DJ Mortgage, LLC obtained a line of credit from Synovus Bank d/b/a Bank of North Georgia to fund its business of making short-term “hard money” loans to real estate investors. This action arises out of the breakdown in that relationship. Central to the issues before us are four claims by DJ of breach of contract by the bank. The trial court granted summary judgment in favor of the bank as to all four claims, and we reverse as to three. First, DJ claims that the bank was not to record the security interests assigned to it except in the event of a default by DJ. As to this claim the contract documents are inconsistent, the ambiguity created by that inconsistency cannot be resolved as a matter of law, and the claim must go to a jury. Second, DJ claims that the bank breached a duty to “endeavor” to timely review loan requests. We reject the bank’s contention that this obligation is meaningless and find that the question of breach must to go a jury. Third, DJ claims that the bank breached a duty to cooperate with DJ in foreclosing on properties securing its underlying loans. Again we reject the bank’s contention that it had no such duty and find that the question of breach must go to a jury. Finally, DJ contends that the bank breached the contract when it stopped advancing DJ money. But as to this fourth claim, we agree with the trial court. The bank was entitled to cut off funding in certain circumstances and undisputed evidence establishes at least one such circumstance.
John Smithgall, one of DJ’s principals, personally guaranteed the bank’s loan to DJ. The bank subsequently stopped allowing DJ to draw on the line of credit, citing DJ’s violation of certain covenants in its loan agreement with the bank. DJ and Smithgall brought an action alleging the four breach of contract claims against the bank summarized above. They sought declarations concerning their obligation to perform under the loan agreement, the enforceability of Smithgall’s personal guaranty, and how the collateral securing the loan should be credited to the amounts, if any, that they owed the bank under the loan agreement. They also sought attorney fees and costs of litigation. The bank counterclaimed, inter alia, that DJ and Smithgall breached the loan agreement and that Smithgall breached the guaranty, and sought attorney fees and costs of litigation. The trial court granted summary judgment to the bank on all claims, and DJ and Smithgall appeal.
