court i'm nancy hammerton i represent the appellant george w k way this case deals only with the issues of law and that is the interpretation of two different texas statutes the limitations texas civil i'm going to start st with sixteen four hundred and eighty three and that is the texas general statute of limitations that applies to suits on a day it provides that a person must bring suit no later than four years after the date the cause of action accrues for an action on the debt so the question here is with respect to a claim on a guarantee when does the cause of action accrue more specifically as applied to this case the question is do the conditions preceding which apply to bring a suit against the note maker that is sending a notice of intent to accelerate and sending a notice of acceleration unless their way to those apply likewise to a suit on a guarantee and mr keyring smits at the answer is no guarantees are treated as separate distinct documents they are not negotiable instruments which notes are and in fact the origin of the requirement for notices of intent to celebrate an acceleration stem from the u c c oracle three which applied to negotiable instruments only also from the portion of what this court in the parties are referring to is not a loan liabilities i take issue with that because they're part of the loan but i think the intent is not principal and interest april th two thousand and nine western southern sent a letter to the borrowers copied mr cayley saying the mezzanine note is in the ball and you have five days to hear so mr position is that when the cure did not happen on april nd western souther under the terms of its mezzanine guarantee had the right to to pursue mr paley for those sums the mezzanine guarantee states that rd yes and presumably if that happened mr cayley would not have a good defense that oh you didn't send the borrower notice of acceleration it doesn't matter the district court erroneous they relied has to be zero so i'm just i'm having a here's a product that i'm having trouble with what is it that makes the debt the full debt the whole of now not just that particular amount from april but what creates that whole thing it is the guarantee your honor this was not in the full amount had already been a lent it was just a matter of when it becomes due in pay when it became due and payable  the liabilities determined by the terms of the contract that the parties have in this case the mezzanine guarantee the mezzanine guarantee says immediately upon an event of the fault the full amount is due when payable as to peggotty that is all that is required is an event of the fault there is no requirement that a notice of acceleration or notice of intent to accelerate be sent that it is only required to be sent to the note maker and the reason for that is because opposed to a maker of a note and a guarantor does not have the same rights as the maker to receive notice of intent to accelerate and that the rights of the guarantor are determined solely from the language of the guarantee i've also also cited to texas appellate court cases which i think are right on point and that is the mid south vs best case out of austin in two thousand and six as well as the more recent james construction case at the and hopkins cases they don't necessarily get into the notice of acceleration but the little joe's i would say is the the best the best case on that issue didn't take some action against the borrower he could not have the terms of the mezzanine guaranty govern this and that is what the parties bargained for that's what they negotiated for and the terms of their greenman should be governed this the next issue i want to discuss is the text of statute under the property code the two year limitations and that texas property co unpaid balance is barred unless suit is filed within two years of the date of foreclosure in this case it's undisputed foreclosure heard on the samberg st of all nine and suit was not filed until tw so the question is specific with questions that i'm going to address or specifically what does the term deficiency mean and the reason why that's important one that's what is the term that the statute uses and the statute implicit defines statute as quote the remaining on paid indebtedness it doesn't say principal and interest on a note only after applying a century to foreclosure proceeds  likewise the statute doesn't differentiate between the source of the underlying obligation i mean a source could be a guarantee a note a contract the only the only issue that determines whether or not fifty one thousand and three a applies is whether a particular item of indebtedness is secured by the real property and this question there is no doubt that the taxes insurance security deposits and the lame claims which the court found mr cayley liable for under the completion guarantee were all items that were secured by the under the deed of trust which is the real property in question here so it's mr k claims likewise fall within the fifty one thousand and three bar the district court found mr taylor there was there were three different guarantees here western southern did a good job of making sure that mr kelly was libel under various sources for different things and the district court found that mr cayley was liable for the principal and interest under the mezzanine note as well as the taxes insurance and under both the mezzanine guarantee as well and in the three items also under the construction guarantee this court previous police stated in its original canyon that items under the construction guarantee w barred well the taxes insurance and security deposit were all items that all within that that guarantee and in snotted matter of the guarantee being secured it's a matter of the items are secured to guarantee or a note or loan agreement those are just the source for the liability but they don't address whether the item is secured it's the deed of trust that specifically states whether the item is secure this is not a situation where western chose only to sue on the guarantee it chose to foreclose on the property and so when it foreclosed on the property it subjected itself to the provisions of the one or three and the two year limitation george i believe that this court specifically would you mandate the issue of whether a call to call the taxes insurance and security deposits the constituent parts of the loan and it specifically remanded those to the district court to consider whether or not they were barred by the same limitations and for the judge to consider that for the st time on remain and and so i don't think that's a lot of the case i believe that was an issue that was filed a suit for taxes insurance and security deposits all of which were secured by the deed of trust in that case the lender tried to argue that suit was not a suit for deficiency or rather for carve out liabilities under a guarantee and the court said no those sums are part of the in debt and is secured by the real property therefore the lenders suit is a super deficiency in arco plating doesn't make it otherwise m g i see i'm just about out of time so i will stop there thank you can't leave said miss richardson if you're on her good morning your honor spirit please the court my name is eric richardson i represent the plaintiff happily western southern life insurance company in this matter i want to quickly address a number of the points that ms hammerin had just made a moment ago s a th in our brief your honour's we believe that the issues regarding fifty one thousand and three have already been resolved by this court we have cited the court to the references in the prior panels opinion where this court found that the claims on of the completion guarantee which is the only guarantee that actually guarantee payment or coverage for the liens were timely and the court's decision is cited in our brief on that point additionally with regard to appellate attorney fees this court had also already decided that mr cayley had failed to adequately challenge those and as a result any challenge was waived that was actually upheld through a petition for rehearing that mr cayley had cited also your honors with regard to when the cause of action a cruise and whether you're looking at the guarantee or whether you're looking at the note mr cayley takes the position that it was error for the district court to actually look at the boring decision which of course focuses attention on when the underlying note was it was accelerated but that's exactly what this panel had directed the district court to do in the last case  in fact mr kelly had actually argued in his response and reply brief which we cited at page forty that a cause of action for breach of a guarantee of a promissory note accrues when the note is celebrated and becomes due this argument now that you only need to look at the guarantee itself is entirely new to this action it was not pursued in the st appeal and in fact it was exactly the opposite which was a decision or which was a position that this court actually t with regard to a colonel as a result your honour's we believe that this argument is waived we also believe that it is incorrect under texas law and under this court's precedent with regard to the little joke case which is cited by ms ham n little joe ultimately decides that there is no notice required to be provided to the guarantor to be able to proceed against that you're unsure but it does not say that a guarantor can be liable before the underlying note matures or is properly accelerated in fact the sole case which is relied upon by mr cayley says that a claim against an unconditional guarantor accrues when the underlying debt reaches maturity mid states resources corp v that's a southern district of texas case that was affirmed by this court does a detailed analysis of texas law and says that a guarantor is not liable until the underlying note either matures or is properly accelerated and then we have additional cases out of the northern district of texas the investor called collect and collection services limited partnership versus thomas and also then of course the mid south telecom versus best says it that you have to look to the notes terms to determine the guarantors obligations as judge change had indicated until the underlying note becomes due or is accelerated the guarantor cannot have liability on it i think the distinction that mr kelly attempts to make is since the situations where a note maker might be not liable but a guarantor still liable but those are very narrow circumstances such as where i believe the texas cases provide the examples where there may be a forgery of the maker's signature but the guarantor is still liable on the guarantee or where the statue of limitations may have started to run against the note maker before they run against the guarantor something very very limited nothing where the underlying note has not appeals additionally your honors with regard to the district court in this action the district court took its mandate as looking to see whether or not notices of intent to accelerate and notice of acceleration had been waived and if not whether or not they've been properly provided we believe the district court answered that question correctly it looked at the april th two thousand and nine letter that is the default letter regarding the mezzanine note that letter states that if the default is not cured in five days than western southern may the precise term may take additional steps including acceleration may has actually been expressly determined not to be sufficient under the texas authority which we had cited in our brief including the texas supreme court's case and object additionally your honors there after there was a long period of discussion between may of two thousand and nine and august of two thousand nine with several drafts of proposals for restructure debt restructure terms things like that and again with the proviso that if we were on able to reach an agreement then western southern may exercise it other rights indicating that it had not actually exercise those rights at that point in time indeed up until august th two thousand and nine western southern had taken no affirmative acts towards trying to actually accelerate  that is another requirement that this court's decision in f d i c vs massengill had provided that not only must the notices be provided but that also there must be some affirmative act taken towards and forcing the acceleration  western southern had taken no such steps during that period of time in fact they were forbearing as the unrefuted testimony indicates from a dave roots some in the trial record that western southern had agreed to forbear from taking any steps towards acceleration or other steps of the mezzanine guarantee or mezzanine note during that period of time while they tried to see if they could work something out in fact it was only on august th when it appeared that they were unable to be able to reach a resolution that western southern provided its notice that it was in fact going to accelerate additional your honour's with regard to the various damages that have been identified and there is the  deficiency which is the loan balance and the interest on the mezzanine note although mr keely takes the position that deficiency is now broad enough to include multiple other categories the texas court of appeals decision and sole which is one that mr cayley cites frequently actually looks at a deficiency as the difference between the loan balance and the foreclosure proceeds and does not include in that definition th property taxes or the attorney fees as part of what it refers to as the deficiency in that section also your honor with regard to those this court had determined that with regard to the non loan obligations that fifty one thousand and three did not apply to them in so far as they were independently guaranteed not only under the construction note but also under the mezzanine note as a result the amounts for the unpaid insurance premiums the unpaid taxes the unrelated security deposits that fifty one thousand and three did not apply to bar those to the extent they arose independently under the mezzanine note that is the basis for the district court's decision on remain and he had noted judge hitler had noted that the claims to the extent they arose under the construction guarantee are barred as recognized by this court prior decision but that they also independently a rose under the mezzanine guarantee and mezzanine note and to that extent fifty one thousand and three does not apply it is the four years statute of limitations in sixteen for instead  honor as we have noted there are also additional grounds for why these non loan obligations are also timely in this particular instance the district court had noted that as to several of these particular items that western southern actually had no knowledge of those items or could not have been indebted to be able to pay any of those until the time of the foreclosure so for example the obligation with regard to taxes with regard to property insurance with regard to the unlimited security deposits which as we've cited in our brief arose when we made demand on mr cayley and his partner mr buchanan to return return approximately twenty thousand in security deposits th tenants had in trust to them and then they refused to do so that only arose in the fall of two thousand and nine and could not have arisen in april or prior to august because demand was not even made until after we had foreclosed on the property only some of the taxes that we've noted in our brief as well only came due at the end of that year so for example two thousand and nine taxes not being due to have to be paid until january two thousand and ten so we believe your honor that those non loan obligations are also independently timely because they could not have accrued at the same time as the demand with regard to the loan deficiency your honors i am happy to answer any additional questions i wanted to primarily answer the panel's questions and then to address the primary issues that we have in our brief i'm happy to address anything else that the piano may have with regard to those point without demand or notice of any kind which demand or notice are hereby expressly waived errant or will pay the lender all amounts due and to become do under the obligations all of the obligations notice of demand which are hereby expressed we waived support have said that the guarantee agreement stands on its own if that's what the parties agreed to that's what the parties agreed to with respect to was not specifically what sums are included within the quote indefinite secured by the by the real property the issue has to do with whether the four years statute or the three year statute applied when the foreclosure took place close to the end of the four years and then the lender wanted an additional two years after that that was the issue that that court decided with respect to the forbearance argument by westerners your honor i with all due respect to mr richardson i think that's a red herring because the forbearance agreement that they may th letter that they're relying as being a or parents agreement is clear on its face it's got every type of waiver that you could possibly have in there it says that it will nothing in the letter will be binding until authorized representatives commit to writing an agreement and further that western southern reserves all right said it had earlier mr rugg some testify the trial that western southern never was through it's been called declaration so i think you know any argument about it or baroness is it has no merit to it  again mr cayley when asked a score to vacate the district court's judgment he believes that all of the sums are barred either by the four year statute or alternative voices with respect