Succeeding in a Motion for Summary Judgment When Your Borrower Has Defaulted on Its Loan

In these challenging economic times, many businesses face substantial struggles. Sometimes, those struggles may lead a business that owes money to yours to fall behind on paying its debts. Of course, your business’ own success is predicated on getting paid the sums that are owed to you, and getting paid on a timely basis. When someone doesn’t, there may be an opportunity to work things out between the two sides. Other times, legal action may be necessary. When the latter is true, look to a knowledgeable Atlanta commercial debt collection lawyer for the legal representation your business needs.

If you’re a lender, dealing with a delinquent borrower can be complicated. There are various steps you can take to deal with the problem. However, if your situation reaches the point where litigation is necessary, you want not only to win your case but also to do so as quickly and efficiently as possible. Doing that may involve bringing — and winning — a motion for summary judgment.

A commercial lending dispute between an Atlanta business intelligence and data analytics company and its lender is a good example. The pair inked a loan agreement in late 2018. On the same day, the borrower submitted two promissory notes to the lender.

After executing these documents, the borrower made exactly zero payments toward the debt, so the lender sued in federal court here in Atlanta. The borrower then counterclaimed alleging breach of fiduciary duty.

In this lender’s motion for summary judgment, its argument was quite straightforward. It asserted that it had unmistakably shown that the borrower had defaulted on the debt and that the borrower could not possibly “point to any admissible fact that would indicate a possible defense or issue of genuine material fact.”

Overcoming a Defense Motion Under Rule 56(d)

The defense tried a procedural maneuver, filing something called a “Rule 56(d) motion.” This is a motion that asserts that there exists certain evidence it has not yet obtained that would possibly support its defense, and make a summary judgment improper at that point in the proceeding.

To do that, though, the defense has to identify some information that is possessed by the other side and link it to some element of its defense. In this lender’s case, the borrower’s Rule 56(d) motion failed because the defense never identified anything that the lender controlled ” that would support a defense to liability on the notes.”

The defense, as part of that motion, tried to introduce an issue about exactly what company funded the loans, but the lender successfully rebuffed this as well. Although the borrower produced a series of emails about what entity would fund the loan, the court recognized that the evidence demonstrated that the lender eventually funded the loan, and the defense had no proof that an assignment ever took place. That meant that the defense’s Rule 56(d) motion failed and the lender was entitled to the summary judgment it sought.

Whatever your business needs when it comes to collecting the debts it’s owed, you can confidently rely on the skilled Atlanta commercial debt collection attorneys at Poole Huffman, LLC to provide the knowledgeable, diligent, and effective legal representation your company needs to get results. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation today.