    Case: 15-60683   Document: 00513486795     Page: 1   Date Filed: 04/29/2016




         IN THE UNITED STATES COURT OF APPEALS
                  FOR THE FIFTH CIRCUIT


                              No. 15-60683                     United States Court of Appeals
                            Summary Calendar                            Fifth Circuit

                                                                      FILED
                                                                  April 29, 2016
                                                                  Lyle W. Cayce
                                                                       Clerk
EDWARDS FAMILY PARTNERSHIP, L.P.;
BEHER HOLDINGS TRUST, LIMITED,

                                          Plaintiffs–Appellees,

versus

WILLIAM D. DICKSON,

                                          Defendant–Appellant.




                Appeal from the United States District Court
                  for the Southern District of Mississippi




Before REAVLEY, SMITH, and HAYNES, Circuit Judges.
JERRY E. SMITH, Circuit Judge:

     William Dickson appeals a summary judgment that he is liable for nearly
$26 million under certain guaranty contracts. We find no error and affirm.

                                     I.
     In 2010, Edwards Family Partnership, L.P. (the “Partnership”), and
     Case: 15-60683       Document: 00513486795          Page: 2     Date Filed: 04/29/2016



                                       No. 15-60683
Beher Holdings Trust, Ltd. (“Beher”) (sometimes referred to jointly as the
“Lenders”), loaned Community Home Financial Services (“Community”) $16
million—the Partnership $4 million and Beher $12 million.                         Dickson—
Community’s founder, president, and CEO—signed the identical loan agree-
ments on behalf of Community and as a personal guarantor. Community also
executed notes to secure its obligations to the Partnership and Beher, respec-
tively, set to mature on August 1, 2013, and Dickson signed them on behalf of
Community and as a personal guarantor.

       Dickson executed contemporaneous, independent, respective guaranties
in favor of the Lenders; by each guaranty, Dickson “unconditionally and abso-
lutely guarantee[d] [] the due and punctual payment and performance when
due of the principal of the Note and the interest thereon . . . .” He accepted
liability that would be “primary and direct and not conditional or contingent
upon the enforceability of any obligation, the solvency of [Community] . . . , [or]
any obligation or circumstance which might otherwise constitute a legal or
equitable discharge or defense of a surety or guaranty . . . .” He also assured
the Lenders that they would not need to “make any demand” upon or “exhaust
[their] remedies against” Community, any collateral, or other guarantor before
recovering from him. The guaranty contracts included other language worthy
of reproduction here:
    The obligations of [Dickson] hereunder shall not in any way be affected
    by any action taken or not taken by [the Lenders], which action or in-
    action is hereby consented and agreed to by [Dickson], or by the partial
    or complete unenforceability or invalidity of . . . the value, genuineness,
    validity or enforceability of the Collateral or any of the Guaranteed
    Obligations.[1]


       1 The term “Guaranteed Obligations” referred to the sums advanced under the loan
agreements and covered by the notes. Community used the sums to purchase consumer-loan
portfolios, which served as “Collateral” for the loan and notes. “Lender” referred to the Part-
nership and Beher.
                                              2
    Case: 15-60683     Document: 00513486795      Page: 3    Date Filed: 04/29/2016



                                  No. 15-60683
             ...
       [Dickson] hereby waives . . . all defenses with respect to . . . any other
   action taken by Lender in reliance hereon . . . it being the intention
   hereof that [Dickson] shall remain liable as a principal until the full
   amount of all Guaranteed Obligations shall have been indefeasibly paid
   in full in cash and performed and satisfied . . . in full . . . and the Loan
   Agreement terminated, notwithstanding any act, omission or anything
   else which might otherwise operate as a legal or equitable discharge of
   [Dickson].
      [Dickson] acknowledges and agrees that his obligations as Guaran-
   tor shall not be impaired, modified, changed, released or limited in any
   manner whatsoever by any impairment, modification, change, release
   or limitation of the liability of [Community] or any other guarantor of
   the Guaranteed Obligations or any other Person or his or their respec-
   tive estates in bankruptcy resulting from the operation of any present
   or future provision of the bankruptcy laws or other similar statute, or
   from the decision of any court.
       ...
     [Dickson] hereby waives and agrees not to assert against [the
   Lenders] any rights which a guarantor or surety could exercise.
       ...
      [Dickson] agrees that his obligations hereunder are irrevocable, joint
   and several, and independent of the obligation of [Community] or any
   other guarantor of the Guaranteed Obligations . . . .
(Emphasis added.)

      Dickson testified that Community had made payments until October
2011 but defaulted by failing to pay thereafter. The Lenders demanded that
Community cure the defaults; neither Community nor Dickson cured but
instead sued the Lenders under theories ranging from breach of contract to
conversion; the Lenders counterclaimed against Community for judgment on
the loan transactions and notes and against Dickson personally for judgment
on the guaranty contracts. Shortly after the Lenders counterclaimed, Com-
munity filed for bankruptcy, which automatically stayed all other proceedings
against it.
                                         3
     Case: 15-60683      Document: 00513486795        Page: 4     Date Filed: 04/29/2016



                                     No. 15-60683
      The Lenders moved to sever their claims against Dickson under the
guaranties. Shortly thereafter, Community and Dickson filed an adversary
complaint in the bankruptcy proceeding, contesting the “extent and validity”
of Community’s obligations to the Lenders. The court granted the Lenders’
motion to sever, allowing their claims against Dickson to proceed because Dick-
son personally was not in bankruptcy and thus was not protected by the stay.

      The notes matured and remained unpaid, so on October 11, 2013, the
Lenders moved for partial summary judgment as to Dickson’s liability as guar-
antor. The court granted summary judgment and ordered the parties to file
affidavits establishing the extent of Dickson’s liability, after which the court
concluded that Dickson owed $25,777,169 ($6,427,978 to the Partnership and
$19,349,191 to Beher), with interest continuing to accrue.

                                            II.
      Dickson avers primarily that summary judgment on his guarantor lia-
bility was premature because, in the bankruptcy proceedings, he and Com-
munity were challenging the extent and validity of the underlying obligations.
Under Mississippi law, 2 guaranty contracts are subject to the same rules of
construction that apply to other contracts. Bank of McLain v. Pascagoula Nat’l
Bank, 117 So. 124, 126 (Miss. 1928). Dickson’s theory carries some intuitive
force because Mississippi defines a “guaranty” as “a collateral undertaking by
one person to answer for the payment of a debt or the performance of some
contract or duty in case of the default of another person who is liable for such
payment or performance in the first instance.” Powell v. Sowell, 145 So. 2d
168, 171 (Miss. 1962).         Also, “[i]f the principal underlying obligation is


      2  The relevant documents expressly adopt Mississippi law, and, in any event, Missis-
sippi law would apply to this diversity action based on a contract. Leonard v. Nationwide
Mut. Ins. Co., 499 F.3d 419, 429 (5th Cir. 2007).
                                            4
     Case: 15-60683         Document: 00513486795           Page: 5     Date Filed: 04/29/2016



                                         No. 15-60683
extinguished, generally the guarantor’s obligation is also extinguished.”
Woods-Tucker Leasing Corp. of Ga. v. Kellum, 641 F.2d 210, 213 (5th Cir.
Unit A Mar. 1981). From this, Dickson reasons persuasively that his guaran-
tor liability is entirely derivative of Community’s obligation, which could be
discharged in the bankruptcy proceeding. Dickson posits that if Community’s
obligation falls away, so must his.

       Though colorable, Dickson’s argument ignores the unambiguous lan-
guage of the guaranty contracts, 3 under which Dickson’s liability is “indepen-
dent of the obligations of [Community]” and “primary and direct and not con-
ditional or contingent upon the enforceability of any obligation.”                       Dickson
agreed that the Lenders need not exhaust their remedies against Community
or any other entity. He expressly waived any and all defenses to enforcement.
Finally, his personal guarantees are not affected by the “unenforceability or
invalidity” of the notes or loans, any bankruptcy proceedings, any limitation
on Community’s obligations, or “the decision of any court.”

       In sum, Dickson personally guaranteed the Lenders that he would sat-
isfy the obligations represented by the promissory notes no matter what. 4 He
does not allege that the guaranty contracts are ambiguous, unenforceable, or



       3  Miss. Transp. Comm’n v. Ronald Adams Contractor, Inc., 753 So. 2d 1077, 1087
(Miss. 2000) (“When a contract is unambiguous, determining its meaning is a question of law
for the court to decide, and the contract must be enforced as written.”).
       4 See, e.g., United States v. Little Joe Trawlers, Inc., 776 F.2d 1249, 1253–54 (5th Cir.
1985) (applying Texas law) (“Even if Texas law required a guarantor to receive notice of intent
to accelerate, the guaranty contract in this case was so broad that Guarantors should be
required to make good on their guarantee even in the absence of such notice . . . . We
emphasize first that the rights of guarantors must be determined from the language of the
contract . . . . In other words, Guarantors, in effect, agreed to be bound by the guaranty
instrument even if they were presented with a legal out . . . . Guarantors, in effect, said in
the guaranty instrument, ‘No problem. We’ll pay anyway.’ This type of guaranty contract
provision has been given effect in other jurisdictions, Black v. O’Haver, 567 F.2d 361 (10th
Cir. 1977) . . ., and we see no reason to refuse to give it effect here.” (some citations omitted)).
                                                 5
     Case: 15-60683       Document: 00513486795          Page: 6     Date Filed: 04/29/2016



                                       No. 15-60683
invalid but only that he cannot be liable as a guarantor until the Lenders show
that Community is liable. 5 That might be a sensible provision to include in a
guaranty, but it was not included here, and under Mississippi law, “[t]he most
basic principle of contract law is that contracts must be interpreted by objec-
tive, not subjective standards. A court must effect a determination of the lan-
guage used, not the ascertainment of some possible but unexpressed intent of
the parties.” 6 We enforce the unambiguous language of the guaranty contracts,
Ronald Adams Contractor, 753 So. 2d at 1087, which requires that Dickson
fulfill the obligations under the notes regardless of any outcome of the bank-
ruptcy proceedings or challenges to the underlying obligation.

       That conclusion does not end the matter, because the Lenders have the
burden to show Dickson is liable under the guaranty contracts. See EAC Credit
Corp. v. King, 507 F.2d 1232, 1236 (5th Cir. 1975). They must show that
(1) Dickson signed the guaranty contracts; (2) those contracts encompass Com-
munity’s obligations under the promissory notes and loan agreements; (3) they
are the current holders and owners of the notes; (4) the notes are in default;
and (5) the conditions (if any) of Dickson’s liability—as laid out in the guaranty
contracts—have been met. See id.; NCNB Tex. Nat’l Bank v. Johnson, 11 F.3d
1260, 1264 (5th Cir. 1994).

       The Lenders presented evidence sufficient to establish Dickson’s liability
as guarantor. They attached copies of the loan agreements, the notes, and the



       5 In his reply brief, Dickson claims that some defenses cannot be waived. Whatever
the merits of that contention, it is waived because he raised it for the first time in his reply
brief. See Hardman v. Colvin, No. 15-30449, 2016 U.S. App. LEXIS 6576, at *23 (5th Cir.
Apr. 11, 2016) (noting that “we ordinarily do not consider claims raised for the first time in a
reply brief” (citation and internal quotation marks omitted)). Moreover, Dickson proffers no
such defenses.
       6 Lehman-Roberts Co. v. State Highway Comm’n, 673 So. 2d 742, 743 (Miss. 1996)
(quoting Simmons v. Bank of Miss., 593 So. 2d 40, 42–43 (Miss. 1992)).
                                               6
    Case: 15-60683     Document: 00513486795    Page: 7   Date Filed: 04/29/2016



                                 No. 15-60683
guaranty contracts, each of which Dickson signed on behalf of Community and
as guarantor. The guaranties specifically make reference to the notes and loan
agreements. The record revealed that the Lenders are the current holders and
owners of the notes. Dickson testified that Community defaulted on the notes
by failing to pay after October 2011, and the evidence showed that the notes
remained unpaid when they matured on August 1, 2013. Finally, the guaranty
contracts reveal no conditions on Dickson’s liability save Community’s default
on the notes, which the Lenders proved. Dickson offers no evidence whatsoever
in response, claiming only that the bankruptcy proceeding may result in the
invalidity of the underlying obligation. Thus, the Lenders met their burden to
recover on the guaranties.

                                      III.
      Dickson challenges the summary judgment on the extent of his guaran-
tor liability. After finding Dickson liable under the guaranties, the court
ordered the parties to file competing affidavits on the extent of his liability.
The court concluded that the Lenders’ affidavit fairly and accurately reflected
Dickson’s liability.

      The Lenders presented an affidavit from Martha Borg, the companies’
bookkeeper. Borg averred that she was responsible for reviewing all of Com-
munity’s financial reports and for calculating the principal-and-interest bal-
ances on its respective promissory notes, so she was familiar with Dickson’s
obligations under the guaranty contracts. She calculated his liability based on
a “Borrowing Base Certificate Form” provided by Community and Dickson in
October 2011 and on an August 2010 agreement regarding the amount due as
of July 31, 2010, and she outlined her calculations and steps in a spreadsheet
attached to her affidavit.

      Dickson filed a competing affidavit that contended that Borg “vastly
                                       7
     Case: 15-60683        Document: 00513486795         Page: 8     Date Filed: 04/29/2016



                                         No. 15-60683
overstates the amounts that could possibly be deemed due.” Dickson also
claimed he lacked sufficient information to contest Borg’s affidavit because,
“through no fault of [his] own,” 7 he could not conduct discovery. He posited
that Borg misrepresented certain sums borrowed by Community, that she
lacked the qualifications and ability to conduct an accurate accounting, and
that she failed to account for at least two repayments made by Community. 8
The combined errors, Dickson maintains, led to a $1.2 million overestimation
of his liability. He offers no documentary evidence or records to support those
assertions.

       Dickson did, however, support his affidavit with an equally conclusional
affidavit from Robert Cunningham, a certified public accountant hired by Com-
munity’s bankruptcy estate to render professional accounting services. Cun-
ningham concurred in Dickson’s conclusion that Borg’s affidavit overstated
Dickson’s liability by $1.2 million but provided no records or documents in
support.

       Dickson has failed to present sufficient evidence to survive summary
judgment on the amount of his obligation under the guaranty contracts. He
admits that he lacked sufficient information to dispute Borg’s claims, but he
did not move for additional time, under Federal Rule of Civil Procedure 56(d), 9
to allow more discovery.               Instead, he alleged (without any supporting
documentation), only that Community did not default on the obligations, that


       7   Dickson was incarcerated.
       8Dickson alleged that Borg failed to account for two repayments made in 2006 and
2007. Because Borg based her affidavit on amounts the parties agreed Community and Dick-
son owed as of 2010, these allegations are irrelevant.
       9“When Facts Are Unavailable to the Nonmovant. If a nonmovant shows by affidavit
or declaration that, for specified reasons, it cannot present facts essential to justify its
opposition, the court may: . . . (2) allow time to obtain affidavits or declarations or to take
discovery . . . .” FED. R. CIV. P. 56(d).
                                              8
    Case: 15-60683    Document: 00513486795     Page: 9   Date Filed: 04/29/2016



                                 No. 15-60683
Borg made errors, and that Borg was unqualified to calculate his guarantor
liability. Cunningham’s affidavit, which contained only another set of allega-
tions that Borg had failed accurately to calculate Community’s and Dickson’s
obligations, is insufficient to preclude summary judgment. See Travelers Ins.
Co. v. Liljeberg Enters., Inc., 7 F.3d 1203, 1207 (5th Cir. 1993). Even supported
by Cunningham’s identical averments, Dickson’s affidavit amounts only to
“[c]onclusional allegations and . . . unsubstantiated assertions,” which “do not
adequately substitute for specific facts showing a genuine issue for trial.” TIG
Ins. Co. v. Sedgwick James of Washington, 276 F.3d 754, 759 (5th Cir. 2002).

      AFFIRMED.




                                       9
