# Wells Fargo Bank National Association v. Choice Medicine: Hwy 53 Medical Center

> District Court, N.D. Alabama · May 20, 2020

URL: https://www.frixlaw.com/law-library/cases/9989473

## Case

- **Court:** District Court, N.D. Alabama
- **Decided:** May 20, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION

WELLS FARGO BANK, )
NATIONAL ASSOCIATION, )

)

Plaintiff, )

)
Civil Action Number
vs. )
5:19-cv-00247-AKK
)

CHOICE MEDICINE: HWY 53 )
MEDICAL CENTER AND ASHER )
A. TURNEY, )
)
Defendants. )

MEMORANDUM OPINION

This breach of contract action arises from a loan Wells Fargo Bank, National
Association extended to Choice Medicine: Hwy 53 Medical Center and a guaranty
executed by Asher A. Turney, Choice Medicine’s CEO, to help secure the loan. Doc.
1. After Choice Medicine defaulted on its obligations, Wells Fargo demanded
payment from Choice Medicine and Turney, and then filed this lawsuit when the
defendants did not pay the amount due under the loan. Before the court is Wells
Fargo’s motion for summary judgment on its claims against Turney. Doc. 25.
Because Turney has not shown a question of fact regarding the elements of Wells
Fargo’s breach of contract claim, Wells Fargo is entitled to a judgment in its favor
of $107,835.50, plus post-judgment interest, costs, and reasonable attorneys’ fees.
I.
Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment

is proper “if the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56.
“Rule 56[] mandates the entry of summary judgment, after adequate time for

discovery and upon motion, against a party who fails to make a showing sufficient
to establish the existence of an element essential to that party’s case, and on which
that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986) (alteration in original). The moving party bears the initial burden

of proving the absence of a genuine issue of material fact. Id. at 323. The burden
then shifts to the nonmoving party, who is required to “go beyond the pleadings” to
establish that there is a “genuine issue for trial.” Id. at 324 (citation and internal

quotation marks omitted). A dispute about a material fact is genuine “if the evidence
is such that a reasonable jury could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
On summary judgment motions, the court must construe the evidence and all

reasonable inferences arising from it in the light most favorable to the non-moving
party. Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970); see also Anderson,
477 U.S. at 255. Any factual disputes will be resolved in the non-moving party’s

favor when sufficient competent evidence supports the non-moving party’s version
of the disputed facts. See Pace v. Capobianco, 283 F.3d 1275, 1276, 1278 (11th Cir.
2002) (a court is not required to resolve disputes in the non-moving party’s favor

when that party’s version of events is supported by insufficient evidence). However,
“mere conclusions and unsupported factual allegations are legally insufficient to
defeat a summary judgment motion.” Ellis v. England, 432 F.3d 1321, 1326 (11th

Cir. 2005) (per curiam) (citing Bald Mountain Park, Ltd. v. Oliver, 863 F.2d 1560,
1563 (11th Cir. 1989)). Moreover, “[a] mere ‘scintilla’ of evidence supporting the
opposing party’s position will not suffice; there must be enough of a showing that
the jury could reasonably find for that party.” Walker v. Darby, 911 F.2d 1573, 1577

(11th Cir. 1990) (citing Anderson, 477 U.S. at 252)).
II.
Wells Fargo extended a loan with a revolving credit line to Choice Medicine,

as evidenced by a Business Lending Confirmation Letter dated February 15, 2016
(the “Loan”). Doc. 26-1 at 3, 9-13. As an inducement for Wells Fargo to make the
Loan, Turney signed a Commercial Guaranty dated April 9, 2016, which guaranteed
payment of the Loan and all obligations due under the Loan. Id. at 4, 47. Pursuant

to the express terms of the Guaranty, Turney agreed to be bound by the Guaranty
and the Wells Fargo Business Lending Disclosure, which provides in part that “[i]n
addition to being liable for the Guaranteed Indebtedness, Guarantor agrees to pay
upon demand all of [Wells Fargo’s] costs and expenses incurred in connection with
the enforcement of [Wells Fargo’s] rights under the Guaranty . . . .” Id. at 33, 47.

Choice Medicine defaulted on its obligations to make payments as required
under the Loan. Doc. 26-1 at 5; see also doc. 21. Wells Fargo sent a written notice
of default and a demand for payment to Choice Medicine and Turney on January 8,

2019. Doc. 26-1 at 5, 49-50. Wells Fargo subsequently filed this action, asserting
breach of contract and unjust enrichment claims against Choice Medicine and
Turney, and seeking damages for the principal due under the Loan, accrued interest,
and the costs of collection, including Wells Fargo’s attorneys’ fees and expenses.

Docs. 1; 26-1 at 5.1
III.
Wells Fargo asks the court to enter summary judgment on its claims against

Turney and to award it damages for the full amount due under the Loan, plus pre-
and post-judgment interest, attorney’s fees and costs. Docs. 25; 26.2 To prevail on
its breach of contract claim, Wells Fargo must prove (1) the existence of a valid
contract binding the parties, (2) Wells Fargo’s own performance under the contract,

1 Choice Medicine failed to respond to Wells Fargo’s complaint, and Wells Fargo obtained a
default judgment against Choice Medicine for $98,222.23, plus post-judgment interest. Doc. 21.

2 Because the court finds that Wells Fargo is entitled to a judgment in its favor on its breach of
contract claim, and Wells Fargo cannot obtain a double recovery, see, e.g., Ex parte Barnett, 978
So. 2d 729, 732 (Ala.2007) (citations omitted), the court does not address the unjust enrichment
claim.
(3) Turney’s nonperformance, and (4) damages. See, e.g., Shaffer v. Regions Fin.
Corp., 29 So. 3d 872, 880 (Ala. 2009) (quotation omitted).3 The elements of a valid

contract are “an offer and an acceptance, consideration, and mutual assent to the
terms essential to the formation of a contract.” Id. (quotation omitted). Mutual
assent is generally shown by a signature on a written contract, Bowen v. Security

Pest Control, Inc., 879 So. 2d 1139, 1142 (Ala. 2003) (citation omitted), and, under
Alabama law, a person who signs a contract is on notice of and bound by the terms
of the contract, Ex parte Leasecomm Corp., 870 So. 2d 1156, 1160 (Ala. 2003)
(citation omitted). Finally, under Alabama’s Statute of Frauds, “[e]very special

promise to answer for the debt [or] default [] of another” is void unless it is in writing
and signed by the guarantor. Ala. Code. § 8-9-2(3).
A.

To prove the existence of a valid contract between the parties, Wells Fargo
submits a copy of the Guaranty signed by Turney with an affidavit from Eddy
Mullinax, a Vice-President in Wells Fargo’s Credit Management Group, attesting to

3 Because the court has diversity jurisdiction over this action, the court must apply Alabama
substantive law and choice-of-law rules. E.g., Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487,
496 (1941). In a breach of contract action, Alabama courts apply the law of the state where the
contract was made, unless the parties choose a different state’s laws to govern their agreement.
E.g., Colonial Life & Acc. Ins. Co. v. Hartford Fire Ins. Co., 358 F.3d 1306, 1308 (11th Cir. 2004)
(citing Cherry, Bekaert & Holland v. Brown, 582 So. 2d 502, 506 (Ala. 1991)). The Guaranty was
formed in Alabama, the Loan provides that it is governed by Alabama law, and the parties agree
that Alabama law applies to Wells Fargo’s claims. See doc. 26 at 6-7; 26-1 at 10; 28 at 5. Thus,
the court applies Alabama law.
the authenticity of the Guaranty. Doc. 26-1 at 2-3, 47. Turney counters that this
evidence does not prove the existence of a binding contract because Mullinax did

not properly authenticate the Guaranty and, therefore, Wells Fargo failed to prove
that Turney signed the Guaranty as required by Alabama’s Statute of Frauds. See
doc. 28 at 5. To that end, Turney attests that he does not recall meeting Mullinax

and that he did not sign the Guaranty in Mullinax’s presence. Doc. 28 at 11. But,
critically, Turney does not deny signing the Guaranty. See id. Moreover, under Rule
803(6) of the Federal Rules of Evidence, business records are admissible,4 and Rule
902(11) provides that documents meeting the requirements of Rule 803(6)(A)-(C)

are self-authenticating and “require no extrinsic evidence of authenticity in order to
be admitted . . . .” Fed. R. Evid. 803(6), 902(11).
Here, Mullinax attests that he has custody and control over the loan documents

at issue, including the Guaranty, and that the documents are kept in the ordinary
course of business:
These records were made at or near the time of the event recorded by a
person with knowledge of the event and charged with responsibility of
recording such events. These records are kept in the ordinary course of
Wells Fargo’s regularly conducted business activity, which is Wells
Fargo’s customary practice.

4 A business record is admissible if “(A) the record was made at or near the time by . . . someone
with knowledge; (B) the record was kept in the course of a regularly conducted activity of a
business . . .; (C) making the record was a regular practice of that activity; (D) all these conditions
are shown by the testimony of the custodian or another qualified witness . . . ; and (E) the opponent
does not show that the source of information or the method or circumstances of preparation
indicate a lack of trustworthiness.” Fed. R. Evid. 803(6).
Doc. 26-1 at 2-3. This testimony establishes that the Guaranty meets the
requirements of Rule 803(6)(A)-(C) because the rule requires only the testimony of

a witness “who is knowledgeable about the procedures used to create the alleged
business records,” and the “witness does not need firsthand knowledge of the
contents of the records, of their authors, or even of their preparation.” In re Int’l

Mgmt. Assocs., LLC, 781 F.3d 1262, 1268 (11th Cir. 2015) (citations omitted). In
that regard, Turney’s testimony that he did not sign the Guaranty in Mullinax’s
presence does not call into question the trustworthiness of Mullinax’s testimony or
the circumstances surrounding the preparation of the Guaranty. Thus, the signed

Guaranty is an admissible, self-authenticating business record that the court may
consider. As a result, Turney’s insistence that he did not sign the Guaranty in
Mullinax’s presence does not create a question of fact regarding whether he signed

the Guaranty and whether the Guaranty is a binding contract between the parties.
B.
Next, Wells Fargo presents evidence that it fully performed its obligations
under the Loan and Guaranty by disbursing the principal amount of the Loan, that

Turney breached his obligation under the Guaranty by failing to pay the amount due
under the Loan, and that it suffered damages as a result of Turney’s breach. Doc.
26-1 at 3, 5-6. Turney does not directly dispute this evidence, but contends that his

obligations under the Guaranty have not yet matured because Wells Fargo has not
tried to collect the collateral Choice Medicine pledged to secure the Loan. Doc. 28
at 6-7; see also doc. 26-1 at 10. This contention is unavailing because the Business

Lending Disclosure expressly provides that a guarantor “waive[s] any right to
require [Wells Fargo] to . . . proceed against any [c]ollateral or any person, including
any [b]orrower [] before proceeding against any . . . guarantor . . . .” Doc. 26-1 at

36, 47. Turney cannot avoid the plain terms of the Guaranty by contending that
Wells Fargo should first attempt to collect the collateral pledged by Choice Medicine
before it can enforce the Guaranty. See Gov’t Street Lumber Co., Inc. v. AmSouth
Bank, N.A., 553 So. 2d 68, 75 (Ala. 1989) (“[A]n absolute guaranty will be enforced

according to its terms.”) (citation omitted). Thus, Turney has not shown a question
of material fact regarding the elements of Wells Fargo’s breach of contract claim.
As a result, based on the record before the court, Wells Fargo is entitled to summary

judgment on the claim.
C.
Finally, Wells Fargo asks the court to award it damages for the amount
outstanding under the loan, plus pre and post-judgment interest, attorney’s fees, and

costs. Docs. 1; 26. The general rule for contract damages in Alabama is that “‘the
damages awarded in an action for breach of contract should be an amount sufficient
to return the nonbreaching party to the position he would have occupied had the

breach not occurred.’” HealthSouth Rehab. Corp. v. Falcon Mgmt. Co., 799 So. 2d
177, 183 (Ala. 2001) (quotation omitted). Moreover, “‘[i]n Alabama, attorneys’ fees
are recoverable . . . when provided for in a contract . . . .’” James v. James, 768 So.

2d 356, 360 (Ala. 2000) (quoting Eagerton v. Williams, 433 So. 2d 436, 450 (Ala.
1983)).
Turning to the specifics here, Wells Fargo seeks the following damages:

(1) the principal amount owed of $74,000.00;

(2) prejudgment interest in the amount of $13,573.06 that accrued through
February 7, 2020;

(3) additional prejudgment interest in the amount of $1,058.84;5

(4) post-judgment interest that accrues at a contractual daily rate of $10.28;

(5) attorneys’ fees and expenses incurred through February 7, 2020 to
enforce the Guaranty in the amount of $19,203.60; and

(6) attorneys’ fees and expenses incurred beginning February 8, 2020 in
connection with enforcing the Guaranty, including any post-judgment
costs of collection.

See docs. 26 at 5; 26-1 at 6; 26-2. Wells Fargo substantiates these damages through
Mullinax’s affidavit, an affidavit from its attorney, and the Loan Documents. See
docs. 26-1; 26-2. The Loan Documents provide in part that Turney “absolutely and
unconditionally guarantees and promises to pay to [Wells Fargo] . . . [the]
Guaranteed Indebtedness,” which includes all of Choice Medicine’s indebtedness

5 This amount includes calculated by multiplying the daily interest rate of $10.28 by 103 days for
the period from February 8 through May 20, 2020.
under the Loan. Doc. 26-1 at 30, 47. Mullinax attests that as of February 7, 2020,
the total amount owed under the Loan was $87,573.06, including $74,000 in

principal, and interest in the amount of $13,573.06, which continues to accrue at a
daily rate of $10.28. Doc. 26-2 at 6. Turney does not dispute this evidence,
challenge the reasonableness of the interest rate, or directly challenge the

authenticity of the Loan Documents. See doc. 28. Thus, the record before the court
establishes that Wells Fargo is entitled to damages in the amount of $88,631.90 for
the unpaid principal due under the Loan and prejudgment interest.
With respect to Wells Fargo’s request for attorney’s fees, the Business

Lending Disclosure, which is incorporated into the Guaranty, provides that Turney
“agrees to pay upon demand all of [Wells Fargo’s] costs and expenses incurred in
connection with the enforcement of [Wells Fargo’s] rights under the Guaranty, and

the prosecution or defense of any action . . . relating to the Guaranty. Such costs and
expenses include . . . [Wells Fargo’s] attorney’s fees . . . and legal expenses relating
to any [] suit . . . relating in any way to the Guaranty, including . . . any anticipated
post-judgment collection efforts . . . .” Doc. 26-1 at 33. Wells Fargo seeks

$19,203.60 in fees and costs incurred through February 7, 2020.6 Docs. 26-1 at 6;
26-2 at 5. To support its request for attorney’s fees, Wells Fargo submits
declarations stating that the fees and expenses claimed “were actually incurred to

6 This amount consists of $17,353.45 in attorney’s fees and $1,850.15 in costs. Doc. 26-2 at 5.
enforce or collect the [i]ndebtedness owed by [Choice Medicine] and Turney under
the Loan Documents... .” Docs. 26-1 at 6; 26-2 at 3. Turney has not challenged
this evidence or the reasonableness of the attorney’s fees claimed. See doc. 28. And,
having reviewed the requested fees and costs, doc. 26-2, the court finds that they are
reasonable and necessary for the collection of the amount owed to Wells Fargo under
the Guaranty. Thus, the record before the court establishes that Wells Fargo is
entitled to attorneys’ fees and costs in the amount of $19,203.60, plus reasonable
fees and expenses incurred beginning February 8, 2020.
IV.
Wells Fargo’s motion for summary judgment, doc. 25, is due to be granted,
and Wells Fargo is entitled to a judgment in its favor against Turney in the amount
of $107,835.50, plus post-judgment interest accruing at the contractual daily rate of
$10.28, and reasonable attorneys’ fees and expenses incurred beginning February 8,
2020, including post-judgment costs of collection. A separate judgment will be
issued.

DONE the 20th day of May, 2020.

— Apso bh te
ABDUL K. KALLON
UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9989473. Public record. Not legal advice.