Apex Bank v. Ameris Bank, Inc.

REPLY BRIEF re MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

N.D. Ga.January 23, 2017

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION APEX BANK (f/k/a Bank of Camden), Plaintiff, v. AMERIS BANK, Defendant. ) ) ) ) ) ) ) ) ) Civil Action No.: 1:16-cv-04019-MHC JURY TRIAL DEMANDED REPLY BRIEF IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS S. Gardner Culpepper Timothy J. Fitzmaurice ROGERS & HARDIN LLP 2700 International Tower 229 Peachtree Street, N.E. Atlanta, GA 30303-1601 404.522.4700 (telephone) 404.525.2224 (facsimile) Counsel for the Defendant Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 1 of 22 Table of Contents Preliminary Statement ................................................................................................ 1 Argument.................................................................................................................... 3 I. The Complaint Fails to Allege the Existence of a Fiduciary Relationship Between Apex and Ameris. ........................................................ 3 II. The Economic Loss Doctrine Bars Apex’s Fiduciary Duty Claims. .............. 9 III. The Complaint Fails to Allege a Breach of the LPA. ...................................12 A. Ameris Did Not Breach the LPA’s Communication Obligations. .........................................................................................12 B. The Complaint Does Not Plausibly Allege a Breach of the “Prudent Man” Clause. ........................................................................13 IV. Apex’s Request for Leave to Amend Should Be Denied. .............................15 Conclusion ...............................................................................................................15 i Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 2 of 22 Table of Authorities Cases Argo v. G-Tec Servs., LLC, 338 Ga. App. 608 (2016) ........................................................................................ 7 Ashcroft v. Iqbal, 556 U.S. 662 (2009) .............................................................................................14 Bruce v. Homeward Residential, Inc., Civil Action File No. 1:14-CV-3325-MHC-AJB, 2015 WL 5797846 (N.D. Ga. Aug. 31, 2015) ....................................................................................... 9 Deep Six, Inc. v. Abernathy, 246 Ga. App. 71 (2000) .......................................................................................... 8 Gen. Elec. Co. v. Lowe’s Home Ctrs., Inc., 279 Ga. 77 (2005) .................................................................................................10 Georgia Operators Self-Insured Fund v. PMA Management Corp., Civil Action No. 1:12-CV-2578-ODE (Nov. 25, 2013) (ECF No. 107)..............11 Guar. Sav. & Loan Ass’n v. Ultimate Sav. Bank, 737 F. Supp. 366 (W.D. Va. 1990) ......................................................................... 4 Hanover Ins. Co. v. Hermosa Constr. Grp., LLC, 57 F. Supp. 3d 1389 (N.D. Ga. 2014) ..................................................................11 Mallett v. Fulford, 142 Ga. App. 200 (1977) ......................................................................................14 Milani v. One West Bank, 491 F. App’x 977 (11th Cir. 2012) .......................................................................15 Mitchell v. Ford Motor Credit Co., 68 F. Supp. 2d 1315 (N.D. Ga. 1998) .................................................................... 9 PNC Bank, Nat’l Ass’n v. Branch Banking & Trust Co., No. 8:08-cv-610-T-27TGW, 2010 WL 391410 (M.D. Fla. Feb. 2, 2010)............. 3 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 3 of 22 Resolution Trust Corp. v. Height of Texas, FSB, Civ. A. No. 89-2099-O, 1991 WL 205040 (D. Kan. Sept. 17, 1991) .................... 4 Resolution Trust Corp. v. United Trust Fund, Inc., 57 F.3d 1025 (11th Cir. 1995) ................................................................................ 5 Verrett v. ABB Power T&D Co., 237 Ga. App. 492 (1999) ........................................................................................ 9 Women’s Fed. Sav. & Loan Ass’n v. Nev. Nat’l Bank, 811 F.2d 1255 (9th Cir. 1987) ................................................................................ 4 Statutes O.C.G.A. § 13-2-2(4) ................................................................................................. 8 Other Authorities Christopher E. Leon, The Lead Lender’s Liability to Its Participant, 109 BANKING L.J. 532, 556 (1992) ............................................................................................... 5 Daniel J. Driscoll & Joseph Philip Forte, Structuring Participations In Real Estate Loans, 4 Real Estate Fin. J. 1, 25 n.9 (1987) ......................................................... 5 iii Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 4 of 22 Ameris respectfully submits this reply brief in support of its Motion to Dismiss the Complaint (the “Motion”), and in response to Apex’s Brief in Opposition to the Motion (the “Opposition”).1 PRELIMINARY STATEMENT Apex’s Opposition is long on rhetoric, but short on citation to either case law or allegations in the Complaint that can sustain the fiduciary duty and contract claims now at issue. As to the fiduciary duty claim, Apex does not dispute that loan participation agreements “ordinarily do not create a fiduciary relationship unless the parties include language imposing a fiduciary standard of care.” (Opp., at 4 (emphasis omitted.) Apex, however, argues that the LPA’s “prudent man” clause qualifies as an unequivocal and extraordinary expression of intent to create a fiduciary duty where one would not ordinarily exist. Yet, Apex fails to cite even a single case where a court has held that a “prudent man” standard of care imposes fiduciary obligations on the lead bank in a loan participation agreement. This Court should not be the first. Moreover, Apex’s characterization of its own Complaint reveals that its fiduciary duty claim flows solely from an alleged breach of contractual language and is thus barred by Georgia’s economic loss doctrine. 1 Capitalized terms not otherwise defined herein shall have the meaning given to them in the Motion. Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 5 of 22 As to the contract claims, Apex first claims that, when Ameris sold the Collateral in 2016, it did not comply with Section 4(e)’s communication requirements. This argument fails as a matter of contract construction because Ameris’s obligations (whatever they were) to communicate with Apex regarding its collection efforts expired in 2009 (the year of default), and the LPA expressly authorized—and obligated—Ameris to take appropriate actions to collect the Loan (which would include selling the Collateral for 85 percent of its appraised value) without communicating with Apex. Apex also claims that Ameris breached the LPA’s “prudent man” clause by taking the commercially reasonable step of relying on appraisals to establish the Collateral’s value. Apex does not seriously dispute that relying on appraisals is ordinarily a perfectly prudent approach. Instead, Apex argues that reliance on these particular appraisals was imprudent because they were inaccurate. The problem, however, is that Apex still cannot point to any specific, plausible allegation that the appraisals were actually inaccurate. Instead, at most, Apex claims to allege that general market conditions indicate that the appraisals may have been inaccurate. Under Georgia law, however, allegations regarding general market conditions are not sufficient to plausibly demonstrate the true value of real property. Thus, even after filing its Opposition, Apex remains where it started. 2 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 6 of 22 It asks the Court to assume that the appraisals were inaccurate (and thus imprudently relied upon) so that Apex will be relieved of any obligation to plausibly plead why/how the appraisals were inaccurate or why/how Ameris should have known of this inaccuracy. This is a fatal pleading deficiency. ARGUMENT I. THE COMPLAINT FAILS TO ALLEGE THE EXISTENCE OF A FIDUCIARY RELATIONSHIP BETWEEN APEX AND AMERIS. In the Motion, Ameris cited abundant authority for the proposition that fiduciary obligations “should not be inferred in the context of loan participation agreements between sophisticated lending institutions, absent unequivocal contractual language establishing a fiduciary relationship.” See, e.g., PNC Bank, Nat’l Ass’n v. Branch Banking & Trust Co., No. 8:08-cv-610-T-27TGW, 2010 WL 391410, at * 9 (M.D. Fla. Feb. 2, 2010) (emphasis added), rev’d in part on other grounds 466 F. App’x 766 (11th Cir. 2012); (see also Mot., at 7-8.) While Apex quibbles that these cases did not include “prudent man” provisions, it ultimately concedes the base line rule that these cases establish. (Opp., at 4, 8.) Thus, the parties essentially agree that the key issue here is whether this LPA contains express and unequivocal contractual language creating a fiduciary relationship where one would not normally exist. Tellingly, Apex cannot identify any case holding that the inclusion of mere “prudent man” language chins to this 3 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 7 of 22 high bar. In fact, Apex fails to cite any case wherein a court identified any kind of language that would be sufficient to create a fiduciary duty in this context. On the other hand, in an effort to illustrate just how unequivocal the language must be to create a fiduciary duty in this arena, Ameris cited two cases. And in both cases the loan participation agreements at issue provided expressly that the lead bank would act “as a trustee with fiduciary duties.”2 The LPA in this case contains no arguably similar or analogous provision. In fact, the word “fiduciary” never appears in the LPA. This alone is arguably fatal to Apex’s quest to create such a duty. See Resolution Trust Corp. v. Height of Texas, FSB, Civ. A. No. 89-2099-O, 1991 WL 205040, at *5 (D. Kan. Sept. 17, 1991) (declining to infer a fiduciary relationship between parties to a loan participation agreement because, inter alia, “the term ‘fiduciary’ appears nowhere in the agreement”). Apparently recognizing that it cannot cite a case wherein fiduciary duties were found to spring from a loan participation agreement with language analogous to this LPA, Apex resorts to citation to law review articles, Georgia’s trust statute, and the Restatement (Second) of Trusts. But Apex does not cite any case holding that any of these sources are even mildly persuasive authority when determining 2 See Women’s Fed. Sav. & Loan Ass’n v. Nev. Nat’l Bank, 811 F.2d 1255, 1257 (9th Cir. 1987) (emphasis added); Guar. Sav. & Loan Ass’n v. Ultimate Sav. Bank, 737 F. Supp. 366, 371 (W.D. Va. 1990) (same). 4 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 8 of 22 whether a loan participation agreement creates a fiduciary duty. This is not surprising. These authorities are not persuasive. Indeed, contrary to Apex’s assertion, the law review articles cited in the Opposition do not establish that the “prudent man” and fiduciary standard of care are equivalent. (Opp., at 5-6.) On the contrary, those articles identify the fiduciary standard of care as the highest standard that could be imposed, the “same care” standard of care as the lowest, and the “prudent man” standard of care as a middle ground.3 Nothing in the articles suggests that the parties to a loan participation agreement can unequivocally create a fiduciary relationship by using the “prudent man” standard of care (the middle ground), or that a fiduciary relationship can be inferred or casually imposed in a loan participation agreement when the word “fiduciary” appears nowhere.4 3 See Christopher E. Leon, The Lead Lender’s Liability to Its Participant, 109 BANKING L.J. 532, 556 (1992) (explaining that requiring the lead bank to exercise the “same level of care” as it exercises with its own loan “affords a participant less protection than [1] a fiduciary or [2] a reasonable man standard”); Daniel J. Driscoll & Joseph Philip Forte, Structuring Participations In Real Estate Loans, 4 Real Estate Fin. J. 1, 25 n.9 (1987) (“[M]ost prudent institutional buyers require [1] a fiduciary or [2] a ‘prudent man’ standard of care” in loan participation agreements); see also Resolution Trust Corp. v. United Trust Fund, Inc., 57 F.3d 1025, 1033 (11th Cir. 1995) (“[T]he disjunctive ‘or’ gives independent meaning to the words it separates.”) 4 Indeed, just as those articles distinguish between the fiduciary and prudent man standards of care, so too does Georgia law, which Apex does not even attempt to 5 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 9 of 22 Apex’s reliance on Georgia’s trust statute and the Restatement (Second) of Trusts is similarly misplaced. Apex does not (and cannot) argue that either of those authorities actually governs the relationship between the parties. Rather, Apex argues that the Court should use Georgia’s trust statute and the Restatement (Second) of Trusts as an aid to interpret the LPA and divine the parties’ intent. (Opp., at 7-8.) According to Apex, because trustees who owe fiduciary duties must act as a “prudent man,” the insertion of “trustee” and “prudent man” language in this LPA creates a fiduciary relationship between the parties. But relying on those trust principles would fly in the face of precedent specific to loan participation agreements, which establishes that the use of the word “trustee” does not establish either a trust or a fiduciary relationship between the parties. (Mot., at 10-11.) Moreover, even if the mere word “trustee” imposed a fiduciary duty in an LPA (which it does not), here the word “trustee” only appears in one provision of this LPA—Section 4(a). Thus, Ameris was not obligated to act as a trustee with respect to all of its LPA obligations. Instead—at most and as Section 4(a) makes clear—Ameris was obligated to act as a trustee only with respect to holding loan documents, payments received and proceeds collected. (LPA, at Section 4(a).) dispute in the Opposition. (See Mot., at 11-15 (under Georgia law, fiduciaries are held to a higher standard of care than ordinary diligence).) 6 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 10 of 22 The Complaint does not allege that Ameris acted improperly in holding the loan documents or proceeds that were ultimately collected. Thus, Section 4(a)’s trustee language is irrelevant. The Complaint alleges that the Ameris behaved improperly in the manner in which it chose to foreclose on collateral in the face of a default. Ameris’s obligations in this regard are governed most specifically by Section 4(e) of the LPA, which tellingly makes no reference to any trustee obligations. To evade the plainly limited applicability of the Section 4(a) trustee standard (which Apex wrongly equates with a fiduciary standard), Apex advances arguments that are foreclosed by the rules of contract construction. First, Apex seemingly argues that the general “prudent man” standard found in Section 4(b) imposes a trustee or fiduciary standard on Ameris as to all of its LPA obligations. (Opp., at 4-8.) But, if this were so, then specifying that Ameris would be a trustee as to the Section 4(a) obligations would have been unnecessary and superfluous. Contracts, of course, cannot be interpreted in this manner. See Argo v. G-Tec Servs., LLC, 338 Ga. App. 608 (2016). The trustee language must be construed as creating a standard that is (i) different from and higher than the prudent man standard and (ii) applies only to Ameris’ Section 4(a) obligations. And it is equally clear that whatever different or heightened standard the parties meant to create by including the trustee language in Section 4(a), they intentionally chose not to 7 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 11 of 22 impose that standard anywhere else in the LPA. There is no other construction that gives meaning to the entire LPA. See O.C.G.A. § 13-2-2(4) (“The construction which will uphold a contract in whole and in every part is to be preferred, and the whole contract should be looked to in arriving at the construction of any part.”). Second, Apex argues that the general prudent man provision can superimpose fiduciary or trustee standards onto the more specific provision of Section 4(e), which deals directly with foreclosure and default activities and makes no mention of any fiduciary or other heightened duty of care. (Opp., at 4-8.) But, under general rules of contract construction, a limited or specific provision will prevail over one that is more broadly inclusive. See Deep Six, Inc. v. Abernathy, 246 Ga. App. 71, 74 (2000). Here, Section 4(e) is a very specific provision that applies to the collateral collection activities at issue in this case. And this Section of the LPA makes absolutely no mention of trustee, fiduciary or any other heightened duty. In fact, it mandates that after a sixty day consultation period Ameris must proceed to foreclose and collect in the manner proscribed by the LPA, even if Apex did not agree to or opposed this approach.5 (See infra Part 5 The LPA relieves Ameris of the obligation to foreclose and collect as proscribed by Section 4(e) only if Apex “expressly consents in writing to the contrary.” (LPA, at Section 4(e).) 8 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 12 of 22 III.A.) A provision that empowers Ameris to proceed over Apex’s objection cannot possibly be read as establishing a fiduciary relationship between the two parties. Thus, using the general prudent man provision to read a fiduciary duty into the more specific language in Section 4(e), which contemplates no such duty, would improperly favor a general contractual provision over a specific one. Lastly, Apex is unjustifiably dismissive of the fact that Section 2 of the LPA creates a “seller and purchaser” relationship between the parties (Opp., at 9-10), which Georgia law views as an arms-length relationship that is the polar opposite of a fiduciary relationship. See Mitchell v. Ford Motor Credit Co., 68 F. Supp. 2d 1315, 1319 n.3 (N.D. Ga. 1998). It would be “inappropriate” for this Court to interpret the “prudent man” clause or any other provision in the LPA in a manner that would change the parties’ express and unambiguous seller-purchaser relationship into a far more burdensome fiduciary one. See Verrett v. ABB Power T&D Co., 237 Ga. App. 492, 493 (1999). II. THE ECONOMIC LOSS DOCTRINE BARS APEX’S FIDUCIARY DUTY CLAIMS.6 6 This argument was not asserted in the Motion, and Ameris acknowledges that this Court does not ordinarily consider arguments raised for the first time on reply. See Bruce v. Homeward Residential, Inc., Civil Action File No. 1:14-CV-3325-MHC- AJB, 2015 WL 5797846, at *15 n.10 (N.D. Ga. Aug. 31, 2015). This argument is, however, very closely related to the arguments raised in the Motion, and its importance and vitality became apparent when Apex characterized its own 9 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 13 of 22 In the Opposition, Apex rightly points out that fiduciary duties can be formed by nature, law, or contract. (See Opp., at 10.) Then, by emphasis and citation to rules of construction, Apex argues that its Complaint only alleges a fiduciary relationship that arises from a contractual obligation—i.e. the prudent man standard in the LPA. (See id. at 4-10.) Apex did not (and apparently cannot) argue that the fiduciary duty at issue in its Complaint arose from nature, law, or the parties’ course of conduct. Thus, the light that Apex shines on its own Complaint reveals that its effort to plead the tort of breach of fiduciary duty runs headlong into Georgia’s economic loss rule. Georgia’s economic loss doctrine “provides that a contracting party who suffers purely economic losses must seek his remedy in contract and not in tort.” Gen. Elec. Co. v. Lowe’s Home Ctrs., Inc., 279 Ga. 77, 78 (2005). Further, this doctrine bars fiduciary duty claims if the alleged “fiduciary duty is derived Complaint as alleging a breach of a fiduciary duty that was created only by contract. This argument has not been waived and if not addressed now will likely have to be addressed in a motion for judgment on the pleadings. Ameris respectfully requests that, for efficiency’s sake, the Court consider this new argument and suggests that any prejudice to Apex caused by the assertion of this new argument could be alleviated by allowing Apex to file a surreply, to which Ameris would obviously consent. Alternatively, Ameris respectfully requests that the Court consider this argument as part of Ameris’s Second Motion to Dismiss, which will be filed along with this reply brief. If the Court is willing to consider this argument as part of this Reply, Apex will withdraw its Second Motion to Dismiss. 10 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 14 of 22 exclusively from the [parties’] agreement.” See Order, at 15-21, Georgia Operators Self-Insured Fund v. PMA Management Corp., Civil Action No. 1:12- CV-2578-ODE (Nov. 25, 2013) (ECF No. 107) (relying on the economic loss doctrine to dismiss fiduciary duty claims), aff’d 631 F. App’x 730 (11th Cir. 2015); Hanover Ins. Co. v. Hermosa Constr. Grp., LLC, 57 F. Supp. 3d 1389, 1396 (N.D. Ga. 2014) (economic loss doctrine bars fiduciary duty claim “[b]ecause [Plaintiff] has not identified. . . .any private duty breached by [Defendant] which exists independently of the duties arising under the [parties’ agreements]”). Here, Apex and Ameris are contracting parties, and Apex only seeks economic damages. Moreover, to establish the alleged fiduciary duty, Apex relies only on the “prudent man” and “trustee” contractual obligations as found in the LPA. (Compl. ¶¶ 45-47.) The Complaint does not allege any course of conduct between the parties that could have created a fiduciary duty. In fact, the Complaint alleges that there was an absence of any communication between the parties in the relevant time period. (See e.g. id. at ¶¶ 36-39, 54.) And the Complaint does not identify any statutory or other non-contractual source for the creation of a fiduciary duty between these sophisticated contracting parties. Thus, the obligations that Ameris owes to Apex are entirely contractual. Apex’s remedy for a breach of these obligations must, therefore, proceed in contract and not in tort. Apex’s 11 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 15 of 22 fiduciary duty claims should be dismissed. III. THE COMPLAINT FAILS TO ALLEGE A BREACH OF THE LPA. Apex alleges that Ameris breached the LPA by (i) violating Section 4(e)’s communication obligations and (ii) relying on inaccurate appraisals to buy and sell the Collateral, in violation of the “prudent man” standard. The former claim fails as a matter of contract construction and the latter is not plausibly pleaded. A. Ameris Did Not Breach the LPA’s Communication Obligations. The first sentence of Section 4(e) provides that “[u]pon becoming aware of a default,” Ameris and Apex “shall attempt to determine by mutual agreement whether, in what manner and to what extent any and all rights and remedies of” Ameris and Apex “with respect to the Obligation and the Collateral shall be exercised.” Section 4(e) then states that “if [Ameris] and [Apex] are unable to mutually agree upon such a course of action within sixty (60) days after the occurrence of a payment default on the Obligation,” Ameris “shall (i) if necessary, accelerate the maturity of the Obligation, (ii) demand payment of the Obligation, and (iii) take appropriate action to collect the Obligation unless [Apex] expressly consents in writing to the contrary.” (emphasis added.) Here, the Complaint alleges that the Loan “matured July 29, 2009 and has been in default since at least that date.” (Compl. ¶ 6.) The Complaint does not 12 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 16 of 22 allege that (i) the parties’ respective predecessors reached an agreement regarding how to collect the Loan or exercise their rights in the Collateral within 60 days of the default or (ii) Apex or its predecessor expressly informed Ameris in writing that it objected to any potential action Ameris could take to collect the Loan and enforce its rights in the Collateral. Thus, under Section 4(e), since late 2009, Ameris was authorized and obligated to “take appropriate action” to collect the Loan and enforce its rights in the Collateral. The LPA simply did not impose communication obligations on Ameris in 2014 or 2016 given that the loan had been in default since 2009 and any contractual right to communication or input was limited to the 60 day period after the default. B. The Complaint Does Not Plausibly Allege a Breach of the “Prudent Man” Clause. Apex alleges that Ameris breached the LPA’s “prudent man” clause by relying on appraisals that caused Ameris to either purchase the Collateral for too much in 2014 or sell it for too little in 2016. (Compl. ¶¶ 53-54, 57-58.) Of course, reliance on appraisals is a presumptively prudent and common practice. This reliance could only be imprudent if the appraisals were inaccurate and if Ameris should have known this to be so. But Apex’s Complaint never actually alleges that any of the appraisals incorrectly valued the fair market price of the Collateral. Nor does the Complaint allege why the appraisals were inaccurate or how Ameris 13 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 17 of 22 should have known that appraisals done by third parties were inaccurate. Instead, Apex’s allegations amount to nothing more than conclusory if-then speculation that does not contain “the factual content that allows the court to draw the reasonable inference that” Ameris breached the LPA. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (emphasis added). In the Opposition, Apex argues that its allegations state a claim because “[t]he Complaint alleges that the Property did not decline in value between 2014 and 2016.” (Opp., at 10 (citing Compl. ¶ 35).) Apex cites Paragraph 35 of the Complaint to support this argument. But Paragraph 35 alleges only that “[t]here was no real estate ‘crash’ in Henry County, Georgia between 2014 and 2016. In fact, real estate values in Henry County, Georgia generally increased between 2014 and 2016.” (Compl. ¶ 35.) Thus, Paragraph 35 alleges nothing about the Collateral’s actual value during that time period. Rather, the allegations relate to market conditions. As a matter of law, allegations regarding the purported condition of the real estate market in Henry County between 2014 and 2016 are insufficient to allege anything about the value of the Collateral. See Mallett v. Fulford, 142 Ga. App. 200, 201 (1977) (the trial court’s determination regarding the value of 38.3 acres of property was “clearly erroneous” because it was based on the testimony of expert witness who testified “only generally with regard to market 14 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 18 of 22 conditions, and not specifically as to the value of the property in question.”). The Complaint does allege that Ameris sold the collateral for 85 percent of its appraised value in 2016 and purchased the property for its appraised value in 2014, which, under Georgia law, is commercially reasonable. (Mot., at 16.) Apex attempts to distinguish the authorities Ameris cites for this proposition on the grounds that “Ameris’[s] defense that it purchased and sold the Property at fair market value is a matter of proof, not a matter of the sufficiency of the pleadings.” (Opp., at 11-12.) That might be the case if Apex had alleged that the appraisals did not accurately value the fair market price of the Collateral. Here, however, Apex failed to include any such allegations in the Complaint. Apex, in essence, asks the Court to assume that the appraisals were inaccurate so that it is relieved of any obligation to plausibly plead why this is so or why Ameris should have known it was so. This is a fatal pleading deficiency. IV. APEX’S REQUEST FOR LEAVE TO AMEND SHOULD BE DENIED. Any amendment would be futile, and Apex’s request for leave to amend should be denied. Milani v. One West Bank, 491 F. App’x 977 (11th Cir. 2012). CONCLUSION For each of the reasons explained herein, Ameris respectfully requests that the Court dismiss the Complaint in its entirety. 15 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 19 of 22 Respectfully submitted this 23rd day of January, 2017. /s/ S. Gardner Culpepper S. Gardner Culpepper Ga. Bar No. 201210 sculpepper@rh-law.com Timothy J. Fitzmaurice Ga. Bar No. 241959 tfitzmaurice@rh-law.com Counsel for the Defendant ROGERS & HARDIN LLP 2700 International Tower 229 Peachtree Street, N.E. Atlanta, GA 30303-1601 404.522.4700 (telephone) 404.525.2224 (facsimile) 16 Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 20 of 22 CERTIFICATE OF COMPLIANCE I hereby certify that, pursuant to Local Rules 5.1C and 7.1D of the United States District Court for the Northern District of Georgia, the foregoing Reply Brief in Support of Defendant’s Motion to Dismiss complies with the font and point selections approved by the Court in Local Rule 5.1C. The foregoing pleading was prepared on a computer using 14-point Times New Roman font. /s/ S. Gardner Culpepper S. Gardner Culpepper Ga. Bar No. 201210 sculpepper@rh-law.com Counsel for the Defendant ROGERS & HARDIN LLP 2700 International Tower 229 Peachtree Street, N.E. Atlanta, GA 30303-1601 404.522.4700 (telephone) 404.525.2224 (facsimile) Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 21 of 22 CERTIFICATE OF SERVICE I hereby certify that on January 23, 2017, I caused a copy of the foregoing Reply Brief in Support of Defendant’s Motion to Dismiss to be electronically filed with the Clerk of Court using the CM/ECF system which will automatically send e-mail notification to the following attorneys of record: John A. Locket, III jlockett@mmmlaw.com Hillary R. Kinsey hkinsey@mmmlaw.com Morris, Manning & Martin, LLP 1600 Atlanta Financial Center 3343 Peachtree Road NE Atlanta, GA 30326 /s/ S. Gardner Culpepper S. Gardner Culpepper Ga. Bar No. 201210 sculpepper@rh-law.com Counsel for the Defendant ROGERS & HARDIN LLP 2700 International Tower 229 Peachtree Street, N.E. Atlanta, GA 30303-1601 404.522.4700 (telephone) 404.525.2224 (facsimile) Case 1:16-cv-04019-MHC Document 18 Filed 01/23/17 Page 22 of 22