newest federal's lawsuit implicates eddy benoit in $2,456,472.45 commercial real estate loan...

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF GEORGIA

VALDOSTA DIVISION BANK OF THE OZARKS, ) ) Plaintiff, ) ) Civil Action v. ) File No. __________________ ) AMBLING GROVE HOLDINGS, LLC, ) AMBLING COMPANIES, INC., ) AMBLING DEVELOPMENT ) HOLDINGS, LLC, MICHAEL H. ) GODWIN, RHETT J. HOLMES, ) R. RYAN HOLMES, EDDY BENOIT ) AND KENNETH BLANKENSHIP, ) ) Defendants. ) )

COMPLAINT

Plaintiff Bank of the Ozarks (Plaintiff or the “Bank”) hereby files its

Complaint against Defendants Ambling Grove Holdings, LLC (“Ambling”),

Ambling Companies, Inc. (“ACI”), Ambling Development Holdings, LLC

(“ADH”), Michael H. Godwin (“Godwin”), Rhett J. Holmes (“Rhett Holmes”), R.

Ryan Holmes (“Ryan Holmes”), Eddy Benoit (“Benoit”) and Kenneth Blankenship

(“Blankenship”) (collectively, the “Defendants”), showing this Court as follows:

Case 7:12-cv-00019-HL Document 1 Filed 01/20/12 of 19

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I. PARTIES, JURISDICTION, AND VENUE

1. Plaintiff is a banking entity created under Arkansas law and having its

principal place of business located in Little Rock, Arkansas.

2. Ambling is a limited liability company organized and existing under

the laws of the State of Georgia. Ambling may be served through its registered

agent, Michael H. Godwin, at 348 Enterprise Drive, Valdosta, Georgia 31601, or

otherwise in accordance with applicable law.

3. Ambling Companies, Inc. is a corporation organized and existing

under the laws of the State of Georgia. Ambling Companies, Inc. may be served

through its registered agent, Michael H. Godwin, at 348 Enterprise Drive,

Valdosta, Georgia 31601, or otherwise in accordance with applicable law.

4. Ambling Development Holdings, LLC is a company organized and

existing under the laws of the State of Georgia. Ambling Development Holdings,

LLC may be served through its registered agent, Michael H. Godwin, at 348

Enterprise Drive, Valdosta, Georgia 31601, or otherwise in accordance with

applicable law.

5. Michael H. Godwin is an individual and resident of the State of

Georgia. Mr. Godwin may be served with process at his home address of 3018

Wendover Road, Valdosta, Georgia 31602, or wherever he may be found.


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6. Rhett J. Holmes is an individual and resident of the State of Georgia.

Rhett Holmes may be served with process at his home address of 4842 Oak Arbor

Drive, Valdosta, Georgia 31602, or wherever he may be found.

7. R. Ryan Holmes is an individual and resident of the State of Georgia.

Ryan Holmes may be served with process at his home address of 2519 Jerry Jones

Drive, Valdosta, Georgia 31602, or wherever he may be found.

8. Eddy Benoit is an individual and resident of the State of Georgia. Mr.

Benoit may be served with process at his home address of 3858 Spalding Wood

Drive, Norcross, Georgia 30092-2629, or 2170 Heathermoor Hill Drive, Marietta,

Georgia 30062, or wherever he may be found.

9. Kenneth Blankenship is an individual and resident of the State of

Georgia. Mr. Blankenship may be served with process at his home address of

610 Hampton Bluff Lane, Alpharetta, Georgia 30004-3075, or wherever he may be

found.

10. Pursuant to 28 U.S.C. § 1332, the Court has subject matter jurisdiction

over this action because complete diversity exists between the parties and the

amount in controversy exceeds the sum or value of $75,000.00, exclusive of

interest and costs. Specifically, the Bank is a banking entity created under

Arkansas law and having its principal place of business located in Arkansas.


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Ambling is a Georgia citizen because it is created under Georgia law, has its

principal place of business in this State, and, upon information and belief, is not

owned by any individual or entity which is a citizen of Arkansas. Ambling

Companies, Inc. is a Georgia citizen because it is created under Georgia law, has

its principal place of business in this State, and, upon information and belief, is not

owned by any individual or entity which is a citizen of Arkansas. Ambling

Development Holdings, LLC is a Georgia citizen because it is created under

Georgia law, has its principal place of business in this State, and, upon information

and belief, is not owned by any individual or entity which is a citizen of Arkansas.

Godwin is a Georgia citizen because he is domiciled in Georgia. Ryan Holmes is a

Georgia citizen because he is domiciled in Georgia. Rhett Holmes is a Georgia

citizen because he is domiciled in Georgia. Eddy Benoit is a Georgia citizen

because he is domiciled in Georgia. Kenneth Blankenship is a Georgia citizen

because he is domiciled in Georgia. As shown below, the amount in controversy

exceeds the sum of $75,000.00. Accordingly, jurisdiction is proper under 28

U.S.C. § 1332.

11. Pursuant to 28 U.S.C. § 1391(a), venue is proper in this Court

because, inter alia, a substantial part of the events or omissions giving rise to the

Bank’s claim occurred in the Middle District of Georgia. Pursuant to L.R. 3.4(b),


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venue is proper in the Valdosta Division of this District because a substantial part

of the events or omissions giving rise to the Bank’s claim occurred in Lowndes

County, which is in the Valdosta Division, and because certain of the Defendants,

as identified above, reside in the Valdosta Division.

II. FACTUAL BACKGROUND

The Note

12. On or about September 20, 2010, Ambling executed and delivered a

Promissory Note in favor of The Park Avenue Bank (“PAB”) in the principal

amount of $2,456,472.45 as a renewal of prior indebtedness (hereinafter the

“Note”). A true and correct copy of the Note, with Allonge, is attached hereto as

Exhibit “A” and is incorporated herein by reference.

13. The Note obligates Ambling to timely pay PAB, or PAB’s successor,

all amounts due under the Note, including principal, interest, and other charges due

and payable thereunder (collectively, the “Indebtedness”).

14. The Note further provides for payment of the costs and expenses of

collection of the Indebtedness, including court costs and fifteen percent (15%) of

the remaining principal plus accrued interest as attorneys’ fees under O.C.G.A. §

13-1-11.


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15. Ambling’s repayment and performance under the Note is guaranteed

through that certain Guaranty executed and delivered by Ambling Companies, Inc.

on September 20, 2010 (the “ACI Guaranty”). A true and correct copy of the ACI

Guaranty is attached hereto as Exhibit “B” and is incorporated by reference herein.


through that certain Guaranty executed and delivered by Ambling Development

Holdings, LLC on September 20, 2010 (the “ADH Guaranty”). A true and correct

copy of the ADH Guaranty is attached hereto as Exhibit “C” and is incorporated by

reference herein.


through that certain Guaranty executed and delivered by Michael Godwin on

September 20, 2010 (the “Godwin Guaranty”). A true and correct copy of the

Godwin Guaranty is attached hereto as Exhibit “D” and is incorporated by

reference herein.


through that certain Guaranty executed and delivered by R. Ryan Holmes on

September 20, 2010 (the “Ryan Holmes Guaranty”). A true and correct copy of

the Ryan Holmes Guaranty is attached hereto as Exhibit “E” and is incorporated by

reference herein.


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through that certain Guaranty executed and delivered by Rhett J. Holmes on

September 20, 2010 (the “Rhett Holmes Guaranty”). A true and correct copy of

the Rhett Holmes Guaranty is attached hereto as Exhibit “F” and is incorporated by

reference herein.


through that certain Guaranty executed and delivered by Eddy Benoit on

September 20, 2010 (the “Benoit Guaranty”). A true and correct copy of the

Benoit Guaranty is attached hereto as Exhibit “G” and is incorporated by reference

herein.


through that certain Guaranty executed and delivered by Kenneth Blankenship on

September 20, 2010 (the “Blankenship Guaranty”). A true and correct copy of the

Godwin Guaranty is attached hereto as Exhibit “H” and is incorporated by

reference herein. The ACI Guaranty, ADH Guaranty, Godwin Guaranty, Ryan

Holmes Guaranty, Rhett Holmes Guaranty, Benoit Guaranty and Blankenship

Guaranty are referred to collectively as the “Guarantees.”

22. The Note is secured by that certain Real Estate Deed to Secure Debt,

Assignment of Rents and Security Agreement (With Future Advance Clause) from


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Ambling, as grantor, to PAB, dated May 26, 2005, recorded in Deed Book 17562,

Pages 21-43, DeKalb County, Georgia Superior Court records as may have been

modified, amended, and assigned (the “Security Deed”). The Security Deed

provides for protective advances and other amounts paid by PAB to protect its

collateral position to be added to the principal balance and collected as part and

parcel of the Indebtedness. A copy of the Security Deed is attached hereto as

Exhibit “I” and is incorporated by reference herein.

23. Plaintiff has made protective advances for property taxes for 2011.

24. During the pendency of this action, Plaintiff may advance and pay ad

valorem taxes, insurance premiums, and other costs to protect its security interest

in the collateral. In the event such costs are paid by Plaintiff, Plaintiff is entitled to

reimbursement therefore in accordance with the terms of the Security Deed and

other Loan Documents.

25. PAB extended funds in excess of $75,000.00 to Ambling subject to

the terms of the Note.

26. Ambling received and has enjoyed the use of the funds that PAB

disbursed.

27. Ambling is in default under the terms of the Note for failure to make

payments on the Note when due. ACI is in default under the terms of the ACI


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Guaranty for failure to make payments on the Note when due. ADH is in default

under the terms of the ADH Guaranty for failure to make payments on the Note

when due. Godwin is in default under the terms of the Godwin Guaranty for

failure to make payments on the Note when due. Ryan Holmes is in default under

the terms of the Ryan Holmes Guaranty for failure to make payments on the Note

when due. Rhett Holmes is in default under the terms of the Rhett Holmes

Guaranty for failure to make payments on the Note when due. Benoit is in default

under the terms of the Benoit Guaranty for failure to make payments on the Note

when due. Blankenship is in default under the terms of the Blankenship Guaranty

for failure to make payments on the Note when due.

Transfer of Loan Documents to Bank of the Ozarks

28. On or about April 29, 2011, the Georgia Department of Banking and

Finance closed PAB, and the Federal Deposit Insurance Corporation was appointed

receiver thereof.

29. The Federal Deposit Insurance Corporation as receiver for PAB

(“FDIC-R”), succeeded to all rights, titles, powers, and privileges of PAB,

pursuant to 12 U.S.C. § 1821(c)-(d). As such the FDIC-R stood in the shoes of

PAB with respect to all matters.


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30. Also on or about April 29, 2011, the FDIC-R and Bank of the Ozarks

entered into a Purchase and Assumption Agreement (the “Purchase Agreement”)

whereby Bank of the Ozarks purchased for value and took physical possession of

the loan documents at issue in this action. Plaintiff remains in possession of the

original Note, Guarantees, Security Deed, and related Loan Documents.

31. On or about April 29, 2011, the FDIC-R, acting through its duly

appointed attorney-in-fact, executed that certain Assignment (effective by its terms

April 29, 2011) which is recorded in Deed Book 22485, at Pages 415-427, DeKalb

County, Georgia, Superior Court records, evidencing the transfer of the Note and

all related Loan Documents at issue in this action to Bank of the Ozarks effective

as of (the “Assignment”). A true and correct copy of the Assignment is attached

hereto as Exhibit “J” and is incorporated by reference herein.

32. In Bank of the Ozarks’ purchase of the assets of PAB from the FDIC-

R, the FDIC-R completely transferred any and all interest it had in the Note and

related Loan Documents involved in this action to Bank of the Ozarks. Bank of

the Ozarks is the holder of the Note and related Loan Documents at issue in this

action with all rights to enforce same.


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Notice of Default

33. Ambling breached its obligations under the Note by failing to make

payments on the Note when due.

34. On or about December 29, 2011, the Bank provided written notice of

the default to Defendants under the terms of Note and Guarantees with notice that

the Bank intended to enforce the attorneys’ fees provisions of the Loan Documents

pursuant to O.C.G.A. § 13-1-11. A true and correct copy of the December 29,

2011 letter is attached hereto as Exhibit “K” and is incorporated by reference

herein.

35. On or about January 6, 2012, the Bank made certain protective

advances for real property taxes under the Security Deed in the total amount of

$19,719.00 (“Protective Advance”). Defendants are hereby notified that unless the

full amount of 19,719.00, plus accrued interest thereon, is paid in full within ten

(10) days from the receipt of this Compliant, Defendants are required to pay

additional attorneys’ fees on the Protective Advance in accordance with O.C.G.A.

§ 13-1-11 and the Note.

36. As of January 19, 2012, the Indebtedness, exclusive of the Bank’s

collection costs, includes outstanding principal of $2,476,191.45, accrued interest

of $121,414.20, late charges of $12,024.76, appraisal fees of $1,200, and appraisal


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Review Fees of $300.00. Interest continues to accrue on the unpaid principal at the

rate of $429.84 per diem from January 20, 2012 through the date of judgment, with

post-judgment interest to accrue under applicable law.

37. To date, Ambling has failed to cure its default and breach of the Note.

38. To date, ACI has failed to cure his default and breach of the ACI

Guaranty.

39. To date, ADH has failed to cure his default and breach of the ADH

Guaranty.

40. To date, Godwin has failed to cure his default and breach of the

Godwin Guaranty.

41. To date, Ryan Holmes has failed to cure his default and breach of the

Ryan Holmes Guaranty.

42. To date, Rhett Holmes has failed to cure his default and breach of the

Rhett Holmes Guaranty.

43. To date, Benoit has failed to cure his default and breach of the Benoit

Guaranty.

44. To date, Blankenship has failed to cure his default and breach of the

Blankenship Guaranty.

III. CAUSES OF ACTION


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COUNT I

BREACH OF NOTE (Against Ambling Grove Holdings, LLC)

45. The Bank incorporates by reference the averments in paragraphs 1

through 44 above as if fully stated herein.

46. Through its default and by failing to pay the amounts due under the

terms of the Note, Ambling has breached its contractual obligations to the Bank.

47. As a result of Ambling’s failure to pay the outstanding Indebtedness

in full, the Bank is entitled to the entry of judgment against Ambling in an amount

equal to the Indebtedness as of the entry of judgment.

COUNT II

BREACH OF GUARANTY (Against Ambling Companies, Inc.)



49. Through his default and by failing to pay the amounts due under the

terms of the ACI Guaranty, ACI has breached his contractual obligations to the

Bank.


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50. As a result of ACI’s failure to pay the Indebtedness, the Bank is

entitled to the entry of judgment against ACI in an amount equal to the

Indebtedness as of the date of entry of judgment.

COUNT III

BREACH OF GUARANTY (Against Ambling Development Holdings, LLC)




terms of the ADH Guaranty, ADH has breached his contractual obligations to the

Bank.

53. As a result of ADH’s failure to pay the Indebtedness, the Bank is

entitled to the entry of judgment against ADH in an amount equal to the

Indebtedness as of the entry of judgment.

COUNT IV

BREACH OF GUARANTY (Against Michael Godwin)




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terms of Godwin Guaranty, Godwin has breached his contractual obligations to the

Bank.

56. As a result of Godwin’s failure to pay the Indebtedness, the Bank is

entitled to the entry of judgment against Godwin in an amount equal to the


COUNT V

BREACH OF GUARANTY (Against R. Ryan Holmes)




terms of Ryan Holmes Guaranty, Ryan Holmes has breached his contractual

obligations to the Bank.

59. As a result of Ryan Holmes’ failure to pay the Indebtedness, the Bank

is entitled to the entry of judgment against Ryan Holmes in an amount equal to the



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COUNT VI

BREACH OF GUARANTY (Against Rhett J. Holmes)




terms of Rhett Holmes Guaranty, Rhett Holmes has breached his contractual


62. As a result of Rhett Holmes’ failure to pay the Indebtedness, the Bank

is entitled to the entry of judgment against Rhett Holmes in an amount equal to the


COUNT VII

BREACH OF GUARANTY (Against Eddy Benoit)




terms of Benoit Guaranty, Benoit has breached his contractual obligations to the

Bank.


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65. As a result of Benoit’s failure to pay the Indebtedness, the Bank is

entitled to the entry of judgment against Benoit in an amount equal to the


COUNT VIII

BREACH OF GUARANTY (Against Kenneth Blankenship)




terms of Blankenship Guaranty, Blankenship has breached his contractual


68. As a result of Blankenship’s failure to pay the Indebtedness, the Bank

is entitled to the entry of judgment against Blankenship in an amount equal to the


COUNT IX

UNJUST ENRICHMENT – IN THE ALTERNATIVE (Against All Defendants)




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70. The Defendants have directly benefited and have been unjustly

enriched through receipt of loan funds wrongfully retained and for which they are

jointly and severally liable to the Bank in the amounts set forth above.

COUNT X

ATTORNEYS’ FEES AND EXPENSES PURSUANT TO O.C.G.A. § 13-1-11 (Against All Defendants)



72. Plaintiff is claiming its attorneys’ fees under the Promissory Note,

Guarantees, and Georgia law, proper notice having been given pursuant to

O.C.G.A. § 13-1-11.

WHEREFORE, Bank of the Ozarks prays:

a. That the Court enter judgment against the respective Defendants on each

count of this Complaint;

b. That the Court award compensatory and actual damages as a result of

Defendants’ conduct;

c. That the Court award Plaintiff its attorneys’ fees and costs pursuant to

O.C.G.A. § 13-1-11; and

d. That the Court award Plaintiff such other and further relief as is just and

proper.


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Respectfully submitted this the 20th day of January, 2012.

/s/ John R. Richard JOHN R. RICHARD Georgia State Bar No. 603989 [email protected] MARK B. CARTER Georgia State Bar No. 114570 [email protected]

TAYLOR ENGLISH DUMA LLP 1600 Parkwood Circle, Suite 400 Atlanta, Georgia 30339 Telephone: 770-434-6868 Facsimile: 770-434-7376

Attorneys for Plaintiff Bank of the Ozarks


Case 7:12-cv-00019-HL Document 1-1 Filed 01/20/12 Page 1 of 9

newest federal's lawsuit implicates eddy benoit in $2,456,472.45 commercial real estate loan...

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