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Okefenokee Aircraft Inc. v. Primesouth Bank

A secured creditor can retain a debtor's collateral while seeking an independent action for money judgment.

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Okefenokee Aircraft, Inc. “OAI” and Joseph E. Rimes, III appeal from a grant of summary judgment to Primesouth Bank the “Bank”, a secured creditor that brought an action for money judgment on the note while holding the collateral pledged by appellants. We conclude that a secured creditor can retain a debtor’s collateral while seeking an independent action for money judgment and therefore affirm. The following facts are undisputed. On or around September 9, 2005, the Bank issued a loan to OAI for the purchase of an airplane. OAI executed a promissory note the “Note” in favor of the Bank in the principal amount of $161,306.25 plus interest. Rimes executed a personal guarantee on the Note, guaranteeing the payment of sums due according to the terms set forth in the Note. The Note was secured by the airplane being purchased.

OAI defaulted on the Note. The Bank made a demand for payment on both appellants, but neither paid the sums due. The Bank then repossessed the airplane securing the Note. Instead of first disposing of the collateral and seeking a deficiency judgment, however, the Bank held the collateral and sued appellants to enforce the Note, seeking a money judgment for the loan principle and interest, plus attorney fees.

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