# United States Court of Appeals **for the Fifth Circuit**

____________ No. 22-30602

____________ In the Matter of AKD Investments, L.L.C.

Debtor , AKD Investments, L.L.C., Appellant ,

versus Magazine Investments I, L.L.C., Appellee

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______________________________ Appeal from the United States District Court for the Eastern District of Louisiana USDC No. 2:22-CV-619

______________________________ Before Duncan and Wilson, Circuit Judges , and Mazzant, District Judge

. * Cory T. Wilson, Circuit Judge : In November 2014, AKD Investments, LLC (AKD), filed for bankruptcy. At that time, Magazine Investments I, LLC (Magazine), held

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* District Judge in the Eastern District of Texas, sitting by designation. United States Court of Appeals Fifth Circuit 

### FILED August 18, 2023

Lyle W. Cayce Clerk Case: 22-30602 Document: 00516863420 Page: 1 Date Filed: 08/18/2023No. 22-30602

2 the notes on AKD’s main asset, a bu ilding on Magazine Street in New Orleans, Louisiana. After Magazine resumed foreclosure proceedings, AKD sought permission from the bankruptcy court to obtain financing to pay off Magazine’s notes and thereby avoid th e looming foreclosure sale of the building. In a February 2015 order, the bankrupt cy court authorized the transaction, and the parties performed under the order. The bankruptcy court confirmed AKD’s reorganization pl an in April 2017. In August 2020, AKD brought this action against Magazi ne as a core proceeding within the still-open bankruptcy case. AKD allege d that it had over paid Magazine in 2015 and sought to recoup the over payment. But the bankruptcy court granted summary judgment to Magazine, concluding that AKD’s claim was barred by the law-of-the-case doctri ne because the amount AKD paid Magazine had been established by the court’s 2015 order. AKD appealed, and the district court affirmed. AKD th en timely appealed to our court. AKD contends that the bankruptcy court erred in applying the law-ofthe-case doctrine because the 2015 order did not actually decide the amount AKD owed Magazine. The order is ambi guous on that point. But deferring to the bankruptcy court’s reasonable interpretation of its order, we nonetheless affirm.
I. AKD owned a building on Magazine Street in New Orleans (the Property). AKD obtained two mortga ges on the Property, one for $1.4 million and one for $100,000, both from a local bank. 1 AKD failed to make timely payments on the notes. Magazi ne acquired the non-performing notes

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1 AKD obtained its mortgages from Hancock Bank of Louisiana. Not long after, Hancock Bank of Louisiana became Whitney Bank, which then held AKD’s notes until they were sold to SummitBridge Credit Investments IV, LLC, in December 2012. Case: 22-30602 Document: 00516863420 Page: 2 Date Filed: 08/18/2023No. 22-30602

3 and initiated foreclosure proceedings against AKD in Louisiana state court in July 2014. The state court scheduled a foreclosure sale for November 13, 2014.
On the eve of the scheduled sa le, AKD filed for Chapter 11 bankruptcy. This trigge red an automatic stay preventing any collection efforts against AKD or the Property. See 11 U.S.C. § 362(a). The foreclosure sale was cancelled. A few days later, Magazine soughtto lift the stay so that foreclosure proceedings could continue. The bankruptcy court granted Magazine’s request in December 2014. See 11 U.S.C. § 362(d) (authorizing such motions). As a result, the foreclosure sale was reset for February 26, 2015. Bankruptcy proceedings continued simultaneously. The bankruptcy court ordered Magazine to file a proof of claim for AKD’s outstanding debt, including an estimated “payoff” amount . Magazine filed its proof of claim on February 2, 2015, specifying thatAKD owed Magazine $2,174,844.27 as of January 31, 2015, with interest and expenses continuing to accrue. Seeking to forestall the scheduled foreclosure sale, AKD sought financing to satisfy its debt with Magazine. AKD found a willing lender— James M. Huger—and reached an agr eement with Huger, memorialized in a loan commitment letter dated Februa ry 19, 2015. The commitment letter specified that Huger would loan AKD $2,225,000 to pay, among other things, “the then outstanding amount of the loan” owed to Magazine in order “to pay off [the] first mortgage no te[s] held by Magazine.” The deal was conditional upon the bank ruptcy court’s approval. AKD filed an emergency motion s eeking approval under 11 U.S.C. § 364(e) on February 20, 2015. AKD’ s motion included the payoff amount from Magazine’s proof of claim but emphasized that AKD “disputed the amount of Magazine’s clai m.” Because of the dispute, AKD requested that Case: 22-30602 Document: 00516863420 Page: 3 Date Filed: 08/18/2023No. 22-30602

4 Huger loan proceeds of approximatel y $2,175,000 “be held in escrow” pending resolution of the dispute. Magazine opposed AKD’s motion, contending the amount to be placed in escrow was insufficient. Because it was pegged to the payoff amount in the proof of claim, the pr oposed escrow amount did not include funds to cover the interest and attorney ’s fees that had accrued since January 31 and that would continue to accrue while in escrow. Id. Magazine averred that, as of February 25, 2015, Magazine ’s claim was at least $2,177,817.10. 2 In response to Magazine’s opposition, AKD amended its motion for approval of the transaction. The amended motion dropped any reference to a dispute over the amount owed. And it no longer sought to have funds held in escrow; instead AKD proposed to use the Huger loan proceeds, as well as bank deposits and rental income as necessary, to pay Magazine “ in full the amount of the claim of Magazine without prejudice immediately upon closing of the loan .” Magazine continued to op pose AKD’s motion, even as modified. On February 25, 2015, the day befo re the scheduled foreclosure sale, the bankruptcy court held a hearing to consider AKD’s amended motion. The next day, the court entered an orde r granting the motion (the Order). Specifically, the Order au thorized AKD “to obtain credit and borrow from James M. Huger $2,225,000 . . . pursuant to the terms and conditions of the loan commitment letter,” and then “to pay Magazine . . . $2,181,919.72 by cashier’s check in immedia tely available funds . . . on or before 11:30 am central time on February 26, 2015.” Upon closing, Huger would receive a

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2 This estimate also excluded the commi ssion Magazine would owe the sheriff, pursuant to Louisiana law, if the bankruptcy court ordered cancellation of the writ of seizure on the Property. Case: 22-30602 Document: 00516863420 Page: 4 Date Filed: 08/18/2023No. 22-30602

5 first-priority lien against the Property, and all liens held by Magazine would be cancelled, as would the foreclosure sale. 3 The parties performed according to the Order’s terms. Two years later, in April 2017, the bankruptcy court confirmed AKD’s plan of reorganization. In August 2020, AKD filed this acti on as a core proceeding within its bankruptcy case. AKD alleged that it had paid Magazine “excessive attorney’s fees, interest charges, an d other charges and expenses” in the 2015 transaction and sought to recove r sums allegedly overpaid. After discovery, Magazine filed a motion for summary judgment, which the bankruptcy court granted. The cour t concluded that AKD’s action was barred by the law-of-the-case doctrine because the Order set the amount AKD paid Magazine. The bankruptcy court entered final judgment in favor of Magazine and dismissed the action. AKD appealed to the district co urt, which affirmed. Then AKD timely appealed to this court.
II. We review a “bankruptcy co urt’s grant of summary judgment de novo , using the same standard employed by the district court.” In re Shcolnik , 670 F.3d 624, 627 (5th Cir. 2012). In ad versarial proceedings in bankruptcy, Rule 56 of the Federal Rules of Civil Procedure governs review of summary judgment motions. F. R. Bankr. P . 7056. Summary judgment is appropriate when “the mova nt shows that there is no genuine dispute as to

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3 The Order also directed that Magazine would not be liable for any commission due the sheriff in relation to cancellation of the foreclosure sale. See supran.2. Instead, “[s]hould any additional costs or commissions be owed, the Sheriff sh[ould] file a proof of claim in” AKD’s bankruptcy case. Case: 22-30602 Document: 00516863420 Page: 5 Date Filed: 08/18/2023No. 22-30602

6 any material fact and the movant is en titled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). While we usually review the bankr uptcy court’s interpretation of its own orders de novo , we “defer to the bankr uptcy court’s reasonable resolution of . . . ambiguities in those documents.” In re Nat’l Gypsum Co. , 219 F.3d 478, 484 (5th Cir. 2000). “[H]owever, the docu ments must truly be ambiguous, even in light of other documents in the record, before we will defer.” Id.
III.
The law-of-the-case doctrine “is based on the salutary and sound public policy that litigation should come to an end.” White v. Murtha , 377 F.2d 428, 431 (5th Cir. 1967). Despit e its importance, the doctrine “is an amorphous concept” with no “precise requirements.” Arizona v. California , 460 U.S. 605, 618 (1983). Generally, “w hen a court decides” an issue, “that decision should continue to govern the same issues in subsequent stages of the same case.” Id. The doctrine has an importan t limitation: It “applies only to issues that were actually decided, rather than all qu estions in the case that might have been de cided but were not.” Alpha/Omega Ins. Servs. v. Prudential Ins. Co. of Am. , 272 F.3d 276, 279 (5th Cir. 2001) (emphasis added). But “the issues need not have been explicitly decided; the doctrine also applies to those issues decide d by ‘necessary implication.’” Id. (quoting In re Felt, 255 F.3d 220, 225 (5th Cir. 2001)). The parties dispute whether the ba nkruptcy court properly applied the law-of-the-case doctrine in this case. They spar over whether the bankruptcy court actually decided the payoff amount in the Order, such that the doctrine bars AKD’s claim to recover its alleged overpayment to Magazine. AKD contends that “neith er the correctness of the amount AKD paid Magazine nor the merits of AKD’s claim[] to recover[] the amount of Case: 22-30602 Document: 00516863420 Page: 6 Date Filed: 08/18/2023No. 22-30602

7 its overpayment” were actually decide d in the Order. Magazine counters that the Order “decided the issue.” AKD’s argument hangs on a single ph rase in the Order: “without prejudice.” The Order provides “t hat immediately upo n closing of the Huger [l]oan, [AKD] is authorized to pay Magazine . . . the Magazine [p]ayoff by the [p]ayoff [d]eadline without prejudice and without conditions by cashier’s check as provided ab ove from the proceeds of the Huger [l]oan.” 4 According to Black’s Law Dictionary, the phrase “without prejudice”: import[s into a transaction] that the parties have agreed that, as between themselves, the rece ipt of the money by one, and the enjoyment by the other, shall not . . . have any legal effect upon the rights of the parties” an d “that such rights will be as open to settlement by negotiation or legal controversy as if the money had not been turned overby the one to the other. Without Prejudice , Black’s Law Dictionary (11th ed. 2019). AKD reasons that the inclusion of “without prejudice” in the Order thus means that the Order did not determine “t he correct amount [AKD] owed to Magazine.” By contrast, Magazine contends that the Order actually decided the final, correct payoff amount. Magazine points to two sections of the Order that emphasize the finality of its terms as evidence that the Order did not leave the payoff amount open to subseq uent challenge. The first provides:

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4 AKD also points out that it “specific ally stated in its original motion for authorized [sic] to refinance its debt [that] it disputed the amount of Magazine’s claim.” But as the district court pointed out, “this wa s not the motion that was granted.” Instead, “[a]ny language in the first motion regard ing a potential dispute . . . was removed [by AKD] upon amendment [and] is therefore of no moment.” But AKD included in its amended motion a request that the payment be made “without prejudice.” Case: 22-30602 Document: 00516863420 Page: 7 Date Filed: 08/18/2023No. 22-30602

8 that the [c]ommitment [l]etter and all other documents, agreements and instruments ne cessary to effectuate and consummate the transaction contemplated by the [c]ommitment [l]etter together with the provisions and terms of this Order are specifically enforceable against and binding upon, and shall not be subject to rejection or avoidance, by [AKD], and any assigns, incl uding without limitation an[y] trustee, responsible person , estate administrator, representative or similar person hereinafter appointed for or in connection with [AKD]’s estate or affairs in this or any subsequent or controverted case under the Bankruptcy Code involving [AKD].
And the second details: that the terms and conditions of the [c]ommitment [l]etter are an integral part of the refinancin g and that, in view of: (i) the good faith of the lender and of Magazine Investments I, LLC, (ii) the reasonableness of th e terms of the [c]ommitment [l]etter, and (iii) the fact that the terms and conditions of the [c]ommitment [l]etter are integral part of the refinancing, the reversal or modification on appeal or otherwise of this Order shall not affect the validity or enforceability of the payoff of the debt of Magazine Investments I, LLC or the validity or enforceability of the Huger [l]oan or the validity, enforceability, or priority of the lien or mortgage against the Property granted to James M. Huger or his assign(s) pursuant to this Order or any of the terms or conditions of the [c]ommitment [l]etter . . . . Read in isolation, the sections of the Order cited by each side somewhat support their proposed in terpretations of the Order. AKD correctly points out that the Order sa ys that AKD’s payment to Magazine was made “without prejudice,” s eemingly meaning that the terms of payment remained open for legal controversy. Yet the two sections cited by Magazine clearly state that the Orde r and its terms—presumably including Case: 22-30602 Document: 00516863420 Page: 8 Date Filed: 08/18/2023No. 22-30602

9 the payoff amount to Magazine—are “specifically enforceable against and binding upon, and shall not be subject to rejection or avoidance by,” AKD. Read as a whole, the Order appears inte rnally inconsistent about whether the payoff amount was “without prejudice” (as AKD contends) or “specifically enforceable against and binding upon” AKD (as Magazine contends). Neither party offers a compellin g way to harmonize the Order in toto , making sense of the apparent contradiction. AKD suggests that we could resolve the contradiction by reading the two sections cited by Maga zine as limited only to securing the liens granted under the Order. Specifically, acco rding to AKD, those two sections “addressed only the effectiveness, enforceability, and perfection of the security interests granted to Huger to secure the Huger loan” and therefore do not render unreviewable the amou nt AKD paid Maga zine. But this suggested reading conflicts with the textof the relevant sections of the Order, which are plainly not limited to Huger’ s lien. Instead, the first section extends broadly to “the [c]ommitmen t [l]etter and all other documents, agreements, and instruments necessary to effectuate and consummate the transaction contemplated by the [c]ommitment [l]etter together with the provisions and terms of this Order.” And the second section specifically emphasizes “the validity [and] enforceab ility of the payoff of the debt of Magazine” in addition to the validityof Huger’s lien. Accordingly, AKD’s proposed reading is untenable. 5

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5 AKD relies on out-of-circuit cases regard ing 11 U.S.C. § 364(e) to support its preferred reading. See Shapiro v. Saybrook Mfg. Co. , 963 F.2d 1490, 1493 (11th Cir. 1992); see also Kham & Nate’s Shoes No. 2, Inc. v. First Bank of Whiting , 908 F.2d 1351, 1355 (7th Cir. 1990). But we have never read § 364(e) to focus myopicallyon liens. Instead, we have read it as a stay requirement. See In re TMT Procurement Corp. , 764 F.3d 512, 519 (5th Cir. 2014) (“A failure to obtain a stay of an auth orization under [§ 364(e)] moots an appeal of that authorization[.]”); see also In re Pacific Lumber Co. , 584 F.3d 229, 240 (5th Cir. 2009) Case: 22-30602 Document: 00516863420 Page: 9 Date Filed: 08/18/2023No. 22-30602

10 Magazine suggests that “without prejudice” is of no moment here because it is insufficiently specific to reserve any rights. As support, Magazine cites two Louisiana inter mediate appellate court opinions. See Barnett v. La. Med. Mut. Ins. Co. , 51908 (La. App. 2 Cir. 5/23/18), 248 So. 3d 594; Advanced Com. Contracting v. Powell Ins. Agency , 09-758 (La. App. 5 Cir. 12/29/09), 30 So. 3d 851. We fail to see the relevance of these cases, which pertain to the interpretation of reservation-of-rights clauses in private settlement agreements under state law, to our immediate task of interpreting an order entered by the bankruptcy cour t. Regardless, we hesitate to agree with Magazine that the phrase “wit hout prejudice” is without meaning. Rather, we “lean in favo r of a construction whic h will render every word operative, rather than one which may make some idle and nugatory.” Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 174 (2012) (citations omitted). So we endeavor to give meaning to all the words written into the Order by the bankruptcy court. But Magazine is ri ght insofar as the scope of “without prejudice” is the source of am biguity in the Order. Reviewing the Order, the Huger commitment letter, and the bankruptcy court record, we find nothing that clarifies the scope and import of “without prejudice” as used in the Order. Thus, the Order is “truly . . . ambiguous, ev en in light of other documents in the record.” In re Nat’l Gypsum Co. , 219 F.3d at 484. In thes e circumstances, we apply a deference rule: As long as the bankruptcy court reasonably resolved the ambiguity as it construed the Order in weighing Magazine’s motion for summary judgment in this case, we defe r to that court’s interpretation. Id.

_____________________ (Section 364(e) “prevent[s] the appellate reversal of an order to sell property or obtain post-petition financing unless such orders were stayed pending appeal.”). Case: 22-30602 Document: 00516863420 Page: 10 Date Filed: 08/18/2023No. 22-30602

11 The bankruptcy court resolved the ambiguity by concluding that the Order specifically decided that AKD ow ed Magazine $2,181,919.72. This was reasonable. When the bankruptcy co urt issued the Order in 2015, it had before it Magazine’s proof of claim, incl uding its suggested payoff amount as of January 31, 2015, and a breakdown of how Magazine calculated that amount; Magazine’s updated estimate as of February 25; the relevant mortgage documents; and the parties’ st ipulations and discussion during the hearing on the motion. Based on this information, the resulting Order set the payoff amount at $2,181,919.72, a very specific number. To be sure, the full scope of “without prejudice” remains unclear, but in gr anting Magazine summary judgment in this case, the bank ruptcy court reasonably determined that the phrase—whatever its scope—did not apply to the payoff amount to Magazine. The court’s interpretation of its prior Order is entitled to deference. AKD disagrees, contending that the bankruptcy court’s interpretation conflicts with Alpha-Omega Insurance Services, In c. v. Prudential Insurance Co. of America , where our court stated: [E]ven when issues have not been expressly addressed in a prior decision, if those matters were “fully briefed to the appellate court and . . . necessary predicates to the [court’s] ability to address the issue or i ssues specifically discussed, [those issues] are deemed to ha ve been decided tacitly or implicitly, and their dispositi on is law of the case.” 272 F.3d 276, 279 (5th Cir. 2001) (all alterations except first in original) (quoting In re Felt , 255 F.3d 220, 225 (5th Cir. 2001)). Based on AlphaOmega , AKD asserts that the Order coul d not have decided the payoff amount because “neither party brie fed” “the correct [payoff] amount” “either in connection with the refina ncing motion or elsewhere” “in the main bankruptcy case.” But AKD’s contention miscasts the record. Case: 22-30602 Document: 00516863420 Page: 11 Date Filed: 08/18/2023No. 22-30602

12 Magazine briefed the correct payoff am ount in the main bankruptcy case, both in its proof of claim and in its opposition to AKD’s motion. Moreover, AKD misconstrues Alpha-Omega . That case specifically does not limit a court’s ability to decide issues presented but not fully briefed. See AlphaOmega , 272 F.3d at 281 (recognizing that the court “could have gone beyond the scope of the . . . parties’ briefs to independently assess the . . . issue”). Rather, Alpha-Omegareiterates our rule from In re Felt that an issue briefed on appeal that is a “necessary prerequi site[]” to an issue actually decided in the appellate opinion is the law of the case, even if the appellate court’s opinion does not explicitly decide the prerequisite issue or grapple with the arguments in the briefs. In re Felt , 255 F.3d at 225–26. Here, though, we defer to the bankruptcy court’s reason able determination that the Order in fact determined the correct value for the payoff amount, whatever the scope of the parties’ briefs, and whatever th e scope of “without prejudice” as used in the Order. 6
IV. The bankruptcy court’s 2015 Order is internally contradictory. Its meaning is therefore ambiguous as to the question at hand: Whether the Order actually decided the correct am ount that AKD owed to Magazine. Accordingly, we defer to the bankruptcy court’s reasonable interpretation of its Order—that it did—and affirm it s invocation of the law-of-the-case doctrine to grant Magazine summary judgment as to AKD’s claim here.
AFFIRMED

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6 Because we affirm on law-of-the-case grounds, we need not reach whether AKD’s instant claim is also barred by res judicata or prior settlement. Case: 22-30602 Document: 00516863420 Page: 12 Date Filed: 08/18/2023