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IBERIABANK v. Previty Surgical PLLC

United States District Court, S.D. Texas, Houston Division

August 4, 2017

IBERIABANK, Plaintiff,
v.
Previty Surgical PLLC; Previty Surgical, East, PLLC; Previty Surgical Assistants, PLLC; Garrett K. Peel, M.D.; and Mandie Peel, Defendants.

          MEMORANDUM AND OPINION

          LEE H. ROSENTHAL, UNITED STATES DISTRICT JUDGE

         This is a suit to collect amounts due on four promissory notes, three related guaranty agreements, and one collateral agreement. IBERIABANK, the lender, sued the borrowers and guarantors. After the deadlines to complete discovery and file dispositive pretrial motions passed, IBERIABANK moved for partial summary judgment on its claims to recover the unpaid principal and interest, leaving for later its claims for attorney's fees. The defendants responded by requesting a continuance to take additional discovery (despite the fact that the discovery period had ended) and by filing a separate motion to compel arbitration (despite the fact that the dispositive motions deadline had passed).

         Based on the pleadings, the motion and responses, the briefs, the record, and the applicable law, the court denies the request for a continuance to allow additional discovery before ruling on the summary judgment motion; denies the motion to compel arbitration; and grants the motion for partial summary judgment. IBERIABANK may file a motion seeking its fees, with appropriate support, no later than August 25, 2017. The reasons are set out in detail below.

         I. Background

         IBERIABANK's summary judgment evidence included the promissory notes, the guarantees, and the collateral agreement at issue. The evidence also included the letter IBERIABANK sent to Previty Surgical, Previty East, and Dr. Peel notifying them that the notes were in default. Brian Hamilton, Vice President of Special Assets at IBERIABANK, provided a declaration of the validity of the promissory note, guarantee, and collateral documents; IBERIABANK's status as owner and holder of these documents; identity of the guarantors; failure of the defendants to make payment; and identification of current balances owed as of June 16, 2017.

         The evidence of the loan documents and their terms is undisputed. On January 31, 2013, IBERIABANK loaned $ 1, 3 75, 000 to Previty Surgical and issued a promissory note referred to in this case as "Previty Surgical Note I." In 2014, the principal amount of the Previty Surgical Note I was increased to $2, 300, 000. The Note called for monthly payments of $17, 445.32 from February 28, 2013 to February 28, 2014, and after that for monthly payments of $28, 3 86.76 from March 28, 2014 to January 28, 2018. The Note defined default to include that the "Borrower fails to make any payment when due under this Note." Default allows IBERIABANK to declare the entire balance due immediately.[1] The Previty Surgical Note I was guaranteed by Dr. Peel, Mandie Peel, Previty Assistants, and Previty East. (Docket Entry No. 24-2).

         IBERIABANK loaned another $650, 000 to Previty Surgical on January 31, 2013 and issued another promissory note, referred to as "Previty Surgical Note II." This Note was renewed, in the same amount, on March 20, 2014. The Note required Previty Surgical to make monthly interest payments beginning on April 20, 2014. The Note matured on March 19, 2015, making the outstanding principal and accrued unpaid interest due. (Docket Entry No. 24-4). The Previty Surgical Note II was guaranteed by Previty East, Dr. Peel, and Mandie Peel. (Docket Entry No. 24-5).

         On March 20, 2014, IBERIABANK loaned Previty East $250, 000 and issued what is referred to as the "Previty East Note." The Note required Previty East to make monthly interest payments beginning on April 20, 2014. The Previty East Note matured on March 15, 2015, and the outstanding principal and interest became due. (Docket Entry 24-6). The Previty East Note was guaranteed by Previty Surgical, Dr. Peel, and Previty Assistants. (Docket Entry No. 24-7).

         On August 9, 2012, IBERIABANK loaned Garrett Peel $3 60, 000 and issued the "Peel Note." The Note called for monthly interest-only payments from September 8, 2012 to September 9, 2013, and monthly principal and interest payments of $6, 797.29 from September 9, 2013 through August 9, 2018, when the Note was to mature. The default provisions in the Peel Note mirrored those in the Previty Surgical Note I. If the borrower failed to make any payment when due, the Note was in default, and IBERIABANK could declare the entire unpaid amount due at that time. (Docket Entry No. 24-8). A collateral agreement secured the Peel Note with "all interest and income distributions" that Dr. Peel received from a limited partnership interest he held in the Victory Medical Center Beaumont, LP. (Docket Entry No. 24-9).

         The guaranty agreements signed for the Previty Surgical Note I, Previty Surgical Note II, and Previty East Note are all in the same form. The guaranty agreements provide that the "Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents, " state that the "Lender can enforce the Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness." (Docket Entry No. 23-4 at 2). The collateral agreement for the Peel Note states that if "Grantor fails to make any payment when due under the Indebtedness, " the "Lender may declare the entire Indebtedness immediately due and payable, without notice of any kind to Grantor, " and the lender "may collect the payments, rents, income and revenues from the Collateral." (Docket Entry 24-9 at 5).

         On December 22, 2016, IBERIABANK sent a letter to the borrowers, Previty Surgical, Previty East, and Dr. Peel, notifying them that the Previty Surgical Note I, Previty Surgical Note II, Previty East Note, and the Peel Note were all in default for the "failure to pay a required monthly payment when due." The default meant that "all amounts owed under the Promissory Notes are now due and payable in full." IBERIABANK notified the borrowers that they would also be responsible for "legal fees and related expenses." IBERIABANK demanded payment of the outstanding principal, interest, and legal fees by January 6, 2017. (Docket Entry No. 24-10). The amounts due at this time were:

Note

Amount Owed

Previty Surgical Note I

$2, 180, 048.05

Previty Surgical Note II

$759, 654.27

Previty East Note

$289, 975.26

Peel Note

$187, 500.44

(Docket Entry 24-10 at 3). Previty Surgical, Previty East, and Dr. Peel failed to respond, leading to this suit. (Docket 24-1 at ¶ 12).

         In support of its motion for partial summary judgment, IBERIABANK submitted a declaration from Brian Hamilton, Vice President, Special Assets for the bank, assigned to collect distressed assets, including the Notes and guarantee agreements at issue. The declaration set out the following summary of the unpaid principal and interest amounts on each of the four Notes as of June 16, 2017:

Note

Amount Owed

Previty Surgical Note I

$2, 358, 948.55

Previty Surgical Note II

$813, 015.62

Previty East Note

$316, 480.11

Peel Note

$193, 943.23

Total

$3, 682, 387.51


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