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Davis Trust Co. v. Jarrs, Inc.

United States District Court, Western District of Virginia

February 13, 2015

DAVIS TRUST COMPANY, Plaintiff,
v.
JARSS, INC., et al., Defendants.

MEMORANDUM OPINION

Glen E. Conrad Chief United States District Judge

Davis Trust Company ("Davis Trust") filed this diversity action against JARSS, Inc. ("JARSS"), Jaya S. Tiwari, and Sridevi J. Tiwari (collectively, "the Tiwaris") to recover the outstanding balances remaining upon default on two promissory notes. The case is presently before the court on Davis Trust's motion for default judgment against JARSS, and its motion for judgment on the pleadings against the Tiwaris. For the reasons set forth below, the motions will be granted.

Background

I. Notel

On March 10, 2011, JARSS and the Tiwaris obtained a $679, 000.00 loan from Davis Trust. The loan is evidenced by a promissory note ("Note 1") signed by the Tiwaris. Note 1 required the defendants to make monthly payments in the amount of $5, 325.00 on the tenth day of each month, and carried an interest rate of 6%. The note permitted Davis Trust to accelerate the entire amount due in the event of default, which included, among other circumstances, the failure to make any payment when due. The defendants also agreed, pursuant to Note 1, to pay Davis Trust's expenses incurred in collecting the amounts due under the note, including attorneys' fees, other legal expenses, and court costs.

Note 1 was secured by a deed of trust on certain property in Nelson County, Virginia. The deed of trust authorized Davis Trust to foreclose on and sell the property in the event that Note 1 went into default.

The defendants failed to make monthly payments due under Note 1. As a result, Note 1 went into default for nonpayment and was declared due and payable in full by Davis Trust. The defendants did not make the requisite payment. Consequently, Davis Trust initiated foreclosure proceedings against the property subject to the deed of trust, and the property was sold at auction on June 27, 2014.

The property brought a final bid of $475, 000.00. After deducting the expenses of the sale, Davis Trust applied the sale proceeds to the amount due under Note 1. This left a deficiency balance, as of June 27, 2014, of $260, 105.92.

II. Note 2

Davis Trust is also the owner and holder of a November 16, 2012 promissory note for a $20, 000.00 loan to JARSS ("Note 2"). Note 2 required JARSS to make regular monthly payments in the amount of $480.29, and carried an interest rate of 7%. The note permitted Davis Trust to accelerate the entire amount due in the event of default, which included, among other circumstances, the failure to make any payment when due. JARSS further agreed, pursuant to Note 2, to pay Davis Trust's expenses incurred in collecting the amounts due under Note 2, including attorneys' fees, other legal expenses, and court costs.

The debt was secured by commercial guaranties executed by the Tiwaris. Under the terms of the guaranties, the Tiwaris absolutely and unconditionally guaranteed payment of all amounts due under Note 2, including the costs, expenses, and attorneys' fees incurred in collecting the amounts due.

JARSS failed to make the monthly payments due under Note 2. As a result, Note 2 went into default and was declared due and payable in full by Davis Trust. The defendants have not made the requisite payment. As of June 27, 2014, Note 2 had an oustanding balance of $15, 675.35.

Procedural History

On November 6, 2014, Davis Trust filed a verified complaint against JARSS and the Tiwaris, seeking to recover the balances due under Notes 1 and 2, plus interest, attorneys' fees, and costs. The verified complaint was served on the defendants. On November 28, 2014, the Tiwaris, proceeding pro ...


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