                             UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT


                             No. 15-1328


BANK OF COMMERCE,

                Plaintiff - Appellee,

           v.

MARYLAND FINANCIAL BANK,

                Defendant - Appellant.



Appeal from the United States District Court for the District of
Maryland, at Baltimore.    Ellen L. Hollander, District Judge.
(1:14-cv-00610-ELH)


Argued:   December 9, 2015                 Decided:   February 16, 2016


Before MOTZ and FLOYD, Circuit Judges, and John A. GIBNEY, Jr.,
United States District Judge for the Eastern District of
Virginia, sitting by designation.


Affirmed by unpublished opinion.        Judge Gibney        wrote   the
opinion, in which Judge Motz and Judge Floyd joined.


ARGUED: Demetrios George Kaouris, MILES & STOCKBRIDGE, P.C.,
Easton, Maryland, for Appellant. Margaret Moran McKee, PROCTOR
& MCKEE, P.A., Towson, Maryland, for Appellee.   ON BRIEF: K.
Donald Proctor, PROCTOR & MCKEE, P.A., Towson, Maryland, for
Appellee.


Unpublished opinions are not binding precedent in this circuit.
GIBNEY, District Judge:

       Bank of Commerce (“Commerce”) and Maryland Financial Bank

(“MFB”)       disagree      about    what     the    word       “first”          means     in     a

contract,      and     $227,323.82        hangs     in    the     balance.           MFB        and

Commerce’s predecessor in interest, Bank of the Eastern Shore

(“BOES”), entered into a Participation Agreement in which MFB

purchased an interest in one of BOES’s loans.                                   When Commerce

later foreclosed on the underlying property, it paid MFB its pro

rata share of the foreclosure proceeds.                         MFB, however, thought

the contract entitled it to “first out” payment.                                 In a “first

out” payment scheme, MFB would recover its entire interest in

the    loan    before       Commerce      recovered       anything,         giving       MFB      a

greater       share    of    the     foreclosure          proceeds.              Because        the

Participation Agreement, when read in full, provides for pro

rata     distribution        of     foreclosure          proceeds,         we     affirm        the

District Court’s grant of summary judgment to Commerce.

       We also reject MFB’s argument that an October 2011 letter

explains       or     modifies      the     Participation             Agreement.                The

Participation         Agreement     is    unambiguous,          so    the       Court    cannot

refer    to    extrinsic      evidence      to    interpret          it.        Further,        the

letter     expressly        “affirms”       the     terms    of       the       Participation

Agreement, and thus does not modify it.




                                             2
                                      I. BACKGROUND

        In   November       2006,   BOES    loaned          a   borrower    three    million

dollars to acquire and renovate a country club.                            In August 2008,

BOES and MFB entered into an agreement in which MFB bought a

participation interest in the loan.                     The Participation Agreement

said     that      “MFB’s     interest      in        the       loan,    expressed     as     a

percentage, is 25.00% (the ‘Participant’s Share’).”                                  J.A. 11

(emphasis in original).

       Several        sections      of     the       Participation         Agreement        are

important       for    purposes      of    this       appeal.           First,   Section     7

explains     how      the   parties      must       divide      payments   received.        It

says:

              7. Payments.    [BOES] shall report to MFB,
              MFB’s share of all accrued interest, fees,
              payments . . . [and] promptly remit to MFB
              its share based on the priorities indicated
              below. [Check only one box.]

                      a. [ ]     First Out: First, to MFB,
                      until each time as MFB has received an
                      amount   equal   to  its    Participation
                      Amount, then to [BOES] until such time
                      as [BOES] has received an amount equal
                      to its Retained Amount and then ratably
                      between [BOES] and MFB in an amount
                      equal to their respective allocable
                      shares   (based   on  MFB’s   Participant
                      Share) of interest, fees and any other
                      payments other than principal amounts.

                      b. [ ]        Last Out: . . .

                      c. [X]    Pro Rata: Ratably between MFB
                      and [BOES] (with appropriate allocation


                                                3
                 of fees, interest and other payments,
                 based on MFB’s Participant’s Share).

                 d. [ ]     100%: . . . .

J.A. 14–15.     The parties put an “X” in the space for option (c),

requiring a pro rata sharing of payments from the borrower.

     Section 8 obliges the parties to divide any losses on the

loan in the same pro rata method that they split up payments.

Specifically, this section says that the parties will “share

[losses] pro-rata in accordance with . . . [their] respective

participation interests.”    J.A. 15.

     Read together, Sections 7 and 8 divide payments and losses

on a pro rata basis, determined by the participation interest in

the loan.     MFB’s participation interest is 25%, so it would

receive 25% of the borrower’s payments, and suffer 25% of any

losses on the loan.

     Finally, Section 9 sets forth the method to allocate the

proceeds from a foreclosure.    In pertinent part, Section 9 says:

            (b) If foreclosure upon the Collateral is
            the action taken, [BOES] shall promptly
            remit to MFB its percentage interest first,
            as   hereinabove   specified,  of   all  net
            proceeds received by [BOES] as a consequence
            of such foreclosure proceeding . . . .

J.A. 16.    This section also provides that if BOES acquires any

property during the foreclosure process, both BOES and MFB will

own the property “equal to their respective percentage interests

in the Loan.”    J.A. 16.

                                   4
       In   October       2011,   BOES    emailed        MFB   a   letter   from      BOES’s

then-president (hereinafter, “the Letter”).                        It reads:

               This letter is to affirm the Bank of the
               Eastern Shore has agreed to remit all
               proceeds on a FIRST OUT BASIS to MFB if the
               above loan (collateral) is obtained as a
               consequence of a foreclosure proceeding by
               BOES.   This condition is contained in the
               Participation Agreement, dated August 17,
               2008, Section 9(b), Default by Borrower.

J.A.    128.        According     to   MFB,       the   Letter     responded     to    MFB’s

“request [for] confirmation from BOES that any foreclosure of

the property owned by [the borrower] would result in MFB getting

paid its participation interest first from the proceeds of any

foreclosure sale.”          J.A. 125–26.

       In   April     2012,     Commerce      assumed      BOES’s     interest     in    the

loan.          In     August      2013,       Commerce         initiated       foreclosure

proceedings against the borrower.                   At the time, the outstanding

loan principal balance was $2,302,765.12.                       The proceeds from the

foreclosure sale were $1,393,469.86.                     Commerce paid 25% of these

proceeds, or $348,367.46, to MFB.

        In March 2014, Commerce sued MFB to clarify the parties’

rights      to      the   proceeds       from      the     foreclosure      proceeding.

Commerce       argued     that,   under    the      Participation       Agreement,       MFB

should receive 25% of the foreclosure proceeds, or $348,367.46—a

pro rata distribution.             On the other hand, MFB argued that it

should receive its remaining 25% interest in the loan (i.e., 25%


                                              5
of the outstanding loan balance) from the foreclosure proceeds,

or $575,691.28—a “first out” distribution.

      The parties filed cross-motions for summary judgment in the

District Court.        Both parties contended that the Participation

Agreement    clearly       and   unambiguously       supports    their   position.

Alternatively,       MFB    argued     that    the    Participation      Agreement

contains ambiguity, requiring the District Court to consider the

Letter as extrinsic evidence.            MFB also provided an alternative

spin on the Letter—that it modified the Participation Agreement.

The   District   Court       entered     summary      judgment    for    Commerce,

finding that the Participation Agreement unambiguously supported

Commerce’s position and, therefore, that the District Court need

not consider the Letter.

                                   II. ANALYSIS

      This   Court    reviews     a   district     court’s   decision     granting

summary judgment de novo.             French v. Assurance Co. of Am., 448

F.3d 693, 700 (4th Cir. 2006).                A district court should grant

summary judgment when “the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to

judgment as a matter of law.”             Fed. R. Civ. P. 56(a); see also

Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986).                        When

parties file cross-motions for summary judgment, “the court must

review each motion separately on its own merits to determine

whether either of the parties deserves judgment as a matter of

                                         6
law.”      Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003)

(internal citation omitted).

                                    A. THE AGREEMENT

      Pursuant         to   Section       20   of   the   Participation          Agreement,

Maryland law applies to this dispute.                     J.A. 19.       Maryland courts

“apply the law of objective contract interpretation.”                            Dumbarton

Improvement Ass’n, Inc. v. Druid Ridge Cemetery Co., 434 Md. 37,

51, 73 A.3d 224, 232 (2013) (internal citation and alteration

omitted);        see    id.      (“[The     Court    of       Appeals    of     Maryland’s]

jurisprudence          on   contract       interpretation        is     well-settled    and

oft-stated.”).          Thus, when interpreting a contract, courts need

not discern the actual mindset of the parties at the time of the

agreement, but instead must “determine from the language of the

agreement itself what a reasonable person in the position of the

parties would have meant at the time it was effectuated.”                               Id.

at   52,    73    A.3d      at    232     (quoting    Gen.      Motors    Acceptance     v.

Daniels, 303 Md. 254, 261, 492 A.2d 1306, 1310 (1985)).                                  In

other words, “a contract’s unambiguous language will not give

way to what the parties thought the contract meant or intended

it to mean at the time of execution.”                     Id. at 51–52, 73 A.3d at

232 (quoting Sy-lene of Wash., Inc. v. Starwood Urban Retail II,

LLC, 376 Md. 157, 167, 829 A.2d 540, 546 (2003)).

      When       interpreting       a     contract,       a    court     must    read   the

contract in its entirety, “and, if reasonably possible, effect

                                               7
must be given to each clause so that a court will not find an

interpretation which casts out or disregards a meaningful part

of the language of the writing unless no other course can be

sensibly and reasonably followed.”           Id. at 52, 73 A.3d at 233

(internal citation omitted).          The court should strive to read

the   contract   provisions     “harmoniously,     and   not   construe   them

either to render one nugatory or to create unnecessary conflict

among them.”     Walker v. Dep’t of Human Res., 379 Md. 407, 420,

842 A.2d 53, 61 (2004); see also Baltimore Gas & Elec. Co. v.

Commercial Union Ins. Co., 113 Md. App. 540, 554, 688 A.2d 496,

503 (1997) (“A contract must be construed as a whole, and effect

given to every clause and phrase, so as not to omit an important

part of the agreement.”).

      If, however, after reviewing the contract, “the language of

the   contract   is    susceptible    of   more   than   one   meaning    to   a

reasonably prudent person,” an ambiguity exists.               Cnty. Comm’rs

of Charles Cnty. v. St. Charles Assocs. Ltd. P’ship, 366 Md.

426, 445, 784 A.2d 545, 556 (2001); see also Slice v. Carozza

Props., Inc., 215 Md. 357, 368, 137 A.2d 687, 693 (1958) (“The

written language embodying the terms of an agreement will govern

the rights and liabilities of the parties, irrespective of the

intent   of   the     parties   at   the   time   they   entered   into    the

contract, unless the written language is not susceptible of a

clear and definite understanding . . . .”).                If an ambiguity

                                       8
exists, “the court must consider any extrinsic evidence which

sheds light on the intentions of the parties at the time of the

execution of the contract.”            Cnty. Comm’rs of Charles Cnty., 336

Md. at 445, 784 A.2d at 556 (quoting Heat & Power Corp. v. Air

Prods. & Chems., Inc., 320 Md. 584, 596–97, 578 A.2d 1202, 1208

(1990)).

     In this case, the relevant section of the Participation

Agreement,        Section     9(b),   reads:     “If   foreclosure    upon       the

Collateral is the action taken [in response to default], [BOES]

shall promptly remit to MFB its percentage interest first, as

hereinabove specified, of all net proceeds received by [BOES] as

a consequence of such foreclosure proceeding.”                  J.A. 16.        While

the contract does not define the term “percentage interest,” the

Court reads the sentence as any reasonable person would on first

bite: BOES must pay MFB its percentage share (i.e., 25%) of all

net proceeds.

     MFB hangs its argument on the word “first” in the operative

sentence of Section 9(b).             MFB argues that “first” means “first

out,” so that MFB should get the foreclosure proceeds “until

[such]     time    as   MFB    has    received    an   amount    equal     to     its

Participation Amount.”          J.A. 14.     The parties, however, knew how

to say “first out” if they desired.               In fact, in Section 7 they

defined both “First Out” and “Pro Rata.”                   That they defined

“First Out” as a term of art in the contract, and then chose not

                                         9
to use the term in the foreclosure section of the agreement,

requires the Court to find that “first” means something other

than “first out.”

      The    use      of    the   word    “first”         in   the       foreclosure   section

could mean a number of things, such as the order in which MFB

should send out checks after a foreclosure proceeding.                                 Whatever

“first” means in Section 9(b), it does not mean the defined term

“First    Out.”            Everywhere     else       in   the       contract,    the   parties

agreed      to    a   pro     rata    distribution             of    profits    and    losses.

Accordingly, it makes sense that they agreed to the same pro

rata distribution in the foreclosure section, especially where

they chose not to use the defined term “First Out.”

      Awarding MFB a pro rata share of the foreclosure proceeds

fits with the remainder of Section 9(b), which uses the term

“percentage interest” to dictate how BOES and MFB would share

any property acquired—as opposed to funds received, as addressed

in the first sentence—by BOES during a foreclosure proceeding. 1

The   only       sensible     reading      of    this      provision         results    in   MFB

having a 25% interest in any property acquired, because a “first

out” distribution could not feasibly work with interests in real

property.          Thus,      under      MFB’s       reading        of    the   Participation

      1This could occur if BOES had bought the property at
foreclosure, or if it accepted a deed to the land in lieu of
foreclosure.



                                                10
Agreement, it would receive two different amounts depending on

whether the foreclosure proceeding resulted in a sale or in the

lender taking over the property.                       Instead, the Court’s reading

prevents this unusual inconsistency.

      The Court’s interpretation of Section 9(b) to require a pro

rata distribution is consistent with the other sections of the

Participation        Agreement,          all    of    which     provide      for   pro    rata

sharing.       See,        e.g.,    J.A.       14–15        (requiring     BOES    to     remit

payments from the borrower to MFB pro rata in Section 7); J.A.

17–18 (requiring ratable application of all collections received

by BOES in Section 15(d)).                     Most notably, Section 8 provides

that MFB “shall share pro-rata . . . any losses sustained in

connection      with       the     Loan.”            J.A.     15.     If     we    read     the

Participation Agreement as MFB advocates, MFB would not share

the losses on the loan pro rata.                     Indeed, if Section 9(b) called

for “first out” distribution, MFB would not incur any loss on

the   loan.     This       proposed       reading       cannot      stand,    as   it     would

“disregard[] a meaningful part of the language of the writing.”

Dumbarton Improvement Ass’n, 434 Md. at 52, 73 A.3d at 233.

      Thus, applying Maryland law, we hold that the Participation

Agreement     provides       for     a    pro    rata        distribution     of    the     net

proceeds      from     a    foreclosure.              Since     the   language       of     the

Participation Agreement leaves no ambiguity on this issue, the



                                               11
Court does not look to extrinsic evidence.                  We therefore affirm

the District Court’s grant of summary judgment to Commerce.

                          B. THE ALLEGED MODIFICATION

       MFB    maintains     that    even   if    the    Participation    Agreement

requires a pro rata distribution of foreclosure proceeds, MFB

and BOES modified the Participation Agreement, as documented in

the Letter. 2       The District Court did not address this argument,

but we can address it on appeal.                We may decide an issue raised

on cross-motions for summary judgment, rather than remand it,

when       “the   facts   are   uncontroverted.”          Monahan   v.   Cnty.   of

Chesterfield, Va., 95 F.3d 1263, 1265 (4th Cir. 1996) (internal

citation omitted).

       Here, MFB argues that the Letter modified the Participation

Agreement.          The   express    language      of    the   Letter,   however,

directly contradicts this argument.               The Letter itself says that

it “is to affirm” the Participation Agreement’s terms.                        J.A.

128.        Further, the Letter states that the condition discussed



       2
       The Participation Agreement contains a clause requiring
that both parties sign any modification.    J.A. 18.   The Letter
does not bear the signature of an MFB representative, leading
Commerce to argue that the Letter cannot modify the agreement.
Maryland law, however, “may operate to allow supplementation or
even modification of the express terms of a valid contract.”
600 N. Frederick Rd., LLC v. Burlington Coat Factory of Md.,
LLC, 419 Md. 413, 438, 19 A.3d 837, 852 (2011). The Court need
not reach this issue because, as explained below, it concludes
that the Letter does not even purport to modify the contract.



                                           12
“is   contained    in    the    Participation     Agreement   .     .   .     Section

9(b).”     J.A. 128.      BOES sent the Letter in response to MFB’s

request for “confirmation” of the agreement.                J.A. 125 (emphasis

added).     Clearly, the parties did not view the Letter as a

modification then, nor can we now.

                                III. CONCLUSION

      To   summarize,     the    Participation      Agreement       unambiguously

requires    distribution         of     foreclosure      proceeds       pro     rata.

Further, the Letter, by its very language, does not qualify as a

modification.     Thus, for the reasons stated above, we affirm the

decision    of   the    District      Court   granting   summary     judgment      to

Commerce.

                                                                            AFFIRMED




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