more precise actually the truth of the matter is i don't know you don't know sorry to disappoint you that's ok this case is about the enforceability of a guarantee where the central issue is the definition are now there are two orders on appeal here one is the denial of the summary judgment and the other is the final order which declined to enforce that guarantee after a bench trial and at the conclusion of the bench trial the trial court stated that there is no question what the bank intended with this guarantee meaning that the bank intended for this guarantee to be enforceable under these circumstances i want the court declined to enforce that guarantee because of what it determined to be ambiguities in the definition of borrower so there are two questions here today number one does this guarantee incorporate the definition of borrower from the security instrument and number two does it matter is it in forcible notwithstanding the answer to that question so to understand why that's important we have to look at the loan transaction itself this was a seventeen and a half million dollar loan in eight days to a tenant in common structure which meant that up to thirty five investors could buy undivided interest in the property and become subject to the financing of that property through these loan documents it was also intended to be sold on the c m b s market meaning it was like a commercial mortgage back securities that lender investors could buy and the testimony at trial was that in that market these loans have to function substantially similar the terms have to be substantially similar there's not a mechanism for individual underwriting  each loan on this market they're pooled together and bought as a pool what why is this i mean just to and like me why is this form of organization being used in in place of a joint venture arrangement  or a limited partnership with these individual elsie's being limited partners i think the structure that's used here in hanson is the marketability of the loan package as part of a group where they're all similar type of commercial properties i'm informed that that this type of structure enhances the marketability if it somehow is more of a lower risk of the payment stream coming through to only if you can go after each of the city certainly certainly that's a major question so the security instrument was that the deed of trust which described the remedies that the lender would have in the event of certain defaults and that instrument had a very broad definition of the bar in the security instrument or the borrower is not only defined as the initial borrower the corporate entity of n after the find acquiring an interest in the property as here and after the find in accordance with the terms year of individually or collectively as the context they require the security instrument further enhanced that definition in section six point eight when it said that words in the singular shall be held in construed to be do include the plural and vice versa unless the context otherwise requires and finally in section six point three six the security instrument or so the question is whether that definition was properly incorporated into the guarantee and to look at the guarantee language which says in substance that that the term the definition of borrower under the guarantee includes the initial borrower as it does on the security instrument it includes the first twenty take energies as it does on the security instrument and then it court found that the stray parentheses was a grounds for finding ambiguity and the reason is because it could not determine whether that that definition as defined in the security instrument whether it modified demo delaware limited liability or something else or nothing at all it couldn't determine based on the way it was stated what that was referring to and to do rely on a straight parent that a to determine ambiguity was reversible error it is the words not the punctuation that are the controlling guide in construing a contract and with regard to typographical errors written contracts are construed according to the part contention notwithstanding the errors when the meaning is clear the court should interpret the contract according to their meaning without regard to punctuation marks or a want for them what are you citing from i'm citing from andersen cas the civil court of appeals of amarillo case why are you arguing that the indemnity in the not very next paragraph whereas the loan is evidence by a promis note and is secured by a deed of trust security agreement and fixture filing blah blah from borrower for the benefit of lender you know it in other words it clearly is referring to in fact take calls from at the end of the paragraph the loan documents and how can you have the guarantee of being inconsistent with the loan documents just as a matter of normal interpretation of collective documentation of loans indeed and we have already argued in our brief that these documents need to be construed together so that they are consistent definition in one should be consistent with definition of the other assuming that is the intent that can be discerned from that document and we contend that notwithstanding the straight parent radical it is the definition that was intended that is what the reference is there to provide my other question asked to do with this associated document that you sent to the court which was called s c c indemnity and guarantee your greenman and it's this it appears that the only difference between that and the one that is does it say that i mean because frank i mean my understanding is that the only absolutely only difference between the f c c indemnity and and this other i rising from the rescission in favor of any bar or arising from a related to a certain investigation by the f c c captured in the matter of triple net properties l l c so it references this it's specific action by the  and is meant to capture a liability in the event of a of a certain condition related to securities why would you lie i mean why would anyone execute is entirely separate document about that i think i believe your honor in this case there was a special circumstance which gave rise to the need to file this there was there's no evidence on that we did we did not believe there was any condition that was violated under the stars but the court's question about how the definition of  guaranteed it's an issue in this case is is the only difference is it includes the phrase together which with each co owner transfer and i see three possibilities for how this might inform the definition of guarantee  number one is that phrase together which heat with each cone or transferee was meant to be included in the guarantee but wasn't or the phrase as defined in the security instrument was meant to be deleted from the guarantee wasn't or the third possibility is it really doesn't inform and all these two documents stand on their own in terms of what they intended to define that's a little bit nonsensical i have to concede because there is no reason to exclude  co owner transferees future cone or transferees from that definition and in fact there is a provision in both these indemnities these both of these guarantees which contemplates future transfers regardless of how the incorporation argument goes so whether there was intent to place it in the side the parent had a core or not it is not it's a matter of interpretation  but with what the texas supreme court is says is that courts can either rewrite the party's contract nor add to its language there is a case out of this court called shore versus state farm foreign casualty insurance companies decided in  seven concerning the interpretation of insurance contracts where the policy owner argued that a prior version of an insurance policy should inform the interpretation of a current version and ask the court to the sense of the rewrite the current version and current this court rejected that approach because the policy in front of them was an in the us and therefore expensive evidence could not be used to create ambiguity and for the same reasons we believe this guarantee is unambiguous there is only one interpretation of what the parties intended by that incorporation was that they meant to have the same definition of borrower across all the loan doc well part of their argument is that this is supposed to be a limited guarantee indeed it is why i it limited well it doesn't cover every condition that's conceivably out there for bar work conduct it's limited to certain circumstances well one of which is failure to repay the loan and so i'm not quite sure i mean it it's all sort of errors and mistakes in management of the property that it's to call it limited is merely a characterization the guarantee terms themselves define what the scope of it is not their subjective belief that it's that it's a limited guarantee it does cover a laundry list of conditions but certainly not every conceivable one so in that matter maybe it is limited maybe it's a problem but it is what it is and it's meant to be interpreted under its own terms hardly why i was confused about that other guarantee is it specifically says it covers borrowers failure to comply with the securities act right and the f c c indemnity covers one specific action for the parent company the initial or so the second question that's before the court is whether this guarantee is in forcible even if the court believes that the borrower definition was not incorporated and we contend that it is and the reason is because the condition of liability that's described in the guarantee covers the act of a bar or placing the property or a part or any part  into voluntary bankruptcy which is precisely what happened here and the only way that phrase or any part there of can have any meaning is if it covers the act of something less than the totality of the bar the reason this is because up to thirty five entities own an undivided interest and the only way you could have a part of the property end up in bankruptcy is if one or two thirty four but something less than thirty five of those entities filed bankruptcy that's the only way a part of the property can be in bankruptcy and so the parties agreed to this condition they meant for it to have some effect the only way to give effect to that intent is to say that it covers the condition of a single borrower placing his undivided property interest in the voluntary bankruptcy and therefore this guarantee isn't forcible on its own terms regardless of the incorporation or no wonder there was a sale in the property would for close yes you're out it was there any attempt to prevent that before we got to this stage i would think that the other investors might have tried to a prevented it to go that far but waited until there was a foreclosure in the sale and it came to this stage yes were they not interested in keeping their property and continuing with payments i would assume what i was i answer your question thank you of the testimony from the lone witness at trial was that in this case which is very common these investors don't know one another they've been sold through one or more don't know one another and they don't coordinate efforts and what happened in this case was one of them hired and visor which was known for aggressive tactics this property was determined to be in some sort of distress and this advisor advised a single l l c ticket to file bankruptcy now there was some correspondence back and forth but i don't believe there was any coordination between the number twenty five tick and the rest of them regarding whether it wanted to engage in the bankruptcy process or not the other b and these the other ticket and the days did not engage that same advisor so they were getting the same advice so they were not aware of when this took place i don't believe there's any evidence they were aware until the filing was made and they received the report that the out of can't for any realty advisors i'd like to address the court's question about why the structure was used specifically was used pursuant to a ten thirty one exchange and the intent was to bar was to be applied in the security agreement into the guarantee permit it's important to note that the appellant is not a party to either of the agreements or these negotiations at trial appellant failed to meet its burden to show the ko to the understanding that the guarantor was guaranteeing collective acts of the investors this if you look at the tenants in common agreement which is referenced in the security agreement these investors were passi correct and so in realty advisors had can let me ask you a question if you were going to buy three percent of a property that somebody else was managing and they had no skin in the game would you do it if they weren't a guarant well let me let me just ask i mean you know killing off of what opposing counsel of said why why can't what your argument fundamentally rests on this one parent pedicle it seems to me and what i've always learned is transactions like this and under texas law i think this is accurate are to be construed holistically in terms of all the governing documents guarantee agreement in the very next paragraph specifically incorporated and endorse and are dependent upon the other security instruments so how can you voice the guarantee from the are so so we'll start with the security agreement itself is much broader and in fact what we're looking at is we're looking at instruction of the application of the definition so the instruction is collectively and individually as required right and that doesn't appear in the guarantee itself you know if you look at the actual short reference whereas the argument was that that there is a straight right this is in fact i would argue that the  six it's six but it goes for some pages word says dissemination of information anyway in that the terms participants sort of patients to looking at the way that those entities are referenced in the security instrument the security instrument specifically sets out in such a one point one well how could i guess my problem is if you construe b er to necessarily incorporate the listed and a tease then borrower does not include according to your interpretation any entities who came into the deal following the execution of this guarantee is that correct would i would say that that's incorrect i think that the intent here wasn't to include all of the property owners well the only way you include all of the property owners is by referring back to the loan and the security agreement but it is a moving target and that you can have people coming in and out i would say that's correct but i doubt that the instruction individually and collectively as applied that is referenced in the security instrument that specifically does not appear in the guarantee agreement i understand but what i'm saying is that you're you are interpretating the by abstracting one paragraph but a call here you are basically cutting the legs out from under the guarantee because there is practically no provision of this guarantee defining borrower that makes any sense in terms of as i read the docket and i did defined solely by the identified and at least one more last one through twenty in other words the garrett it's supposed to be a narrow guarantee i don't understand what that means but i can explain i'll find so the guarantee is structured to repay that because none of these individual investors there's not recourse against them directly under a right so the loan is structured dependent upon the management talent of and in and the ability of the property to generate sufficient income to pay off the loan right in the market in general i would throw that as a factor and it's not i mean you can be as counted as one if the market there are no tenants are right agreement managing member of the pair in addition to the foregoing indemnity or shall be liable for all principal interest and other amounts which may be due and owing by borrow under the note bar and from an after from an after and then it specifically enumerates those factors i understand that but borrower only makes sense in that context if you're defining it in terms of the security greenman and not in terms of your limited contract here again your honor that goes back to the intent of this agreement was to include all of the property owners but we're looking i think we're quiver kidding between well you've got to make a document consider in other words you have to interpret it to be consistent within itself well you want to the law is that if a guaranteed guarantee should be strictly construed if a guarantee is on certain that the terms go towards the guarantor in favor of the guarantor and so the guarantor here because of the exercise of control because of the structure of this investment had control of the collective now as my colleague pointed out one investor runs off and filed bankruptcy in breach of all the agreements that's not something that the guarantor was willing to guarantee against because the guarantor does not have control and fully liable for all amounts do knowing under the under the security agreement but after those specific events so again i want to go back to the point a simple non payment on that alone does not trigger the guarantee are specific to numerated collective events and it's evident through the structure the guarantor would not guarantee these individuals thirty five up to thirty five individuals scattered throughout the country that were meant to be passive investors but that if we interpret borrower to mean all entities and then and you look at all these documents is a hold and then aren't there clauses in portions of the guarantee that didn't don't seem to apply to anything or don't make sense if you look at a measure as a one into t rather than separate groups then there's there's parts of the guarantee that don't know where they fit so  i would point out one term that i think the court's referring to unless there's something else more specific there was an argument that was raised about the term or any part there of in reference to the guarantee that was something that was that admission and said that that would not change the definition and application of the term borrower and again here if the if the guarantee is is not clear then the can you have that if it's just one borrower who or this is where one f says refers to borrower are any of its principals officers general partners or members only individual borrowers can file chapter eleven that i mean under the bankruptcy law there's no provision under the bankruptcy law for a series of twenty five l file bankruptcy collectively i've actually participated in a bankruptcy filed by all of the investors in similar structures like this i don't know how the bankruptcy court i guess i guess nobody had raised the question but the definition  of a debtor is i don't see that a joint venture is an entity that can file and i'll see it as an entity that can file but i can't file with my brother yes but one of my questions here was a property when other part there of a property can file bankruptcy only people come file bankruptcy and people or and legal entities and i would question the obviously it was in people's mutual interest so they fought to handle the preceeding collectively and i'm not opining on whether a bankruptcy court could having a collective filing you know so in other words it is not provided in the bankruptcy law so your definition the way you're defining borrower is not something the teevan within the bankruptcy law guarantee not to be nugatory it's although i would assume as well i i just typed from my experience i've participated in ok well i don't know how it was done well nobody raised it but i don't i also don't see judge prados question prop bar or property or any part thereof you know again i don't see how you can just write out language in a guarantee well i mean why don't you why don't you just say that this reference as defined in the security instrument is boilerplate because down in the very next paragraph they clearly make the entirety of the indemnity dependent upon the if what you mean is superfluous i did not mean all right i meant that while it could have some impact at times here it does not change the specific application of a defined term and what do you how do you respond to his argument that you can't use punctuation to overcome the otherwise pretty clear meaning of document well again if the argument is that the between instrument and the comma the borrower and i would in fact argue that if if if the court is going to consider the stray part this is argument it would be the print this is after bar or if you look at the document general de parent is as defined as curious written throughout that document so if there is any straight parenthesis it comes after a borrower not instrument all right if there are no other questions that's  condition that the guarantor would have agreed to because it wouldn't have been able to control the outcome and the example for that is they were not able to control this tick twenty five from filing bankruptcy however there is provisions including the fraud and intentional misrepresentation clause that judge prado questioned about found on page thirteen forty of the record there is language in there that says that a fraud or misrepresentation by and a member of the borrower would give rise to liability and certainly a statement that is a misrepresentation by an individual member of a borrower is not something that the guarantor could control these statements come out in their ordinary course  not cleared by the guarantor who by his own admission is not a part of this loan that was not part of the loan structure except as to appear as a guarantor secondly the term boilerplate is a term that the district court used is certainly not a term that the witness used the witness conceded that he saw the language about property or any part there of and many of their front loan documents this is no surprise he works for a loan servicer that deals with loans of this type of structure that contains similar language indeed he testified at trial that the whole point of this structure of this market is to have loan documents that function in the same that are substantially similar in their terms so of course his testimony was that not only that term in the in the paragraph that starts in addition to the foregoing where the where the condition that we're relying on is found there are specific references to bar work conduct under the security instrument for instance allowing an in to be made on the property without consent well that's what i mean under that definition but the point do you agree that the quote property could have filed by all of the c s filing  collective some kind of collective bankruptcy apparently it happens and apparently the courts permit it but it seems pretty untaught done it i mean you know i had some background in bankruptcy  and that is in comprehensible to me that nobody raises and maybe not to the best interests of either the borrowers or the lenders but it is incomprehensible to me the bankruptcy court would take cognizance of something that the statute does not define as a debtor i would have to agree rather well somebody better raise that because that's you know i don't i mean it's just like when the bankruptcy courts of grant back when all these things you know a big realty company would file each of its apartment buildings the separate l l c and then the bankruptcy court with separate but lenders in every in many cases and then the bankruptcy court would issue a block stay over all of these separate entities even know you want to them or two of them were actually insolvent and in bankruptcy i mean it's the same thing it's it's it's that they wouldn't it would never need the phrase or any part thereof as part of the triggering condition the fact that it's pot maybe it's theoretically possible for all of them to file it is certainly possible for something less than all of them to file and that's why that phrase exists in the