UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

_________________________________ 

REALTY INTERNATIONAL 

ASSOCIATES, INC., 

 Plaintiff - Appellant, 

v. 

CAPITAL FUND SECURITIES, Limited, 

a foreign corporation, 

 Defendant - Appellee. 

No. 14-2189 

(D.C. No. 1:12-CV-00116-MV-WPL) 

(D. N.M.) 

_________________________________ 

ORDER AND JUDGMENT*

_________________________________ 

Before KELLY, BALDOCK, and GORSUCH, Circuit Judges. 

_________________________________ 

Realty Investment Associates, Inc. (Realty) brought this action alleging that 

Capital Fund Securities, Limited (CFS) breached a participation agreement relating to 

wraparound notes on several apartment projects in New Mexico. Realty claimed CFS 

failed to fulfill a contractual obligation to approve excess refinancing of the projects’ 

primary mortgages, which would have generated funds for distribution to note 

 *

 After examining the briefs and appellate record, this panel has determined 

unanimously that oral argument would not materially assist in the determination of 

this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore 

ordered submitted without oral argument. This order and judgment is not binding 

precedent, except under the doctrines of law of the case, res judicata, and collateral 

estoppel. It may be cited, however, for its persuasive value consistent with 

Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. 

FILED 

United States Court of Appeals

Tenth Circuit 

September 25, 2015

Elisabeth A. Shumaker 

Clerk of Court

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participants, including Realty. The district court granted summary judgment for 

CFS, holding that it had not breached the agreement. Realty now appeals. 

I. BACKGROUND 

 In 2003, CFS, Realty, and others executed a participation agreement to resolve 

a dispute over ownership of the wraparound notes, which have unrecorded liens 

secondary to primary mortgages on a number of apartment projects. The agreement 

recognizes CFS as the holder of the notes, but grants participation rights to Realty. 

These rights involve a share in the proceeds from refinancing, sale, or cash flow of 

the projects in proportion to Realty’s ownership interest in the notes. The agreement 

contemplated immediate refinancing of the existing primary mortgages on the 

projects, which was accomplished in 2004 with half of the refinancing proceeds in 

excess of the existing mortgage balances distributed to the note participants. The 

new mortgages were set to mature in 2011. “Estoppel letters,” drafted by the 

partnership that owned the projects and signed by all note participants, stated that on 

or before 2011 the participants would either modify the terms of the new mortgages 

to extend their maturity dates or pay them off through refinancing. If the note 

participants failed to act, the partnership was to do so in their stead.1

 All note 

participants retained final signatory approval with respect to negotiations over 

mortgage refinancing. 

 1

 There is a dispute as to whether the partnership’s authority to refinance was 

limited to the balances of existing mortgages. The point is immaterial to resolution 

of this appeal. 

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When the maturity dates for some of the mortgages became imminent, Realty 

and CFS disagreed on what course to take. Realty wanted to refinance for amounts 

substantially exceeding the mortgage balances in order to obtain a share of the excess 

proceeds. CFS wanted simply to extend the maturity date for the existing balances at 

lower interest rates, and sent a letter to the mortgage lender, copying the partnership 

owning the projects, expressing that position. Ultimately, the mortgages were 

refinanced by the partnership without excess proceeds for distribution to the note 

participants. 

Realty filed suit claiming that CFS’ refusal to refinance for amounts in excess 

of current balances (amounts acceptable to the mortgage lender) breached the 

participation agreement and caused Realty to lose out on its share of the forgone 

excess proceeds.2

 Realty alleged that the purpose of the participation agreement was 

to generate proceeds through excess mortgage refinancing; that the agreement 

prohibited any note participant from rejecting such refinancing except on the ground 

that it entailed objectionable loan-to-value ratios; and that no objection to the 

relevant loan-to-value ratios had been made by CFS or any other note participant. 

CFS moved for summary judgment on the basis that it had no duty under the 

agreement to accept the excess refinancing sought by Realty. The district court 

agreed with CFS and entered judgment in its favor. 

 2

 Realty also alleged that CFS breached the agreement by interfering with 

negotiations between the mortgage lender and the representative designated in the 

agreement to negotiate on behalf of the note participants. Realty has abandoned this 

claim. 

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II. PARTICIPATION AGREEMENT 

The relevant provisions of the participation agreement can be grouped into 

four categories. The first consists of provisions characterizing the parties’ legal 

interests in the notes, which specify that CFS is the holder of the notes and the other 

parties, including Realty, have an interest in the notes entitling them to participation 

in revenue derived therefrom. Aplt. App. at 22 (Recital A), 24 (para. 2). 

The second category consists of provisions generally indicating that mortgage 

refinancing is to be done for the benefit of both CFS and participants such as Realty: 

Para. 4(d): “[R]efinancing of the existing mortgages shall be 

 undertaken for the benefit of the holder of the Notes and to 

 the extent permitted by the lender, the new loans shall be 

 made for, on behalf of, or in the name of the holder of the 

 Notes.” 

Recital D: “[The parties] desire to have the mortgage loans on the 

 apartment projects refinanced for the benefit of the Wrap 

 Loan Lenders (as defined below [to include all participants 

 in the agreement]).” 

Id. at 22, 25; see also id. at 24 (Recital L). 

 The third category consists of provisions specifying how the parties share in 

revenue derived from the notes, including excess proceeds from refinancing of the 

primary mortgages. These establish that the parties share in proportion to their 

interests in the notes. See id. at 24 (Recital K and para. 2), 26 (para. 8). 

 The fourth category relates to the parties’ rights with respect to negotiation of 

mortgage refinancing. It consists of a broad provision granting the parties a right of 

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final approval over refinancing negotiations and a specific provision dealing with 

agreement on particular loan-to-value ratios: 

Para. 5: This paragraph designates a representative for negotiating 

 “for the purpose of having the first mortgages on the 

 [projects] refinanced,” but provides that “all distribution 

 participants have final signatory approval of such 

 negotiations.” 

 

Para. 4(b): “The existing mortgages shall be replaced with new 

 mortgages at a loan to value, as mutually agreed by the 

 participants, as the value is determined by a current 

 appraisal.” 

Id. at 25-26. 

 Finally, what the agreement does not say is also significant. There are no 

provisions stating that (1) its purpose is to obtain excess refinancing whenever 

possible to maximize revenue from this source; or that (2) notwithstanding the right 

of final approval in paragraph 5 and the requirement of mutual agreement as to loan 

to value in paragraph 4(b), parties must consent to excess refinancing whenever it is 

available unless a specific objection is raised on loan-to-value grounds. 

III. ANALYSIS 

The district court’s decision does not address, or barely touches on, several 

contentions pressed by each side on appeal. This is clearly a consequence of the 

gradually developing nature of the positions taken by both parties. CFS argues that 

we should not consider points now argued by Realty that were not included in its 

response to CFS’ motion for summary judgment. But some of these points address 

arguments CFS itself failed to include in that motion. Given these circumstances, 

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and the fact that our review is de novo, see In re Universal Serv. Fund Tel. Billing 

Practice Litig., 619 F.3d 1188, 1202 (10th Cir. 2010), we decide this appeal—and 

affirm the district court—based on a simple, straightforward review of all relevant 

provisions of the participating agreement. 

A. CFS’ Right to Reject Refinancing Based on its Status as Holder of Notes 

The primary textual basis cited by CFS in its summary judgment motion for a 

right to reject excess refinancing (it invoked other provisions after Realty responded 

to the motion) was the recognition of its status as holder of the notes in paragraph 2 

and the statement in paragraph 4(d) that mortgage refinancing was to be undertaken 

for the benefit of the holder of the notes. CFS argued these two provisions allowed it 

to act out of self-interest contrary to the wishes of note participants who wanted to 

share in proceeds from excess refinancing. 

The district court found merit in this argument. Discerning nothing in the 

agreement preventing CFS from deciding what refinancing terms would be to its own 

benefit, the district court held that CFS did not breach the agreement simply because 

it had favored its perceived interest at the expense of a benefit to Realty. That was 

not the end of the district court’s analysis; it still had to address Realty’s overarching 

claim that the intent of the agreement was to obtain excess refinancing whenever 

available. That intent, if controlling, would effectively equate the benefit of 

refinancing with excess-proceed-sharing, thereby undercutting CFS’ argument that its 

exclusive designation as intended beneficiary meant it could reject such refinancing 

in pursuit of some other benefit. Nevertheless, the district court still considered CFS’ 

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status as note holder as supportive of its ultimate holding that CFS was not obligated 

by the agreement to accept excess refinancing. For that reason, it is important to 

acknowledge a textual counterpoint to the district court’s analysis of the purportedly 

unique position of CFS with respect to the benefits of refinancing. As set out earlier, 

another provision of the agreement expressly refers to refinancing “for the benefit of 

the Wrap Note Lenders,” Aplt. App. at 22, which includes all of the note participants, 

id. at 24. While this does not negate the intent to benefit CFS, it does deprive it of 

the exclusivity the district court attributed to it. ’’ 

In this vein we need to address an argument by Realty that goes beyond 

asserting that CFS had no right to put its interest over the interests of the other parties 

to asserting that CFS had an affirmative duty to put the others’ interests first. Realty 

premises this duty on its claim that CFS is a fiduciary vis-à-vis the note participants. 

There is, however, nothing in the text of the agreement about fiduciary duties to 

support this argument. Rather, Realty points to a document relating to an earlier, 

discarded proposal that would have stated “CFS was to retain ‘ownership’ of all wrap 

around mortgages as trustee and would distribute any proceeds in proportion to their 

ownership.” Id. at 149 (emphasis added). But “the parol evidence rule precludes the 

admission of prior negotiations or extrinsic evidence offered to contradict or vary the 

terms of a complete, integrated, written agreement.” Sanders v. FedEx Ground 

Package Sys., Inc., 188 P.3d 1200, 1208 n.2 (N.M. 2008) (brackets and internal 

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quotation marks omitted).3

 While such evidence may be “admitted to determine the 

circumstances under which the parties contracted and the purpose of the contract,” id.

(internal quotation marks omitted), the rejected proposal—read against the text of the 

agreement omitting the very term Realty seeks to interpose—does not create a 

genuine issue that the agreement was intended to impose a fiduciary duty on CFS. 

Even if CFS’ receipt of proceeds for distribution to participants might suggest some 

responsibility with respect to the proper distribution of received funds, that would not 

establish the quite different duty Realty seeks to impose on CFS to subordinate its 

interests to those of the other participants. 

In sum, the most that can be said of the “benefit” provisions is that they are not 

dispositive of either party’s position on refinancing. Other provisions, discussed 

below, supply a firmer basis for the district court’s holding that CFS did not breach 

the agreement by rejecting excess refinancing of the primary mortgages. 

B. Provisions Regarding Agreement on Loan-to-Value Ratios and 

 Final Signatory Approval of Mortgage Refinancing Negotiations

The district court concluded its order by noting two provisions that much more 

directly undercut Realty’s claim that the agreement obligated CFS to accede to 

available excess refinancing: 

The 2003 Agreement gives CFS the right to disagree as to a 

proposed loan to value ratio, and to withhold final signatory approval of 

any refinancing proposal negotiated [by the participants’ representative 

and the partnership owning the projects]. Nothing in the 2003 

 3

 The participation agreement states that it “constitutes the entire agreement 

between the parties and supersedes all prior . . . negotiations.” Aplt. App. at 27. 

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Agreement obligated CFS to agree to a certain loan to value ratio or to a 

certain refinancing proposal, simply because it would benefit Realty. 

By the same token, nothing in the 2003 Agreement entitled Realty to a 

refinancing at the maximum possible loan to value ratio, or to CFS’ 

approval of a refinancing on the terms believed by Realty to be most 

beneficial. Accordingly, CFS could not, and thus did not, breach the 

2003 Agreement by preventing the refinancing of the apartment projects 

[in excess of the existing balances]. 

Aplt. App. at 175. An obligation to accept any available excess refinancing would 

plainly conflict with the reservation of an unqualified right of final approval as well 

as with the requirement of mutual agreement on loan-to-value ratios. 

Realty contends the loan-to-value provision plays no role here, because CFS 

did not make an objection on that basis when rejecting excess refinancing and has not 

demonstrated grounds for such an objection in this case. But the provision is not 

written in terms of objections to loan-to-value ratios preventing proposed refinancing 

but in terms of mutual agreement on loan-to-value ratios allowing refinancing to 

proceed. Thus, simply withholding agreement would in itself appear sufficient to 

forestall refinancing. In any event, regardless of whether the provision was actually 

triggered here, its acknowledgment that parties can block refinancing by rejecting 

attendant loan-to-value ratios is inconsistent with Realty’s broad position that the 

agreement was intended to obligate participants always to accept excess refinancing. 

If that were indeed the intent, the agreement would not enable a participant to block 

excess refinancing proposals just by not agreeing to their loan-to-value ratios. But 

we need not rely solely on the existence of the loan-to-value provision to affirm 

summary judgment for CFS. 

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The agreement gives all participants “final signatory approval of [refinancing] 

negotiations.” Id. at 26. An intent not to obligate participants to accept any specific 

refinancing proposal could hardly be more clear. Realty attempts to avoid this 

conclusion in two ways, neither of which is persuasive. First, Realty contends that 

the right of final signatory approval is given only for refinancing “negotiations,” 

which should not be read to include refinancing proposals. Realty does not cite any 

authority supporting this strained reading of what is on its face a straightforward 

provision. When a contract’s terms “have a common and ordinary meaning, that 

meaning controls in determining the intent of the parties.” United Nuclear Corp. v. 

Allstate Ins. Co., 285 P.3d 644, 647 (N.M. 2012) (internal quotation marks omitted). 

Even if a party seeks only to establish an ambiguity, the provision in question must 

be “reasonably and fairly susceptible” of the alternative construction proffered to 

create the ambiguity. Id. at 648 (internal quotation marks omitted); see Randles v. 

Hanson, 258 P.3d 1154, 1164 (N.M. Ct. App. 2011). Any commonsense reading of 

the signatory-approval provision would plainly encompass the right to approve/reject 

refinancing proposals—which are the raison d’ȇtre of negotiations.4

 The provision is 

not reasonably and fairly susceptible of Realty’s contrary construction. 

Realty’s other effort to undercut the signatory-approval provision is to argue 

that it is qualified by the provision relating to loan-to-value ratios. Realty contends 

 4

 It appears Realty may also object to the fact that CFS peremptorily indicated 

its opposition to excess refinancing from the outset of negotiations. But nothing in 

the agreement prohibits a party from giving advance notice of an intention to exercise 

its right of (dis)approval with respect to refinancing. 

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that even if the right of approval permits a party to veto proposed refinancing, that 

right may be exercised only on the basis of an objection to the loan-to-value ratio of 

the mortgage in question. There is no textual support for this contention. The 

signatory-approval provision itself does not define or limit the grounds upon which 

approval may be withheld, nor does it make any reference to the separate provision 

regarding loan-to-value ratios. And nothing in the loan-to-value provision (or any 

other part of the agreement) ties that provision to the right of signatory approval. 

In sum, CFS’ contractual right to reject mortgage refinancing proposals is 

clearly supported by the provision giving it final signatory approval and further 

buttressed by the provision requiring its agreement to attendant loan-to-value ratios. 

Absent an overriding contractual directive qualifying these provisions by reference to 

the parties’ intent always to secure excess refinancing, they dictate a ruling in favor 

of CFS here. 

C. Intent of Parties to Obtain Excess Refinancing 

The existence of such an overriding directive is a premise running throughout 

Realty’s briefing. Realty insists that the parties’ predominant intent in entering the 

agreement was to obtain excess refinancing whenever available in order to realize 

immediate revenue from sharing the proceeds. CFS’ alleged thwarting of this intent 

is the core of Realty’s breach-of-contract claim. The problem for Realty is that this 

alleged intent is nowhere to be found in the plain terms of the agreement. 

“‘The purpose, meaning[,] and intent of the parties to a contract is to be 

deduced from the language employed by them; and where such language is not 

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ambiguous, it is conclusive.’” Benz v. Town Ctr. Land, LLC, 314 P.3d 688, 695 

(N.M. Ct. App. 2013) (quoting ConocoPhillips Co. v. Lyons, 299 P.3d 844, 852 

(N.M. 2012)). “‘When discerning the purpose, meaning, and intent of the parties to a 

contract, the court’s duty is confined to interpreting the contract that the parties made 

for themselves, and absent any ambiguity, the court may not alter or fabricate a new 

agreement for the parties.’” Id. at 696 (quoting CC Hous. Corp. v. Ryder Truck 

Rental, Inc., 746 P.2d 1109, 1111 (N.M. 1987)). No provision in the participation 

agreement states that the intent of the parties is always to opt for excess refinancing 

when that is available, nor does any provision obligate a party to accept such 

refinancing when other parties desire it. To the contrary, as we have discussed, the 

relevant provisions of the agreement plainly give a party like CFS the right to reject 

any proposed refinancing, excess or not. 

Notwithstanding the terms of the agreement, Realty contends the participants’ 

post-agreement conduct demonstrates that it was their intent that excess refinancing 

had to be accepted when available. Course of performance, while inadmissible to 

deviate from the unambiguous terms of a contract, may be considered in determining 

whether a contract is ambiguous in the first place. Benz, 314 P.3d at 695 (discussing 

C.R. Anthony Co. v. Loretto Mall Partners, 817 P.2d 238, 242-43 (N.M. 1991)). 

Noting that earlier refinancing had generated excess proceeds, Realty argues that this 

reflected the parties’ intent always to refinance in excess of mortgage balances, and 

that if such an intent is not expressed (or disavowed) clearly in the agreement, the 

result is an ambiguity leaving the contract susceptible to the reading urged by Realty. 

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We disagree. The fact that the parties chose excess refinancing early on does not 

imply such refinancing was mandatory, thereby putting the provision granting a right 

of final approval in doubt; it simply shows that the parties had hitherto accepted 

excess refinancing proposals, obviating the need for anyone to exercise their right to 

reject such a proposal. Tellingly, Realty does not cite a single instance when the 

overarching intent it seeks to read into the agreement was invoked to force a 

participant to accept excess refinancing to which it objected. In short, the parties’ 

conduct was entirely consistent with the plain meaning of the final-approval 

provision and thus affords no basis on which to reject or question the straightforward 

reading we have given to it here. Nor is the plain meaning of that provision clouded 

by Realty’s self-serving insistence that it had intended to obtain funds from excess 

refinancing under the agreement at every opportunity. See Ponder v. State Farm 

Mut. Auto Ins. Co., 12 P.3d 960, 965 (N.M. 2000). 

IV. CONCLUSION 

The forgoing discussion explains our rationale for affirming the grant of 

summary judgment for CFS. We note the focus and thrust of that rationale have 

obviated discussion of a number of collateral points addressed in the parties’ briefing. 

Thus, for example, the belabored disputation of what should count as a financial 

benefit or disadvantage with respect to refinancing under the participation agreement 

is immaterial, as is the extraneous discussion of the “ownership” interests of the 

participants in the notes. And, like the district court, we do not rely on CFS’ 

position—advanced early in the litigation but not pressed on appeal—that the 

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agreement contemplated excess refinancing only on those mortgages in place in 

2003. Realty’s contention on appeal that the district court erroneously accepted this 

position through improper factfinding on summary judgment is both incorrect and 

immaterial. Finally, Realty’s broader objection regarding the resolution of this case 

on the basis of improper factfinding is also inapt. The interpretation of unambiguous 

contract terms is a legal matter for the court. Smith v. Price’s Creameries, Div. of 

Creamland Dairies, Inc., 650 P.2d 825, 828 (N.M. 1982). The determination of 

ambiguity vel non is likewise for the court. See Strata Prod. Co. v. Mercury Expl. 

Co., 916 P.2d 822, 830 (N.M. 1996). The district court properly concluded that the 

text of the agreement and extrinsic evidence did not raise a genuine issue regarding 

the plain meaning of the operative provisions supporting CFS’ case as discussed 

above. 

The judgment of the district court is affirmed. 

Entered for the Court 

Paul J. Kelly, Jr. 

Circuit Judge 

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