Petition for Writ of Certiorari — Gissendaner Mortgage Co. v. Central Bank of the South

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-~- a |! Supreme Court. U.S.

Re 139% FILED

FES 24 1987

+g i ;

JOSEPH F. SPANIOL, JR,

CASE NO, CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1986

GISSENDANER MORTGAGE COMPANY,

J. C. GISSENDANER, JACKSON M.

GISSENDANER, AND JOE C. GISSENDANER,

Petitioners,

Vs.

CENTRAL BANK OF THE SOUTH,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE DISTRICT COURT OF APPEAL

OF FLORIDA, FIRST DISTRICT

HAL A. DAVIS

7 W. Washington Street

Quincy, Florida 32351

Counsel for Petitioner

QUESTIONS PRESENTED FOR REVIEW

Whether the Petitioners were

denied due process of law and equal pro-

tection of the laws of Florida requiring

a jury trial, by entry of a summary judg-

ment awarding a deficiency judgment which

could not have been legally entered had

petitioners been accorded the benefit of

a legal presumption that, upon a failure

to prove sale of collateral in a commer-

cially reasonable manner, it is presumed

that the collateral was worth the amount

of the debt at the time of repossession.

Whether an Alabama money judg-

ment which included an award of 15% of

the collected amount as a reasonable

attorney's fee, unsupported by evidence,

should have been denied full faith and

credit in Florida where the contract for

fees provided only for a reasonable fee

not exceeding 15% of the amount collected.

TABLE OF CONTENTS

PAGE

QUESTIONS PRESENTED FOR 1

REVIEW

TABLE OF CONTENTS ii

TABLE OF AUTHORITIES iii

REFERENCE TO OFFICIAL AND l

UNOFFICIAL REPORTS OF

OPINIONS

JURISDICTIONAL STATEMENT 2

CONSTITUTIONAL PROVISIONS

AND STATUTES INVOLVED 3

STATEMENT OF THE CASE 5

REASONS FOR GRANTING THE 14

WRIT

The (R ) references are

in conformity with the designations in

the Florida Appellate Court except that

petitions for rehearing and orders

denying them are kept without such

designations in the Appellate Court with

the record on appeal returned to the

trial court.

TABLE OF AUTHORITIES

- » ee

‘ ‘~

(‘T

PAGE

a i a. . . oO eve i > =

Alyeska Pipeline Service .........2 }

Am , “7 X% TL - LJ4 ] ~-7

Company v. The Wilderness

ce nf _o 4 7 TT )

Society, 421 U.S. 420, 44

T 7 ) 1 7 on" 7 7

L BG 2d L141, YO o GE, LOLZ

A 7 . ~~ x7 Ala ; 4 1 R- L- ,

Applestein v. National Bank,...... 16

So 2d 106

(Fla. 3rd DCA May 2, 1978)

—Y

-— -

ma Bank v. Parsons,

390 So 2d 640 (Ala. 1980)

¥. Sereoee, £9. Be 2s ssccéanne

Fla. 1966)

Peoples Bank of Polk County.......20

v. Roberts, 779 F 2d 1544

Weimer v. American Petrofina......2l

Marketing, Inc., 482 So 2d

1362 (Fla. 1986)

World-wide Volkswagen Corp........24

v. Woodson, 444 US 286, 62 L

Ed 2d 490, 100 S. Ct. 559

Article AlV, BOCeioe ba vs vee cckevace

Constitution of the Unites

States

Arectete. 1. BOGCION: Bb a scs chcdeccenneee

Florida Constitution

Alabama Uniform Commercial........4

Code, Section 7-9-504

REFERENCE TO OFFICIAL AND

UNOFFICIAL REPORTS OF OPINIONS

There are no judicial opinions

or findings of fact in any of the prior

State Court proceedings in this case

except for the order of the first trial

judge where in denying the first motion

for summary judgment he found there were

issues to be tried. (R 44)

The order affirming the trial

court's entry of judgment, Per Curiam,

is reported as Gissendaner Mortgage

Company v. Centra! Bank of the South,

495 So2d 751 (Fla. DCA, 1986).

PhO

JURISDICTIONAL STATEMENT

The Judgment sought to be

reviewed was dated and entered on

October 3, 1986, (A 3) a Motion for Re-

hearing and Motion for Rehearing en banc

was filed on the 20th of October, 1986,

and denied on the 18th of November, 1986

(A 4). An amended Motion for Rehearing

en banc was filed on the 14th day of

November, 1986 and was denied on the 28th

of November, 1986 (A 5).

The jurisdiction of this

Honorable Court is invoked pursuant to

the specific provisions of 28 U.S.C.

§1257 (3).

CONSTITUTIONAL PROVISIONS

AND STATUTES INVOLVED

Constitution of the United States

Article XIV, Section l

(Fourteenth Amendment)

"All persons born or natural-

ized in the United States,

and subject to the juris-

diction thereof, are citizens

of the United States and of

the State wherein they reside.

No State shall make or enforce

a law which shall abridge the

privileges or immunities of

citizens of the United States;

nor shall any State deprive any

person of life, liberty, or

property, without due process

of law; nor deny to any person

within its jurisdiction the

equal protection of the laws."

Constitution of the

State of Florida

"Trial by jury. - The rignt

of trial by jury shall be

secure to all and remain

inviolate. The qualifications

and the number of jurors, not

fewer than six, shall be fixed

by law. Art. I, §22, Fla.Const.

Alabama Statutes

"(3) Disposition of the

collateral mav be by public

or private proceedings and may

be made by way of one or more

contracts. Sale or other

disposition may be as a unit

or in parcels and at any time

and place and on any terms but

every aspect of the disposition

including the method, manner,

time, place and terms must be

commercially reasonable. Un-

less collateral is perishable

or threatens to decline speed-

ily in value or is of a type

customarily sold on a recog-

nized market, reasonable noti-

fication of the time and place

of any public sale or reasonable

notification of the time after

which any private sale or other

intended disposition is to be made

shall be sent by the secured party

to the debtor..." Uniform Com-

mercial Code, Section 7-9-504

STATEMENT OF THE CASE

The Petitioners’ (Gissendaners)

Statement of the Case will begin with

the filing of the Complaint in Florida

relating such prior facts of record as

are applicable to the Florida proceed-

ings. The Respondent Bank will be

referred to as "the Bank".

The Gissendaners were in the

business of dealing in real estate

mortgages and held a substantial number

of them encumbering real property in

the State of Florida.

Needing money, the Gissendaners

went to nearby Dothan, Alabama and

borrowed $140,000.00 from the Bank upon

a promissory note secured by the real

estate mortgages (R 6) which were there-

after in possession of the Bank but the

Gissendaners continued collecting the

mortgage payments.

After a time the Gissendaners

fell in arrears on the payments due on

the promissory note held by the Bank

and the Bank declared a default,

accelerated the debt, and began

collecting the mortgage payments.

(R 66-68, 99).

While still holding the mort-

gages the Bank brought suit in Alabama

upon the accelerated debt and obtained

a judgment which included an attorney's

fee of 15% upon the entire amount claim-

ed. (R 33-35)

The attorney's fee was provided

for in the promissory note as a reason-

able fee not to exceed 15%. No evidence

of what fee would be reasonable was ever

presented but the trial court assessed

the 15% based upon a Bank officer's

testimony that the Bank usually paid

their attorneys a 15% collection fee.

(R 15)

Without crediting the collected

mortgage payments the Bank brought an

action in Florida State Court seeking

full faith and credit for the judgment

in the full amount. (A 6-10; R 1-2)

On the 30th day of March, 1983,

the Bank filed suit in Circuit Court in

Gadsden County, Florida, (A 6-10; R 1-2)

seeking full faith and credit on an

Alabama judgment for $158,076.74.

The Gissendaners filed an answer,

defenses and counterclaim on the 25th

of April, 1983, admitting the entry of

the Alabama judgment but denying that no

part of it had been paid and affirma-

tively alleging the conversion of certain

notes and mortgages of the Defendants

and an unconscionable attorney's fee

award. (R 3-7) The Counterclaim alleged

conversion of mortgages worth $140,998.44.

(R 4-7)

The Gissendaners filed an

amended answer, defenses and counter-

claim on the 17th day of June, 1983,

denying for lack of knowledge the alle-

gations of paragraph 1 of the Complaint

which asserted entry of a valid Alabama

judgment. (A 11-19; R 11-16) This

pleading also added a third affirma-

tive defense of set off and a second

count of the counterclaim alleging

slander of title to the mortgages. A

jury trial was demanded.

On February 15th, 1984, the

Bank filed it's answer to the affirmative

defenses and counterclaim. (R17) On the

29th of February, 1984, an order was

entered by the Honorable Ben C. Willis

denying the Bank's motions to strike the

Gissendaner's first and third affirma-

tive defense and to dismiss count one of

the counterclaim. (R 18)

That order granted the Bank's

motions to strike the Gissendaner's

second affirmative defense, with leave

to amend, and the motion for more

definite statement. (R 18)

On March 14th, 1984, the

Gissendaners filed a more definite state-

ment, as ordered, and alleged that the

Bank contacted the Mortgagors of the

assigned mortgages claiming full ownership

therein and alleging that the value of the

mortgages exceeded the debt to the Bank.

(R 19)

Also, on the 14th of March, 1984,

the Gissendaners filed a second amended

answer, defenses and counterclaim alleg-

ing that the portion of the judgment con-

sisting of attorney's fees should not be

enforced because the fees were awarded in

violation of due. process of law. (A 2-21;

R 20)

On the 20th of March, 1984,

the Bank moved to strike and to dismiss;

the motion to strike being aimed at the

second affirmative defense and the motion

to dismiss being directed at count two

of the counterclaim. (R 21-22)

On April 11, 1984, the Bank

filed two affidavits, one by John C.

Stack, a vice-president of the Bank,

and one by the presiding Circuit Judge,

Jerry M. White, who had entered the

judgment in Alabama for which full faith

and credit was sought in this case.

(R 23-39)

The Bank also filed a motion for

summary judgment on the 11th day of April,

1984 which was apparently to be supported

by the above mentioned affidavits, al-

though the motion does not refer to them.

(R 40-41).

On June 15th, 1984, the

Gissendaners filed an affidavit of Joe

C. Gissendaner in opposition to the

motion for summary judgment, stating

that although the Bank held the mort-

gages as collateral they never credited

their value or payments thereon as evi-

denced by the Alabama judgment which was

for the full amount of the debt alleged

to be due by the Bank. (R 42-43)

The summary judgment effort was

denied by order of then presiding Judge

Ben C. Willis, on July 13th, 1984, be-

cause there were issues to be tried.

(R 44)

Then, on January 30th, 1985,

the Bank filed still another motion for

summary judgment. This time, in addition

to an affidavit of John Stack concerning

his efforts to dispose of the collateral,

the motion sought support from the depo-

sitions of John C. Stack and J.C. Gissen-

daner taken November 14, 1984 (R 46-

125).

This motion was granted by

order filed on the 18th of July, 1985,

by the Honorable Charles E. Miner, Jr.,

the Judge replacing Judge Willis in

the case. (R 126)

On July 24th, 1985, the Gissen-

daners filed a motion for rehearing

(R 127-128) but before any action on that

motion could be heard, a final judgment

was entered without notice to the Gissen-

daners showing the date of signing as

July 23, 1985 and a filing date of July

26, 19683. - (RB i129)

On July 29th, 1985, the Gissen-

daners filed a second motion for rehearing

directed at the final judgment with attach-

ments of the Bank's motion for summary

judgment, and the Gissendaners' first

motion for rehearing.

This last motion was denied on

October 16, 1985 by order of the Honorable

Charles E. Miner. (R 135)

Notice of Appeal to the District

Court of Appeal of Florida, First Dis-

trict, was filed on the 18th day of

October, 1985 (R 136) and, after briefs

were filed by both parties, that Court

enter :d an order affirming Per Curiam

the final deficiency judgment. (A 3)

The Gissendaners filed a motion

for rehearing and motion for rehearing

en banc on the 20th day of October, 1986,

wnich was denied on the 18th day of

November, 1986, (A 4) Then on the i4th

day of November, 1986, an amended motion

for rehearing and motion for rehearing

en banc was filed(A 24)and denied the 26th

day of November, 1986. (A 5) On that

date, the judgment of the Appellate Court

became final for the purpose of computing

time for review in this Court,

REASONS FOR GRANTING THE WRIT

THE PETITIONERS WERE DENIED

DUE PROCESS OF LAW AND EQUAL

PROTECTION OF LAW WHEN, AFTER THE

BANK FAILED TO PROVE A COMMERCIALLY

REASONABLE SALE OF COLLATERAL,

THE APPELLATE COURT REFUSED TO

ACCORD THEM A LEGAL PRESUMPTION

THAT WOULD HAVE REQUIRED A JURY TRIAL

The case for which review is

sought began as a suit in the Florida

trial court seeking full faith and credit

for an Alabama judgment. It became a

suit for a deficiency judgment after a

sale of the collateral failed to produce

a sum equal to the amount of the judgment

debt.

The sale of the security was

after the entry of judgment in Alabama,

The security was never mentioned in the

Alabama action nor in the Florida pro-

ceedings, until the sale was "smoked

out" by appropriate pleadings. (A 20-26;

R 11-16)

While a creditor has cumulative

remedies under the Uniform Commercial

Code of both Florida and Alabama, the

use of any one of which does not bar re-

sort to the other, due process requires

that the selection of a particular remedy

does require fair dealing to the extent

that such selected remedy should be pur-

sued to its ultimate procedural fruition

before undertaking another available

remedy.

Here, due process of law was

oppressively abused by the creditor in

that, while holding the mortgages after

repossession and collecting the payments

due thereon, it undertook a suit and ob-

tained a judgment upon the full amount

of the debt without crediting any received

payments on the mortgages and obtained

a 15% attorney's fee award based upon

that full amount.

ree

As necessarily applied the

Florida trial court and affirmed by the

ippellate court,the Uniform Commercial

Code of Florida operated to deny the

Appellants due process of the law and

equal protection of the law by failing

to procedurally apply a presumption

accorded others in equal circumstances

which further operated to deny them a

trial by jury also accorded others in

equal circumstances.

The Gissendaners were entitled

ury on the issues so triable.

’

aes

[, Section 22 of the Constitution

of the State of Florida.

A necessary element of an

action seeking a deficiency, because the

llateral sells for less than the amount

of the debt, is proof of a commercially

‘

reasonable Saie Ol the collateral. Apple-

ion a NJ 7 R L- > 7? e c : )

stein v. National Bank of Tulsa, 358 So 2d

ae ee |

;

There, the Court specifically

held:

“the sale, if it is to

produce a deficiency,

is an element of the

action that must be

proved without genuine

issue, if a summary final

judgment is to be entered.

Cf. Pompano Paint Co.

Vv. Pompano Beach Bank

and Trust Company, 208

Ath DCA 1976)."

In this regard the Bank failed

to prove a commercially reasonable

sale of the mortgages because:

(1) There was no showing of

whether or not a recognized market

existed;

(2) Even if a recognized

market had been shown, no market price

was proved;

(3) The time of repossession

was never established, and;

(4) The sale was not carried

out in conformance with the Notice of

Sale as required by Alabama law. First

Alabama Bank v. Parsons, 390 So 2d 640

(Ala. 1980)

On this point, the Bank, after

some lazy sale efforts, sent a letter to

the Gissendaners' attorney advising that

it intended to conclude a sale of the

collateral prior to October 1, 1983, and

that if they could find a better pur-

chaser they must notify the Bank prior

to September 27, 1983. (A 22-23; R 56)

This could not have been

"reasonable notice" since the Bank's vice

president, Stack, swore in his Affidavit

in Support of Summary Judgment (to which

the referred to letter was an exhibit)

that the sale was in fact concluded much

later, to wit; October 26, 1983. (R 50)

There is nothing to show that

the Gissendaner's were advised of this

later sale date and therefore summary

judgment was never, at any stage,

appropriate since a commercially reason-

able sale was never shown,

The Florida Supreme Court

has established concisely the burden of

opposing parties where summary judgment

is sought to surplant the right to a jury

trial. In Holl v. Talcott, 191 So 2d 40,

it held:

"This means that before it

becomes necessary to de-

termine the legal sufficiency

of the affidavits or other

evidence submitted by the

party moved against, it must

first be determined that the

movant has successfully met

his burden of proving a nega-

tive, i.e., material fact.

He must prove this negative

conclusively. The proot

must be such as to overcome

all reasonable inferences

which may be drawn in favor

of the opposing party."

(Emphasis supplied)

The question before this Court

is widespread in commercial transactions

throughout the nation. It involves the

requirements of a reasonably commercial

sale of secured property upon default and,

ancillary tnereto, the remedies appli-

cable to a commercially unreasonable sale.

Petittouaks submitted a Notice

of Additional Authorities to the Florida

Appellate Court dated the 13th day of May,

1986, containing a case in which the

Eleventh Circuit Court of Appeals affirmed

an order of the United States District

Court, Middle District of Florida, holding

that a commercially unreasonable sale

barred a deficiency judgment for the

amount of the debt remaining unsatisfied

after a commercially unreasonable sale.

That ruling was based upon an assessment

of the holdings of the various District

Courts of Appeal in Florida. See Peoples

Bank of Polk County v. Roberts, 779 F2d 1544.

aii

The Florida Supreme Court has

settled that question differently from

the Federal Court.

In Weimer v. American Petrofina

Marketing, Inc., 482 So 2d 1362 (Fla. 1986)

that court held that a commercially unreason-

able sale did not bar a deficiency. It did

however, lay down the burdens upon the re-

spective parties in a suit for deficiency

judgment :

"However, the secured party's

failure to dispose of the

collateral in a commercially

reasonable manner should not

impose a burden on the debtor

to prove damages,"'

"We therefore hold that when

it has been determined that a

secured party has disposed of

collateral in a commercially

unreasonable manner, there will

arise a presumption that the

fair market value of the col-

lateral at the time of repo-

session was equal to the amount

of the total debt that it

secured. The burden to prove

that the fair market value

of the collateral was less

than the debt will be upon the

secured party.

(Emphasis supplied)

Thus, the District Court of

Appeal of Florida, First District, was

aware of this presumption. Had it

applied it a reversal would have been

required with directions to the trial

court to order a trial by jury under

appropriate instructions to the jury to

consider the presumption.

THE ALABAMA AWARD OF

ATTORNEY'S FEES VIOLATED

DUE PROCESS AND THEREFORE

WAS NOT ENTITLED TO FULL FAITH

AND CREDIT IN FLORIDA

In this case, the Gissendaners

raised the unconscionableness of the

attorney's fees and that they were awarded

in denial of due process of law in their

answer and defenses in the Florida suit

for deficiency.

The only probative material in

support of the attorney's fees awarded in

Alabama was the sworn statement of John

Stack, the Bank's vice president, that:

"It is our standard practice

to allow our attorneys 15%

of the collection." (R 6)

This statement is not probative

of a reasonable fee in the case in Alabama.

Since the United States Supreme

Court decided Alyeska Pipeline Service

Company v. The Wilderness Society, 421

U.S. 420, 44 L Ed 2d 141, 93 5S Ct, i612,

it is clear that attorney's fee awards

must be supported by contract, statute

or other legal foundation. Here,

petitioners contracted to pay a reason-

able fee not_to exceed 15% of the amount |

collecteds=enar did not contract to pay

what the Bank usually paid it's attorneys. .

It goes without necessity of i

citation that such awards must be supported

in the evidence...lacking here. In 1980

;

this Court also held that a judgment :

rendered in violation of due process is

ren

ate Apmis

void in the rendering state and not en-

titled to full faith and credit. World-

Te a, Ty AN TD

wide Volkswagen Corp. v. Woodson. 444 US

286, 62 L Ed 2d 490, 100 S. Ct. 5359

The attorney's fee included in

the Alabama judgment, not being based on

Re ee) ME eee ean

the contract, is not entitled to full faith

apes Ke

and credit.

The State Appellate Court has

necessarily rendered a decision which

has sanctioned a departure so far from

the accepted and usual course of judicial

proceedings by refusing to reverse the

judgment of the trial court entered upon

a summary judgment as to deprive the

Gissendaners of due process and equal

protection of the law.

A substantial and important

federal question being involved, the

decision on review should be reversed and

remanded with directions for the District

Court of Appeal of Florida, First District,

to require a new trial consistant with

due process and equal protection of the

law as mandated by the Constitution of the

United States.

Respectfully submitted,

HAL A. DAVIS

7 W. Washingtin Street

Quincy, Florida 32351

904-627-7587

Attorney for Petitioner

A-i

INDEX TO APPENDIX

Judgment of the Florida ,,....., Al

Trial Court

Per Curiam Opinion of the...... A3

District Court of Appeal

of Florida, First District

Order denying motion for....... AG

rehearing and motion for

rehearing en banc of the

District Court of Appeal of

Florida, First District

Order denying amended ......... A5

motion for rehearing and

motion for rehearing en

banc of the District Court

of Appeal of Florida, First

District

Complaint for full faith....... A6é

and credit filed in Circuit

Court of Florida

Amended answer, defenses....... All

and counterclaim filed in

response to the complaint

Affidavit of John Stack in..... Al?

support of judgment in Alabama

Circuit Court (attachment "B”

of amended answer, defenses

and counterclaim)

Second amended answer,........- A20

defenses and counterclaim

A-1

attorney not icing

. 17 . ]

sale of collateral

: , .

» ’ | TY , , , -

AMenaed moLLOn LUT

} rina ! ‘o} .

nearinyve ana reneal!l

; 7 | y

cil )aTi¢ rlied Lil {

¥ | ¥ an 1 7 ,

I LazUd AVVOCLIAGALEG

4 . ~~ ~~ } 2 . 5 «

Letter rrom the Bank s

tne

IN THE CIRCUIT COURT

OF THE SECOND JUDICIAL

CIRCUIT, IN AND FOR

GADSDEN COUNTY, FLORIDA.

CENTRAL BANK OF THE SOUTH,

A National Banking Association,

Plaintiff,

vs. CASE NO.: 83-275-CA

GISSENDANER MORTGAGE COMPANY,

et al.,

Defendants.

JUDGMENT

The above entitled action

having come before the Court on Motion

For Summary Judgment by the Plaintiff

and the Court by order of July 17, 1985,

having entered its Order granting summary

judgment in favor of the Plaintiff and

against the Defendants,

It is ORDERED and ADJUDGED

that Plaintiff, Central Bank of the South,

shall have and recover from Defendants,

J.C. Gissendaner, Jackson M. Gissendaner

and Joe C. Gissendaner, individually, and

d/b/a Gissendaner Mortgage Company, the

following:

The sum of $58,496.98

principal, $12,095.67 for interest at

the rate of 12%, with costs in the sum

of $77.00, making a total of $70,592.65,

plus interest at a legal rate from the

date of the entry of this judgment for

which let execution issue.

DONE and ORDERED this 23rd

day of July, 1985.

S/ Charles E. Miner, Jr.

Charles E. Miner, Jr.

Circuit Judge

Copy to:

Stephen T. Etheredge, Esquire

P.O. Box 1193

Dothan, Alabama 30302

Hal A. Davis, Esquire

7 W. Washington Street

Quincy, Florida 32351

IN THE DISTRICT COURT

OF APPEAL, FIRST

DISTRICT, STATE OF

FLORIDA

GISSENDANER MORTGAGE COMPANY,

a partnership, JOE C. GISSEN-

DANER, J.C. GISSENDANER and

JACKSON M. GISSENDANER, Indi-

vidually, and as members of

the partnership, . NOT FINAL

UNTIL TIME EX-

Appellants, PIRES TO FILE

REHEARING MOTION

vs. AND DISPOSITION

THEREOF IF

CENTRAL BANK OF THE SOUTH, FILED

A National Banking Association,

Appellee.

CASE NO.:

BJ-171

Opinion filed October 3, 1986

An Appeal from the Circuit Court

for Gadsden County. Charles E.

Miner, Jr., Judge.

Hal A. Davis, Quincy, for

Appellants.

Stephen T. Etheredge of Jackson

Huskey, Hornsby and Etheredge,

Dothan, Alabama, for Appellee.

PER CURIAM.

AFFIRMED.

ERVIN, WIGGINTON & BARFIELD, JJ., CONCUR.

DISTRICT COURT OF APPEAL,

FIRST DISTRICT

Tallahassee, Florida 32301

Telephone No. (904)488-6152

DATE: NOVEMBER 18, 1986

CASE NO.: BJ-171

GISSENDANER MORTGAGE CO. vs. CENTRAL

BANK OF THE SOUTH

Appellant/Petitioner Appellee/Re-

spondent

ORDER

Motion for rehearing and

motion for rehearing en banc are

DENIED.

By Order of the

Court

(SEAL) RAYMOND E. RHODES,

CLERK

I HEREBY CERTIFY that a true

and correct copy of the above was mailed

this date to the following:

Hal A. Davis, Esquire, Quincy, Florida;

Stephen T. Etheredge, Esquire, Dothan,

Alabama.

S/ Karen Roberts

Deputy Clerk

DISTRICT COURT OF APPEAL,

FIRST DISTRICT

Tallahassee, Florida 32301

Telephone No. (904) 488-6152

DATE: NOVEMBER 26, 1986

CASE NO.: BJ-1/1

GISSENDANER MORTGAGE vs. . CENTRAL BANK

CO. OF THE SOUTH

Appellant/Petitioner Appellee/

Respondent

ORDER

Amended motion for rehearing

and motion for rehearing en banc is

DENIED.

By Order of the

Court

(SEAL)

RAYMOND E. RHODES,

CLERK

I HEREBY CERTIFY that a true

and correct copy of the above was mailed

this date to the following:

Hal A. Davis, Esquire, Quincy, Florida;

Stephen T. Etheredge, Esquire, Dothan,

Alabama.

S/ Karen Roberts

Deputy Clerk

Aé

IN THE CIRCUIT COURT OF THE

SECOND JUDICIAL CIRCUIT

IN AND FOR GADSDEN COUNTY

FLORIDA

CENTRAL BANK OF THE SOUTH,

A National Banking Association,

Plaintiff,

_ CIVIL ACTION NO.:

; 85-275-CA

GISSENDANER MORTGAGE COMPANY,

a Partnership comprised of J.C.

GISSENDANER, JACKSON M. GISSEN-

DANER, AND JOE C. GISSENDANER,

AND J.C. GISSENDANER, Individually,

and JACKSON M. GISSENDANER, Indi-

vidually, AND JOE C. GISSENDANER,

Individually,

Defendant.

COMPLAINT

Comes now the Plaintiff in

the above-styled action and states

its complaint as follows:

1. On the 17th day of March,

1983, in an action in the Circuit

Court of Houston County, Alabama,

Civil Action No.: CV-82-507-W, wherein

Central Bank of the South, a National

Banking Association, was Plaintiff,

and Gissendaner Mortgage Company, a

partnership comprised of J.C. Gissen-

daner, Joe C. Gissendaner, Jackson M.

Gissendaner, and J.C. Gissendaner,

individually, Joe C. Gissendaner, Indi-

vidually, and Jackson M. Gissendaner,

Individually, were Defendants, judgment

was duly entered in favor of the

Plaintiff and against the Defendants

for the sum of $158,076.74, and the

further sum of $42.00 as court costs,

a copy of which is attached hereto as

Exhibit "A".

2. No part of said judgment

les been paid.

3. WHEREFORE, Plaintiff

demands judgment against the Defendants

in the sum of One Hundred Fifty-Eight

Thousand Seventy Six and 74/100 Dollars

($158,076.74), interest and costs.

JOHNSON, HUSKEY, HORNSBY

& ETHEREDGE

BY S/Stephen T. Etheredge

Stephen T. Etheredge

Attorney for Plaintiff

PO . Box 1193

Dothan, Alabama 36302

Florida Bar No. 213683

CERTIFICATE OF JUDGMENT

THE STATE OF ALABAMA/ Circuit COURT

Houston COUNTY /WO.CV 82-507-W

/March Tern 1983

I, Julia L. Trant Clerk

of the CircuitCourt for said County

and State hereby certify that on

the 17th day of Marck, 1983

CENTRAL BAiK OF THE SOUTH, A National

Banking Association,

Plaintiff recovered of GISSENDANER

MORTGAGE COMPANY, A Partnership com-

prised of J.C. GISSENDANER, JACKSON M.

GISSENDANER, and JOE C. GISSENDANER,

and J.C. GISSENDANER, Individually,

Jackson M. Gissendaner, Individually,

and Joe C. Gissendaner, Individually,

Defendants in the Circuit Court of

said County a judgment.

for the sum of One Hundred Fifty Eight

Thousand Seventy Six and 74/100

Exhibit "A"

Al0

($158,076.74) Dollars and the further

sum of Forty Two and No/100 ($42.00)

Dollars cost of suit, and that Dow

T. Huskey is Plaintiff's Attorney

of record.

Given under my hand, this

17th day of March, 1983.

S/ Julia L. Trant CLERK

I hereby further certify

that said was, on the

day of 19 transferred to

as shown by

record in my office.

CLERK

All

IN THE CIRCUIT COURT OF THE

SECOND JUDICIAL CIRCUIT, IN

AND FOR GADSDEN COUNTY,

FLORIDA.

CASE NO.: 83-275-CA

CENTRAL BANK OF THE SOUTH,

A National Banking Association,

Plaintiff,

vs.

GISSENDANER MORTGAGE COMPANY,

SE Bhsa

Defendants.

AMENDED ANSWER, DEFENSES

AND COUNTERCLAIM

For answer to the complaint

the defendants state:

1. Paragraph 1 of the

complaint is admicted except that it

is denied for lack of knowledge that

the alleged judgment was duly entered.

2. Paragraph 2 of the

Complaint is denied.

FIRST AFFIRMATIVE DEFENSE

BEFORE commencement of this

action Plaintif£ converted to its own

Al2

use notes and mortgages belonging

to Defendant J.C. GISSENDANER,

having a value of $140,988.44. A

copy of trial balance sheet having to

do with these notes and mortgages is

attached hereto and by these refer-

ences made a part hereof and marked

Defendant's exhibit "A".*

SECOND AFFIRMATIVE DEFENSE

THAT the Alabama judgment

that is the basis of this action was

obtained upon motion of Plaintiff

for summary judgment and the amounts

contained in said judgment were based

upon affidavit of JOHN STACK filed

in said cause, a copy being attached as

Defendant's exhibit "B". That as re-

flected in said affidavit and judgment

sued upon, an attorney's fee of 15%

was allowed. That for this Court to

allow such a fee when the action was

terminated upon entry of summary judg»

ment would be inequitable and unjust.

Al3

The affidavit in support

(exhibit "B") relates only to the

note sued upon whereas the judgment

includes 15% attorney's fees against

all defendants.

There being no separation

of the judgments as to each defendant

or designation of costs and attorney's

fees the judgment becomes unenforceable

as a matter of due process because there

can be no valid judgment for attorney's

fees under the guaranty agreement.

THIRD AFFIRMATIVE DEFENSE

The Plaintiff holds certain

mortgages belonging to GISSENDANER

MORTGAGE COMPANY and is collecting

the payments due thereof for which

the Defendants are due set off.

COUNTERCLAIM

Counter-Plaintiff, J.C.

GISSENDANER d/b/a GISSENDANER MORTGAGE

COMPANY, sues Counter-Defendant CENTRAL

BANK OF THE SOUTH and alleges:

Al4

COUNT ONE

1. This is an action for

damages that exceed $5,000.00.

2. On or about March 18,

1983, after entry of the judgment

Plaintiff/Counter Defendant sues upon,

it illegally converted to it's own use

notes and mortgages which are the

property of the Counter-Plaintiff

of the value of $140,998.44. A copy

of the trial balance sheet having to

do with these notes and mortgages is

attached hereto and by this reference

made a part hereof and marked Counter-

Plaintiff's Exhibit "A'.*

3. The Counter-Defendant in

its Complaint herein claims no part of

the judgment has been paid when in fact

it has collected monies due to Counter-

Plaintiff under the notes and mortgages

under claim of owning the same.

4. As a direct and proximate

cause of the above described malicious

Al5

acts of the Counter-Defendant the

Counter-Plaintiff has suffered damages

to its credit in addition to the loss

of payments due and paid on the notes

and mortgage and the loss of use of the

notes and mortgages as assets.

Wherefore Counter-Plaintiff

demands judgment against Counter-

Defendant for damages both actual and

punitive, costs, attorney's fees and

trial by jury.

COUNT TWO

5. Counter-Plaintiff re-

alleges paragraphs 1, 2, and 3 of

Count One.

6. The Counter-Defendant

has slandered the title to Counter-

Plaintiff's title to the above mentioned

notes and mortgages knowing it had al-

ready obtained a judgment for all amounts

due it from Counter-Plaintiff.

7. As a direct and proximate

cause of the above described actions of

Al6

the Counter-Defendant, the Counter-

Plaintiff has suffered damages to his

credit reputation and title to his

property.

Wherefore Counter-Plaintiff

demands, both actual and punitive,

costs, attorney's fees and trial hy

jury.

S/ Hal A. Davis

HAL A. DAVIS

7 W. Washingtin Street

Quincy, Florida 32351

904-627-7587

Attorney for Defendant

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy

of the above and foregoing has been

furnished by United States mail to Mr.

STEPHEN T. ETHEREDGE, Attorney for

Plaintiff, Post Office Box 1193, Dothan,

Alabama 36302, this 8th_ day of June,

1983.

S/ Hal 4. Davis

*Counter-Plaintiff's exhibit

a'' has been omitted.

Al7

CENTRAL BANK OF * IN THE CIRCUIT

THE SOUTH,

COURT OF WUSTON

* COUNTY, ALABAMA

Plaintiff

vs.

* CIVIL ACTION ?

CV-82-507W

“

GISSENDANER MORTGAGE

CO., @€ ai. *

Defendant *

AFFIDAVIT

Before me, the undersigned, a

Notary Public, personally appeared John

Stack, who, being known to me, and being

by me first duly sworn, deposes and says

as follows:

My name is John Stack. I

am Vice-President of Central

Bank of the South, Dothan,

Alabama. In such capacity,

I have personal knowledge of

the loan of Defendants with

Central Bank of the South.

Prior to making this Affidavit

I have thoroughly reviewed the

loan file again to insure its

accuracy as much as possible.

The Defendants executed a

Note to Central Bank of tne

South on September 17, 1981,

in the principal sum of

$140,000.00. The interest

on this loan was at a rate equal

to one pereen above the prime

Al8

lending rate. This note

was due on September 17,

1982. Credit has been

given for all payments of

principal and interest made

by or on behalf of the

Defendant. The current prin-

cipal amount due and owing

through March 16, 1983, is

$129,098.58; the current

interest due and owing through

March 16, 1983, is $8,359.46.

The interest on the principal

balance of this loan is

accruing at a daily accrual

rate of $42.44. The total

principal and interest due on

this note as of March 16,

1983 is $137,458.04.

As shown by the note signed

by the Defendants, on file

in this proceeding, the

Defendants agreed to pay a

reasonable attorneys fee not

to exceed 15% of the amount

collected in the event this

m te was placed in our attorneys

hands for collection. It is

our standard practice to allow

our attorneys 15% of the col-

lection. 15% of the principal

balance with accrued interest to

date amounts to $20,618.71.

This would make the total of

principal,interest and

attorneys fee due, after all

credits, $158,076.74.

S/ John Stack

JOHN STACK

Alg9

| SWORN to and SUBSCRIBED

before me this 16th day of March,

1983.

S/ Stephen T. Etheredge

Notary Public

Defendants!’ Exhibit ''B"

A20

IN THE CIRCUIT COURT OF

THE SECOND JUDICIAL

CIRCUIT, IN AND FOR

GADSDEN COUNTY, FLORIDA

CASE NO.: 83-275-CA

CENTRAL BANK OF THE SOUTH,

a National Banking Association,

Plaintiff,

vs.

GISSENDANER MORTGAGE COMPANY,

Ot €i.;

Defendant.

SECOND AMENDED ANSWER

DEFENSES AND COUNTERCLAIM

COMES NOW the Defendant and here-

by amends the Amended Answer, Defenses and

Counterclaim filed herein by inserting at

the end of Second Affirmative Defense a

new paragraph as follows:

"Since there is no evidence or

probative matter to support the Judgment

for Attorney's fee against Defendant

Gissendaner Mortgage Company, nor under any

A21

theory of law as against the individual

Defendants, it would be a denial of due

process of law to enforce an unfounded

judgment and be in violation of the 14th

Amendment of the United States Constitution

as well as Section 9 of Article 1 of the

Florida Constitution."

HAL A. DAVIS

7 W. Washingtin Street

Quincy, Florida 32351

904-627-7587

Attorney for Defendant

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of

the above and foregoing has been furnished

by United States mail to Mr. Stephen T.

Etheredge, Post Office Box 1193, Dothan,

Alabama 36302, this 14th day of March,

1984.

HAL A. DAVIS

A22

LAW OFFICES OF

JOHNSON, HUSKEY, HORNSBY & ETHEREDGE

131 NORTH OATES STREET

TELEPHONE (205) 793-3377

September 16, 1983

J. HUNELEY JOHNSON Reply to:

DOW T. HUSKEY P.O. Box 1193

ERNEST H. HORNSBY

STEPHEN T. ETHEREDGE*

CHERYL S. WOODRUFF

*Also admitted in Florida

Mr. Hal A. Davis

Attorney at Law

7 W. Washingtin Street

Quincy, Florida 32351

Re: Central Bank of the South v.

Gissendaner Mortgage Company,

el al

Dear Mr. Davis:

As I advised in correspondence of

May 16, 1983, and subsequently in corres-

pondence of June 8, 1983, Central Bank of

the South has been actively engaged in

soliciting the sales of the mortgages

which were assigned by the Gissendaner's to

secure the indebtedness which was subsequent-

ly the subject matter of litigation. To

date, although various mortgage companies

have been contacted, the best offer received

for the purchase of the eight mortgages has

been recieved from Mortgage Funding Corpor-

ation of Hattiesburg, Mississippi. Central

Bank of the South has received an offer of

A23

a total purchase price for these mortgages

in the amount of $98,600.00. The sum of

$98,600.00 represents the gross purchase

price which will be reduced by the cost

of closing.

You and your clients are hereby noti-:

fied that it is the intention of Central

Bank of the South to conclude the sale of

the eight mortgages to Mortgage Funding

Corporation prior to October 1, 1983. If

your clients wish to match or better the

gross purchase price offered by Mortgage

Funding Corporation or if they are able to

obtain a purchaser who is willing to pur-

chase these mortgages for a larger purchase

price, please advise me of their intentions

not later than September 27, 1983. If

we do not receive correspondence or communi-

cation from you or your client regarding

this matter prior to the date indicated, we

will proceed with the sale as proposed.

Sincerely,

S/Stephen T. Etheredge

Stephen T. Etheredge

STE/db

CERTIFIED MAIL

RETURN RECEIPT REQUESTED

A24

IN THE DISTRICT COURT OF

APPEAL OF FLORIDA

FIRST DISTRICT

GISSENDANER MORTGAGE

COMPANY a partnership

comprised of J.C. GISSEN-

DANER, JACKSON M. GISSEN-

DANER and JOE C. GISSENDANER:

and J.C. GISSENDANER, indi-

vidually, and JACKSON M.,

GISSENDANER, individually,

and JOE C. GISSENDANER,

individually,

Appellants,

vs. CASE NO.: BJ-171

CENTRAL BANK OF THE SOUTH,

A National Banking Association,

Appellee.

AMENDED MOTION FOR REHEARING

AND MOTION FOR REHEARING EN BANC

Counsel apologizes to this

Honorable Court for failure to keep up

with applicable law but in this instance

a most important case bearing on this

cause was inadvertently overlooked, hence

this proffered anended motion.

A25

The question before the Court

is widespread in commercial transactions

throughout this state and the country.

It involves the requirements of a reason-

ably commercial sale of secured property

upon default and ancillary thereto the

remedies applicable to a commercially un-

reasonable sale.

Appellants previously submitted a

Notice of Additional Authorities to the

Court dated the 13th day of May, 1986,

in which the Eleventh Circuit Court of

Appeals held that a commercially unreason-

able sale barred a deficiency judgment

for the amount of the debt remaining un-

satisfied after a commercially unreasonable

sale. That ruling was base. upon an

assessment of the holdings of the various

district courts of appeal in Florida.

See Peoples Bank of Polk County v. Roberts,

779 F2d 1544.

A26

It now appears that the Florida

Supreme Court has settled that question

differently from the Federal Court and,

at least in one aspect, adverse to the

Appellants position, in favor of that

position.

In Weimer v. American Petro-

fina Marketing, Inc., 482 So2d 1362, the

Supreme Court held that a commercially

unreasonable sale did not bar a deficiency.

It did however, lay down the burdens upon

the respective parties in a suit for

deficiency judgment.

That case arrived at the Supreme

Court on a petition for review from the

Fourth District Court of Appeal which

court certified that its decision was in

direct conflict with another district

court's decision in Florida First National

Bank vs. Martin, 449 So2d 861 which held

that a commercially unreasonable sale

barred a deficiency judgment.

A27

In resolving the conflict

and holding a deficiency judgment was

available to the creditor reduced by

the difference between the fair market

value at the time of sale and the

amount actually received, the court

stated:

"However, the secured

party's failure to dispose

of the collateral ina

commercially reasonable

manner should not impose

a burden on the debtor to

prove damages."

"We therefore hold that

when it has been determined

that a secured party has

disposed of collateral in a

commercially unreasonable

manner, there will arise a

presumption that the fair

market value of the col-

lateral at the time of repo-

session was equal to the

amount of the total debt

that it secured. The burden

to prove that the fair market

value of the collateral was

less than the debt will be

upon the secured party.”

(emphasis supplied)

A28

Here, the secured party never, al

(sic)all, did anything to establish the

value of the collateral at the time of

repossession and therefore there is

nothing to show the value of the colla-

teral at that time.

The Affidavits of John Stack,

and his deposition, are completely barren

in that regard. Additionally, no market

value was ever established and those

material facts which might have been were

rebutted by opposing Affidavits.

Respectfully submitted,

S/ Hal A. Davis

HAL A. DAVIS

7 W. Washingtin Street

Quincy, FL 32351

904-627-7587

Attorney for Apjellants

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.