Aug. 13--Two years after filing suit and tentatively settling a claim against state House Majority Leader Micky Hammon, R-Decatur, Regions bank is seeking a $410,388 judgment on a home equity loan.
Hammon's lawyer, Barney Lovelace, said Morgan County Circuit Judge Steven Haddock on Thursday verbally denied a motion for summary judgment filed by Regions, meaning there are factual disputes regarding the amount of Regions' claims. Haddock has not issued a written ruling.
"This matter has been very frustrating for me because I have always paid my bills, and this loan is no different," Hammon said in an email Tuesday. "However, I feel that I must protect my rights by letting the court system resolve the disagreement I have with Regions bank."
Hammon declined to respond to questions by phone. In response to an email asking how much he believes he owes, Hammon said he could not comment because the litigation is ongoing.
According to pleadings in the case, Hammon took out a $350,000 home equity line of credit in 2006, using a Destin, Florida, condominium as collateral.
Regions filed the suit in May 2012, seeking a judgment of $415,866. The parties settled the case in September 2012, based on an agreement that Hammon would make monthly payments through May 2013, and then pay the balance of the alleged $415,866 debt by the end of May 2013.
According to Regions, Hammon made monthly payments through April 2013, but failed to make the final lump-sum payment.
Regions reinstated the lawsuit in January and filed a motion for summary judgment in March.
According to Regions' motion, Hammon owes $353,552 in principal and $23,736 in interest, less $19,993 he paid on the loan. Regions claims Hammon also owes $53,032 in attorney fees for Regions' Birmingham lawyer, Naomi Ivker.
An affidavit filed by Lovelace alleged the attorney fees are excessive. Lovelace wrote Ivker worked about 40 hours on the case, and was entitled to a maximum of $8,000.
Ivker, who did not return calls Tuesday, responded with an affidavit stating Regions agreed to pay her a contingency fee of 15 percent of the principal amount of the loan, an amount she said is reasonable.
"Mr. Hammon has a valid disagreement with Regions bank concerning this loan," Lovelace said. "Clearly, there is merit to Mr. Hammon's position, considering the court denied the motion for summary judgment by Regions bank."
Hammon filed an affidavit claiming Regions failed to offset the amount he owed by payments he made pursuant to the 2012 settlement agreement. He also questioned a $9,281 charge claimed by Regions.
According to loan documents Regions filed in court, Hammon's line of credit was backed by a mortgage on a condominium at Pelican Beach Resort in Destin. In 2006, according to the loan documents, the condominium's appraised value was more than $400,000.
Okaloosa County, Florida, property records indicate Hammon purchased the condominium in 2001 for $205,000. Hammon sold the property to its current owner, according to property records, for $322,500, in November 2007.
Florida condominium values reached a peak in early 2006, but plummeted beginning in 2007, when the recession hit. According to real estate surveys, coastal Florida condominiums were among the hardest hit in the nation, losing up to 60 percent of their value.
Lovelace said he did not represent Hammon until recently, and thus did not know whether the recession affected Hammon's ability to repay the loan.
Hammon was unopposed in the June primaries. No Democrat is challenging his seat. He was first elected to the House in 2002.
Hammon said he would decline an automatic 1.5 percent raise in his legislative pay this year, but he failed to file the paperwork declining the raise by the April deadline.
"As soon as I get back to Montgomery, I will fix that, and I will be happy to add up what it is and donate it to charity," Hammon said last month.
Birmingham-based Regions contributed to Hammon's 2006 campaign.
"I have enjoyed a long-standing relationship with Regions bank," Hammon said in the email. "Unfortunately, that mutually beneficial relationship has taken a turn, and we have a disagreement over what is owed by me and what is claimed by the bank."
Hammon loaned his campaign $7,000 in 2006 and $50,000 in 2009.
Richard Fording, chairman of the political science department at the University of Alabama, said he doubts Regions' claim will cause any long-term damage to Hammon's political career.
"It is not clear why Mr. Hammon is unable to repay his loan, but it does not appear that he has done anything illegal," Fording said in an email. "I think most people -- and especially fiscal conservatives -- do frown upon people who fail to repay their debts. But Mr. Hammon's debt was incurred on real estate during the recession, and we saw record numbers of homeowners defaulting on mortgages during this period."
Fording said politicians in similar situations have usually managed to limit the political consequences.
"Given the fact that Mr. Hammon took a big loss on the house after it depreciated, along with the fact that he can frame this as a fight against a 'greedy' bank and lawyers, I think that there will be relatively little outrage over this," Fording said.
Fording compared Hammon's situation to that of U.S. Rep. Tom Graves, R-Ga. Graves allegedly defaulted on a $2.2 million bank loan, an issue that was publicized after he won the 2010 election.
"Graves' defense was that the bank should not have made the loan because they knew he couldn't repay the loan," Fording said. "He eventually reached a settlement out of court with the bank. No details were disclosed, and he won re-election in 2012 in a landslide. I don't think voters in Georgia are that different than Alabama. For better or worse."
Eric Fleischauer can be reached at 256-340-2435 or email@example.com. Follow him on Twitter @DD_Fleischauer.
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