             Case: 13-14196   Date Filed: 07/09/2014   Page: 1 of 7


                                                       [DO NOT PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT
                         ________________________

                               No. 13-14196
                           Non-Argument Calendar
                         ________________________

                     D.C. Docket No. 1:12-cv-00823-JOF


WILLIAM N. ASMA, ALLAN F. EAYERS,
JANIS M. EAYERS and ERNEST EAYRS,

                                                       Defendants - Appellants,

vs.

WELLS FARGO BANK, N.A.,

                                                       Plaintiff - Appellee.

                         ________________________

                  Appeal from the United States District Court
                     for the Northern District of Georgia
                        ________________________

                                 (July 9, 2014)

Before WILSON, JORDAN, and ANDERSON, Circuit Judges.

PER CURIAM:

      William N. Asma, Allan F. Eayrs, Ernest Eayrs, and Janis Eayrs appeal the

district court’s grant of summary judgment in favor of Wells Fargo Bank, N.A.
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After review of the record and the parties’ briefs, we affirm. 1

                                                 I

       Because we write for the parties, we assume familiarity with the underlying

facts of the case and recite only what is necessary to resolve this appeal.

       Each of the appellants-guarantors elected to guaranty the repayment of either

one or two real estate loans. Under the first loan (“Loan A”), SouthTrust Bank,

N.A. loaned Ms. J. Eayrs $900,000. As to this loan, Mr. Asma, Mr. A. Eayrs, and

Mr. E. Eayrs agreed to “pay all expenses paid or incurred by Lender in collecting

any and all sums owing under [the Guaranties] and in the enforcement of its rights

under the security given by Guarantor[s] for [their Guaranties] . . including

reasonable attorney’s fees.” Under the second loan (“Loan B”), SouthTrust loaned

$1,800,000 to Royalty Properties, LLC. As to this loan, the guarantors pledged to

“pay all of the Bank's and its affiliates' reasonable expenses incurred to enforce or

collect any of the Guaranteed Obligations, including without limitation, reasonable

. . . attorneys' . . . fees and expenses….”

       The borrowers defaulted under both loans. Wells Fargo, which had since

acquired the loans, foreclosed on the real property collateral for the loans and then

sued the guarantors in federal district court to recover the balance owed under the

loan documents.

       1
          We issued a jurisdictional question in this case. The parties' responses to the question
satisfy us that complete diversity exists.
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      The district court granted summary judgment in favor of Wells Fargo,

concluding that the guarantors breached their respective guaranty agreements and

imposing joint and several liability for principal, prejudgment interest, and

attorneys’ fees. In so doing, the district court applied O.C.G.A. § 13-1-11(a)(2) to

calculate the attorneys’ fees to which Wells Fargo was entitled. The guarantors

now appeal.

                                         II

      We review de novo the grant of summary judgment, applying the same legal

standards used by the district court. See Doe v. Sch. Bd. of Broward Cnty., Fla.,

604 F.3d 1248, 1253 (11th Cir. 2010). These legal standards require that we view

the facts and resolve all reasonable inferences in favor of the non-moving party.

See Hawkins v. Sarasota County Sch. Bd., 322 F.3d 1279, 1280-81 (11th Cir.

2003). Summary judgment should only be granted if the record reveals that there

are no genuine issues of material fact and the movant is entitled to judgment as a

matter of law. Id.

      We review the district court’s award of attorney’s fees for abuse of

discretion. Am. Civil Liberties Union of Ga. v. Barnes, 168 F.3d 423, 427 (11th

Cir. 1999). But the district court’s interpretation of a state statute is subject to

plenary review. Blasland, Bouch & Lee, Inc. v. City of North Miami, 283 F.3d

1286, 1294 (11th Cir. 2002).


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                                              III

       The guarantors argue that the district court erroneously calculated the

attorneys’ fees to which Wells Fargo is entitled. They maintain that the district

court erred (1) when it applied the attorneys’ fees provisions of the guarantys

instead of the fees provisions in the promissory notes for the underlying loans, and

(2) when it held that the formulas for computing attorneys’ fees set forth in

O.C.G.A. § 13-1-11(a) apply to contracts that provide for reimbursement of

attorneys’ fees actually incurred. We disagree. 2

                                               A

       As an initial matter, we conclude that the attorneys’ fees provisions of the

guaranties govern in this case. Georgia courts have repeatedly characterized and

enforced guaranty agreements as contracts. See Charania v. Regions Bank, 591

S.E. 2d 412, 414 (Ga. Ct. App. 2003) (referring to a guaranty agreement as a

contract); Rodgers v. First Union Nat. Bank of Ga., 470 S.E.2d 246, 250 (Ga. Ct.

App. 1996) (applying O.C.G.A. § 13-1-11(a) to guaranty agreements containing

provisions for the payment of attorneys' fees). Wells Fargo sued the guarantors to

enforce their respective guaranty agreements. Because guaranty agreements are

enforced as contracts, the attorneys' fees provisions in the guaranty agreements,


       2
         The guarantors also contend that the district court should have required Wells Fargo to
surrender the original loan documents to the district court. They acknowledge, however, that they
have located no binding authority supporting this proposition.
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rather than the attorneys’ fees provisions in the underlying promissory notes,

govern the guarantors’ liability under their respective guaranties.

      The district court applied O.C.G.A. § 13-1-11(a) to calculate the attorney’s

fees that the guarantors owed. This statute provides, in relevant part:

      (a) Obligations to pay attorney's fees upon any note or other
      evidence of indebtedness, in addition to the rate of interest
      specified therein, shall be valid and enforceable and
      collectable as a part of such debt if such note or other
      evidence of indebtedness is collected by or through an
      attorney after maturity . . . subject to the following
      provisions:
              (1) If such note or other evidence of indebtedness
             provides for attorney's fees in some specific percent of
             the principal and interest owing thereon, such
             provision and obligation shall be valid and enforceable
             up to but not in excess of 15 percent of the principal
             and interest owing on said note or other evidence of
             indebtedness;
              (2) If such note or other evidence of indebtedness
             provides for the payment of reasonable attorney's fees
             without specifying any specific percent, such provision
             shall be construed to mean 15 percent of the first
             $500.00 of principal and interest owing on such note
             or other evidence of indebtedness and 10 percent of
             the amount of principal and interest owing thereon in
             excess of $500.00….

O.C.G.A. § 13-1-11(a)(1)-(2).

      The guarantors posit that the formulas set forth under this statutory scheme

do not govern because, under the loan documents, they are only liable for

attorneys’ fees actually incurred. We are not persuaded.

      The Georgia Court of Appeal has had several occasions to address the
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interplay between § 13-1-11(a) and specific language in a negotiable instrument

allowing for the recovery of fees actually incurred. In Rodgers, the guaranty at

issue stipulated that the guarantor would pay all legal expenses and reasonable

attorney’s fees “actually incurred.”    470 S.E. 2d at 250.       The guaranty also

stipulated that 15 percent of the total amount due constituted a reasonable

attorney’s fee. Id. Applying § 13-1-11(a)(1), the Court of Appeal ruled that,

irrespective of the “actually incurred” language in the guaranty, the bank was

entitled to “recover 15 percent of the total balance,” a sum that fell below the

statutory cap but that the parties agreed was a reasonable fee. Id.

      In S & A Industries, Inc. v. Bank Atlanta, 247 Ga. App. 377 (Ga. Ct. App.

2000) (en banc), by contrast, the promissory note between the bank and the debtor

stipulated that the debtor would “pay any fee, not to exceed 15 percent of the

principal and interest then owed that [the bank] incurred, plus court costs.” Id. at

383 (punctuation omitted).     Observing that “the statute does not mandate the

recovery of 15 percent attorney fees in every case,” the Court of Appeal concluded

that “the bank’s maximum recovery for attorneys’ fees is 15 percent, and it must

establish that it has actually incurred fees in that amount in order to recover the

maximum.” Id.

      On the surface, there appears to be some tension between Rodgers and S & A

Industries, but the cases may be reconcilable because in Rodgers the parties

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contractually agreed that 15% of the total amount due should be a reasonable fee.

Fortunately, the Georgia Supreme Court recently resolved any lingering doubt by

recognizing and accepting the reality that the application of § 13-1-11(a) will

sometimes result in a windfall for lenders, particularly where “the damages

awarded exceed the actual fees incurred.” Austin v. Bank of Am., N.A., 743 S.E.

2d 399, 405-06 (Ga. 2013) (“That the statutory formula [under O.C.G.A. § 13-1-

11] resulted in an award in excess of actual fees incurred does not provide a ground

for ignoring this mandatory statute or forbearing its enforcement.”). Given the

Georgia Supreme Court’s recent guidance on this issue, we conclude that the

district court properly applied § 13-1-11 in calculating attorneys’ fees. Because the

guaranties “provide[] for the payment of reasonable attorney's fees without

specifying any specific percent,” the district court correctly concluded that § 13-1-

11(a)(2) governs in this case.

                                         IV

      The district court’s grant of summary judgment in favor of Wells Fargo is

affirmed.

      AFFIRMED.




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