United States District Court, D. South Carolina, Florence Division
SYNOVUS BANK, formerly known as NBSC a division of Synovus Bank, Plaintiff,
STEVENS LAW FIRM, a/k/a Stevens Law Firm, PC, a/k/a The Stevens Law Firm, Professional Corporation; and JAMES P. STEVENS, JR., Defendants.
Bryan Harwell, Chief United States District Judge.
matter is before the Court on Defendants Stevens Law Firm
(“Stevens Law Firm”) and James P. Stevens
(“Mr. Stevens, ” and collectively with Stevens
Law Firm, “Defendants”) motion to dismiss
Plaintiff Synovus Bank's (“Synovus”)
complaint for lack of subject matter jurisdiction pursuant to
Federal Rule of Civil Procedure 12(b)(1). ECF No. 10. For
the reasons discussed below, the Court denies Defendants'
motion to dismiss.
and Procedural History
complaint generally alleges the follwing: Synovus is a
Georgia banking corporation with its principal place of
business in Columbus, Georgia. ECF No. 1
(“Compl”) ¶ 1. Stevens Law Firm is a South
Carolina corporation doing business in Horry County, South
Carolina. Id. ¶ 2. Mr. Stevens is a citizen of
Brunswick County, North Carolina. Id. ¶ 3.
about May 30, 2012, Stevens Law Firm executed a promissory
note (“First Note”) to Synovus in the principal
amount of $274, 104.43. Id. ¶ 11; ECF No. 1-1.
The purpose of the First Note was to refinance an office
building and consolidate debt. ECF No. 1-1 at 1. The First
Note provided for 60 monthly payments, beginning on July 10,
2012, with a maturity date of June 10, 2017; the First Note
was subject to five percent interest per year on the unpaid
principal balance. Compl. ¶ 11; ECF No. 1-1 at 1. If
Stevens Law Firm defaulted on the note, which included
failing to make payment when due, the note indicated Stevens
Law Firm was to pay the costs of any collection. Compl.
¶ 11; ECF No. 1-1 at 3.
secure the First Note, Mr. Stevens executed real estate
mortgages in favor of Synovus on property located in Loris,
South Carolina. Compl. ¶ 12; ECF No. 1-2. Mr. Stevens also
executed a guaranty in favor of Synovus whereby he guaranteed
payment of the First Note and mortgages to Synovus, and
agreed to pay all costs of collection on the First Note.
Compl. ¶¶ 21-22; ECF No. 1-4. The First Note was
modified by agreements between Synovus and Defendants dated
May 1, 2017, and May 18, 2018. Compl. ¶ 13; ECF No.
The modifications changed the interest rate on the First Note
and extended the maturity date to May 1, 2019. Id.
Law Firm failed to pay Synovus all amounts due under the
First Note, and is therefore in default; Synovus has thus
declared the entire balance owing due and payable. Compl.
¶ 15. As of May 9, 2019, the amount due under the First
Note is $95, 218.79, plus interest, reasonable attorneys'
fees, costs, and expenses. Id. ¶ 17.
about October 28, 2016, Stevens Law Firm executed another
promissory note (“Second Note”) in favor of
Synovus in the principal amount of $300, 000. Compl. ¶
27; ECF No. 1-5. The purpose of the Second Note was renewal.
ECF No. 1-5 at 1. The Second Note provided for six monthly
payments beginning December 1, 2016, with a maturity date of
May 1, 2017. Compl. ¶ 27; ECF No. 1-5 at 1. The Second
Note was subject to a variable interest rate which began at
7.05 percent per year and could fluctuate daily. Id.
The Second Note, like the First Note, provided if Stevens Law
Firm defaulted on the note by inter alia failing to
make payment when due, Synovus would be entitled to
collection costs. Compl. ¶ 31, ECF No. 1-5 at 3. The
Second Note was secured by the same real estate mortgages as
the First Note. Compl. ¶ 28; ECF No. 1-2. Mr. Stevens
also executed a guaranty in favor of Synovus indicating he
guaranteed payment of the Second Note and collection costs.
Compl. ¶¶ 36-37; ECF No. 1-6. The Second Note was
subject to the same two modification agreements as the First
Note, which changed the interest rate and extended the
maturity date on the Second Note to May 1, 2019. Compl.
¶ 29; ECF No. 1-3.
Law Firm defaulted on the Second Note by failing to pay the
amount due; Synovus thus declared the entire balance of the
Second Note due and payable. Compl. ¶ 32. The amount due
on the Second Note is $160, 941.24, plus interest, reasonable
attorneys' fees, costs, and expenses. Id. ¶
14, 2019, Synovus filed the instant lawsuit in this Court
against Defendants. Compl. Synovus's complaint brought
causes of action for: (1) foreclosure based upon default on
the First Note; (2) collection on the guaranty based upon
default on the First Note; (3) collection on the Second Note;
(4) collection on the guaranty on the Second Note; (5)
reformation; and (6) receivership. Id.
5, 2019, Defendants filed a motion to dismiss Synovus's
complaint in its entirety for lack of subject matter
jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1). ECF No. 10.
Synovus responded. ECF No. 11. Accordingly, this matter is
now ripe for decision before the Court.
may file a motion to challenge a federal court's subject
matter jurisdiction over a case. Fed.R.Civ.P. 12(b)(1). In
deciding a motion under Rule 12(b)(1), the burden is on the
plaintiff to show subject matter jurisdiction exists, and the
Court may consider evidence outside the pleadings without
converting the motion into a motion for summary judgment.
Richmond, Fredericksburg & Potomac R.R. Co. v. United
States, 945 F.2d 765, 768 (4th Cir. 1991). When ruling
on a 12(b)(1) motion, the Court “should apply the
standard applicable to a motion for summary judgment, under
which the nonmoving party must set forth specific facts
beyond the pleadings to show that a genuine issue of material