Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 1 of 22
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE MIDDLE DISTRICT OF GEORGIA
`MACON DIVISION
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`ONESOUTH BANK,
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`Plaintiff,
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`) Case No. 5:20-cv-00379
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`v.
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`HERMAN CURT TITSHAW; CRISP
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`MELONS, INC.; SUMMER TIME
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`MELONS, LLC; GLOBAL
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`PRODUCE SALES, INC.; STEPHEN ROSS )
`NICHOLS; LEE ALLEN WROTEN, III; and, )
`MARK A. ELLIOTT,
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`Defendants.
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`UCOMPLAINT
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`1.
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`For its Complaint against Defendants, Herman Curt Titshaw (“Titshaw”);
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`Crisp Melons, Inc. (“Crisp”); Summer Time Melons, LLC (“Summer Time”);
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`Global Produce Sales, Inc. (“Global”); Stephen Ross Nichols (“Nichols”); Lee
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`Allen Wroten, III (“Wroten”); and Mark A. Elliott (“Elliott”) (Crisp, Summer
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`Time, Global, Nichols, Wroten, and Elliott are sometimes collectively referred to
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`as the “Buyer Defendants”), Plaintiff OneSouth Bank states as follows:
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`JURISDICTION AND VENUE
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`2.
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`This Court has original jurisdiction over this action pursuant to 7 U.S.C. §
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`1631, the Food Security Act, and supplemental jurisdiction pursuant to 28 U.S.C.
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`§§ 1331 and 1338 as this action alleges third party misappropriation of property
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 2 of 22
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`that was subject to a perfected security interest under 7 U.S.C. § 1631. This Court
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`has supplemental jurisdiction over the Bank’s related state and common law
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`claims pursuant to 28 U.S.C. §§ 1338 and 1367 as the state and common law
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`claims arise out of the common nucleus of operative facts.
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`3.
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`Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(b)(2),
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`as a substantial part of the events or omissions giving rise to the claim occurred
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`in this District.
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`PARTIES
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`4.
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`Plaintiff OneSouth Bank (“Bank”) is a state-chartered bank organized and
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`existing under the laws of the State of Georgia (Control Number J715964) with its
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`principal place of business located at 12347 Columbia Street, Blakely, Georgia
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`39823.
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`5.
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`Defendant Herman Curt Titshaw (“Titshaw”) is a resident of the State of
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`Georgia with his principal place of residence located at 2016 16th Ave E., Cordele,
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`Georgia 31015.
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`6.
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`Defendant Crisp Melons, Inc. (“Crisp”) is a corporation organized and
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`existing under the laws of the State of Georgia (Control Number 0001485) with
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`its principal office address located at PO Box 827, Lakeland, Florida 33815 and its
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`registered agent, Stephen Ross Nichols, located at 1176 Highway 280 W.,
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`Cordele, Georgia 31015.
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 3 of 22
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`7.
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`Defendant Summer Time Melons, LLC (“Summer Time”) is a limited
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`liability company organized and existing under the laws of the State of Georgia
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`(Control Number 17029120) with its principal office address located at 1176
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`Highway 280 West, Cordele, Georgia 31015 and its registered agent, J. Mitchell
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`Gibbs, located at 109 E. 14th Ave., Cordele, Georgia 31015.
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`8.
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`Defendant Global Produce Sales, Inc. (“Global”) is a corporation organized
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`and existing under the laws of the State of Florida with its principal address
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`located at 1018 E. Oleander Street, Lakeland, Florida 33815 and its registered
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`agent, Mark A. Elliott, located at 1018 E. Oleander Street, Lakeland, Florida
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`33801.
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`9.
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`On information and belief, Defendant Stephen Ross Nichols (“Nichols”) is
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`a resident of the State of Florida who may be served at 5025 Lake in the Woods
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`Blvd., Lakeland, Florida 33813.
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`10. On information and belief, Defendant Lee Allen Wroten, III (“Wroten”) is a
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`resident of the State of Florida who may be served at 6065 Mountain Lake Dr.,
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`Lakeland, Florida 33813.
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`11. On information and belief, Defendant Mark A. Elliott (“Elliott”) is a
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`resident of the State of Florida who may be served at 1398 Grove Ter., Winter
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`Park, Florida 32789.
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`FACTUAL ALLEGATIONS
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 4 of 22
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`The Loan and Promissory Note
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`12. On information and belief, Herman Curt Titshaw is an agricultural
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`producer specializing in watermelon production.
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`13.
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`Titshaw is, and at all times relevant hereto has been, a resident of Crisp
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`County, Georgia.
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`14. On November 29, 2018, Titshaw executed a promissory note (the “Note”),
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`loan agreement (the “Loan Agreement”), a commercial loan agreement (the
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`“Commercial Loan Agreement”), and security agreement (the “Security
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`Agreement”) in favor of the Bank in exchange for the operating funds necessary
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`to conduct his 2019 watermelon production.
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`15.
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`The Note is in the face amount of $1,300,000.00 and has a maturity date of
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`November 29, 2019. The Note required Titshaw to make a single payment of all
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`unpaid principal and accrued interest on or before said maturity date with an
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`interest rate of 7.25%. A true and accurate copy of the Note is attached hereto as
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`Exhibit A.
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`16.
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`The Loan Agreement and the Commercial Loan Agreement provide the
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`terms and conditions under which the Note is governed and the referenced loan
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`is to be administered. A true and accurate copy of the Loan Agreement is
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`attached hereto as Exhibit B and a true and accurate copy of the Commercial
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`Loan Agreement is attached hereto as Exhibit C.
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 5 of 22
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`17.
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`The Loan Agreement, with reference to the Note, contains the following
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`provisions regarding the Loan that are pertinent to this matter:
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`a) Security - To secure payment of the [N]ote and all modifications,
`extensions, renewals, and obligations, Titshaw granted the Bank a
`first lien security interest in all of Titshaw's then owned and
`thereafter acquired interests in the collateral as described in the
`corresponding Security Agreement. Titshaw further granted the
`Bank a security interest in that real property owned by Titshaw and
`located in Land Lot 168, District 10, Crisp County, Georgia that is
`perfected by that Security Deed to the Bank recorded in Book 993,
`Page 153, Land Records of Crisp County, Georgia.
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`(b) Loan Purpose - Titshaw certified that that proceeds from the
`[N]ote were being used for 2019 Crop Production.
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`(c) Affirmative Covenants - In addition to all of the other covenants
`set forth in the [N]ote, corresponding Loan Agreement and Security
`Agreement, or other obligations, Titshaw represented and
`warranted that Titshaw would maintain proper books, records, and
`accounts of his operation, would provide annual financial
`statements and tax returns to the Bank, would advise the Bank of
`any change or event which will materially affect the financial
`condition or performance of Titshaw, would timely pay to the Bank
`the proceeds derived from any sale or other disposition of the crops
`subject to the security interest described herein, and that Titshaw
`would immediately report to the Bank any crop loss or other
`collateral loss.
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`(d) Events of Default - Upon the occurrence of an "Event of Default,"
`as defined in the corresponding Loan Agreement or other
`obligations, the Bank could, at its option, without any demand or
`notice whatsoever, declare the [N]ote and all other obligations to be
`fully due and payable in their aggregate amount, together with
`accrued interest and all prepayment premiums, fees, and charges
`applicable thereto.
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`(e) Remedies - Upon the occurrence of an "Event of Default," the
`Bank could, at its option, cease making advances under the [N]ote (if
`the [N]ote allowed for such advances), declare the [N]ote and all
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 6 of 22
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`other obligations of Titshaw to be fully due and payable in their
`aggregate amount together with accrued interest plus any applicable
`prepayment premiums, fees, and charges. In addition to other
`remedies permitted by law, the Bank could at any time, without
`notice, apply the collateral to the [N]ote and/or other obligations,
`whether due or not, and the Bank could, at its option, proceed to
`enforce and protect its rights by an action at law or in equity or by
`any other appropriate proceedings.
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`(f) Late Payments; Default Rates; Fees - The parties agreed that if any
`payment under the [N]ote is not made when due (whether by
`acceleration or otherwise) or within ten days thereafter, Titshaw
`would pay the Bank a late payment fee of ten percent (10%) of the
`payment amount or $250.00, whichever is less. In addition, the
`parties agreed to post-maturity interest at fifteen percent (15%) or
`the maximum amount allowed by law, whichever is less and cost of
`collection, including attorneys’ fees as described below.
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`(g) Modification; Waiver of Secured Party - The parties agreed that
`the modification or waiver of any Titshaw obligation or the Bank’s
`rights under the [N]ote must be contained in writing and signed by
`the Bank.
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`(h) Governing Law - The parties agreed that the laws of the State of
`Georgia govern the construction of the [N]ote and the rights,
`remedies and duties of the parties.
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`(i) Attorneys' Fees - The parties agreed that in the event of Titshaw’s
`default under the [N]ote (including the documents and instruments
`referred to in the [N]ote), the Bank is entitled to attorneys' fees and
`other costs equal to fifteen percent (15%) of the total amount of
`Titshaw’s default.
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`(j) Due on Sale or Encumbrance – The parties agreed that upon the
`creation of, or contract for the creation of, any lien, encumbrance,
`transfer, or sale of all or any part of the property subject to the
`Bank’s security interest, the Bank may, at its option, declare the
`entire balance of the [N]ote immediately due and payable.
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`The Security Agreement
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 7 of 22
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`18.
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`The Security Agreement granted to the Bank a security interest in, among
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`other things, all crops and proceeds of crops owned by Titshaw. A true and
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`correct copy of the Security Agreement is attached hereto as Exhibit D and
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`incorporated herein by this reference.
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`19.
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`Pursuant to its terms, the Security Agreement was made as collateral
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`security for: (a) the Note and (b) all present and future debts from Titshaw to the
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`Bank.
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`20.
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`Pursuant to the terms of the Security Agreement, Titshaw granted to the
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`Bank a security interest in the following:
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`(a) all farm products, including all annual and perennial crops, of
`any type or description, including, but not limited to cotton,
`peanuts, corn, soybeans, produce, vegetables, sweet corn and wheat,
`as well as hay, grass, grain and other feeds and forage, now or
`hereafter planted, grown or located on land owned or rented by
`Titshaw and all such crops acquired, wherever stored, together with
`all products of any of the foregoing, and all proceeds of any sale or
`disposition of any of the foregoing;
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`(b) an assignment of the proceeds of any crop insurance obtained
`with respect to the crops described in Paragraph 20(a), as well as the
`proceeds of and/or participation in any and all governmental
`programs relating to said crops or land owned or rented by Titshaw,
`whether such proceeds relate to crop disaster, price support, land
`diversions, or other programs;
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`(c) all payments, accounts, general intangibles, or other benefits
`(including, but not limited to, price support payments, payments in
`kind, deficiency payments, disaster payments, letters of entitlement,
`warehouse receipts, storage payments, emergency assistance
`payments, diversion payments, counter-cyclical payments, loan
`deficiency payments, and conservation reserve payments) in which
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 8 of 22
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`Titshaw now has, or may have in the future any rights or interest or
`which may relate, in any fashion, to the above-described crops, or
`the land owned or rented by Titshaw, and which arise under or as a
`result of any pre-existing, current, or future federal or state
`governmental programs (including, but not limited to, all programs
`administered by the Commodity Credit Corporation, the FSA
`and/or the ASCS); and,
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`(d) all cash and non-cash proceeds of the foregoing.
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`21. As required by the Security Agreement, Titshaw, on November 29, 2018
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`supplied to the Bank a list of buyers, commission merchants, selling agents and
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`auctioneers to or through whom he may sell the farm products described in the
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`Security Agreement pursuant to the provisions of Section 1324 of the Food
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`Security Act of 1985, 7 U.S.C. § 1631 (the “Certification of Potential Buyers”), so
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`that the Bank could give notices required by, and enjoy the protections afforded
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`by, Section 1324 of the Food Security Act1. Contained within the Certification of
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`Potential Buyers is Titshaw’s agreement to update this list by providing the Bank
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`with any additions or deletions immediately upon becoming aware of such
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`changes. A true and correct copy of the Certification of Potential Buyers is
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`attached hereto as Exhibit E.
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`1 The Food Security Act (“FSA”) was enacted by Congress in order to protect purchasers of farm products who a)
`do not know that the sale of the products violates a pre-existing security interest and b) lack any practical method for
`discovering the existence of the security interest (see 7 U.S.C. § 1631(a)(1)) from enforcement of a pre-existing
`security interest resulting in double payment to both the seller and the security holder (see 7 U.S.C. § 1631(a)(2)).
`Under the FSA, a lender can preserve its security interest by writing directly to prospective agricultural buyers,
`warning them of the lender's interest in a particular producer's farm products, and requiring that all checks for those
`farm products should include the lender's name as a co-payee. See 7 U.S.C. § 1631(e)(1)(A).
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 9 of 22
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`22.
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`Pursuant to the terms of the Security Agreement, an "Event of Default"
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`takes place when any one of the following occurs:
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`(a) Titshaw fails to make the required payment towards the
`principal or interest on the Note, or towards any other obligation,
`when due;
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`(b) any representation or warranty of Titshaw set forth in any
`agreement, instrument, document, certificate or financial statement
`evidencing, guarantying, securing or otherwise provided to the
`Bank in connection with the Note, or any other obligation, is
`materially inaccurate or misleading;
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`(c) Titshaw fails to observe or perform any term or condition in the
`Note or any other term or condition set forth in any agreement,
`instrument, document, certificate or financial statement evidencing,
`guarantying or otherwise related to the Note;
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`(d) the insolvency or bankruptcy of Titshaw; and,
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`(e) any sale, conveyance or transfer of any rights in the property
`securing the obligations under the Security Agreement, or any
`destruction, loss or damage of or to the said property in any material
`respect.
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`23.
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`Pursuant to the terms of the Security Agreement, when an "Event of
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`Default" occurs, the Bank shall have all rights and remedies in and against the
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`property securing the obligations under the Security Agreement and otherwise
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`of a secured party under the Uniform Commercial Code of Georgia, as well as all
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`other applicable laws and all rights contained in the Security Agreement, in the
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`Note, and in all other instruments securing or related to the Note and/or
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`Titshaw’s other obligations to the Bank.
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`24.
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`Pursuant to the terms of the Security Agreement, no delay on the part of
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`the Bank in the exercise of any such right or remedy shall operate as a waiver. No
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`single or partial exercise by the Bank of any right or remedy shall preclude any
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`other further exercise of it or the exercise of any other right or remedy. No
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`waiver or indulgence by the Bank of any "Event of Default" shall be effective
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`unless in writing and signed by the Bank, nor shall a waiver on one occasion be
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`construed as a waiver of any other occurrence in the future.
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`25.
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`Pursuant to the terms of the Security Agreement, the laws of the State of
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`Georgia govern the construction of the Security Agreement and the rights,
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`remedies and duties of the parties thereto.
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`26.
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`Pursuant to the terms of the Security Agreement, the parties agreed that
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`service of process in any such proceeding relating to the Security Agreement
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`shall be effective if mailed to Titshaw at the address set forth in the Security
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`Agreement. The address listed in the Security Agreement for Titshaw is 454
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`Byrds Mill Road, Cordele, Georgia 31015.
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`Perfection of the Bank’s Security Interests
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`27.
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`In accordance with Section 1324 of the Food Security Act of 1985, 7 U.S.C. §
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`1631, the Bank mailed notice of its security interest to Crisp Melons, Inc. at 1176
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`Highway 280 W., Cordele, Georgia 31015 (the “Notice of Security Interest”) on
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 11 of 22
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`November 29, 2018. A true and correct copy of the Notice of Security Interest is
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`attached hereto as Exhibit F and incorporated herein by this reference.
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`28.
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`The Bank filed with the County Clerks of Sumter, Lee, and Pulaski
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`Counties, in the State of Georgia, as required by Georgia law, UCC Financing
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`Statements on or about the second week of January 2019, identifying as
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`collateral, among other things, all crops and proceeds owned by Titshaw. True
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`and correct copies of the said UCC Financing Statements are attached hereto
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`as Exhibit G and incorporated herein by this reference.
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`29.
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`The State of Georgia does not maintain a central filing system as defined
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`under the Food Security Act, 7 U.S.C. § 1631.
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`Titshaw Defaults on the Loan
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`30. On August 12, 2019 and August 16, 2019, Titshaw made two partial
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`payments towards the principal and interest due under the note by first paying
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`$250,000.00 to the Bank and then paying $9,900.47 to the Bank.
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`31.
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`Titshaw defaulted on the Note by failing to make payments on the
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`remaining principal and interest due before November 29, 2019, the final
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`maturity date under the Note (the “Default”).
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`32.
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`By letter dated June 2, 2020, the Bank, through counsel, notified Titshaw of
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`his default under the terms of the Note and the Security Agreement and
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`demanded payment of $491,487.15 plus ongoing interest accruing at $85.91 per
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 12 of 22
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`day (the “Titshaw Demand Letter”). A true and correct copy of the said Titshaw
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`Demand Letter is attached hereto as Exhibit H and incorporated herein by this
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`reference.
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`The Buyer Defendants
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`33.
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`Plaintiff is informed and believes and thereon alleges that between about
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`June 1, 2019 and about July 31, 2019, Titshaw caused watermelons owned and
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`possessed by Titshaw and subject to the Bank's security interest to be delivered
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`from Titshaw's possession in Georgia to the possession and control of the Buyer
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`Defendants.
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`34.
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`Plaintiff is informed and believes and thereon alleges that between about
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`June 1, 2019 and about July 31, 2019, the Buyer Defendants, as a selling agent,
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`commission merchant, or otherwise, sold to third-party buyers the watermelons
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`owned by Titshaw which were subject to the Bank's security interest and
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`received the proceeds from the sale of such watermelons.
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`35.
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`Plaintiff is informed and believes and thereon alleges that the Buyer
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`Defendants exerted dominion and control over the watermelons and the
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`proceeds of the watermelons of Titshaw in which the Bank had a perfected and
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`superior security interest.
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`36. At no time did the Bank authorize the sale or disposition of any
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`watermelons owned by Titshaw and in the possession of the Buyer Defendants
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`free and clear of the Bank's perfected security interest, or otherwise.
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`37.
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`Plaintiff is informed and believes and thereon alleges that for each of the
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`lots of watermelons owned by and sold on behalf of Titshaw, the Buyer
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`Defendants deducted or set-off from the proceeds derived from the sale of the
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`watermelons the costs and expenses incurred by the Buyer Defendants, including
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`but not limited to processing costs, freight charges, and interest.
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`38.
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`The Bank did not consent to the Buyer Defendants retaining proceeds from
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`the sale of the subject watermelons.
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`39. At no time relevant did the Bank receive written notice from any party that
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`the Buyer Defendants were claiming or would claim a lien on any of the
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`watermelons or proceeds of the watermelons for the costs and expenses related
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`to the sale of the watermelons or for interest or for any other charge.
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`40. None of the checks issued by any of the Buyer Defendants for any of the
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`watermelons sold, as described above, were made jointly payable to the Bank.
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`41.
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`The market value for the watermelons produced by Titshaw in which the
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`Bank had a perfected and superior security interest at the time said watermelons
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`were sold was not less than $491,487.15.
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`42. At all times herein mentioned, each of the Buyer Defendants participated
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`in the acts hereinafter alleged to have been done by the Buyer Defendants, and
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`furthermore, at all times herein mentioned, the acts and omissions of the Buyer
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`Defendants, and each of them, concurred and contributed to the various acts and
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`omissions of each in proximately causing the injuries and damages as herein
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`alleged in Count II.
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`43.
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`Plaintiff is informed and believes and thereon alleges that at all times
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`herein alleged, the Buyer Defendants, and each of them, were the successor,
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`assign, affiliate, subsidiary, or representative of each of the remaining parties
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`described as Buyer Defendants herein and was acting within the course and
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`scope of such succession, assignment, affiliation, subordination, or
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`representation at all material times herein. Each of the Buyer Defendants,
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`whether acting for itself or otherwise, is in some way responsible for the injuries
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`and damages as hereinafter alleged.
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`44.
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`Plaintiff is informed and believes and thereon alleges that at all times
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`herein alleged, the Buyer Defendants, and each of them, ratified the acts or
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`omission complained of within Count II herein.
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`45.
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`By letters dated September 9, 2020, the Bank, through counsel, demanded
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`that the Buyer Defendants transmit all proceeds retained by the Buyer
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`Defendants from any sale of the watermelons produced by Titshaw to the Bank
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 15 of 22
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`within 10 days of their receipt of said demand letters (collectively the “Buyer
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`Defendants Demand Letters”). To date, Buyer Defendants have refused to
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`comply with the terms of the Buyer Defendants Demand Letters. True and
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`correct copies of the said Buyer Defendants Demand Letters are attached hereto
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`as Exhibit I and incorporated herein by this reference.
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`Common Identity of Buyer Defendants
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`46.
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`Plaintiff is informed and believes and thereon alleges that, at all times
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`relevant hereto, there existed a unity of interest and ownership between
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`defendants Crisp, Summer Time, Global, Nichols, Wroten, and Elliott such that
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`any individuality and separateness between defendants Crisp, Summer Time,
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`Global, Nichols, Wroten, and Elliott has ceased, and each of said defendants is
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`the alter ego of the other defendants described herein in that said defendants,
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`and/or their principal owners, exert control over the other defendants described
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`herein to the extent there is no separation of identity.
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`47. Adherence to the fiction of the separate existence of each of the Buyer
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`Defendants as distinct entities and individuals would permit an abuse of
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`corporate privilege and would sanction fraud and promote injustice in that said
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`defendants could avoid obligations that said defendants are otherwise liable for.
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`48.
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`Plaintiff is informed and believes and thereon alleges that Nichols, Wroten,
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`and Elliott own all the equity in and/or control all the activities of Crisp,
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`Summer Time, and Global, and have moved assets freely between the entities for
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`their own benefit.
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`49.
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`Plaintiff is informed and believes and thereupon alleges that, during all
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`times in question, Nichols, Wroten, and Elliott have failed to follow corporate
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`formalities in regards to Crisp, Summer Time, and Global and have left said
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`corporate entities undercapitalized.
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`50.
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`Plaintiff is informed and believes and thereupon alleges that, during all
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`times and events in question, the Buyer Defendants acted under the name of, or
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`held themselves out as part of, Crisp, an entity that has since been
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`administratively dissolved by the Georgia Secretary of State for non-payment of
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`annual registration fees, rather than conducting business in the appropriate
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`names and entities.
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`COUNT I – Breach of Contract
`[Defendant Titshaw]
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`The Bank incorporates by reference the allegations contained in Paragraphs
`
`
`51.
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`1 through 50, as if fully set forth herein.
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`52.
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`53.
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`The Note is a valid and enforceable contract between the Bank and Titshaw.
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`The Bank has performed its obligations under the Note and has satisfied all
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`conditions precedent to its enforcement.
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`54.
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`Titshaw has breached the terms of the Note by, among other things, failing
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`to pay all remaining principal and interest due on November 29, 2019.
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 17 of 22
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`55.
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`Pursuant to the Note, Titshaw’s default under the Note entitles the Bank to
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`accelerate the principal balance and all accrued interest due and owing under the
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`Note.
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`56.
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`Titshaw has failed to cure his breach of the Note, despite written demand to
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`do so.
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`57.
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`Pursuant to the Security Agreement, if Titshaw defaults under the Note, the
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`Bank is entitled to all remedies provided for in the Security Agreement.
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`58. As a direct and proximate result of Titshaw’s breach of the Note, and Bank's
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`acceleration of all amounts owed by Titshaw to the Bank, the Bank has suffered
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`and continues to suffer damages that, as of June 2, 2020 are in the amount of
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`$491,487.15 plus all interest that will continue to accrue, together with applicable
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`late charges, attorneys' fees, and other costs of collection. The Bank is also entitled
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`to all remedies provided for in the Loan Agreement and Security Agreement.
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`59.
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`Pursuant to the Note, the Bank is entitled to reasonable attorneys' fees and
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`costs incurred, with interest accruing thereon, due to the Bank’s enforcement of
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`the terms of the Note and the Security Agreement2.
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`COUNT II - Conversion/Misappropriation of Collateral and Proceeds
`[Buyer Defendants]
`
`
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`2 See Paragraph 9 of the Security Agreement and page 4 of the Loan Agreement under the heading “Demand and
`Post Default Rights”.
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 18 of 22
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`60.
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`The Bank incorporates by reference the allegations contained in
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`Paragraphs 1 through 59, as if fully set forth herein.
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`61.
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`The Bank, through its security interest, had rights in the watermelon crop
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`and the proceeds of the watermelons owned by Titshaw.
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`62.
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`The Bank's security interest in the watermelon crop and the proceeds of
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`the watermelon crop owned by Titshaw was perfected due to the filing of Bank's
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`UCC Financing Statements in Sumter, Lee, and Pulaski Counties and the sending
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`of the Notice of Security Interest to the Buyer Defendants through their
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`predecessor, affiliate, and/or Subsidiary Crisp.
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`63.
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`The Bank's perfected security interest in the watermelon crop and the
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`proceeds of the watermelons owned by Titshaw was superior to any rights that
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`the Buyer Defendants had or may have had in the watermelons.
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`64. At no time relevant did the Bank authorize the disposition of any proceeds
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`of any watermelons owned by Titshaw free and clear of the Bank's perfected
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`security interest.
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`65.
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`The dominion and control exerted by the Buyer Defendants over the
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`watermelon crop and seizure and retention of the proceeds of watermelons in
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`which the Bank had a security interest was unauthorized and wrongful due to
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`Buyer Defendants selling such watermelons without the express authorization of
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`the Bank, deducting or offsetting interest and costs and expenses from the sale
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 19 of 22
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`proceeds, and remitting the proceed from the sale of the watermelons to Titshaw
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`without including the Bank's name on the check.
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`66.
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`The unauthorized and wrongful dominion and control exerted by the
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`Buyer Defendants over the watermelon crop and the proceeds of the
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`watermelons in which the Bank had a perfected security interest has deprived
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`the Bank of its rights, as a secured party, in the watermelon crop and the
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`proceeds from the watermelons.
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`67.
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`The Buyer Defendants have failed to return to the Bank the proceeds of the
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`watermelon crop, despite written demand to do so.
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`68.
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`The Buyer Defendants further failed to comply with the Food Security Act3
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`and the Uniform Commercial Code4 by failing to pay the Bank the proceeds from
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`the sale of Titshaw’s watermelon crop, as described above.
`
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`3 7 U.S.C.S. § 1631(e) provides in part: A buyer of farm products takes subject to a security interest created by the
`seller if within one year before the sale of the farm products, the buyer has received from the secured party or the
`seller written notice of the security interest organized according to farm products that: (i) is an original or
`reproduced copy thereof; and (ii) contains the name and address of the secured party, the name and address of the
`person indebted to the secured party, the social security number of the debtor or, in the case of a debtor doing
`business other than as an individual, the Internal Revenue Service taxpayer identification number of such debtor, a
`description of the farm products subject to the security interest created by the debtor, including the amount of such
`products where applicable, crop year, county, or parish, and a reasonable description of the property.
`
`4Article 9 of the Uniform Commercial Code, codified at Title 11, Article 9 of the Georgia Code, governs secured
`transactions, in which a debtor grants a creditor a security interest in personal property as collateral to secure a debt,
`making the creditor a secured party. O.C.G.A. § 11-9-109. Three conditions must be met before a security interest is
`enforceable against anyone. First, unless the secured party possesses the collateral, there must be a written security
`agreement signed by the debtor and containing a description of the collateral. Second, the secured party must have
`given value to the debtor. And third, the debtor must have "rights in the collateral." O.C.G.A. 11-9-203(b). If all
`three conditions are met, the secured party's security interest has been properly "attached" to the collateral.
`
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`Case 5:20-cv-00379-MTT Document 1 Filed 09/28/20 Page 20 of 22
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`69. As a result of the Buyer Defendants’ actions, the Bank has incurred
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`damages in an amount not less than $ 491,487.15.
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`COUNT III – Attorneys’ Fees and Costs Pursuant to O.C.G.A. § 13-6-11
`[Buyer Defendants]
`
`70.
`
`The Bank incorporates by reference the allegations contained in
`
`Paragraphs 1 through 69, as if fully set forth herein.
`
`71.
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`The Buyer Defendant’s conversion of the Bank’s property has caused
`
`unnecessary trouble and expense. Their conduct prior to the lawsuit being filed
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`was in bad faith as contemplated under O.C.G.A. § 13-6-11: "bad faith connected
`
`with the transaction and dealings out of which the cause of action arose, rather
`
`than bad faith in defending or resisting the claim after the cause of action has
`
`already arisen." Brown v. Baker, 197 Ga. App. 466, 398 S.E.2d 797 (1990). Buyer
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`Defendants ignored the Bank’s security interest in the watermelon crop and
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`refused to pay the Bank the proceeds from the sale of Titshaw’s watermelon crop
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`after demands made by the Bank. Such bad faith has led to the filing of this
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`lawsuit, and, accordingly, the Bank is entitled to recove