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Competition Marine of MS, Inc. v. Whitney Bank

Court of Appeals of Mississippi

May 23, 2017

COMPETITION MARINE OF MS, INC. A/K/A COMPETITION SPORTS OF MS, INC. AND GINA PRICHARD NADEAU APPELLANTS
v.
WHITNEY BANK, A MISSISSIPPI STATE CHARTERED BANK F/K/A HANCOCK BANK, A MISSISSIPPI STATE CHARTERED BANK DOING BUSINESS UNDER TRADE NAME HANCOCK BANK APPELLEE

          DATE OF JUDGMENT: 11/23/2015

         HARRISON COUNTY CIRCUIT COURT, FIRST JUDICIAL DISTRICT HON. LAWRENCE PAUL BOURGEOIS JR. TRIAL JUDGE

          ATTORNEYS FOR APPELLANTS: WILLIAM B. WEATHERLY RICHARD CLARENCE SMITH

          ATTORNEYS FOR APPELLEE: MICHAEL ANTHONY SHAW BENJAMIN HARTE HARRIS III

          BEFORE LEE, C.J., BARNES, ISHEE AND GREENLEE, JJ.

          BARNES, J.

         ¶1. In this debt-collection case, Competition Marine of MS Inc. (Competition Marine) and Gina Nadeau, its president, appeal the judgment of the Circuit Court of Harrison County, which granted Whitney Bank's[1] motion for summary judgment. The case involved two promissory notes executed by Appellants in favor of Whitney Bank. The trial court awarded Whitney Bank $633, 401.72 on the first promissory note (Note 1). This amount represented principal, accrued interest, and late fees; pre-judgment interest of $9, 243.82; and post-judgment interest at the rate of 5.250%. The trial court awarded Whitney Bank $191, 324.80 on the second promissory note (Note 2), representing principal, accrued interest, and late fees; pre-judgment interest of $2, 928.96, and post-judgment interest at the rate of 6.0%. The trial court also awarded attorney fees at the rate of 25% of the indebtedness. Finding no error, we affirm the trial court's decision granting summary judgment in favor of Whitney Bank.

         STATEMENT OF FACTS AND PROCEDURAL HISTORY

         ¶2. On July 6, 2007, Competition Marine executed Note 1 payable to Whitney Bank for the principal amount of $700, 000 at an interest rate of 7.5%.[2] Nadeau, as president of Competition Marine, executed a Commercial Guaranty for the loan, personally guaranteeing full repayment for Competition Marine's indebtedness to the bank.[3] Note 1 was to be repaid in fifty-nine monthly installments of $5, 703.79, beginning August 20, 2007. Note 1 was secured by a deed of trust in favor of the bank on real property at 309 Courthouse Road in Gulfport, Mississippi. On August 24, 2012, Competition Marine renewed Note 1 for another five years with the principal amount totaling $632, 555.84.

         ¶3. On December 8, 2011, Competition Marine executed a second promissory note, Note 2, payable to Whitney Bank for the principal amount of $191, 324.80, with an interest rate of 6%, to be repaid in fifty-nine monthly installments of $2, 132.61, beginning January 8, 2012. The provisions of Note 2 were similar to that of Note 1. Collateral for the loan consisted of deeds of trust in favor of Whitney Bank on real property at 309 Courthouse Road, and additionally, #2 Villa Cove Drive in Gulfport. Nadeau again personally guaranteed the commercial loan.

         ¶4. On July 15, 2014, counsel for Whitney Bank sent two letters to Nadeau demanding payment on the loans as they were in default. When payment was not made Whitney Bank sued Competition Marine and Nadeau for monetary damages in the amount of $748, 496.19. Whitney Bank also sought attorney's fees of atleast25% ofthis figure, or $187, 124.05, and other expenses, as well as pre- and post-judgment interest.

         ¶5. Competition Marine and Nadeau in turn filed a counterclaim against Whitney Bank on the grounds the bank intentionally misled them into believing the loans were current in order to add fees and interest to the debt. Also, Nadeau believed the payments were being automatically drafted from a bank account. Competition Marine and Nadeau also claimed that Whitney Bank was deliberately bringing financial harm to them by suing on collection of the debt rather than invoking rights under the deeds of trust. They contend the bank refused to release the deeds of trust, thereby making it impossible for them to use the collateral to satisfy the debt.

         ¶6. On August 4, 2015, Whitney Bank moved for summary judgment. Competition Marine and Nadeau responded, arguing the bank should be required to foreclose on the underlying collateral before obtaining summary judgment for monetary damages, because aforeclosure sale would reduce Nadeau's liability under the guaranties. They acknowledged their argument was not supported by current law but based on principles of fairness, equity, and public policy.

         ¶7. After a hearing, the circuit court granted summary judgment in favor of Whitney Bank. Competition ...


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