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Case 1:11-cv-03423-RWS Document 221-1 Filed 07/31/14 Page 1 of 5

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION






CIVIL ACTION FILE NO.:

1:11-CV-3423-RWS


























Plaintiff,



FEDERAL DEPOSIT INSURANCE
CORPORATION AS RECEIVER

FOR ALPHA BANK & TRUST



v.


JAMES A. BLACKWELL, JR.,
JOSEPH L. BRINER (nominally, to
extent of Insurance policy coverage
only), DAN E. BURGE, CLAUD E.
CLARK, THOMAS D. DANIEL,
BARRY E. MANSELL, JACK. V.
MILLER, JAYANTILAL K. PATEL,
and ROBERT E. SKEEN, III
Defendants.



BRIEF IN SUPPORT OF MOTION TO VACATE IN PART ORDER

OF AUGUST 3, 2012 GRANTING IN PART

DEFENDANTS’ MOTION TO DISMISS



Plaintiff Federal Deposit Insurance Corporation as Receiver for Alpha Bank

& Trust (FDIC-R) moves this Court to vacate the portion of this Court’s Order of

August 3, 2012 [dkt 41] in which the Court granted Defendants’ Motion to Dismiss

[dkt 24] as to FDIC-R’s Count I based on ordinary negligence. As grounds for this

Motion, FDIC-R shows the Court as follows:

1. Defendants’ Motion to Dismiss [dkt 23] the FDIC-R’s ordinary negligence

claim was based almost entirely upon the “rule” derived from Brock Built, LLC



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Case 1:11-cv-03423-RWS Document 221-1 Filed 07/31/14 Page 2 of 5

v. Blake, 686 S.E.2d 425 (Ga. Ct. App. 2009), and Flexible Products. Co. v.

Ervast, 643 S.E.2d 560 (Ga. Ct. App. 2007), which Defendants argued that

negligence claims against bank directors and officers are barred unless a

plaintiff can show fraud, bad faith or abuse of discretion in the performance of

their duties. See Brief in Support [dkt 23-1].

2. In its Response to Defendants’ Motion to Dismiss, the FDIC-R maintained that

dismissal of the FDIC-R’s ordinary negligence claim was not appropriate, even

assuming the viability of the “business judgment rule” in light of O.C.G.A. § 7-

1-490, because “To claim the protection of the BJR, the Defendants must first

make the requisite showing that they acted in good faith and in an informed and

deliberate manner.” Response [dkt 30] at 12.

3. This Court’s Order of August 3, 2012, dismissing Count I of the FDIC-R’s

Complaint alleging ordinary negligence under O.C.G.A. §7-1-490 was

expressly based upon the application of Brock Built and Flexible Products.

4. On July 11, 2014, the Georgia Supreme Court issued a unanimous opinion

holding, inter alia, that Brock Built and Flexible Products described a version

of the “business judgment rule” at variance with Georgia law, and expressly



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Case 1:11-cv-03423-RWS Document 221-1 Filed 07/31/14 Page 3 of 5

overruled Brock Built and Flexible Products. See FDIC v. Loudermilk, Case

No. S14Q0454, July 11, 2014, Slip Op. at 28-29.1

5. The Georgia Supreme Court’s opinion in Loudermilk is consistent with the

FDIC-R’s Response to the Motion to Dismiss, as the Court held that:

In the light of this statutory history, we conclude that OCGA § 7-
1-490 (a) is perfectly consistent with the business judgment rule
acknowledged at common law in the decisions of this Court. To
be sure, subsection (a) provides that an officer or director who
acts “in good faith and with that diligence, care, and skill which
ordinarily prudent men would exercise under similar circum-
stances in like positions” “shall have no liability by reason of be-
ing or having been a director or officer of the bank or trust com-
pany.” OCGA § 7-1-490 (a). And no doubt, these provisions im-
ply strongly that, if an officer or director fails to act in good faith
or with such ordinary care, he is subject to liability. But taken in
its legal context, the statutory reference to ordinary “diligence,
care, and skill” is most reasonably understood to refer to the care
required with respect to the process by which a decision is made,
most notably the diligence due to ascertain the relevant facts.


Loudermilk, Slip Op. at 23-24.

6. Because the Georgia Supreme Court has now clarified that the “business

judgment rule” does not act as a bar to ordinary negligence claims in every

instance, and because the Georgia Supreme Court overturned the two cases

relied upon by Defendants’ in their Motion to Dismiss the FDIC-R’s ordinary

negligence claim, this Court should apply Loudermilk, vacate its Order of



1 The Georgia Supreme Court’s opinion answered a certified question from
Judge Thomas W. Thrash, Jr., in FDIC v. Loudermilk, (Civ. Action No. 1:12-cv-
4156-TWT).



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Case 1:11-cv-03423-RWS Document 221-1 Filed 07/31/14 Page 4 of 5

August 3, 2012 with respect to the ordinary negligence claims of the FDIC-R,

and direct the Clerk to reinstate Count I of Plaintiff’s Complaint.



Respectfully submitted this 31st day of July, 2014.









SIMKINS HOLLIS LAW GROUP,
PC
/S. Paul Smith/
Jeanne Simkins Hollis
Georgia Bar No. 646890
S. Paul Smith
Georgia Bar No. 663577
1924 Lenox Road, NE
Atlanta, GA 30306
(404) 474-2328 phone
(770) 587-0726 FAX
[email protected]

Attorneys for the Federal Deposit
Insurance Corporation as Receiver
for Alpha Bank & Trust



LR 7.1 CERTIFICATE

Pursuant to L.R. 7.1D, counsel certifies that the foregoing complies with the font
and point selections approved by the Court in L.R. 5.1.C. This document was
prepared using Times New Roman font, 14-point.

/S. Paul Smith/
S. Paul Smith
Simkins Hollis Law Group, P.C.



CERTIFICATE OF SERVICE

I certify that, on July 31, 2014, I served a copy of the foregoing to all counsel of



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Case 1:11-cv-03423-RWS Document 221-1 Filed 07/31/14 Page 5 of 5

record via the Court’s ECF/EM filing system.






/S. Paul Smith/
S. Paul Smith
Simkins Hollis Law Group, P.C.



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