Beruflich Dokumente
Kultur Dokumente
No. 13-2467
No. 13-2549
Appeals from the United States District Court for the District
of South Carolina, at Charleston. Patrick Michael Duffy, Senior
District Judge. (2:12-cv-00063-PMD)
Argued:
Decided:
Before MOTZ and DIAZ, Circuit Judges, and DAVIS, Senior Circuit
Judge.
guaranty
agreements
executed
by
CCT
Reserves
sole
The
affirm
the
district
courts
grant
of
summary
outstanding
principal
and
reverse
its
denial
of
the
I.
Although the basic facts of this case are not in dispute,
we view them in the light most favorable to Terry as the non3
maintains
his
in
Georgia
and
has
undertaken
real
Carolina.
promissory
notes
The
financing
was
and
mortgages
in
extended
favor
of
in
exchange
CresCom
on
for
the
February
1,
CresCom
loaned
CCT
$1,275,000
for
Finally,
on
October
25,
CresCom
loaned
CCT
an
CCT
renewed
the
loans
several
times,
the
maturity date for all three notes was July 25, 2009.
2009,
with
maturity
approaching,
CCT
began
having
final
In early
difficulty
other
loans.
expenses
related
to
the
real
estate
securing
the
J.A.
26570,
9.
The
Commitment
Letter
was
to
survive the closing of the new $750,000 loan and become binding
5
Id. 26.
Terry signed
June
25,
2009,
pursuant
to
the
Commitment
Letter,
mortgage
in
favor
of
CresCom
on
CCTs
real
estate
in
South
The Loan
[under
the
cross-default
provision]
it
shall
give
Borrowers no less than ten (10) days written notice from the
date
of
specified
the
that
receipt
of
the
notice
notice
be
given
by
cure
certified
to
default,
or
J.A. 31012.
and
another
The Loan
arrangements.
The
letters
were
sent
by
regular
and
debt and on June 18, 2011, the principal of all four loans
remained outstanding.
After CCT and Terry failed to pay the debt, CresCom filed a
complaint
in
the
district
court
seeking
to
enforce
the
four
this
action
was
pending,
CCT
filed
Chapter
11
Georgia.
CresCom
participated
in
CCTs
bankruptcy
that
directly
to
the
properties
CresCom.
securing
After
an
CCTs
loans
evidentiary
be
deeded
hearing,
the
properties
and
crediting
that
value,
$2,551,000,
against
the
found
that
claim
against
the
CCT
remaining
was
value
$1,121,029,
of
based
CresComs
on
the
unsecured
amount
of
CresCom
late
fees,
plus
attorneys
fees
and
continuing
per
diem
he
his
claimed
agreements
that
were
(1)
discharged
obligations
because
under
CresCom
the
failed
guaranty
to
give
event,
(3)
his
liability
was
capped
at
$1,121,029
as
district
court
granted
CresComs
motion
for
summary
CCTs
bankruptcy
did
not
discharge
Terrys
independent
the
district
court
denied
CresComs
motion
found
that
because
Georgia
law
governs
the
and
The
guaranty
ordering
court
supplemental
awarded
CresCom
briefing
on
$2,171,211.04
damages,
in
the
principal,
II.
Terry raises a number of arguments on appeal that can be
distilled into two primary issues:
agreements
and
thus
refusing
to
award
any
attorneys
fees
incurred by CresCom.
We review the district courts award of summary judgment de
novo, applying the same legal standards as the district court
did.
Motor Club of Am. Ins. Co. v. Hanifi, 145 F.3d 170, 174
no
genuine
of
material
fact
v.
Liberty
Lobby,
Inc.,
477
and
the
movant
is
242,
247
(1986).
A.
We first consider Terrys claim that the district court
erred
by
finding
him
liable
to
CresCom
under
the
guaranty
Addendum,
and
Loan
Amendment,
CresCom
was
We
disagree.
Under Georgia law, 4 the enforcement of unambiguous terms in
a guaranty agreement presents an issue appropriate for summary
judgment.
336, 341 (Ga. Ct. App. 2011) (quoting Brookside Cmtys., LLC v.
Lake Dow N. Corp., 603 S.E.2d 31, 33 (Ga. Ct. App. 2004)).
Georgia
law
thus
recognizes
the
enforceability
of
blanket
at
*9
(M.D.
Ga.
Aug.
22,
2013).
Although
Georgia
11
479, 481 (11th Cir. 1988), they have not held that failure to
give proper notice discharges independent agreements with nonparties, including guarantors.
As the district court observed, the guaranty agreements in
this case are absolute and relatively unambiguous.
They provide
payment
when
due,
whether
at
maturity
or
earlier
by
J.A. 74 (emphasis
Lender
that
[n]o
act
or
thing
need
occur
to
agreements
also
specifically
J.A. 74.
provide
The
that
the
asserting
its
rights
under
the
guaranty
agreements.
J.A. 75.
agreement,
CCT
agrees
that
12
default
will
occur
if
In
it
J.A.
from
his
obligations
under
the
guaranty
agreements
the
parties
2009
Commitment
Letter
and
Loan
Amendment,
of
$750,000
provision
of
concurrently
additional
credit
to
with
the
CCT.
To
J.A. 265.
J.A. 266.
The
Terry was
paragraph,
the
Amendment
identifies
In its
only
two
parties: (1) the Lender (CresCom Bank), and (2) the Borrowers
(Terrys wholly owned companies).
be
directed
to
Edward
Terry
at
his
business
and
Loan
Amendment
to
provide
him,
in
his
personal
enforcing
the
guaranty
agreements
against
him.
He
and
individually.
deliver
the
notice
of
default
to
Terry
Because no notice of
Loan
rights
Amendment
under
the
refer
newly
cross-default provisions.
only
to
negotiated
CresComs
exercise
of
its
cross-collateralization
and
The notice
interpretation
which
make
clear
payment.
The
is
consistent
that
default
Loan
with
occurs
Amendments
the
loan
immediately
notice
agreements,
upon
provision
non-
further
full
payment
was
not
made,
all
of
CCTs
loans
were
was
necessary
because
independently in default.
all
of
the
loans
were
claim
the
relies
on
language
in
parties
Therefore, his
Commitment
Letter.
on
to
say
that
as
used
herein,
the
The provision
term
Borrower
J.A. 265.
Terry argues
Terry
Homes . . . ,
is
signing
Sugarloaf
on
behalf
Marketplace,
of
LLC,
Borrower,
Whipple
Brentwood
Development
17
J.A. 270.
On a lower
each
of
these
provisions
and
the
Commitment
Terry
absurd result.
in
his
personal
capacity
without
inviting
an
refers
to
the
Banks
loans
to
the
Borrower,
but
Still
J.A. 268.
it
agreements.
is
based
on
Terrys
breach
of
the
guaranty
See J.A.
and
protest
of
18
any
instrument
evidencing
Indebtedness.).
Therefore,
even
if
CresCom
failed
to
give
any
and
all
Borrower . . . except
full.).
defenses,
the
Because
claims
defense
Terrys
of
and
discharge
guaranty
discharges
of
by
in
payment
obligations
arose
erroneous.
different
Specifically,
aspects
of
the
he
district
assigns
courts
error
award.
to
three
First,
he
CresComs
CCTs
Chapter
bankruptcy
remaining
11
courts
unsecured
proceedings.
valuation
claim
at
Second,
of
the
he
the
conclusion
argues
properties
that
conveyed
of
the
to
Third, Terry
19
We address
cap
damages
at
$1,121,029,
which
reflects
the
bankruptcy
stresses
that
because
[a]
guarantors
liability
is
even
though
any
other
person
obligated
to
pay
20
in bankruptcy.
J.A. 82 7, 8.
As the
of
remaining
debt
against
guarantor
unless
the
nonetheless
argues
that
even
if
the
discharge
of
those
obligations
are
limited
to
the
$1,121,029
as
prevent
part
of
finding
debtors
that
bankruptcy
debt
has
been
plan,
wholly
nor
or
does
it
partially
However, Terry
the
transferred
properties]
against
CresComs
claim
in
not
properties
contend
was
not
(nor
could
he)
subtracted
CresCom.
21
from
that
the
the
value
amount
he
of
now
those
owes
$3,747,314
Petition
plus
Date.
costs
and
Appellants
attorneys
Br.
at
27
fees
through
(emphasis
the
added
and
At
fees,
outstanding
bankruptcy
was
$4,663,294.70.
unsecured
was
$2,112,294.70,
only
the
claim
Therefore,
at
$1,121,029,
total
the
CCT
indebtedness
although
conclusion
actually
less
the
CresComs
of
CCTs
owed
CresCom
value
of
the
conveyed properties.
Contrary to Terrys suggestion that CresCom will enjoy a
windfall if it is allowed to recover more than $1,121,029 under
the guaranty agreements, it is clear from the record that CCTs
actual indebtedness to CresCom exceeded $2 million after the
value of the conveyed properties was applied.
We
therefore
reject
Terrys
contention
that
the
district
court
next
argues
that
the
district
courts
award
was
He points
properties
from
2009
that
totaled
well
over
$4
million,
court.
If
the
district
court
had
adopted
those
figures, Terry argues, the debt would have been fully satisfied
upon transfer of the properties.
the
properties
by
the
bankruptcy
court
was
undoubtedly
more
23
stipulate
to
the
findings
for
purposes
of
the
district
values
of
the
properties
other
than
proffering
the
required
to
present
additional
evidence
to
propose
stipulation.
Notably, the only evidence Terry presented to contradict
the
bankruptcy
appraisals.
the
district
courts
valuations
were
CresComs
2009
to
support
his
assertion
that
the
figure
His reliance on
value
of
particularly
the
in
properties
light
of
at
the
the
time
bankruptcy
of
conveyance,
courts
thorough
No.
73,
at
n.5
(D.
S.C.
Nov.
25,
2013).
Because
the
make clear that the parties intended late fees to apply only to
missed
monthly
interest
payments
and
not
to
the
entire
an
unenforceable
penalty.
CresCom
devotes
only
late
fees
are
an
accepted
business
practice
that
do
not
Letter
and
final
loan
were
finalized.
The
loan
26
after the Commitment Letter was signed) used the same standard
late charge provision as the other loan agreements, the parties
agreed that the terms of the Commitment Letter would survive the
closing of the new loan and the modifications to the existing
loans.
The
subsequent
modifications
essentially
incorporated
the
binding
J.A. 46.
nature
of
the
Commitment
Letter,
we
cannot agree with the district court that a late charge on the
entire principal is supported by the loan documents because Note
3572 broadened the late charge language to cover all payments.
J.A. 742.
provision
the
loan
agreements
might
previously
have
been
and
documents).
become
binding
together
with
all
other
loan
the
Commitment
Letter
as
an
indication
that
the
parties
interest
assessment
of
under
late
all
of
charge
the
notes.
on
the
Accordingly,
multi-million
the
dollar
We therefore vacate
28
the
district
court
to
reduce
CresComs
award
by
five
C.
We now turn to CresComs sole basis for appeal--that the
district
because
court
it
improperly
found
that
refused
Georgia
to
law
award
applies
attorneys
to
the
fees
guaranty
CresCom
that
the
attorneys
fees
it
incurred
in
CCTs
parties
agree
mortgages,
and
that
the
Commitment
loan
agreements,
Letter
contain
promissory
unambiguous
However,
he
signed
them
at
his
office
in
Georgia.
CresCom
effective
Carolina),
dealing
(i.e.,
and
demonstrates
upon
moreover
that
the
delivery
that
the
entire
to
its
parties
transaction
office
in
course
of
(including
the
district
problematic here.
court
observed,
the
term
executed
is
Id.
Terry
(Georgia)
enforceable
(South
or
the
state
Carolina).
30
in
which
clear
it
became
legally
contractual
term
susceptible
to
more
than
one
reasonable
interpretation
405, 412 & n.9 (4th Cir. 1995); Ward v. Dixie Natl Life Ins.
Co., 257 F. Appx 620, 627 (4th Cir. 2007) (unpublished).
Under basic principles of either South Carolina or Georgia
contract
law,
we
construe
agreement
strictly
against
the
the
ambiguity
drafter,
in
the
CresCom.
parties
Duncan
v.
Little, 682 S.E.2d 788, 791 (S.C. 2009); J & E Builders, Inc. v.
R
Dev.,
Inc.,
646
S.E.2d
299,
301
(Ga.
Ct.
App.
2007).
are the clear South Carolina choice of law clauses found in each
of
the
signed
parties
the
other
guaranty
documents.
agreements
Therefore,
in
Georgia
because
and
Terry
reasonably
31
fees
are
valid
and
enforceable
subject
to
the
following
condition:
[T]he holder of the note or other evidence of
indebtedness . . . shall,
after
maturity
of
the
obligation, notify in writing the maker, endorser, or
party sought to be held on said obligation that the
provisions relative to payment of attorneys fees in
addition to the principal and interest shall be
enforced and that such [party] has ten days from the
receipt of such notice to pay the principal and
interest without the attorneys fees.
CresCom concedes, and we agree, that under Georgia law it would
not be entitled to attorneys fees incurred in this litigation
because it did not provide Terry proper notice.
But CresCom
argues that Georgia law does not bar it from recovering the
attorneys fees it incurred participating in CCTs bankruptcy,
because those fees are a part of the underlying indebtedness and
are not covered by Georgia law.
choice
Georgia,
requiring
CresCom
of
South
to
law
clauses
Carolina
give
does
notice
32
in
of
the
loan
not
have
its
intent
agreements.
a
provision
to
collect
attorneys fees.
make clear that CCT is liable for reasonable attorneys fees and
costs
incurred
as
part
of
CresComs
collection
J.A. 250.
of
the
debt,
The guaranty
J.A. 77.
We
therefore
partially
reverse
the
district
courts
33
III.
For the reasons given, we affirm the district courts grant
of summary judgment to CresCom with respect to Terrys liability
under the guaranty agreements.
11
34