     Case: 15-10122      Document: 00513095213         Page: 1    Date Filed: 06/26/2015




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                            United States Court of Appeals
                                                                                     Fifth Circuit

                                                                                   FILED
                                    No. 15-10122                               June 26, 2015
                                  Summary Calendar
                                                                              Lyle W. Cayce
                                                                                   Clerk
In The Matter of: STANLEY JUSTIN MCWILLIAMS,

              Debtor

STANLEY JUSTIN MCWILLIAMS,

              Appellant

v.

NATIONAL FARM LIFE INSURANCE COMPANY,

              Appellee




                   Appeal from the United States District Court
                        for the Northern District of Texas
                              USDC No. 4:14-CV-698


Before DAVIS, CLEMENT, and COSTA, Circuit Judges.
PER CURIAM:*
       Stanley McWilliams appeals the district court’s affirmance of the
bankruptcy court’s order awarding attorney’s fees and expenses to National
Farm Life Insurance Company. For the following reasons, we AFFIRM the


       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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district court’s order affirming the bankruptcy court’s award of attorney’s fees
and expenses.
                                         I.
         Stanley McWilliams (“McWilliams”) is the President of Red Point
Development, Inc. (“Red Point”), which in turn is the sole general partner of
Race Street Properties, L.P. (“Race Street”). In 2009, National Farm Life
Insurance Company (“NFLIC”), a Texas life insurance company, loaned Race
Street $1,162,500 for a construction project, and McWilliams personally
guaranteed the loan. In doing so, McWilliams signed a Note and Guaranty on
the loan. In 2010, Race Street defaulted on the loan. NFLIC then accelerated
the debt and foreclosed on the collateral securing the loan.         Because the
foreclosure proceeds did not satisfy the loan balance, NFLIC sued McWilliams,
Race Street, and Red Point in state court for the deficiency. The parties settled
in 2011, and the state court entered an Agreed Final Judgment in the amount
of $874,768.19, broken out as follows: $781,086.95 for the loan deficiency,
$18,681.24 for pre-judgment interest, and $75,000 for “reasonable attorney’s
fees.”
         McWilliams then filed a voluntary petition for relief under Chapter 7 of
the United States Bankruptcy Code in the Northern District of Texas, Fort
Worth Division, attempting to discharge the Agreed Final Judgment. Seeking
to protect its judgment, NFLIC initiated an adversary proceeding. After a
three-day bench trial, the bankruptcy court found that because McWilliams
had obtained the loan from NFLIC by fraud, the judgment was
nondischargeable.      The bankruptcy court then entered a final judgment
against McWilliams and awarded NFLIC costs and $99,177.87 in attorney’s
fees incurred during the adversary proceeding, which it calculated by taking
10 percent of the Agreed Final Judgment of $874,768.19 plus post-judgment
interest of $117,010.51. This calculation was apparently based on a provision
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                                         No. 15-10122
of the note on the loan providing that attorney’s fees and costs would generally
be calculated as “10% of all amounts due.”
         McWilliams timely appealed the order awarding attorney’s fees and costs
to the Northern District of Texas under 28 U.S.C. § 158, and the district court
affirmed. This appeal followed.
                                               II.
         “This Court reviews the decision of a district court, sitting as an
appellate court, by applying the same standards of review to the bankruptcy
court’s findings of fact and conclusions of law as applied by the district court.”
In re SI Restructuring, Inc., 542 F.3d 131, 134-35 (5th Cir. 2008). We thus
review the bankruptcy court’s factual findings for clear error and conclusions
of law de novo. Id. at 135. In Texas, the meaning of an ambiguous contract is
a question of fact. Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983). 1
                                              III.
         A creditor that successfully contests the dischargeability of its claim in
an adversary proceeding under 11 U.S.C. § 523 is entitled to recover attorney’s
fees if it has a contractual right to them under state law. In re Luce, 960 F.2d
1277, 1286 (5th Cir. 1992).            Here, McWilliams does not dispute NFLIC’s
entitlement to attorney’s fees—the Note and Guaranty expressly provide for
their recovery in these circumstances—but he does dispute the amount of fees
that the bankruptcy court awarded.
         As relevant here, the Note provides that:
         If this note or any instrument securing or collateral to it is given
         to an attorney for collection or enforcement, or if suit is brought for
         collection or enforcement, or if it is collected or enforced through
         probate, bankruptcy, or other judicial proceeding, then Maker
         shall pay Payee all costs of collection and enforcement, including


         1   The parties agree that Texas law applies to the underlying contract construction
issue.
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                                  No. 15-10122
      reasonable attorney’s fees and court costs, paid to an attorney who
      is not an employee of Payee, in addition to other amounts due.
      Reasonable attorney’s fees shall be 10% of all amounts due unless
      either party pleads otherwise.
      Similarly, the Guaranty provides that:
      The term “Guaranteed Indebtedness” as used herein, includes (a)
      all indebtedness of every kind and character, without limit as to
      amount, whether now existing or hereafter arising, of Borrower to
      Creditor, regardless of whether evidenced by notes, drafts,
      acceptances, discounts, overdrafts, or otherwise, and whether such
      indebtedness be fixed, contingent, joint, several, or joint and
      several, including to [sic] not limited to that one certain Real
      Estate Lien Note in the principal amount of $1,162,500.00, dated
      July 27, 2009, executed by Race Street Properties, L.P., a Texas
      limited partnership, made payable to National Farm Life
      Insurance Company; (b) interest on any of the indebtedness
      described in (a) preceding; (c) any and all costs, attorney’s fees, and
      expenses suffered by Creditor by reason of Borrower’s default in
      payment of any of the foregoing indebtedness; and (d) any renewal
      or extension of the indebtedness, costs, or expenses described in (a)
      through (c) preceding, or any part thereof.
      McWilliams contends that because the Agreed Final Judgment issued by
the state court included $75,000 for “reasonable attorney’s fees”—an amount
equal to 9.4 percent of the original loan deficiency plus interest—the
bankruptcy court erred in awarding NFLIC attorney’s fees equal to 10 percent
of the entire Agreed Final Judgment. Whether McWilliams is correct turns on
the proper definition of the term “all amounts due” in the fee provision. We
find this phrase to be ambiguous in this context, and thus its interpretation is
a question of fact. See Coker, 650 S.W.2d at 394.
      The Note states that if it “is collected or enforced through . . .
bankruptcy,” the debtor owes “[r]easonable attorney’s fees,” which shall be
“10% of all amounts due.” The bankruptcy court, adhering to the principle that
“separate documents executed at the same time, for the same purpose, and in
the course of the same transaction are to be construed together,” Jim Walter
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Homes, Inc. v. Schuenemann, 668 S.W.2d 324, 327 (Tex. 1984), appears to have
looked to the Guaranty’s definition of Guaranteed Indebtedness—the total
amount that McWilliams agreed to pay NFLIC—to construe “all amounts due.”
Effectively, the bankruptcy court viewed the terms “Guaranteed Indebtedness”
and “all amounts due” as synonymous.               And McWilliams agreed that his
Guaranteed Indebtedness would include “any and all costs, attorney’s fees, and
expenses suffered by Creditor by reason of Borrower’s default.” 2 So even
though the Agreed Final Judgment included an agreed-on sum purportedly
attributable to attorney’s fees, 3 at the time the bankruptcy court assessed
attorney’s fees under the Note’s fee provision, the bankruptcy court found that
the entire Agreed Final Judgment (plus post-judgment interest) constituted
McWilliams’s Guaranteed Indebtedness and thus “all amounts due.”
       We find that the bankruptcy court’s factual determination of the contract
term’s meaning was not clearly erroneous. Other provisions in the Note and
Guaranty, moreover, support that determination.
       For example, both the Guaranty and the Note contemplate that
McWilliams will be liable for attorney’s fees through whatever proceedings are
required to collect or enforce the debt, including bankruptcy. Note (“If this note
or any instrument securing or collateral to it . . . is collected or enforced through
. . . bankruptcy . . . , then Maker shall pay Payee all costs of collection and
enforcement, including reasonable attorney’s fees[.]”); Guaranty (providing
that Guaranteed Indebtedness includes “any and all costs, attorney’s fees, and


       2  Although the Guaranty provides that McWilliams would owe “any and all costs,
attorney’s fees, and expenses suffered by Creditor by reason of Borrower’s default,” the
bankruptcy court construed the Note and Guaranty together and found that the parties
intended to cap NFLIC’s attorney’s fees at 10 percent (unless NFLIC pleaded extra fees, and
the bankruptcy court found that it did not).
        3 As the district court pointed out, the bankruptcy court “noted that the $75,000 for

which the parties designated as ‘attorney’s fees’ ‘may or . . . may not have been’ the amount
of attorneys’ fees that were actually incurred.”
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                                  No. 15-10122
expenses suffered by Creditor by reason of Borrower’s default”).         Nothing
indicates that in the Agreed Final Judgment, NFLIC somehow waived its
entitlement to attorney’s fees that it might incur in further proceedings needed
to collect or enforce the debt. In other words, we see no reason to infer that the
parties intended to permit McWilliams to discharge his responsibility for
attorney’s fees halfway through the collection process.
      The Guaranty also contemplates that McWilliams’s indebtedness would
survive any number of changes in form. It provides that his indebtedness
would not be “released, diminished, impaired, reduced, or affected” by, among
other things, “any release, surrender, exchange, subordination, . . . any partial
release of the liability of Guarantor, . . . any renewal, extension, and/or
rearrangement of the payment . . . , or any adjustment, indulgence,
forbearance, or compromise that may be granted or given by Creditor to
Borrower of [sic] Guarantor.” As the bankruptcy court noted, this provision
indicates that the Agreed Final Judgment (however characterized) did not
diminish McWilliams’s obligation to pay attorney’s fees of 10 percent of his
entire obligation to NFLIC at the time of enforcement—even though he had
agreed, in the Agreed Final Judgment, to an increase in his total indebtedness
by some amount potentially attributable to attorney’s fees.
      In sum, when read together, the Note and Guaranty indicate that
McWilliams agreed to pay attorney’s fees of 10 percent of his total indebtedness
to NFLIC at the time NFLIC collected or enforced the debt. We thus decline
to disturb the bankruptcy court’s factual findings and attorney’s fees award.
                                       IV.
      For the foregoing reasons, the judgment is AFFIRMED.




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