Opinion
CASE NO.: 5:12-cv-233 (WLS)
11-26-2013
CERTUSBANK N.A., Plaintiff, v. FOWLERS HOLDINGS LLLP et al, Defendant.
ORDER
This is a diversity action seeking to collect $9,969,200.48 from Fowlers Holdings, Fowlers Furniture, and Donald Fowler in outstanding principal, interest, fees, and related costs allegedly past due and owed to CertusBank under two commercial promissory notes. (Doc. 1 ¶ 15.) The matter is before the Court on Defendant Buck Creek Venture's Rule 25 Motion to Substitute Itself as Plaintiff in Place of Certusbank, N.A. (Doc. 61.) In support of this motion, Buck Creek shows that CertusBank sold the notes and related documents at issue to Buck Creek. Plaintiff CertusBank and Defendant Fowlers Furniture do not oppose substitution.
Rule 25(c) of the Federal Rules of Civil Procedure provides: "If an interest is transferred, the action may be continued by or against the original party unless the court, on motion, orders the transferee to be substituted in the action or joined with the original party." Fed. R. Civ. P. 25(c). "Rule 25(c) is not designed to create new relationships among parties to a suit but is designed to allow the action to continue unabated when an interest in the lawsuit changes hands." Matter of Covington Grain Co., Inc., 638 F.2d 1362, 1364 (5th Cir. 1981). The transfer of interest is governed by state law. Virgo v. Riviera Beach Assocs., Ltd., 30 F.3d 1350, 1358 (11th Cir. 1994). Under Georgia law, the holder of a promissory note has standing to sue for default. E.g., Hazel v. Tharpe & Brooks, Inc., 283 S.E.2d 653, 654 (Ga. Ct. App. 1981).
Therefore, the Court concludes that Buck Creek is the proper plaintiff to continue the lawsuit as the note holder. Additionally, because Buck Creek purchased CertusBank's interest, the action for declaratory judgment against Buck Creek to determine priority is moot. Buck Creek is hereby SUBSTITUTED as plaintiff and DISMISSED as a defendant. CertusBank is DISMISSED from this suit.
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W. LOUIS SANDS, JUDGE
UNITED STATES DISTRICT COURT