NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION F ile Nam e: 10a0117n.06 No. 08-4399 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT
GEORGE J. SAAD; NOU R MANAGEMENT, I NC., a n O h i o C o r p o r a tio n; D E A C O N E S S RA DI OL OG I CA L SER

VI CES , I NC .; D EA CO NE SS EM ERG EN CY RO OM SER VI CES , I NC ., an O hio Corporation, Pla int if fs -A pp e lla nts ,

v. GE HF S HOL DI

N G S, I NC., former ly

known as He ller Hea lthcare Financ es, I

nc., Def endant- Appellee

. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ON APPEAL FROM THE UN I TE D ST AT ES D I STR I CT CO UR T F OR

THE NO RTH ERN D IS T R IC T O F O H IO

B EF OR E: NO RRI S, CO OK , a nd GR I F F I N, Cir c uit

Judg e s. GRI FF I N, Circuit J udg e. Ge or g e Sa a d ( “ Sa a d” or

“ Dr . Sa a d” ), No ur

Ma na g e me nt C omp any

(“Nour”) , D e a c on e ss Radiologic al Service s, I nc. (“ DRS” ), and Deacone ss Emerg ency Room S ervic es, Inc. (“ DERS”) (collec tively , Nour, DRS, a nd DERS a

re ref err ed to a s “the plaintiff c ompanies” a nd with Saad ar e ref err ed to as “ plaintiffs”) a

ppeal the district c ourt’s order gra nting GE HFS Holding s, I nc.’s ( “GE HFS”) first motion for summary judgme nt, a rguing that there was a

g enuine issue of

materia l fac t

as t o wh et h er

GE HF S re p re s en t ed t h at i two u l d fu n d p l ai n t i ff s $ 2 5 0 , 0 0 0 i np o s t -p et i t i o nfi n an ci n g. Plaintiffs also appea l the d i strict court’s or der g rantingGE HF S’s third moti on for summaryNo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

The DI P St ipulation was approved by the bankruptcy court on November 26, 2003, pursuant 1 t o t h e “ O r d e r

A p p r o v i n g E m e r g e n c y

S t i p u l a t i o n

R e In t e r i m P o s t

- P e t i t i o nF i n an c i n g ” ( t h e “ D IP Orde r”) . Collectively , the DI P Order and the DI P St ipulation are r efe rre d to as the “D I P Financing .” - 2 - judgme nt on the issue of attorney s’ fees and costs. Be cause the admis sible evidenc e demonstrates GE HF S acted at all relevant times within its contra ctual rig hts as set forth in the c lear and unambig uous terms of the L oan Agr eeme nt and Emerg ency Stipul ation Re Post-Petit ion Financ ing (the “ DI P St ipulation”), we aff irm the district court’s first summary judgme nt order. I n addition, 1 beca use the district cour

t did not err in a

war ding GE HFS its rea sonable attorney s’ fe es, which a re enfor cea ble under Ohio law, we aff

irm its thi rd summary

judgme nt order. I. I n it s o rd e r o n GE HF S’ s thi rd mot ion fo r summa ry jud g me nt, the dis tr ic t c ourt a c c ur a te ly

se t f or th t he fa c ts o f t

he c a se : Af te r n e arl y six y e ars of

lit ig a tin g thi s c a se in t

hr e e su its, th e pa

rt ie s are we ll acqua inted with the fac ts

. After Dea coness Hospital (the “hospital”) f iled for bankruptc y , Dr. Saa d cre ated a new De acone ss Hospital L L C ( “De acone ss”), whic h enter ed into a loan a g ree ment (the “ L oan Ag ree ment”) w ith GE HFS so that Dea coness c ould purcha se all of the hospital’s asse ts. Deac oness, Pear lview Square I nc. (“ Pearlview ”), a

nd Nour[] (collec tivel y , Dea coness, Pea rlview, a nd Nour a

re ref err ed to as the “De btor Companies”) wer e provided a $3,000,000 revolvingline of cr edit throug h a re volving c redit note (the “Revolving Credit Note”) , which wa s late r i nc re a sed to $4 ,5 00 ,0 00 . T he re vo lvi ngc re dit lin e wa s se c ur e d b y

pr op e rt y owned by Pearlviewand a pe rsonal guara nty by Dr. Saad of $750,000 (the “ Personal Guar anty ”). O ver time, ma n y am endments we re ma de to the L oan Ag ree ment as we ll a s to the Pe rs on a l Gua ra nty

. On Oc tob e r 9, 200 3, the pa rt ie s e xec ute d a

n e ig hth amendment ( “Amendme nt Eight” ) to the L oan Ag ree ment , which made DRS and DE RS bo rr ow e rs un de r the L oa n Ag re e me nt an d g a ve GE HF S a se c ur ity int e re st i n their ac counts and a ccounts re ceiva ble. (Doc . No. 67, Exhi bit 9). At that time, Dr. Sa a d r a tif

ie d a nd c on firmed h is p re vio us Pe rs on a l G ua ra nty wi th r e sp e c t to Amendment Eig ht. L ike previous versions of the L oan Ag ree ment, this final versionNo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

- 3 - of t he L oan Agr eeme nt contained an attorney s’ fee provisi on. Specifica lly , the L oan Ag re e me nt p ro vid e d th a t: Bor rowe r also agree s to pay

all out-of-poc ket cha

rg es and ex penses rea so n ab ly

incurre d by

L ender (including the re asonable fee s and e xpe ns e s o f L end e r’ s c ouns e l) in c onne c tio n w iththe e nf or c e me nt, protec tion or prese rvation of a ny rig ht or claim of L ender , the termination of the Ag ree ment, the termination of any liens of L ender on the Collateral, a

nd the collec tion of any

amounts due und er the L oan Doc uments. (D oc . N o. 67 , E xhibi t 1) . Si mil arl y , th e re vo lvi ngc re dit no te a lso pr ov ide d th a t: Eac h party

liable on this Note in any capa city , whether

as make r, e nd or se r, sure ty , gua

ra nto r o r o the rw ise

. . . ( v) a g re e s to pa y , in addition to all other sums of money due, al l costs of collec tion and re a so na ble a tto rn e y ’s fe e s, wh e the r s uit be br ou g ht o r n ot, if

thi s N ote is not paid i nf

u ll w h e nd

u e , w h e th e r

a t t h e s tate d matu r it y o r by acc eler ation. (D oc . N o. 67 , E xhibi t 15 ). F ina lly , th e Pe rs on a l G ua ra nty sig ne d b y Dr . Sa a d s tate s: I n addition to its g uara

ntee of Bor rowe r’s pa

y ment of t he Ove rline Ob lig a tio ns and

B or ro wer’s pe rf

or manc e of

a ll c ov e na

nts , ob lig a tio ns , a

nd a g reement s c on ta ine d in the L oa n D oc ume nts , Guar antor shall pay

all actua l costs and expenses (including rea sonable attorney ’s fees) paid or i ncurr ed by L ender in connec tion with the enfor ceme nt of this Guara nty

. (Doc . No. 67, Exhi bit 24). Despite eff

orts by Dr. Saad, the hospital ge nerated oper ating losses and the De btor Companies filed for

bankruptc y

on November

21, 2003. Af

t er the bankruptc y petition was filed (the “B ankru p t cy Cases”) , the bankr

uptcy court sig ned an or der (the “ DI P Order” ) appr oving a n emer g ency

stipulation (the “DI P St ipulation”) so that Dea coness c ould obtain an additional $250,000 from GE HFS to pay for the hospital’s operating e x penses, whic h was c onditioned upon a re -commitment by Dr. Saad to per sonally

g uaran tee the de bt up to $1,000,000 (the “Revised Per sonal Guar anty ”)

. L i k e the L oan Ag ree ment, the DI P St ipulation also provided for a tto rn e y s’ fe e s:No. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

- 4 - The B orrowe rs s hall reimburse GE, or GE m ay at its option m ay [si c] c ha rg e any acco un t of

the B or ro we rs ma int a ine d w ithGE , f or a ll a tto rn e y ’s fe e s and

/or c os ts i nc ur

re d by GE in c onne c tio n w iththe se Chapter 11 c ases, including , but not l i m ited to, the neg otiation, prepa ration, administration or enf orce ment of t he Agr eeme nts and/or this S tipulation. Notwiths tanding the fore g oing, the allo wa n ce and pay ment of attorne y ’s fe es and c osts is subj ect to Court appr oval. (Doc . No. 67, Ex hibit 26). The DI P Orde r re iterate d the B orrowe rs’ oblig ation for a tto rn e y s’ fe e s to GE HF S: Th e De bto rs are a

uth or ize d to bo rr owand sp e nd mon ie s in acc ordanc e with the Ag ree ments and ar e fur th er authorized and dir e c te d to do and

pe rf or m a ll a c ts, to make , e xec ute , a nd de liv e r a ll instruments nece ssary

for their p erf

ormanc e, including , without lim itatio n: . . . (c ) [t]he re imb ur se me nt to GE of its re a so na

ble c os ts and expenses including , without lim it at i on, all of its attorney ’s fe es and d isbursements re quired by the terms of the Ag ree ments and/or the Stipul ation. (Doc . No. 67, Exhi bit 27). De s p i t e the ag ree ment, GE HF S did not provide the post-petition fi n an cing and the hospital wa s forc ed to ce ase ope rations on November

29, 2003. On Dec ember

3, 2003, GE HFS decla

red Dea coness in defa

ult of its obli g ations and delivere d a dema

nd letter to D r. Saad to pay the full amount of the Revised Per sonal Guar anty . On Dec ember

12, 2003, the [pl aintiffs] f iled suit in t he Court of Common Pleas for Cuy ahog a County , claiming that GE HFS had violated its obli g ations under the DI P St ipulation and DIP Or der by not providing the additional $250,000 nec e s s ar y to ma inta in

th e h o s p it a l’ s o p e r a ti o n s . T h e [p la in ti f f s ] r e qu e s te d compensatory

and punitive damag es; attorney s’ fe es, intere st and costs; and injunctive rel i ef en

joining GE H FS from “ any action to obtain possession of or otherwise se ll or dispose of t he [ collater al] until Plaintiff’s [si c] claims ag ainst GE are deter mined . .

. .” The case was re moved by GE HF S to federa l court on Dec ember

12, 2003 (the “ District Court L itigation”) . (Doc . No. 1). On J u n e 9 , 2 0 0 4 , th e D e b to r Pl a in ti f f s f il e d ana dv e r s ar

y p r o c e e d in g ( “ A dv e r sary Procee ding” ) with the ban kruptcy court ra ising va

rious brea ch of duty , lender li abi li ty , an d eq ui tab le s ub ord in ati on cla im s agai ns t G E HF S

. A l t h o ugh GE HFSNo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

- 5 - considere d

c o n s o li d a ti n g th e A d v e r s a r y Pr o c e edingwith the District Court L itigation, it chose to allow the suits ag ainst it to proceed se parately

. On J u l y 25, 2005, the bankr uptcy court re solved GE HF S and the Debtor s Companies’ disag ree ment on the amount of indebte dness as of the petit ion date. The a pp ro ve d s e ttl e me nt t e rm

sh e e t ( the “ Se ttl e me nt A g re e me nt” ) s tate d: The GE Cre dit o rs asser

t a Secur ed Claim and an A dminist rative Claim ag ainst the Debtors’ estates; and those Claims currently total mor e tha n $4 ,9 00 ,0 00 .0 0. Th e [C]la ims of the GE Cr e dit or s c on sis t o f: [a] the GE HF S Secured Claim balanc e as of October 1, 2004 (immediately

befor e the $3,500,000.00 pa y ment to GE HF S on October 1, 2004) in the amount of $4,298,548.42; ( b) al l charg es (i nc lud ing , b ut n ot limi te d to , c on tin uin g int e re st a c c ru a ls, le g a l f e e s, and c os ts) tha

t GE HF S ha s inc ur

re d and a sse rt s that it

is e nti tle d to rec over a s part of its Secur ed Claim from and a fter O ctober 1, 2004; and (c ) a G E Med Admin i s t rative Claim of at least $77,489[.] 54 arising from the Debtors’ post-petition use of equipment lease d from GE [Med] under lease s subsequently reje cted by the Debtor s. Subject to all of t he provisions of the Settlement, including specific ally , but without lim itation, the acc ommodation s that the GE Cre ditors are wi lli ngto m ake in l ie u o f p os iti on s th a t th e y wo uld ass e rt

in litigation, the GE H FS Secur ed Claim will be al l o we d under the Settlement as a Sec ured Claim ag ainst the Debtors’ estates in the amou nt o f $ 4, 25 0, 00 0. 00 ; and

the GE Me d A dmi ni s t

r a tiv e Cla im w ill be a llo we d und e r t

he Se ttl e me nt as an A dmi nis tr a tiv e Cla im a g a ins t the Debtor s’ estate s in the amount of $77,489.54. I n sum, the Se ttl e me nt Ag re e me nt s tate s th a t G E H F S a sse rt e d thre e c la ims a g a ins t the Debtor C o m p an i es : a sec ured c laim, an unsec ured c laim for cha rg es, and a

n administrative claim. The se cla ims tot aled more than $4.9 milli on, and the pa rties a g re e d th a t $4 .2 5 mi lli on

of that c on sis te d o f the se c ur e d c la im. Th is s e c ur e d c la im, as GE HF S re co gn i z es i n i t s b ri ef s , i n cl u d ed m o s t o f i t s at t o rn eys ’ f e e s t h r o u gh October 1, 2004. (Doc . No. 87). The bankruptc y court a nd the Settlement Ag re e me nt, ho we ve r, dis tin g uis he d be tw e e n th e $4 .2 5 mi lli on se c ur e d c la im a g a ins t th e D e b to r

Co mp an ie s and any

r e ma in in g u n s e c u r e d

c la im a g a in s t t h e [p la inti f

f s ]. The settlement ter

m sheet spec ifically

provided that “ [w] h i le the GE Cre ditors c ov e na nt w iththe D e bto rs ’ e state s n ot t o s e e k f ur the r r e c ov e ry

fr om t he De bto rs ’ estates a fter G E HF S rece ives indefe asible pay ment of $3 , 8 5 0 , 0 0 0 .00 . . . , the GENo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

- 6 - Creditors re serve and do not rele ase their claims ag ainst Dr. Saad a nd the non-de btor entities.” The S e tt le me n t A g r e e me n t r e c o g n iz e d p r e - p e ti ti o n p ay me n ts o f $ 3

. 8 5 mi ll io nand provided that GE H FS would ag ree not to seek recove ry of t he re maining $400,000 (the “car ve out”) of t he $4.25 milli on secur ed cla im, because the ca rve out would be paid to estate pr ofessionals to satisfy GE HF S’ obligations to Bank One , who provided the post-petition f inancing

. GE HFS, howeve r, did not ag ree that the ca rve out constituted a pay

ment of the rema ining indebtedness, and it declar ed the Plaintiff Comp a n ie s in d e f a ult of their obligations under the Settlement Ag ree ment, delivering a d e m an d l e t t e r t o D r . S a a d t o p ay t h e f

u l l a m o u n t o f t h e R e v i s e d P e r s o n a l G u ar an t y. A f t e r t h e [ p l a i n t i f

f s ] p u r p o rt e d l y d e f a u l t e d o n t h e i r o b l i g a t i o n s u n d e r

t h e D IP Stipul ation and DI P Order, G E HF S filed a counte rcla im on Dece m b er 1 , 2005 ag ainst the [plaint i ff

s ] t o seek r ecove ry

of debts still outst anding , namely , the $4 00 ,0 00 c arv e out and the a tto rn e y s’ fe e s and c os ts i nc ur re d in de fe nd ingits e lf

in the var ious actions. On Sep t ember

21, 2006, this court g rante d GE HF S’s first motion for summary judgme nt and dismissed the [pl aintiffs’] complaint with pr ejudice. Spec ifically , the court found that “nothing in the D I P St ipulation, Amendment Eig ht, or the L oan Ag ree ment indicate that GE had an oblig ati o n t o immediately advanc e Plaintiffs $250,000.00.” (D o c. No

. 65). On Nove mber 11, 2006, GE H FS filed a second motion fo r s ummary

judgme nt on its counterclaim, cla iming that the Plaintiff Companies still owed GE HFS t he $400,000 ca rve out a nd attorney s’ fe es and claiming that Dr. Saa d was liable under the Revised Personal Gua ranty . (Doc . No. 67). On August 16, 2007, the cour t determined, in re sponse to this second motion, that GE HF S had been c onstructively paid the conte sted $400,0 0 0 ca rve out. The court de termined that the $400,000 constructive pay ment fully

satisfied the De btor Companies’ and Plaintiff Companies’ obligations under the L oan Ag ree ment and Settlement Ag ree ment with reg ard to the $4,250,000 secur ed claim. Thus, the cour t found, that, with reg ard to the se cure d claim, “the Plainti ff C o m p anies have no rema ining oblig ations to GE.” (D oc. No. 67)

. The c ourt, howeve r, re co gnized the possibil ity that unsecur ed debt r emained outstanding in the form of attorney s’ fees and costs incurre d by GE HFS in defending it sel f i n t he v ari ou s act io ns . I n the seco nd mo ti on for su mm ary ju dgmen t, GE H FS also soug ht $961,388.10 in interest indebtedness, attorney s’ fe es, and c osts from the De bto r C omp anie s and

c la ime d th a t D r. Sa a d h a d p e rs on a lly g ua ra nti e d u p to $1,000,000 of GE HF S’ remainingclaims. The court did not rule on this portion ofNo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

- 7 - GE HF S’ mot ion

fo r s umm ary

jud g me nt, bu t r e qu e ste d t hat th e pa rt ie s su bmi t additional briefs on the issue of attorne y s’ fe es. On September

26, 2008, the di s t ri ct court gra nted GE HF S’s third moti on for summary jud g me nt o n th e iss ue of a tto rn e y s’ fe e s and c os ts. I t awa

rd e d G E H F S $1 ,0 55 ,3 12 .2 3 in a tto rn e y s’ fee s pursuant to Ohio Revised Code § 1301.21, as we ll as $30,145.90 in costs, for a total a war d of $1,085,458.13. Plaintiffs t i m el y appeal the district court’s or ders on GE HFS’s f irst and third motions for summary judgme nt. II. “We revie w de novo the district c ourt’s orde r[s] g rantingsummary judgme nt.” Da ug

he rty

v. S a j a r Plastics, Inc ., 544 F.3d 696, 702 ( 6th Cir. 2008). Summ ary judgme nt is proper “ if the pleading s, the discover

y and disclosure materia ls on file, and any aff i d avits show that there is no g enuine issue a s to any

materia l fac t and that the m ovant i s entitled to judgme nt as a matter of law .” F ED . R. C IV . P. 56( c)( 2). The moving party has the burden of proving the abse nce of

g enuine issues of mater ial fac t and its entitlement to judgment as a matter of la

w. C e l o t e x C o r p . v . Ca tre tt , 477 U.S. 317, 323 (1986). When deter mining whether the movant has met this burden, we must view the evidenc e in the light most favora ble to the nonmoving pa

rty

. Smith W

holesale Co., Inc. v . R.J. Rey nolds Tobacco Co. , 477 F.3d 854, 861 ( 6th Cir. 2007). III

. First, plaintiffs a ssert that the district cour t erre d in enteringthe first

s u mm a r y judgme nt order be c a us e the re wa s a

g e nu ine iss ue of

mate ri a l f

a c t r e g ard ingwh e the r G E H F S r e pr esen ted th at itNo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

- 8 - would advanc e $250,000 in post-petition financing . Moreov er , p l ai ntiffs contend that the L oan Ag ree ment and Amendme nt Eight ther eto, as modified by the DI P Or der a nd the DI P St ipulation,

are ambig uo u s as to whethe r the DRS and DERS acc ounts were “Qua lified Acc ounts” as of November

26, 2003. Be cause of this pur ported “ambiguity ,” plaintiffs argue that the district court

err ed by excluding extrinsic evidence to interpre t the terms of the documents. In addition, plaintiffs

a sse rt that th e dis tr ic t c ourt

sh ou ld h ave c on sid e re d e xtri ns ic e vid e nc e of GE HF S’ s a lle g e d p ro mis e to advanc e $250,000 as e vidence of fr audulent induce ment. A. Plaintiffs’ claim is predicated on the assumption that, upon signingthe DI P St ipulation, they

wer e immediately

entitled to the additional $250,000 of post-petition financ ing. Howeve r, nothing in th e DI P S ti pu lat io n o r t he D I P Ord er (o r L oan Agreem ent s in corp orat ed th erei n) requ ir ed G E HFS
to advanc e $250,000 to the Debtor Companies automatically upon entry of the DI P Order. Rather, the DI P Stip ulatio n sta tes tha t “ GE ha s a g re e d in

g oo d f a ithto consider [] providing additional funding to the I nitial Borr ower s and provide funding to I ndog a, subjec t to the terms set forth in the [pre-petition L oan] Ag ree ments as modified by the terms of thi s Stipul ation.” (Empha sis added.) The only rele vant modification of the pr e-pe tition L oan Ag ree ments with respe ct to financ ing w as to increa se the amount available f rom $100,000.00 to $250,000.00. Otherwise , the DI P St ipulation is c lear that “all terms and conditions of the [pre-pe tition L oan] Ag ree ments remain in full for ce a nd eff ect.” Moreove r, under

the express terms of t h e DIP Stipul ation, the Debtor Companies wer eNo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

The district cour

t he ld, a s a matter of law, that GE HF S was “we ll within i ts rights unde r the 2 various ag ree ments” to not approve post-petition financing beca use there was e vidence to support a finding t hat DR S and DERS wer e not “Qua lified Acc ounts.” I n pertinent part, the district court no te d: Upon re ceivingthe re quest for post-pe tition financ ing, G E Senior Vice President Ric ha rd Ar ro ws mith a

nd Ac c ount Mana g e r Rahm Dv ir fo un d sev e ra l de fi c ie nc ie s in the Ag ing that acc ompanied the r equest : (1 ) t h e suspi cious use of a n Ex cel Spreadshe et that was created and pr esente d by someone indepe ndent from the Acc ounts manag ement sy stem, (2) the a bnormal mig ration of ov er $835,000 of acc ounts, which instead shoul d have been collected a nd deposited into the lockbox acc ount cre ated unde r t h e L o an Ag ree ment, and (3) the inclusion of Medica re a nd - 9 - require d to comply

with their obligations under the pre- petition L oan Ag ree ments prior to securing

a ca sh advanc ement. Those oblig ations, with respec t to DRS and DERS, are set forth i n the orig inal L oan Ag ree ment and Amendme nt Eight to that Ag ree ment. Pursuant to the orig inal L oan Ag ree ment, a Bor rowe r is only

entitled to bor

row acc ording to a spec ified B orrowingBa se F ormula, which f actor s in th e Borrow er’ s “Qua lified Acc ounts.” On Oc tober 9, 2003, whe n the par ties executed Am e ndme nt E ig ht, the y

a g re e d a nd a c kn ow le dg e d th a t G E H F S: h a s n o t c o mp le te d it s d

u e d il ig e n c e o f N e w B o r r o w e r [D RS an d D E RS] , and the re fo re , th e Ac c ounts of Ne w B or ro we r [DRS an d DER S] sh a ll n ot b e de e me d to be Qualified Acc ounts, a

nd conseque ntly , such Acc ounts sha ll not be included in the B or ro wi ngB a se , unle ss a

nd un til L e nd e r h a s d e te rm ine d, in its s ole and a bs olute discretion, to include Ne w B orrowe r’s [DRS and D E RS] Acc ounts, or a portion there of, in the B orrowingBa se. As noted by

the district court, GE HFS was unable to determine whe ther the a ccounts of D RS and DERS constitut ed “Q ualified Ac counts” due to d ef i ci en cies in plaintiffs’ A g ing that were never explained or corr ecte d. 2No. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

Medica id Accounts for

periods prior to the t ime when DRS and DERS had obtaine d Medica re/Medic aid provider

ag ree ments. (Arr owsmith Decl., at ¶ 49; Dvir Dec l., at ¶ 14.) The se def

iciencie s wer e never explained nor corr ecte d despite re quests from GE for further clar ification. - 10 - Plaintiffs argue that the inclusion of langua g e in the DI P St ipulation stating that GE HF S had not completed its due dilige nce w ith respec t t o t h e I n d og a Ac counts, and that they there fore wer e de e me d n ot t o b e “ Qu a lif

ie d Ac c ounts ,” make s the op e ra tiv e do c ume nts a mbi g uo us wi th r e sp e c t to the status of

the DR S and

DE RS a c c ounts be c a

us e the DI P S ti pu lat io n did n ot a dd re ss t ho se

acc ounts. As plaintiffs note, howeve r, Indog a wa s a “‘ New B orrowe r’ a dded to the L oan Ag ree ment by the DI P Stipulation.” Be cause the status of the Indog a Ac counts would not have be en addr essed in t he or ig ina l L oa

n A g re e me nt o r i n A me ndme nts On e thr ou g h E ig ht, it w a s nec e ssa ry to a dd re ss it in the DI P St ipulation. I n cont ra st, DRS and DERS were a lrea dy Bor rowe rs under

the L oan Ag ree ments at the time of t he DI P St ipulation; therefor e, the status of the ir ac counts was a ddresse d pr e vio us ly

by the pa rt ie s in pre -p e tit ion

loa n d oc ume nts , a

nd the re wa s n o n e e d to re fe re nc e tho se

acc ounts in either the DI P St ipulation or DI P Order. Acc ording ly , we f ind (1) no ambiguity

in the Lo anA g r e e m e n tan d

A m e n dm e n tE i g h tt h e r e t o , a s m o d i f i e d b y t h e D IP O r d e r

an d t h e D IP Stip ulatio n, and

(2 ) n o mo dif

ic a tio n o f t

he pa rt ie s’ a g re e me nts , wh ic h w ou ld h a ve un c on dit ion a lly require d GE HF S to provide $250,000 in post-petition financing

. B. Next, plainti ffs a

rgue that the district cour

t err ed in not consideringextrinsi c evide nce in the form of a ffidavits by

Daniel De Marc o and S aad clarify ing whether

DRS and DERS were “ Qualified Acc ounts” as of N ovember 26, 2 003. Howeve r, bec ause the DI P St ipulation is unambiguous andNo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

The district cour

t found t h at , althoug h the under ly ing L oan Ag ree ments are g overne d by 3 Mary land law, the DI P Stip ulatio n is g ov e rn e d b y Oh io l aw. Th e pa

rt ie s d o no t a

pp e ar t o d isp ute this finding as both pa

rties cite Ohio law

in their discussions of the DI P Stipulation a nd DI P Order. Reg ardle ss, the law on contr act inter pretation is t he same in Ohio and Mary l an d : p lain and unambig uous terms are to be enf orce d as written a

nd “will not give awa

y to what the parties thoug ht that the ag ree ment meant or intende d it to mean.” Calomiris v. W oods , 72 7 A. 2d 35 8, 36 3 ( Md . Ct

. Ap p. 19 99 ) ( int e rn a l qu otatio n ma rk s and c itatio n o mitte d) ; Layne , 820 N.E.2d at 869. The integ ration cla

use states: “This Stipulation sets forth the entire u n d er standing of the 4 parties he reto with re spect to the matter s descr ibed her ein, and c anno t be modified except in a writing signe d by

the par ties and appr oved by

the Court.” As sumin g argue nd o th a t th e dis tr ic t c ourt sh ou ld h a ve c on sid e re d th e a ff ida vit s, tho se 5 documents do not cre ate a g enuine issue of

materia l fac t. The af

fi davits do not state, as plaintiffs maintain, that “GE HFS informed DeMa rco and Saad that the acc ounts of DRS a nd DE R S were qualified a ccounts a

nd, thus, GE HFS would fund the $250,000.00 post-petition loan.” I ndeed, the - 11 - has an integ ration cla

use, Ohio law limit s the d i s t ri ct court’s a naly sis to the four cor

ners of the 3

a g re e me nt. Se e As tor

v . I nt’ l B us . M

ac hs . Co rp ., 7 F .3 d 53 3, 53 9 ( 6th Cir . 1 99 3) (“ Th e law i n O hio 4

conce rning the ef

fec t to be g iven to a fully integ rate d ag ree ment is clear : . . . Inten t i ons not expre ssed in the writing are deemed to have no existenc e and may not be shown by parol evide nce .”) (i nte rn a l quot a tio n ma

rk s and c itatio ns omi tte d) ; se e als o Layne v. ProgressivePreferred I ns . Co ., 82 0 N. E. 2d 86 7, 86 9 (O hio 20 04 ) (“ Whe n tw o p art ie s h a ve ma de a c on tr a c t and

have e xpre sse d it in a writing to which they have both a ssented as the complete an d ac cu rate integ ration of that

c on tr a c t, e vid e nc e , wh e the r p aro l or oth e rw ise , o f a

nte c e de nt u

nd e rs ta nd ing s and

ne g oti a tio ns wi ll not be admitted for the purpose of vary ing or contra dicting the writing .”) ( internal quotation marks and citation omitted). Acc ording ly , the district court cor rec tly limit ed its analy sis to the tex t of the parties’ ag ree ments and prope rly excluded the parol evidenc e conta ined in DeMa rco’ s and Saad’ s

a ff ida vit s. 5No. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

De Marc o A ff

ida vit do e s n ot m e nti on

DR S or DE RS at a ll. Th e Se c on d Sa a d A ff ida vit re pr e se nts only that Saad would make the DRS and DERS acc ounts rece ivable “available” as collate ral. L ike the De Ma rc o A ff ida vit , Sa a d’ s a ff

ida vit is sil e nt a

bo ut wh e the r su c h a c c ounts we re un de rs too d to be “Q ualified.” - 12 - C. Plaintiffs also contend that they should ha ve been permitted to introduc e extrinsi c evide nce of GE HF S’ s all eged p ro mis e to a dv anc e $2 50 ,0 00 a s e vid e nc e of fr a ud ule nt i nd uc e me nt. Spe c if ic a lly , p la int if

fs ma int a in t

hat Sa a d p le dg e d a dd ition a l a sse ts a nd a g re e d to inc re a se his pe rs on a l g ua

ra nty ba se d o n G E HF S’ s a lle g e d re pr e se ntatio n to De Ma rc o that the DR S and

DE RS

acc ounts were “Qua lified.” “Howe ver, the parol evidenc e rule may not be avoided by

a fr audulent inducement c laim which alleg es that the inducement to sign the writing was a promise, the terms of which ar e dire ctly

contra dicted by

the sig ned wr iting.” Galmish v. Cicchini , 734 N.E.2d 782, 790 (Ohio 2000) ( internal quotation marks a nd citation omitted). I t is we ll-established under O hio law that: A per son of ordinar y mind cannot say

that he wa s misled into signing a pape r which wa s di fferent fr om what he int e nd e d to sig n w he n h e c ou ld h a ve kn ow n th e tr uth mere ly by looking when he signed. . . . I [f] this were pe rmitted, contrac ts would not be wor th the paper

on which they

wer e wr itten. Dice v

. A kr o n , Ca n t o n, & Y oungstown R.R. Co. , 98 N.E.2d 301, 304 (Ohio 1951) , rev’d on other grounds, 342 U.S. 359 (1952). Thus, the district court corre ctly denied plaintiffs’ reque st to consider the af fidavits of De Marc o and Saad a s evidenc e of f raudule nt inducement. I V.No. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

To the ex tent plaintiffs seek to rely on extrinsi c evidence presente d by Saad and D eMar co 6 re g ard ingthe ir

a lle g e d s ub

je c tiv e int e nt i n e nte ri ngint o th e DI P Stip ulatio n, su c h e vid e nc e is inadmissable for the rea sons alrea dy explained – the DI P Stipulation is clea r and una mbiguous a

nd contains an e x press integ ration cla use. Mo re ov e r, un de r O hio law, GE HF S pe rf or me d it s o bli g a tio ns un de r t he DI P F ina

nc ingin 7 g ood faith bec ause it exercise d its rights ac cordingto the written terms of its contra cts. Se e As tor , 7 F.3d at 539. As the district court re asonably noted, “the f

act that GE funded a

$512,000.00 advanc e to Plaintiffs on November 26, 2003, under a

separ ate a ccount unde rcuts any alleg ation that GE wa s actingin bad fa ith.” - 13 - P l a i n t i f f s n e x tar g u e t h a tS a a d ’ s R e v i s e d P e r s o n a l G u ar an t y

a s c o n t a i n e d

i nt h e D IP Financ ing is invalid and une nforc eable “due to a lack of consideration” beca

use Saad pr ovided the persona l gua

ra n t y in order to obtain a n additional $250,000 in post-petition financing , which GE HFS did not provide. Howeve r, nothing in the DI P Stipul ation, Amendment Eig ht, or the orig inal 6 L oan Ag ree ment imposed upon GE HFS an oblig ation to immediately advanc e plaintiffs $250,000. I n fac t, the parties clea

rly contemplated the possibili ty that the post-petition financingwould not be

a pp ro ve d. I n th is r e g ard , G E H F S on ly a g re e d to “c on sid e r” the po st- pe tit ion fi na nc ing , “su bje c t to the te rm s se t f

or th i n th e Ag re e me nts a s mo dif ie d b y the te rm s o f t

his Stip ulatio n. ” Th os e ag ree ments make it clea

r that no due dilig ence had t ak en plac e and that GE HF S had “sole a nd absolute discre tion” in determining whether DRS and DERS had “Qua lified Acc ounts” to borrow ag ainst. For

the re asons explained above, GE HFS wa s unable to appr ove post-petition financ ing 7 beca use there was e vidence to sup p o rt a c onclusion that DRS and DERS were not “ Qualified Acc ounts.” Thus, we hold that plaintiffs’ argument fails as a matter of la

w. V.No. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

- 14 - Pla int if fs argue that th e se tt lemen t pa y me nt o f $ 4, 25 0, 00 0 c omp le te ly e xtinguis he d a ll outstanding obligations owe d to G E HFS. I n support of their c laim, plaintiffs cite the district cour t’s second summar

y judgme nt order of

Aug ust 16, 2007, where it denied GE HF S’s motion for summar y judgme nt on the issue of the $400,000 c arve out and stated that “the Plaintiff Companies have no

rema ining oblig ations to GE.” Howeve r, plaintiffs ig nore that the district court made this finding wi thi n th e sp e c if

ic c on te xt o f the iss ue ra ise d in GE HF S’ s se c on d mo tio n f or summa ry jud g me nt: whether the $400,000 ca

rve out wa s con s t ru ct ively paid in satisfac tion of the secure d c la im. Although the district court ruled that constructive pa y ment had occ urre d and that the secure d c la im

was satisfied, it did not make any fac tual finding s at that time reg ardingthe unsecure d claim that GE HFS might have ag ainst plaintiffs. I ndeed, if the district court ha d found that the $4,250,000 sec ured claim was the only

debt owed, it log ically would not have r equeste d further briefing , as it did, on the issue of attorne y s’ fe es. Moreove r, the district cour t’s Aug ust 16, 2007, finding is en t irely consistent with the Se ttl e me nt T e rm

She e t, whic h w a s a

pp ro ve d b y

the ba nk ru ptc y c ourt : The GE Creditors assert a Secure d Claim and an Administrati ve Claim against the Debtors’ e

states; and those Cla i ms cu r r entl y total more than $4,900,000.00. The Claims of the GE Creditors consist of : ( a) the GE HF S Secured Claim balanc e as of October 1 , 2004 (immediately

befor e the $3,500,000.00 pa y ment to GE HF S on October 1, 2004) in the amount of $4,298,548.42; ( b) all char g es (including , but not limit ed to, continuing i n t er est acc ruals, leg al fe es, and c osts) that GE HF S has incurre d and asse rts that it is entit led to rec over a s part of its S ecur ed Claim from and afte r Oc tober 1, 2004; and (c) a GE Med Administrative Claim of at least $77,489.54 arising from the Debtors’ post-petiti on use of equipment l ease d from GE Me d under lease s subsequently

reje cted by

the Debtor s.No. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

I n its opini on, the bankruptcy court stated that “GE HFS asser ts a claim of m ore tha

n $4.9 8 milli on, secur ed by

essentially

all of the de btors’ asse ts.” The Settlement T erm Sheet expressly rese rved GE HFS’s rig ht to pursue th e r emaining 9 de fi c ie nc y

c la im ( i.e ., the un se c ur e d p or tio n o f i ts c la im) a g a ins t Sa a d a nd the no n- de bto r c o m

p a n i e s: Whil e the GE C re d i tors covena nt with the Debtors’ e states not to seek fur ther rec overy from the De btors’ estate s after GE HF S rece i v es i ndefe asible pay ment of $3,850,000.00 (the $3,500,000.00 pa y ment rec eived October 1, 2004 and the f urther $350,000.00 indefe asible pay ment provided in subpar agra ph 3(b) a bove), the GE Credit o r s reserv e and do not releasetheir claims against Dr. Saad and the nondebtor entities. (Emphasis adde d.) - 15 - (E m p h as i s added.) The July 25, 2005, bankruptc y

court opinion approvingthe Settlement Term Sheet reiter ates these terms and rec og nizes that “GE HF S asserts a secure d claim as of October 1, 2004 of $4,298,548.42 plus c harges including interest ac crua l, le ga l fe es, an d c os ts p ro v ide d fo r in thefin an c ing

do c um e nts .” (Empha sis added.) Thus, it is appar ent from the Settlement Term Sheet and the bankruptc y court’s opinion that GE HF S asserted three claims ag ainst plaintiffs: (1) a se cure d claim; (2) a n unsecur ed cla im for

c h a r g e s ( i n c l u d i n g , b u tn o tl i m i t e d t o , a t t o r n e y s ’ f e e s an d c o s t s ) ; an d

( 3 ) ana dm i n i s t r a t i v e c la im (which is not at issue in this case) . Those cla ims tot aled more than $4,900,000. The parties to the 8
court-a pproved se ttlement of the bankr uptcy case s ag ree that $4,250,000 of that amount consisted of the se c ur e d c la im. Ho we ve r, pa y me nt of the $4 ,2 50 ,0 00 did no t e xtingui sh all of p la int if fs ’

o b l i g a t i o n s , w h i c h t h e y c o n t r a c t e d t o p ay an d

g u ar an ty. 9No. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

- 16 - Be cause the re cord suppor ts the district court’s determination that settlement of GE H FS’s

se c ur e d c la im o f $ 4, 25 0, 00 0 in the ba nk ru ptc y pr oc e e din g s d id n ot i nc lud e a tto rn e y s’ fe e s a nd c os ts

acc rued a fter O ctober

1, 2004, we a ffirm the district c ourt’s rulingon this iss ue. V I. Next, plainti ffs c ontend t hat the district cour t erre d in gr anting summary judgme nt to GE HFS on its counterc laim beca use of an alleg ed fac tual dispute as to the amount GE HF S was owed. They argue that the rec ord supports three possible c onclusions: ( 1) GE HF S was entitled to less than $4,250,000; (2) GE HFS was pa id in full when it rece ived $4,250,000; or (3) “simply that there was/is a fa ctual dispute as to the a mount that [ GE HF S] was owe d and/or the a mount [ GE HF S] was paid.” A. Plaintiffs assert that GE H FS ca nnot be owed mor e than $3,405, 531.40, comprised of a principal ba lance of $3,314,851.25 (the eff ective loan balanc e as of the Nove mber 21, 2003, filing date of the bankruptcy case s), pl us interest of $90,680.21 (at the rate of 7.5%) throug h October 1, 20 04 . Ho wev er, p lai nt if

fs’ all egati on regardi ng th e pri nci pal bal ance of it s obl igat io n to G E HFS is predicated entire ly

on part of a

lo an intere st statement from Nove mber 2003, be fore the bankr uptcy

c a s e s w e r e f

i l e d

. B u t , G E H F S i s o w e d t h e b a l a n c e u n d e rt h e Lo anA g r e e m e n tan d t h e D IP Financ ing a s of Octobe r 1, 2004 (a lmos t a y ea r after the filing of the ba nkruptcy case s and af

ter

su bs tanti a l a c c ru a ls to the c la im) . T he No ve mbe r 2 00 3 lo an inte re st s tate me nt, c ite d b y pla int if fs , actua lly confirms the a ccur acy

with which GE HFS ca lculated its claim. GE HF S’s claim calc ulationNo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

Plaintiffs asser

t that no advanc es were made afte r the Nove mber 21, 2003, filing date of the 10 bankruptc y

case s. This is demonstrably false. GE HFS made a $512,000.00 advanc e to the De btor Companies under the L oan Ag ree ment and the DI P Financingon November 26, 2003. The district court c orre ctly

rec og nized this fac t in its September 21, 2006, order on GE HF S’s first motion for summary judgme nt. I n co ns ide ri ng wh e the r to ap pr ov e a pr op os e d co mpr omi se , “[t]he ba nk ru ptc y c ourt

. . . is 11 obligated to weig h all conflictinginterests in dec iding whe ther the c omp ro m i se is ‘fa ir and equitable,’ consideringsuch fa ctors as the probability of success on the mer its, the complex ity and expense of litigation, and the rea sonable views of c reditors.” Bauer v. Comm erceUnion Bank, 859 F .2 d 4 38 , 4 41 (6 th C ir . 1 98 8) (c itatio n o mitte d) ; accord Re ynolds v. Comm’r , 861 F .2 d 469 , 4 73 (6 th C i r. 1 9 8 8 ) ( ci t i n g Protective Comm. for Indep. Stockholders of TMT Trail er Ferry, Inc. v . Anderson , 390 U.S. 414, 424 (1968)). - 17 - sta rt s f ro m th e same loa

n inte re st s tate me nt; the GE HF S c a lc ulatio n s imp ly inc lud e s th e loa

n in te re st state me n ts f

o r th e p e r io d a f

te r th e f il in g o f th e b an kr

u p tc y c a s e s thr o u g h th e O c to b er 1, 2004,

c a lc ulatio n d a te and a dd s ac c ru e d att or ne y s’ fe e s and oth e r c ha

rg e s. Th e se loa

n inte re st s tate me nts show how the amount of GE HF S’s claim incre ased ove r time. Plaintiffs cannot cr eate a g enuine issue of mater ial fac t by

relying upon part o f a l o an i ntere st statement that sets forth an historica l claim number, a

nd then ig nore a ll the subsequent statements for the applica

ble per iod of time. 10 B. Moreove r, the amount of GE HF S’s secure d claim was r esolved by the settlement of the bankruptc y

case s. On J uly

25, 2005, the bankruptcy court allowed GE HF S a $4,250,000 secur ed cl ai m under the L oan Ag ree ment and the DI P financingproposed by the Unsec ured Cre ditors Commi ttee and G E HF S , and supported by the Chapter 11 T rustee ( “Truste e”) appointed for the Debtor Companies. In approvingthe settlement, the ba nkruptcy court noted that it was the Trustee ’s evaluation that “it is l ikely that GE HF S will have a secure d claim of not less than $4.25 million.” 11No. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

Administrative cre ditors Hahn L oeser & Par ks and Kline a

nd Ass ociates, L L C, who 12 provided prof

essional servic es to the debtors, f iled objections. Hahn L oeser & Par ks’ claim wa s for at to r n e y s ’ f e e s in c u r r e d a s c o u n s e l to th e d e b to r an d d e b to r - in

- p o s s e s s io n . K li n e s e r ved as the acc ountant. Pla int if fs c omp la in t

hat “ [n]e ith e r the De a c on e ss De bto rs , Dr

. Sa a d, No ur , D RS, n or DE RS 13 wer e p ar t i es to the settlement.” H oweve r, all intere sted parties to the pr ocee ding w ere provided notice and the opportunity to object to the settlement, as de mons t rate d by the objections filed by administrative cr editors Hahn L oeser & Par ks and Kline a

nd Associates, L L C. I f th ere h a d b e e n a

n a pp e a l, a ba nk ru ptc y c ourt ’s de c isi on

“ a uth or izin g the tr

us te e in 14 bankruptc y

to enter into a co m p ro m i se of c reditors’ c laims rests in the sound discretion of the [bank ru ptc y ] jud g e . Are vie wi ngc ourt wi ll n ot d ist

ur b o r s e t a sid e su c h a

c ompr om is e un less it obviously achie ves such a

n unjust re sult a s to a

mount to an abuse of disc retion.” Ma c h. Te rm ina ls , Inc. v . W oodward ( In re Albe rt-Harris, Inc .), 313 F .2d 447, 449 (6th Cir. 1963). - 18 - (Emp h asis added.) The ba nkruptcy court fur ther re cog nized that, as of the date of the settlement he ari ngin Jun e 20 05 , “ [t]he GE Cr e dit or s’ c la im [i. e ., GE HF S’ s c la im p lus a pp ro xima te ly $77,500.00 owed to GE Me d] t otals more than $4.9 million.” As GE HF S states, “[a]l l of the Plaintiff Companies (contr olled by Dr. Saa d), and D r. Saad persona lly , rec eived notice of the Settlement and ha d the opportunity to obje ct[.] ” None of them 12 objected to e ither the proposed settlement or t he bankruptcy court’s entry of final judgme nt in the

a dv e rs ary pr oc e e din g , to wh ic h th e Tr us te e sti pu late d in ac c or da nc e wi th t he se ttl e me nt a g re e me nt. 13 Moreove r, none of

them appea led either the bankruptcy court’s f inal order approvingthe settlement

or the sti pu late d f

ina l ju dg me nt. 14 Finally , the district court a lso ex amined the am o unt of GE HF S’s claim and ac cepte d the bankruptc y

court’s de termination that GE HF S had a secur ed claim of $4,250,000. Plaintiffs have failed to p ro vid e the dis tr ic t c ourt or thi s c ourt

wi th a ny e vid e nc e that e ff

e c tiv e ly c ha lle ng e s th isNo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

- 19 - deci s i o n . Ac co rding ly , we a ffirm the district c ourt’s finding that GE HF S had a sec ured c laim of $4,250,000. V II. On the iss ue of

a tto rn e y s’ fe e s, the dis tr ic t c ourt fo un d th a t: The doc umentation submitt ed by GE HF S undisputably show that attorney s’ fe es and costs in the Ba

nkruptcy Cases, t h e Adversar

y Procee ding, a

nd the District Court L itigation totaled $1,545,276.01. GE HFS has c lear ly showed that the se ttlement pa y me nt o f $ 4, 25 0, 00 0 s a tis fi e d o uts tand ingpr inc ipa l, i nte re st, other re c ov e ra ble costs and cha

rg es, and all but $47,667.78 in leg al fees t hroug h October 1, 2004. A defic iency , th er ef

o re , exis ts for the $47,667.78 in leg al fe es that GE HF S incurred prior to Octobe r 1, 2004. A de ficienc y also exist s for a ll lega l fee s and costs incurr ed by GE HF S after O ctober

1, 2004, or $1,037,790.35. In total, GE HF S has sh o wn that a tot a l de fi c ie nc y of $1 ,0 85 ,4 58 .1 3 e xists fo r wh ic h it c an c oll e c t if the a tto rn e y s’ fee s provisions are e nforc eable ag ainst the [plainti ffs]. I n thi s a pp e a l, p la int if

fs argue that: ( 1) the a tto rn e y s’ fe e s p ro vis ion s in the loa n d oc ume nts

are vo id a s a g a ins t pu

bli c po lic y ; ( 2) the a tto rn e y s’ fe e s and c os ts G E HF S inc ur

re d d o n ot r e late to the enf orce ment of a c ontrac t of indebtedne ss; an d (3 ) t h e att orney s’ fe es and c osts are not

rea sonable. We addr ess ea ch of the se ar g uments in turn. A. Plaintiff s co n t en d that GE HF S is precluded f rom enfor cingthe attorne y s’ fe es provisions b e c a u s e s u c h p r o v i s io n s ar e v o id a s a g a in s t p u

b li c p o li c y

“ u n d e r lo n g s ta n d in g O h io c o mm o nla

w [. ]” (C i t i n g Mi lle r v . Ky le , 9 7 N .E . 3 72 (O hio 19 11 ); CIT Group/Equip. Fin., Inc

. v. N ew GIFL, Inc ., 823 F . Su pp . 4 79 , 4 88 (N .D . O hio 19 93 )) ; see also State v. Taylor , 10 Ohio 378, 381 (1841). How ever , the rule a rticulated in Taylor

and Mi ll er is qualified. Under Ohio law, contr actua l provisions requiringthe pay

ment of attorne y s’ fe es ar e enf orce able whe n arr ived at “thr oug h fre e andNo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

A “ ‘[c ]ont

ra c t of ind e bte dn e ss’ me ans a no te , b on d, mor tg a g e , c on dit ion a l sa le c on tr a c t, 15 reta il insta ll me nt contrac t, lease, se curity ag ree ment, or other written evidenc e of inde btedness, other - 20 - understandingneg otiation” and whe re both pa rties “we re a

ble to protec t their respe ctive intere sts.” W orth v. Aetna Cas. & Sur. Co. , 51 3 N.E .2 d 2 53 , 2 58 (O hio 19 87 ); se e als o No tti ng da le Homeowne rs’ Ass’n, Inc . v. Darby , 514 N.E.2d 702, 705 (Ohio 1987) (“ Miller is f actua lly a fa

r cr y fr om t he c a se no w be fo re us wh ic h invo lve s a sp e c if ic c on tr a c tua l pr ov isi on

that w a s a sse nte d to in

a non-c ommercia l setting by compet en t parties with equa l barg aining positions and under neither

c o mp u l s i o nn o r

d u r e s s . ” ) ; C

h ase Manhattan Mortgage Corp. v. Tudor , N o . 2 :0 6 c v 2 6 , 2 0 0 7 WL 4322187, at *5 (S.D. Ohio De c. 7, 2007). Th e dis tr ic t c ourt

ma de the fo llo wi ngfi nd ing s: Her e , it is c le ar f

r o m th e r e c o r d th a t th e p arti e s ’ b ar g a in in g p o s it io n s wer e not unequal. The recor d shows that Dr. S aad is a sophi sticated medical profe ssional and business man. He w as re prese nted by counsel whil e neg otiating the r eleva nt transac tions. He ag ree d to important amendments and ne g otiated his own amendments duringthe cour se of the e vents d es cr i b ed. F urthermor e, he ha s prese nted no evidenc e to sugg est that he e ntere d into the ag ree ments from a position of unequa l power. Be cause the par

ties were not of unequa l barg aining power and Ohio law e x pressly all ows for

a tto rn e y s’ fe e s, we ho ld t hat th e a tto rn e y s’ fe e s p ro vis ion s at is su e were no t inva lid a s c on tr ary

to Ohio public policy

. B. I n addition, the g ener al rule a g ains t attorney s’ fe es ar ticulated in Taylor

and Mi lle r was abrog ated by Ohio Revised Code § 1301.21, which g overns the e nforc ement of a commitment to pay attorney s’ fe es in commerc ial contra cts of indebtedne ss. Section 1301.2 allows for a n awa rd of 15No. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

than indebtedne ss incurre d for pur poses t h at are primarily

persona l, family , or household.” O H IO R EV . C ODE ANN . § 1301.21(A)( 1) (West 2008). “‘Maturity

of the de bt’ includes m at u ri ty upon defa

ult or otherwise.” O HI O R EV . C ODE 16 ANN . § 13 01 .2 1( A) (3 ) ( Wes t 20 08 ). Re g ard ingthi s r e qu ir e me nt, the dis tr ic t c ourt state d: Her e, the parties both acknow ledg e that the [ plaintiffs] defaulted on their oblig ations under the L oan Ag ree ment in 2003. The [pl aintiffs] attempt to argue that they wer e curr ent i n their oblig ations under the Settlement Ag ree ment, but the Settlement Ag ree ment is not the releva nt document for this analy sis. I t is the L oan Ag ree ment and the Revised Per sonal Guar anty that constitute the rele vant “c ontrac t of indebtedness.” - 21 - attorney s’ fe es, provided that: ( 1) the parties enter ed into a contra ct of indebte dness; (2) the c ontrac t “includes a co mmitm ent to pay attorney s’ fe es”; (3) “the c ontrac t is enforc ed throug h judicial proce eding s or otherw ise afte r maturity of the de bt” ; (4) “the total amount owed on the contra ct of

16 indebtedness at the time the contra ct was enter ed into e x cee ds [$100,000] ”; and ( 5) the oblig ation is for “a rea sonable amount.” O HI O R EV . C ODE ANN . § 1301.21(B ), (C), & (D) ( West 2008). Her e, it is clea

r that plaintiffs and GE HFS enter ed into a contra ct of indebtedness, that the
cont ra ct co n t ai n ed a c ommitm ent to pay attorney s’ fe es, and that the total amount owed on the
contra ct exceede d $100,000. Plaintiffs argue, howe ver, that: (1) the fee s GE HF S incurred in the ba nk ru ptc y c a se s, the a dv e rs a

ry pr oc e e din g , a

nd in the pr e se nt s uit

to d e fe nd

a g a ins t pl a int if

fs ’ claims do not relate to the enforce m en t of a c ontrac t of indebtedne ss, and (2) the amount of the attorney s’ fe es aw arde d to GE HF S was not rea sonable. The district cour

t found that GE HFS’s defe nse of the claims asse rted a g ainst it by plaintiffs and GE H FS’s prosecution of i ts counterc laim ag ainst plaintiffs both relate to the enfor ceme nt of theNo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

- 22 - c on tr a c t of

ind e bte dn e ss. I n su

pp or t of its ho ldi ng , the dis tr ic t c ourt re lie d on de c isi on s f ro m bo th the Ei g hth

and Te nth Cir c uit s: In Du ry e a v . Thi rd Nor thw este rn Nat ’l Ba nk of M inn e ap oli s , 606 F .2 d 8 23 , 8 25 (8 th Cir. 1979), th e Eig hth Circuit held that finding othe rwise would lea d to an un de sir a ble re su lt: I f the Ba nk had instituted suit t o collect the note and plaintiff ha d, by wa y o f c o u n t e r c l a i m , s e r

v e d t h e c o mp l a i n t t h a t i s t h e b a s i s of thi s action, all costs of

both bring ing suit and de fendingag ainst the counter claim would be “ costs of collection” of the note. This cour

t sees little differ ence wher e plaintiff bring s suit to [ p]revent collec tion of the no te. B e c a

us e it i s n e c e ssa

ry fo r t he B ank to d e fe nd

a g a ins t such an a ction in order to c ollect on the note, attorney ’s fe es incurr ed in defe nding a g ainst plaintiff’s suit are a “cost of collec tion” as that term is used in the note. A contra ry result would per

mit the maker of a no te by wi nn ingthe “ ra c e to t

he c ourt ho us e ” to c oe rc e se ttl e me nt. This would rende r the “ cost of collec tion” provision of l i t t le value, appar ently

contra ry to what the par

ties to the note intended. Id . at 826. Other c ircuits have similarly held that def

endingan ac tion i n o rd er t o collect on a note consti tutes a cost of c ollection or enf orce ment. See, e.g., Univ. Drilling Co. v. Camay Drilling Co. , 737 F.2d 869, 875- 77 (10th Cir. 1984). He re , al l of the loan doc uments and the DI P Order e x pressly provide for

the pay ment of attorney s’ fe es and c osts. GE HFS enf orce d the loan docume nts and the DI P Or der throug h judicial proce eding s via its counterc laim in t h e d i s t ri ct co urt. All of the attorne y s’ fe es and c osts that GE HFS soug ht were incurre d as a r esult of the bankr uptcy case s, the adve rsar

y proce eding , and the dis tr ic t c ourt lit ig a tio n. GE HF S’ s e ff or ts i n e a c h o f t

ho se c a se s r e late to t

he e nf or c e me nt o f i ts c la im ag ainst the jointly

and seve rally o b l iga

ted B orrowe rs (both the De acone ss Debtors and the

no n- De bto r C omp anie s) and Gu ara nto r S a a d, or

to G E H F S’ s n e c e ssa

ry de fe nse of it s c la im.No. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

Citi ng Saad’s Revised Per sonal Guar anty , plaintiffs argue that the dist rict cour t erre d to the 17 extent that it imposed upon Saad any obligation to personally p ay an amount in excess of $1,000,000. Be cause the par ties do not appea

r to dispute this iss ue, we h o l d t h at Saad’ s persona l obligation is l imited to a max imum amount of $1,000,000. - 23 - Acc ording ly , we hold that the attorney s’ fee s and costs GE HF S incurred in de fendingag ainst the claims asser

ted by plaintiffs are fully

rec overa ble provided the y

are rea sonable. C. Fin a lly , p la int if

fs c on te st the re a so na

ble ne ss o f t

he $1 ,0 85 ,4 58 .1 3 in

le g a l f e e s a nd c os ts amassed by

GE HF S. I n deter

mining what constitutes a “r easonable amount” of fee s under § 17 13 01 .2 1, pa

ra g ra ph(D ) p la c e s th e burd e n o n p la int if fs to s ho w that G E H F S’ s f e e s a re imp ro pe r: I n deter mining the am o u nt of attorney s’ fe es that is rea sonable, a ll releva nt fac tors shall be consider ed, including but not lim ited to, the nature of the ser vices re ndere d, the time expended in rende ring the servic es, the amount of money and the va lue of the prope rty

aff ecte d, and the pr ofessional skil l an d ex pertise of the attorne y

or attorney s rende ring the servic es. Unl es s a cour t has bee n reque sted to make a deter mination of the amount of attorne y s ’ fe es that is reasona ble and f inds to the c on tr ary by a prep onde ra

nc e of the e vid e nc e , th e fo llo wi ngare de e me d r e a so na ble a mou nts : * * * (2 ) If t h e c o m m i t m en tt o p ay at t o rn ey s ’ fe es i s n o t b as edu p o na s p ec i fi c p er ce n t age of the t o tal principal, intere st, and other c harg es owe d on the contra ct of indebtedness, a

n amount eq u al to the attorne y s’ fe es customar ily char g ed by

the attorney or attorne y s rende ring the servic es. O H I O R EV . C ODE ANN . § 1 3 0 1

. 2 1 ( D )

. T h u s , S e c t i o n 1 3 0 1

. 2 1 r e qu i r e s t h a t p l a i n t i f f s s h o w , b y a preponde ranc e of the evidenc e, that GE H FS’s fe es ar e in excess o f those “c ustomarily char g ed.”

“ [M]e re ly po int ingthe Court

to an ano ma lou s fe e is no t su ff ic ie nt. Se c tio n 1 30 1. 21 (D )( 2) take s a subjective view, requiring that a debtor show why the particula r fee is not ‘customarily

char g ed byNo. 08-4399

Saad, et al. v. GE H

FS Holdings, Inc.

- 24 - the attorney or attorney s rende ring the servic es.’” In re M cKenna , 362 B.R. 852, 857 (B ankr. N .D. Oh i o 2 0 0 6 ) ( qu o t i n g O HI O R EV . C ODE ANN . § 1301.21(D)( 2)). Her e, plainti ff

s fa i led to satisfy

their evide ntiary

burden be cause they

did not provide the dis tr ic t cou

rt wi th ev ide nc e de mon str a tin g that the a tto rn e y s’ fe e s inc ur re d by GE HF S are in e xce ss of those “c ustomarily

char g ed.” On t he other hand, GE HF S submi tted substantial evidence to the dis tr ic t c ourt , inc lud ingc ouns e ls’ inv oic e s, bio g ra ph ie s o f i ts atto rn e y s, and c ouns e ls’ de c laratio ns , that show the re asonable ness of their attorney s’ fees. After revie wing this evidenc e, the district court deter mined that the rates cha

rg ed by GE HF S’s counsel wer e rea sonable a nd that their time spent on this matter was “ rea sonably expended, especially in light of the complicate d and protra cted nature of the c ase.” We find no clea r er ror in the district cour

t’s deter minati o n an d t here fore aff irm the district court’s a

war d of attorne y s’ fe es and c osts. V III

. For these re asons, we a ffirm the judg ment of the district cour t.