     10-4556-cv
     Joel Ross, et al. v. Stanley E. Thomas

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Daniel Patrick Moynihan
 3       United States Courthouse, 500 Pearl Street, in the City of
 4       New York, on the 3rd day of February, two thousand twelve.
 5
 6       PRESENT: DENNIS JACOBS,
 7                              Chief Judge,
 8                RICHARD C. WESLEY,
 9                SUSAN L. CARNEY,
10                              Circuit Judges.
11
12       - - - - - - - - - - - - - - - - - - - -X
13       JOEL ROSS, ERIC LEVINE, JERDE
14       DEVELOPMENT CO.,
15                Plaintiffs-Counter
16                Defendants-Appellees,
17
18       MELANIE L. CYGANOWSKI,
19                Receiver-Appellee,
20
21                    -v.-                                               10-4556-cv
22
23       STANLEY E. THOMAS, S. THOMAS
24       ENTERPRISES OF SACRAMENTO, LLC,
25                Defendants-Counter
26                Claimants-Appellants.
27       - - - - - - - - - - - - - - - - - - - -X
28

                                                  1
 1   FOR APPELLANT:             Kirk M. McAlpin, Jr., Cushing,
 2                              Morris, Ambruster & Montgomery,
 3                              LLP, Atlanta, GA, Steven
 4                              Spielvogel, Gallion & Spielvogel
 5                              LLP, New York, NY.
 6
 7   FOR APPELLEES:             Colin R.P. Delaney, Smith,
 8                              Gambrell & Russell, LLP,
 9                              Atlanta, GA, John J. Lee, Smith,
10                              Gambrell & Russell, LLP, New
11                              York, NY.
12
13        Appeal from a judgment of the United States District
14   Court for the Southern District of New York (Scheindlin,
15   J.).
16
17        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
18   AND DECREED that the judgment of the district court be
19   AFFIRMED.
20
21        Defendants Stanley Thomas and S. Thomas Enterprises of
22   Sacramento, LLC (“Thomas Enterprises”), appeal from a
23   judgment entered on summary judgment by the United States
24   District Court for the Southern District of New York
25   (Scheindlin, J.). We assume the parties’ familiarity with
26   the facts, procedural history, and issues presented on
27   appeal.
28
29        Plaintiffs are real estate developers who partnered
30   with defendants to develop the Union Pacific rail yard in
31   Sacramento, California into residential, commercial, and
32   retail space. The operating agreement of Thomas
33   Enterprises--of which Thomas was the sole member and
34   manager--provided that plaintiffs would receive up to a
35   total of $10 million upon two contingencies, one of which
36   being when Thomas Enterprises comes into receipt of “Certain
37   Excess Amounts” of cash. Plaintiffs contend that a $125
38   million loan that defendants secured from an affiliate of
39   Inland America Realty Trust created sufficient “Excess
40   Amounts” of cash to entitle them to $10 million under the
41   operating agreement. The district court agreed and granted
42   summary judgment in plaintiffs’ favor.
43
44        In the context of contractual disputes, “[w]e have
45   repeatedly held that . . . summary judgment may be granted
46   only where the language of the contract is unambiguous.”


                                  2
 1   Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182,
 2   1192 (2d Cir. 1996). Under Delaware law--which the parties
 3   agree controls interpretation of the operating agreement--we
 4   look at the “objective” meaning of a contract, i.e., the
 5   “words found in the written instrument.” Sassano v. CIBC
 6   World Mkts. Corp., 948 A.2d 453, 462 (Del. Ch. 2008). “When
 7   the plain, common, and ordinary meaning of the words lends
 8   itself to only one reasonable interpretation, that
 9   interpretation controls the litigation.” Id. Ambiguity
10   exists only when “the provisions in controversy are fairly
11   susceptible [to] different interpretations or may have two
12   or more different meanings.” Eagle Indus. v. Devilbiss
13   Health Care, Inc., 702 A.2d 1228, 1232 (Del. 1997).
14
15        Plaintiffs’ entitlement to the claimed distribution
16   turns on whether the Inland loan was a “Capital
17   Transaction,”--a term defined in the operating agreement to
18   include “a financing or refinancing of all or any portion of
19   the Real Property or the Project.” Joint Appendix at 55.
20   The district court properly found that the Inland loan was a
21   Capital Transaction. The loan obtained by defendants was to
22   be used for the Union Pacific rail yard project, it was
23   secured by a deed to the property, and a portion of the loan
24   was immediately used to pay off the previous financing for
25   the project.
26
27        Defendants argue that the entire $125 million loan
28   cannot meet the definition of “financing or refinancing”
29   because they believe (contrary to Inland) that the property
30   was worth much less than $125 million, they argue that
31   financing can only exist up to the value of the property,
32   and they assert that most of the loan was attributable to
33   Thomas’s personal guarantee. In interpreting a contract, we
34   are required to give words their plain and ordinary meaning.
35   See Northwestern Nat. Ins. Co. v. Esmark, Inc., 672 A.2d 41,
36   44 (Del. 1996). Financing is commonly understood to mean
37   “[t]he act or process of raising or providing funds.”
38   Black’s Law Dictionary (9th ed. 2009). Likewise, one act
39   of refinancing is “repaying the existing loan with money
40   acquired from a new loan.” Id. These terms describe
41   precisely the purpose of the Inland loan. Thomas’s personal
42   guarantee, a common requirement of banks, does not alter the
43   analysis.
44
45
46
47

                                  3
1        Finding no merit in defendants’ remaining arguments, we
2   hereby AFFIRM the judgment of the district court.
3
4
5                              FOR THE COURT:
6                              CATHERINE O’HAGAN WOLFE, CLERK
7
8




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