loan, the East loan, and the North
loan; granting SEPH's motion for a summary judgment as to the
counterclaim asserted against SEPH alleging that it had agreed to provide
further financing for the Bama Bayou project; and denying SEPH's motion
for a summary judgment as to the counterclaims asserting against SEPH
a violation of the Equal Credit Opportunity Act.6    
Regarding the wrongful-foreclosure issue, the trial court stated: 
"On October 5, 2015, this Court addressed the remedies
available to the parties, noting each of the mortgages executed
by the Borrowers contains the following language in the
following provision concerning the parties' agreement in the
event a foreclosure is 'determined adversely to Lender':
" 'Discontinuance of Proceedings - Position of
Parties, Restored. In case the Lender shall have
6The trial court also disposed of a number of the other counterclaims,
third-party claims, affirmative defenses, and motions not directly relevant
to these appeals. 
25
1190205, 1190251
proceeded to enforce any right or remedy under
this Mortgage by foreclosure, entry or otherwise,
and such proceedings shall have been discontinued
or abandoned for any reason, or shall have been
determined adversely to the Lender, then and in
every such case the Borrower and the Lender shall
be restored to their former positions and rights
hereunder, and all rights, powers and remedies of
the Lender shall continue as if no such proceeding
had been taken.'
"The Court held then that the only remedy available to
the Borrowers and the Guarantors was for the Court to
judicially set aside the foreclosure if the Court should
determine a wrongful foreclosure had occurred. The Court also
held the Guarantors did not have standing to assert an
affirmative cause of action for wrongful foreclosure, although
the Court did recognize the Guarantors could raise affirmative
defenses.
"On October 26, 2016, the Court ruled on the issue of
wrongful foreclosure, holding as follows:
" '[T]he Court finds the extremely low bids at the
foreclosure 
sale 
raise 
the 
presumption 
of
unconscionableness and the grossly inadequate
prices coupled with substantial evidence of
misconduct justifies setting aside the foreclosure
sale.'
"Because the foreclosure was 'determined adversely to the
Lender,' the parties' contracts provide the Borrower and
Lender 'shall be restored to their former positions and rights
... as if no such proceeding had been taken.'
26
1190205, 1190251
"....
"Turning to the issue of the affirmative defense based on
wrongful foreclosure, the Court invokes its equity powers in
determining the appropriate remedy. When a foreclosure is set
aside, the mortgagor’s equity of redemption is restored. See,
e.g., Cotton v. First Nat. Bank, [228 Ala. 311,] 153 So. 225
(Ala. 1934); Murphy v. May, [243 Ala. 94,] 8 So. 2d 442 (Ala.
1942). During the period after the voided foreclosure sale, the
mortgagee is regarded as a mortgagee in possession before
foreclosure, and an accounting is to be performed for this
period to determine the amount of the debt. See Smith v.
Stringer,[220 Ala. 353,] 125 So. 226 (Ala. 1929); and De
Moville v. Merchants & Farmers Bank of Greene County, [233
Ala. 204,] 170 So. 756 (Ala. 1936). During this period, interest
continues to accrue on the debt. See, e.g., Smith v. Stringer,
[228 Ala. 630,] 155 So. 85 (Ala. 1934); De Moville v. Merchants
& Farmers Bank of Greene County, [237 Ala. 347,] 186 So. 704
(Ala. 1939). The purpose of the accounting is to determine the
amount of the debt so the mortgagor can exercise its equity of
redemption and re-acquire title to its property. De Moville,
[233 Ala. 204,]  170 So. 756. This is the remedy afforded the
mortgagor on a voided foreclosure sale even when there has
been a finding of misconduct by the mortgagee in connection
with the foreclosure. See, e.g., De Moville, [233 Ala. 204,] 170
So. 756; and  De Moville, [237 Ala. 347,] 186 So. 704.
"Under this body of law, interest ordinarily would accrue
on the debt from the time of the wrongful foreclosure to date
because there is no doubt the borrowers had the use of the
money at issue. If the bids, however, on the foreclosed property
had been reasonable but still created a deficiency owed by the
borrowers, then the interest the borrowers would have paid on
any deficiency amount would be substantially reduced. 
Moreover, much of the delay in this litigation may be laid at 
27
1190205, 1190251
the feet of the Lenders and their respective backing entities.
Therefore, based upon consideration and balancing of the
relative equities involved, the Court orders an accounting of
the debt for purposes of the equitable right of redemption in
the amount consisting of:
"(1) principal amounts on each loan due on the date
of foreclosure, March 20, 2009;
"(2) interest and late charges on the principal
amount from the date the notes were last timely
paid through March 20, 2009;
"(3) interest only on the amount determined in (2)
above from March 20, 2009 until the date of the
remand from the ... removal to federal court,
August 21, 2013.
"Judgment is entered for the Borrowers and the
Guarantors on the Plaintiff's claims for late charges after the
date of foreclosure, interest after August 21, 2013, attorneys'
fees, litigation expenses, collection expenses, property
preservation expenses, and other costs otherwise claimed.
"Judgment is entered against the Borrowers and the
Guarantors on their claims for attorneys' fees and expenses.
"The Plaintiffs’ requests for summary judgment as to the
Guarantors is premature in the face of the equities employed
by the Court in this case and so is denied." 
28
1190205, 1190251
The trial court further ordered the parties to confer with each other and
to file a joint status report as to any outstanding issues that would
prevent the order from being a final judgment in the cases.
On September 27, 2018, the parties submitted the joint status report
indicating, among other things, that FNB's breach-of-contract claim
against Marine Park was still outstanding, because FNB had not moved
the trial court for a summary judgment as to that claim; that FNB's
breach-of-contract claim against the Marine Park guarantors was still
outstanding, because FNB had moved the trial court for a summary
judgment as to only some of the Marine Park guarantors; that SEPH's
breach-of-contract claims against Bama Bayou were still outstanding,
because there was no monetary value attached to the judgment in favor
of SEPH on those claims; that SEPH's breach-of-contract claims against
the Bama Bayou guarantors was still outstanding;7 that  SEPH's claim for
7In its August 31, 2018, order, the trial court initially granted
SEPH's motion for a partial summary judgment as to its breach-of-
contract claims against the Bama Bayou guarantors. However, the order
also states that the "requests for summary judgment as to the Guarantors
[was] premature in the face of the equities employed by the Court in this
case and so is denied." SEPH contends that, because there was no
29
1190205, 1190251
an inspection and accounting of records and payments made by the
borrowers and the guarantors remained outstanding, because SEPH had
not sought a summary judgment as to that claim; that SEPH's fraud
claims remained outstanding, because SEPH had not sought a summary
judgment as to those claims; and that the counterclaim asserting against
SEPH a violation of the Equal Credit Opportunity Act remained
outstanding.
On April 23, 2019, the trial court entered an order empowering a
special master with the authority to retain an expert to prepare an
accounting within the parameters set forth by the trial court in its August
31, 2018, order to establish debt figures for equitable-right-of-redemption
purposes. On May 29, 2019, the special master submitted its
recommendation as to the calculation of Bama Bayou's and Marine Park's
monetary judgment entered against the guarantors, its breach-of-contract
claims against the Bama Bayou guarantors remain outstanding. The
guarantors contend that the trial court denied the motions against them
as being premature. It is clear that, regardless of the reason, those claims
remained outstanding.  
30
1190205, 1190251
equitable rights of redemption based on the ordered accounting. The
special master's recommendation provided as follows:
"1.   A listing of the subject 4 loans with the principal balances
as of the last time a principal payment was made is: [West
loan] - $6,000,000.00; [East loan] - $5,000,000.00; [North loan]
- $3,950,495.29; and [Marine Park loan] - $4,976,422.62. 
"2. Interest and Late Charges accrued from the date of last
payment through March 20, 2009 for each of the loans in the
order set out above is: $140,933.34; $144,544.45; $115,332.41;
and $178,806.33. 
"3. The Special Master directed Mr. Hall [the retained expert]
to determine what the default interest rate on each of the 4
loans was and to then use that rate to come up with a daily
interest amount for each loan. Further, the Special Master
directed Mr. Hall to apply that daily rate to principal balances
and to calculate it for the time from March 20, 2009 through
August 21, 2013 as previously directed by this Court in the
order of August 31, 2018. 
"4. The additional interest amounts for each of the loans in the
order set out above is: $1,725,611.35; $1,769,862.35;
$1,398,363.90; and $2,201,891.00. See, Hall affidavit. 
"5. Accordingly, the equitable right of redemption figure for
each of said loans is: [West loan] - $7,866,544.69; [East loan]
- $6,914,406.80; [North loan] - $5,464,191.60; and [Marine
Park loan] - $7,357,119.95."
On July 8, 2019, the trial court entered an order adopting the special
master's recommendation adjudging the equitable-right-of-redemption
31
1190205, 1190251
figure for each loan to be: $7,866,544.69 for the West loan; $6,914,406.80
for the East loan; $5,464,191.60 for the North loan; and $7,357,119.95 for
the Marine Park loan. The trial court further ordered the parties to file
dispositive motions as to the remaining issues in the action, as identified
in the joint status report. 
On August 6, 2019, SEPH, in separate motions, (1) moved the trial
court for a summary judgment as to all of its remaining claims -- except
its fraud and accounting-and-inspection claims -- asserted against the
borrowers and the guarantors and as to all remaining counterclaims
asserted against it by the borrowers and the guarantors and (2) moved the
trial court to dismiss its accounting-and-inspection claim asserted against
the borrowers and the guarantors.  On October 29, 2019, SEPH moved the
trial court to dismiss its fraud claims asserted against the borrowers and
the guarantors. 
On August 13, 2019, FNB moved the trial court for a summary
judgment on its claims asserting a breach of the promissory note and
guaranty agreements against Marine Park and the remaining Marine
Park guarantors. FNB also moved the trial court for a summary judgment
32
1190205, 1190251
as to any remaining counterclaims asserted against it by Marine Park and
the Marine Park guarantors. 
On November 20, 2019, the trial court entered a final judgment
disposing of all remaining motions and claims pending in SEPH's case.8
The trial court's judgment dismissed SEPH's claim for an inspection and
accounting of records; dismissed SEPH's fraud claims; and entered a
summary judgment in favor of SEPH on the counterclaim asserting a
violation of the Equal Credit Opportunity Act.  The trial court further
entered a judgment in favor of SEPH on its breach-of-contract claims
against Bama Bayou in the following amounts: $7,866,544.69 on the West
loan; $6,914,406.80 on the East loan; and $5,464,191.60 on the North loan.
The trial court also entered a judgment in favor of SEPH on its breach-of-
contract claims against the Bama Bayou guarantors, in certain specified
8On October 1, 2019, SEPH moved the trial court, pursuant to Rule
21, Ala. R. Civ. P., to sever, as a separate action, all claims brought by
SEPH and the Bank of Franklin against each other. The trial court
granted the motion to sever those claims as a separate action. The trial
court also disposed of all remaining claims as they pertained to other
parties not specifically discussed in this opinion, because they have no
direct relevance to the issues raised in these appeals.    
33
1190205, 1190251
amounts, holding each Bama Bayou guarantor jointly and severally liable
with Bama Bayou and each other Bama Bayou guarantor, up to the
specified amount of principal and interest owed on each note.9 Significant
for purposes of these appeals, the amounts awarded SEPH on its breach-
of-contract claims were consistent with the trial court's August 31, 2018,
order and, thus, included interest only up to August 21, 2013, and did not
include any late charges after the date of foreclosure, attorney's fees,
collection costs, and property-preservation expenses. 
On November 20, 2019, the trial court also entered a final judgment
in favor of FNB on its breach-of-contract claims against Marine Park and
the Marine Park guarantors.  The trial court awarded FNB $7,357,119.95
on its breach-of-contract claim against Marine Park. The trial court also
awarded FNB certain specified amounts against each of the 16 Marine
Park guarantors on its breach-of-contract claim against the Marine Park
guarantors, holding each Marine Park guarantor jointly and severally
9There are 23 Bama Bayou guarantors. This Court has not set forth
the specific dollar amount of the monetary award entered against each
guarantor. Suffice it to say, the awards were substantial, ranging from 
$1,793,596.31 to $14,544,347.80. 
34
1190205, 1190251
liable with Marine Park, and each other, up to the specified amount of
principal and interest owed under the note on the Marine Park loan. As
was the case with the awards in SEPH's favor, the amounts awarded FNB
on its breach-of-contract claims were consistent with the trial court's
August 31, 2018, order and, thus, included interest only up to August 21,
2013, and did not include any late charges after the date of foreclosure,
attorney's fees, collection costs, and property-preservation expenses. 
SEPH and FNB each timely appealed, challenging the trial court's 
damages awards on their breach-of-contract claims.  See Ex parte
Weyerhaeuser, 702 So. 2d at 1228. The appeals were consolidated by this
Court.
Standard of Review
"This Court's review of a summary judgment is de novo.
Williams v. State Farm Mut. Auto. Ins. Co., 886 So. 2d 72, 74
(Ala. 2003). We apply the same standard of review as the trial
court applied. Specifically, we must determine whether the
movant has made a prima facie showing that no genuine issue
of material fact exists and that the movant is entitled to a
judgment as a matter of law."
Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038 (Ala. 2004).
Discussion
35
1190205, 1190251
SEPH and FNB appeal from the trial court's final judgments of
November 20, 2019, awarding them damages on their breach-of-contract
claims against the borrowers and the guarantors that, pursuant to the
trial court's August 31, 2018, order, did not include interest accrued  after
August 21, 2013, late charges accrued after the date of foreclosure,
attorney's fees, collection costs, and property-preservation expenses.10 
On October 5, 2015, the trial court entered an order initially finding
that, under both Alabama law and the agreements between the parties in
these cases, the appropriate remedy upon a finding of wrongful foreclosure
was to judicially set aside the foreclosures and to return the parties to
their original positions and rights, as if the foreclosure proceedings had
not taken place. Following an evidentiary hearing, the trial court, on
October 26, 2016, entered an order finding that the foreclosures were
wrongful and setting them aside. 
10The trial court gave no explanation as to why it determined that
SEPH and FNB could not recover interest accrued  after August 21, 2013,
other than to note that that date was the date the cases were remanded
to the trial court following their removal to federal court.   
36
1190205, 1190251
On August 31, 2018, the trial court entered an order expressly
invoking its equitable powers to fashion a remedy in favor of the
borrowers and the guarantors that prohibited SEPH and FNB from
recovering interest accrued after August 21, 2013, late charges accrued
after the date of foreclosure, attorney's fees, collection costs, and property-
preservation expenses.  That order is inconsistent with  the trial court's
October 5, 2015, order, in which it determined that the sole remedy
available upon the finding of wrongful foreclosure was to judicially set
aside the foreclosures and to return the parties to their original positions
and rights, as if the foreclosure proceedings had not taken place. 
SEPH and FNB argue that, in its October 5, 2015, order, the trial
court determined the sole remedy available pursuant to both the parties'
agreements and Alabama law and that the trial court erred in ignoring
the parties' unambiguous agreements and the law of this state to fashion
its own equitable remedy to relieve the borrowers and the guarantors of
their obligations to pay interest accrued after August 21, 2013, late
charges accrued after the date of foreclosure, attorney's fees, collection
costs, and property-preservation expenses. SEPH and FNB  expressly
37
1190205, 1190251
state that they are not seeking to reinstate the foreclosures by having the
trial court's order setting aside the foreclosures reversed. 
The borrowers and the guarantors argue on appeal that it would be
inequitable for them to pay interest accrued after August 21, 2013, late
charges accrued after the date of foreclosure, collection costs, and
property-preservation expenses  after Vision Bank had wrongfully
foreclosed on the loans by submitting unconscionably low credit bids.  The
borrowers and the guarantors further argue that, because equitable
principles provided the basis for setting aside of the wrongful foreclosures,
the trial court had the authority to fashion whatever additional equitable
relief it deemed necessary.  
I. The Loan Documents
The promissory notes executed in relation to each of the loans made
to Bama Bayou and Marine Park required Bama Bayou and Marine Park
to repay the principal amount of the loans with interest. The promissory
notes also provided that Bama Bayou and Marine Park were obligated to
pay reasonable attorney's fee and costs incurred by the lender in collecting
on the promissory notes in the event of a default.  The promissory notes
38
1190205, 1190251
were secured both by the guaranty agreements and by the mortgages
executed in conjunction with the promissory notes. 
The mortgages also required Bama Bayou and Marine Park to repay
the principal amount of the loans with interest and all reasonable
attorney's fees and costs incurred by the lender  in the event of a
foreclosure of any of the mortgages. The mortgages further provided that
Bama Bayou and Marine Park were responsible for the payment of all
property-preservation expenses,  including taxes, insurance premiums,
the costs of maintenance and repairs, the costs of security and protection,
liens, utility charges, and assessments. 
Section 2.14 of the mortgages expressly sets forth the remedy to be
applied if a foreclosure is found to be wrongful: 
"Discontinuance of Proceedings - Position of parties, Restored.
In case the Lender shall have proceeded to enforce any right
or remedy under this Mortgage by foreclosure, entry or
otherwise, and such proceedings shall have been discontinued
or abandoned for any reason, or shall have been determined
adversely to the Lender, then and in every such case the
Borrower and the Lender shall be restored to their former
positions and rights hereunder, and all rights powers and
remedies of the Lender shall continue as if no such proceeding
had been taken." 
39
1190205, 1190251
(Emphasis added.)
Section 2.15 of the mortgages further emphasizes that each of the
lender's rights, powers, and remedies under the promissory notes,
mortgages, and loan documents are  cumulative to each other and that the
lender is entitled to pursue all of its available remedies under the
promissory notes, mortgages, and loan documents. Section 2.15 of the
mortgage provides:
"Remedies Cumulative. No right, power, or remedy conferred
upon or reserved to the Lender by this Mortgage is intended to
be exclusive of any other right, power, or remedy, but each and
every such right, power and remedy shall be cumulative and
concurrent and shall be in addition to any other right, power,
and remedy given hereunder, or under the Note, or under the
Loan Documents, or now or hereafter existing at law or in
equity or by statute."
(Emphasis added.)
This Court has stated:
" A promissory note is a form of contract; therefore, it
must be construed under general contract principles. See 11
Am. Jur. 2d Bills and Notes § 2 (1997) ('Bills and notes ... are
contracts; accordingly, the fundamental rules governing
contract law are applicable to the determination of the legal
questions which arise over such instruments.' (footnotes
omitted)) .... ' "General contract law requires a court to enforce
an unambiguous, lawful contract, as it is written. . . . " '
40
1190205, 1190251
Dawkins v. Walker, 794 So. 2d 333, 339 (Ala. 2001) (quoting
Ex parte Dan Tucker Auto Sales, Inc., 718 So. 2d 33, 35-36
(Ala. 1998))."  
Bockman v. WCH, L.L.C., 943 So.  2d 789, 795 (Ala. 2006). Further, "[a]
mortgage agreement is construed like any other contract." Tennant v.
Chase Home Fin., LLC, 187 So. 3d 117, 1181 (Ala. Civ. App. 2015). "Where
a contract, by its terms, is plain and free from ambiguity, there is no room
for construction and the contract must be enforced as written." Austin
Apparel, Inc. v. Bank of Prattville, 872 So. 2d 158, 165 (Ala. Civ. App.
2003).  
Section 2.14 of the mortgages operates to govern the rights and
responsibilities of the parties if a wrongful foreclosure is set aside, and it
requires that, in every such case determined adversely to the lender (i.e.,
SEPH and FNB), both the borrower (i.e., Bama Bayou and Marine Park)
and the lender "shall be restored to their former positions and rights"
under the mortgages and "all rights, powers, and remedies of the Lender
shall continue as if no such proceeding had been taken."  Section 2.14 is
unambiguous and leaves no room for the application of other remedies,
whether equitable or not, in the case of a wrongful foreclosure.  The
41
1190205, 1190251
"rights, powers, remedies" of the lender include its right to accrued
interest, late charges, attorney's fees, collection costs, and property-
preservation expenses as allowed by the promissory notes, the mortgages,
and other loan documents.  As stated above, the  trial court expressly
recognized in its October 5, 2015, order that the mortgages at issue
"expressly require" that the foreclosures be set aside as the sole remedy
for a wrongful foreclosure.
Vision Bank and Bama Bayou and Marine Park decided in the
mortgages that the sole remedy for a wrongful foreclosure was to set aside
the foreclosure and to return the parties to their former positions and
rights under the mortgages and that all rights, powers, and remedies of
Vision Bank would continue as if no foreclosure proceeding had taken
place, including the right to recover accrued interest, late charges,
attorney's fees,  collection costs, and property-preservation expenses.
Those provisions are clear and unambiguous. Thus, the mortgages must
be enforced as written. Bockman, supra, Austin Apparel, supra. The plain
language of the mortgages and the promissory notes prohibit the trial
court's ruling limiting the amount of interest and late charges SEPH and
42
1190205, 1190251
FNB could recover and disallowing the recovery of attorney's fees,
collection costs,  and property-preservation expenses. Accordingly, we
conclude that the trial court erred in refusing to enforce the unambiguous
provisions of the promissory notes and mortgages by entering an award
in favor of SEPH and FNB on their breach-of-contract claims that limited
their damages awards by including interest accruing only up to August 21,
2013, by including late charges accruing only up to the date of foreclosure,
and by not including attorney's fees, collection costs, and property-
preservation expenses.
II. Alabama Law
SEPH and FNB contend that the trial court's ruling that a wrongful
foreclosure justifies a release from part of the indebtedness incurred by
Bama Bayou and Marine Park is also inconsistent with the law of this
state. They contend that the law of this state is in fact consistent with the
contractual provisions contained in the mortgages and the promissory
notes. 
In Alabama, the appropriate remedy for a wrongful foreclosure,
based upon a finding of an inadequate purchase price at the foreclosure
43
1190205, 1190251
sale, is to have the foreclosure set aside. Breen v. Baldwin Cnty. Fed.  Sav.
Bank, 567 So. 2d 1329, 1333 (Ala. 1990) (citing Hayden v. Smith, 216 Ala.
428, 113 So. 293 (1927)). When a claim for a wrongful foreclosure has been
made, " ' "a court of equity will enjoin a sale or will set it aside if made." ' "
Jackson v. Wells Fargo Bank, N.A., 90 So. 3d 168, 171 (Ala. 2012) (quoting
Paint Rock Props. v. Shewmake, 393 So. 2d 982, 984 (Ala. 1981), quoting
in turn Abel v. Fricks, 219 Ala. 619, 621, 123 So. 17, 18 (1929))(emphasis
added). See also First Nat'l Bank of Opp v. Wise, 235 Ala. 124, 126, 177
So. 636, 638 (1937) (holding that, in a wrongful-foreclosure case, the party
contesting the foreclosure, if successful, is "entitled to have the sale set
aside and annulled"); Ross v. Rogers, 25 So. 3d 1160, 1168 n. 9 (Ala. Civ.
App.  2009) ("[W]e are not at all convinced that, even if the amount Ross
paid for the Madison County property created 'a presumption of fraud,
unfairness, or culpable mismanagement,' ... the appropriate remedy would
have been to judicially declare both promissory notes satisfied. The proper
remedy appears to be the setting aside of the foreclosure sale ...."), and
Harmon v. Dothan Nat'l Bank, 186 Ala. 360, 378, 64 So. 621, 627 (1914)
(Mayfield, J., dissenting) ("A mere pretext, a mere sham sale, where the
44
1190205, 1190251
mortgagee both sells and buys (even under his authority so to do) for a
mere song, and for the sole and real purpose of depriving the mortgagor
of his right to redeem, will not have the desired effect of a real and bona
fide foreclosure sale. Courts of law, as well as courts of equity, will treat
such pretended sales as they ought to be treated -- as if they had never
occurred -- and treat the mortgagee as in possession without foreclosure.").
The trial court initially recognized in its October 5, 2015, order that courts
of this state have consistently held that setting aside the foreclosure sale
was the single appropriate remedy in a wrongful-foreclosure proceeding.
Once a foreclosure has been set aside, the law in Alabama restores
the parties to their former positions and rights under the mortgage.  This
Court has explained: 
"Alabama classifies itself as a 'title' state with regard to
mortgages. Execution of a mortgage passes legal title to the
mortgagee. Lloyd's of London v. Fidelity Securities
Corporation, 39 Ala. App. 596, 105 So. 2d 728 (1958); Moorer
v. Tensaw Land & Timber Co., 246 Ala. 223, 20 So. 2d 105
(1944); Jones v. Butler, 286 Ala. 69, 237 So. 2d 460 (1970). The
mortgagor is left with an equity of redemption, but upon
payment of the debt, legal title revests in the mortgagor. §
35-10-26, Code 1975. The equity of redemption may be
conveyed by the mortgagor, and his grantee secures only an
equity of redemption. McDuffie v. Faulk, 214 Ala. 221, 107 So.
45
1190205, 1190251
61 (1926). The payment of a mortgage debt by the purchaser
of the equity of redemption invests such purchaser with the
legal title. Denman v. Payne, 152 Ala. 342, 44 So. 635 (1907).
The equity of redemption in either case, however, is
extinguished by a valid foreclosure sale, and the mortgagor or
his vendee is left only with the statutory right of redemption.
... McDuffie, supra."
Trauner v. Lowrey, 369 So. 2d 531, 534 (Ala. 1979)(emphasis added). The
important distinction to be made is that, before a foreclosure, the
mortgagor possesses the equity of redemption and that, after a foreclosure
sale, the mortgagor has the  statutory right of redemption. See also Chess
v. Burt, 87 So. 3d 1201, 1207 (Ala. 2011) (holding that foreclosure
extinguished the equity of redemption and actuated the statutory right of
redemption); and Cotton v. First Nat'l Bank, 228 Ala. 311, 315, 153 So.
225, 229 (1934) (holding that the "foreclosure sale should be set aside and
vacated and the foreclosure deed canceled, leaving the complainants the
right to enforce the equity of redemption"). Thus, when the trial court set
aside the foreclosures, Bama Bayou and Marine Park, as the mortgagors,
had their equity of redemption restored, giving them the opportunity to
satisfy the indebtedness and to have title to the properties vested in them.
Trauner, 369 So. 2d at 534.
46
1190205, 1190251
As the law relates to a mortgagee's possession of property between
the date of foreclosure and the date a trial court sets aside a foreclosure,
the mortgagee may be liable to a mortgagor for income earned on, and
waste to, the property during that period.  
"It may be well at this point to say that the law is
established that one in possession of land as a purchaser at a
foreclosure sale, made in strict compliance with the terms of
the mortgage, is not a mortgagee in possession, but the
absolute owner not chargeable with rent or for waste; but a
mortgagee in possession before foreclosure, or after an
irregular foreclosure, may be liable for rent and waste, and the
purchase by the mortgagee, unless authorized by the
mortgage, is such an irregularity as to render him liable for
rent and waste. "
Hale v. Kinnaird, 200 Ala. 596, 600, 76 So. 954, 958 (1917)(emphasis
added) .  Although the mortgagee in possession of property following a
wrongful foreclosure is liable for rents and waste, the mortgagee is also
entitled to receive interest on the mortgage debt -- because the interest
continues to accrue on the debt -- during the period between the
foreclosure and the time when the mortgage debt is adjudicated. See
Smith v. Stringer, 228 Ala. 630, 155 So. 85 (1934) ("Smith II"), De Moville
47
1190205, 1190251
v. Merchants & Farmers Bank of Greene Cnty., 237 Ala. 347, 186 So. 704
(1939). 
In  Smith v. Stringer, 220 Ala. 353, 355, 125 So. 226, 227
(1929)("Smith I"), the plaintiff brought a claim seeking to have the
foreclosure of certain real property set aside as invalid, to enforce her
equity of redemption, and for an accounting. The trial court determined
that the foreclosure, which occurred in August 1925, was invalid and set
aside the foreclosure. This Court upheld the trial court's order setting
aside the foreclosure. This Court further determined that the defendant
mortgagee was considered merely a mortgagee in possession and, as such,
was accountable to the plaintiff for certain rents or profits realized during
his possession of the property after foreclosure, as well as for  any waste
or mismanagement of the property caused by his failure to use reasonable
care and diligence in dealing with the property. This Court reversed the
portion of the trial court's judgment basing its accounting on only rents
and profits received by the defendant. Smith I.
On remand, the matter was retried,  seeking a full accounting of the
mortgage debt by including payments for taxes, repairs, and insurance for
48
1190205, 1190251
the property paid by the defendant while in possession of the property but
deducting amounts for rents received and for  and any waste on the part
of the defendant while in possession of the property. In reaching its
determination as to the amount of the mortgage debt, the trial court
attributed $375 to waste on the part of the defendant, and the defendant
appealed.  Smith II.
On appeal, this Court determined that the $375 attributed by the
trial court as waste was too high and lowered that amount to $50. This
Court then determined the mortgage debt by factoring in, among other
things, the reduced amount for waste and also  eight years of accrued
interest from the time of the foreclosure in 1925.11 This Court explained:
11It is not entirely clear from the decisions in Smith I and Smith II
as to the event that occurred in 1933 that prompted this Court to
determine that date to be the cutoff point for the accrual of interest;
however, it is safe to assume that the prompting event was the entry of
the trial court's judgment from which the appeal was taken in Smith II.
What is abundantly clear from Smith II is this Court's determination that
interest continued to accrue on the mortgage debt through the entire
period of time following the foreclosure of the mortgage up until when the
mortgage debt was finally adjudicated.  
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1190205, 1190251
"Complainant purchased the property for $325, $25 cash
and assumption of the mortgage $300, prior to the entry of the
mortgagee, or any disturbance of the grapevines. ...
"....
"... [U]pon a careful review and consideration of the
evidence, taken before and after the former appeal, we
conclude the court greatly erred in the allowance for waste. It
should be and is here reduced to the sum of $50, a sum ample,
we think, to cover any influence this vineyard had on the real
value of the property.
"This, with interest for eight years, $32, added to the
balance found on rent account, $73.15, makes aggregate
credits on the mortgage debt as of the date of the decree, July
31, 1933, the sum of $155.15.
"The mortgage debt, with interest to same date [1925-
1933] was $486.
"A decree will be here rendered ascertaining and
decreeing a balance due on the mortgage debt of $330.85, with
interest from July 31, 1933."
Smith II, 228 Ala. at 632, 155 So. at 86 (emphasis added).  See also De
Moville, 237 Ala. 347, 186 So. 704 (affirming the award of accrued interest
from the time of foreclosure in January 1932 through the date of final
adjudication of the mortgage debt in June 1937 and determining that a
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1190205, 1190251
mortgagee in possession is entitled to property-preservation expenses such
as taxes, insurance, and repairs).
Based on the foregoing, we conclude that the appropriate remedy to
be applied upon the finding of a wrongful foreclosure is to set aside the
foreclosure and that the trial court erred by limiting SEPH's and FNB's
damages on their breach-of-contract claims by allowing postforeclosure
interest only from March 20, 2009, until August 21, 2013, and by not
allowing their recovery of property-preservation expenses.
III. The Guarantors
As stated above, the trial court awarded SEPH and FNB certain
specified amounts against each of the Bama Bayou guarantors and the
Marine Park guarantors on their breach-of-contract claims and held each
Bama Bayou guarantor and Marine Park guarantor jointly and severally
liable with either Bama Bayou or Marine Park, up to the specified amount
of principal and interest owed under each of the promissory notes. The
amounts awarded SEPH and FNB were consistent with the trial court's
August 31, 2018, order and included interest only up to August 21, 2013,
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1190205, 1190251
and did not include any late charges after the date of foreclosure,
attorney's fees, collection costs, and property-preservation expenses. 
 Pursuant to Section 1 of the guaranty agreements, the guarantors 
"unconditionally guarantee[d] and promise[d] to pay" any and all
indebtedness of Bama Bayou or Marine Park arising under the promissory
notes and loan agreements, "including principal, interest, costs of
collection, and attorney's fees." Section 14 of the guaranty agreements
limits the guarantors' liability to (1) an amount equal to a specified
portion of the principal; (2) 100% of all interest accrued or accruing on the
loan; (3) 100% of all costs and expenses of collection, including a
reasonable attorney's fees, relating to the enforcement of the guaranty
agreements; and (4) 100% of all other costs and expenses of collection,
including a reasonable attorney's fees, relating to all principal, interest,
and other charges under the promissory notes and/or relating to any other
indebtedness. Further, although the guaranty agreements obligate the
guarantors to pay any and all indebtedness of Bama Bayou or Marine
Park arising under the promissory notes and loan agreements, "including
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1190205, 1190251
principal, interest, costs of collection, and attorney's fees," the guarantors
are not obligated to pay property-preservation expenses.
" 'Rules governing the interpretation and construction of contracts
are applicable in resolving a question as to the interpretation or
construction of a guaranty contract.' Government Street Lumber Co. v.
AmSouth Bank, N.A., 553 So. 2d 68, 75 (Ala. 1989)." Barnett Millworks,
Inc. v. Guthrie, 974 So. 2d 952, 954 (Ala. 2007). " ' "General contract law
requires a court to enforce an unambiguous, lawful contract, as it is
written." ' "  Bockman, 943 So. 2d at 795 (quoting other cases).  The
guaranty agreements are plain and unambiguous and must be enforced
as written.
 The guarantors have expressly "guaranteed and promised" to pay
unconditionally any and all indebtedness of Bama Bayou or Marine Park
arising under the promissory notes and loan agreements, "including
principal, interest, costs of collection, and attorney's fees." Because we
have determined that the trial court erred in entering awards in favor of
SEPH and FNB that did not include interest accrued after August 21,
2013, late charges accrued after the date of foreclosure, attorney's fees,
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1190205, 1190251
and collection costs, we also hold that the awards entered in favor of
SEPH and FNB against the Bama Bayou guarantors and the Marine Park
guarantors that likewise did not include interest accrued after August 21,
2013, and the aforementioned fees and expenses is in error. 
Conclusion
We reverse the trial court's judgments entered in these consolidated
cases and remand the cases for a determination consistent with this
opinion regarding the appropriate damages awards on SEPH's and FNB's
breach-of-contract claims.  Such awards should account for all accrued
interest,  late charges, attorney's fees, collection costs, and property-
preservation expenses owed to SEPH and FNB.12 
1190205 -- REVERSED AND REMANDED WITH INSTRUCTIONS.
1190251 -- REVERSED AND REMANDED WITH INSTRUCTIONS.
12The borrowers and the guarantors ask this Court to remand the
cases with instructions to the trial court to clarify or resolve the
inconsistencies in its orders. "[T]he law of Alabama is well-settled on this
point. In the absence of taking an appeal, an appellee may not
cross-assign as error any ruling of the trial court adverse to appellee."
McMillan, Ltd. v. Warrior Drilling & Eng'g Co., 512 So. 2d 14, 24 (Ala.
1986). The borrowers and the guarantors have not filed cross-appeals in
these cases. Thus, this Court cannot consider this request. 
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1190205, 1190251
Shaw, Bryan, Sellers, Mendheim, and Mitchell, JJ., concur.
Parker, C.J., dissents.
Stewart, J., recuses herself.
55