### IN THE UNI TED STAT ES COURT OF APPEALS FOR THE FIF TH CIRCU IT

N o

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A M K 2 0 0 0

- A

, L

. L

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P l a i n t i f f

- A p p e l l e e

v

.

A M I N A M A L I E K

, a n I n d i v i d u a l ; A M I R A L I M A V A N I

, a n I n d i v i d u a l ; D O L L A R V A L U E

, I N C O R P O R A T E D

, a T e x a s C o r p o r a t i o n ; M & V C O M P A N Y

, I N C O R P O R A T E D

, a T e x a s C o r p o r a t i o n ,

D e f e n d a n t s

- A p p e l l a n t s

A p p e a l f

r o m t h e U n i t e d S t a t e s D i s t r i c t C o u r t f o r t h e W e s t e r n D i s t r i c t o f T e x a s U S D C N o

. 5 : 0 9

- C V

- 8 2 5

B e f o r e J O N E S

, C h i e f J u d g e , a n d J O L L Y a n d S O U T H W I C K

, C i r c u i t J u d g e s

. P E R C U R I A M : *

A m i n a M a l i e k

, A m i r a l i M a v a n i

, D o l l a r V a l u e , I n c

. , a n d M & V C o m p a n y , I n c

. ( “ A p p e l l a n t s ” )

, e x e c u t e d a g u a r a n t y i n f a v o r o f U

. S

. B a n k N a t i o n a l

A s s o c i a t i o n ( “ U

. S

. B a n k ” ) a s p a r t o f a c o m m e r c i a l l o a n t r a n s a c t i o n

. A f t e r t h e 1 U n i te d S ta te s C o u rt o f A p p ea l s F i ft h C i rc u i t 

### F I L E D
Februa ry 11 , 20 11

Lyle W . Cayce Clerk

Purs uant to 5 T H C I R

. R. 47.5
, the court has dete rm ined that thi s op inion s hould not * be publ ish ed and is not pr ece dent excep t unde r the lim ite d cir cum st ance s se t for th in 5 T H C I R

. R. 47.5 .4.

U. S. Bank Nat ional Ass ocia tio n wa s the tru st ee for the Regis ter ed Ho lde rs of FMAC 1 Loan Recei vables Trus t 2000- A, a sp ecia l pur pos e bus ines s tru st organi zed and exis ting unde r De law are la w , the lend er in this cas e. On Oc tobe r 8, 2010, U. S. Bank Nat ional Ass ocia tio n Case: 10-50588 Document: 00511379522 Page: 1 Date Filed: 02/11/2011N o

. 1 0

- 5 0 5 8 8

o r i g i n a l b o r r o w e r d e f a u l t e d

, A p p e l l a n t s b e c a m e l i a b l e f o r a l l a m o u n t s d u e u n d e r

t h e l o a n a g r e e m e n t

. T h e d i s t r i c t c o u r t a w a r d e d U

. S

. B a n k $ 2
, 2 1 5
, 8 7 0

. 0 7 i n

d a m a g e s , w h i c h i n c l u d e d a c o n t r a c t u a l p r e p a y m e n t p e n a l t y t o t a l i n g
$ 7 5 4
, 6 5 6

. 5 9

. A p p e l l a n t s o n l y c h a l l e n g e t h e a w a r d o f t h e p r e p a y m e n t p e n a l t y

o n a p p e a l

, a r g u i n g i t c o n s t i t u t e s a n u n e n f o r c e a b l e p e n a l t y

. W e a f f i r m

. I

. A p p e l l a n t s e x e c u t e d a l o a n g u a r a n t y u n d e r w h i c h t h e y p e r s o n a l l y

g u a r a n t e e d t h e f

u l l p a y m e n t o f

a l l o b l i g a t i o n s a r i s i n g u n d e r a c o m m e r c i a l l o a n

a g r e e m e n t b e t w e e n A M K E n t e r p r i s e s , L L C ( “ A M K ” )

, t h e b o r r o w e r , a n d U

. S

. B a n k

. T h e o r i g i n a l l o a n a m o u n t g u a r a n t e e d b y A p p e l l a n t s w a s $ 1
, 2 5 0
, 0 0 0
, w i t h

i n t e r e s t a t 9

. 5 % p e r a n n u m

. A f t e r A M K d e f a u l t e d o n t h e l o a n , U

. S

. B a n k s o u g h t

p a y m e n t f

r o m A p p e l l a n t s a n d e v e n t u a l l y i n i t i a t e d t h i s d i v e r s i t y a c t i o n f o r

b r e a c h o f c o n t r a c t w h e n A p p e l l a n t s f a i l e d t o m a k e a n y p a y m e n t t o U

. S

. B a n k

. O n M a r c h 1 8
, 2 0 1 0
, t h e d i s t r i c t c o u r t g r a n t e d U

. S

. B a n k ’ s m o t i o n f o r

p a r t i a l s u m m a r y j u d g m e n t o n l i a b i l i t y , f i n d i n g A p p e l l a n t s l i a b l e f o r b r e a c h o f

t h e g u a r a n t y

. O n A p r i l 7
, 2 0 1 0
, U

. S

. B a n k t h e n f i l e d a m o t i o n f

o r p a r t i a l

s u m m a r y j u d g m e n t o n d a m a g e s

. U

. S

. B a n k s o u g h t $ 2
, 2 1 5
, 8 7 0

. 0 7
, w h i c h

i n c l u d e d a l l a m o u n t s p r o v i d e d f o r u n d e r t h e l o a n a g r e e m e n t

. O f t h i s s u m , A p p e l l a n t s d i s p u t e d o n l y t h e “ D e f e a s a n c e A m o u n t
, ” w h i c h t o t a l e d $ 7 5 4
, 6 5 6

. 5 9

a n d w h i c h A p p e l l a n t s a r g u e d w a s a n u n e n f o r c e a b l e p e n a l t y

. T h e y f i r s t r a i s e d

t h i s a f f i r m a t i v e d e f e n s e , h o w e v e r , i n t h e i r r e s p o n s e t o U

. S

. B a n k ’ s m o t i o n f o r

s u m m a r y j u d g m e n t o n d a m a g e s

. A p p a r e n t l y r e c o g n i z i n g t h e i r f a i l u r e t o p l e a d

i t e a r l i e r , A p p e l l a n t s a l s o f i l e d a m o t i o n f

o r l e a v e t o a m e n d t h e i r a n s w e r t o

i n c l u d e t h i s d e f

e n s e

.

tra nsf err ed its inte res t in the judgm ent and the guarant y to AMK 2000- A LLC, mak ing it the real par ty in inte res t. For eas e of ref ere nce, how ever, we wi ll cont inue to ref er to “U .S

. Bank ” in this ap pea l.

2 Case: 10-50588 Document: 00511379522 Page: 2 Date Filed: 02/11/2011N o

. 1 0

- 5 0 5 8 8

O n M a y 1 2
, 2 0 1 0
, t h e d i s t r i c t c o u r t d e n i e d A p p e l l a n t s ’ m o t i o n f o r l e a v e t o

a m e n d a n d g r a n t e d U

. S

. B a n k ’ s d a m a g e s m o t i o n , c o n c l u d i n g t h a t A p p e l l a n t s ’

d e f e n s e w a s n o t s u p p o r t e d b y t h e r e l e v a n t a u t h o r i t y a n d t h u s t h a t a m e n d m e n t

w o u l d b e f

u t i l e

. T h e d i s t r i c t c o u r t t h e n e n t e r e d a j u d g m e n t a g a i n s t A p p e l l a n t s

f o r $ 2
, 2 1 5
, 8 7 0

. 0 7
, p l u s p o s t

- j u d g m e n t i n t e r e s t

. O n a p p e a l

, A p p e l l a n t s a r g u e t h a t t h e D e f e a s a n c e A m o u n t i s a n

u n e n f o r c e a b l e p e n a l t y , a n d t h a t t h e d i s t r i c t c o u r t e r r e d i n d e n y i n g t h e i r m o t i o n

f o r l e a v e t o a m e n d

. B e c a u s e w e c o n c l u d e t h a t t h e D e f e a s a n c e A m o u n t i s n o t a n

u n e n f o r c e a b l e p e n a l t y , w e a f f i r m t h e j u d g m e n t o f t h e d i s t r i c t c o u r t

.

I I

. A c c o r d i n g t o t h e p r o m i s s o r y n o t e , t h e b o r r o w e r c o u l d n o t p r e p a y t h e l o a n

u n l e s s t h e b o r r o w e r a l s o p a i d a “ D e f e a s a n c e A m o u n t
, ” w h i c h w o u l d b e

d e t e r m i n e d a c c o r d i n g t o a p r e

- a r r a n g e d f o r m u l a

. T h e p r o m i s s o r y n o t e p r o v i d e d

2

t h a t t h e D e f e a s a n c e A m o u n t w o u l d b e d u e n o t o n l y i n t h e c a s e o f v o l u n t a r y

p r e p a y m e n t
, b u t a l s o i n t h e e v e n t o f a c c e l e r a t i o n d u e t o d e f a u l t

. C o n s e q u e n t l y , 3

A p p e l l a n t s b e c a m e l i a b l e f o r t h a t f e e o n c e A M K d e f a u l t e d o n t h e l o a n

. U

. S

. B a n k c l a i m e d t h a t t h e D e f e a s a n c e A m o u n t f

o l l o w i n g A M K ’ s d e f a u l t t o t a l e d

Sec ti o n 2.5. 2 of the pr om iss ory note st ated

, “The De fea san ce Amo unt sha ll be the 2

amo unt wh ich, wh en add ed to the [ou ts tand ing] Princ ipal Amo unt of the Not e

. . . is suf fic ient
to pur chas e dir ect
, non- call able obligat ions of the Unit ed Sta tes of Ame r i c a ( t h e “ U. S. Ob ligati ons ”) that pr ovide for paym ents pr ior

. . . to the due dat e f o r e ach Regular Mo nthly Payme nt Amo unt or pr incip al paym ent thr ough and inclu ding the Mat urit y Da te, wit h each

suc h payme nt being equal t o o r great er than (1) t he Regular Mo nthly Payme nt Amo unt and (2) wi th res pec t to the paym ent due on the Mat urit y Da te, the enti r e o u t s t a n d i n g Princ ipal Amo unt of this Not e toget her wi th any inte res t acc rued as of suc h dat e and all othe r amo unts payabl e pur sua nt to the Loan Do cum ents

. The De fea san ce Amo unt sha ll inclu de an amo unt suf fic ient to pay all cos ts
, char ges and expe nse s incur red or to be incur red in conne cti on wi th the pur chas e o f the U. S. O bligat ions .”

Sec tio n 2.5. 3 pr ovide s, “The De fea san ce Amo unt sha ll app ly not only in the cas e o f 3 volunt ary pr epa ymen t, but als o in the event t hat this Not e beco me s due and payabl e in full in the event of

ac cele rat ion by r eas on of the occ urr ence of a De faul t Event or othe rw ise .”

3 Case: 10-50588 Document: 00511379522 Page: 3 Date Filed: 02/11/2011N o

. 1 0

- 5 0 5 8 8

$ 7 5 4
, 6 5 6

. 5 9
, w h i c h t h e c o u r t a w a r d e d

. A p p e l l a n t s a r g u e o n a p p e a l t h a t t h i s 4

a m o u n t i s “ e x c e s s i v e a n d u n r e a s o n a b l e a n d s h o c k i n g , ” a n d t h a t t h e f e e s h o u l d

t h u s b e c o n s t r u e d a s a n “ u n e n f o r c e a b l e p e n a l t y ” u n d e r T e x a s l a w

. A p p e l l a n t s 5

a r e m i s t a k e n

.

“ U n d e r T e x a s l a w , a b o r r o w e r h a s n o r i g h t t o p r e p a y a l o a n i n t h e a b s e n c e

o f t h e c o n t r a c t p e r m i t t i n g i t

. ” P a r k e r P l a z a W

. P a r t n e r s v

. U N U M P e n s i o n &

I n s

. C o

. , 9 4 1 F

. 2 d 3 4 9
, 3 5 2 ( 5 t h C i r

. 1 9 9 1 ) ; G r o s e c l o s e v

. R u m , 8 6 0 S

. W

. 2 d 5 5 4
,
5 5 7 ( T e x

. A p p

. 1 9 9 3 ) ( s a m e )

. H e r e , t h e p r o m i s s o r y n o t e p r o v i d e d A M K t h e r i g h t

t o p r e p a y t h e l o a n c o n d i t i o n e d u p o n p a y m e n t o f w h a t e s s e n t i a l l y a m o u n t s t o a

p r e p a y m e n t p e n a l t y

. S e e 1 3 T E X

. J U R

. 3 D C o n s u m e r & B o r r o w e r P r o t e c t i o n § 5 6
( 2 0 1 0 ) ( “ A p r e p a y m e n t p e n a l t y i s a p a y m e n t o r c o n s i d e r a t i o n f o r t h e o p t i o n o r

p r i v i l e g e o f p a y i n g o f f a l o a n e a r l y

. ” )

. S u c h p e n a l t i e s a r e e x p l i c i t l y a u t h o r i z e d

b y T e x a s s t a t u t e a n d a r e v a l i d “ w h e t h e r p a y a b l e i n t h e e v e n t o f v o l u n t a r y

p r e p a y m e n t
, i n v o l u n t a r y p r e p a y m e n t
, a c c e l e r a t i o n o f m a t u r i t y , o r o t h e r c a u s e

t h a t i n v o l v e s p r e m a t u r e t e r m i n a t i o n o f t h e l o a n

. ” S e e T E X

. F I N

. C O D E A N N

. § 3 0 6

. 0 0 5 ( W e s t 2 0 0 6 ) ; s e e a l s o P a r k e r P l a z a , 9 4 1 F

. 2 d a t 3 5 6 ( “ T e x a s p u b l i c

p o l i c y i s n o t v i o l a t e d s o l e l y b e c a u s e a p r e p a y m e n t p r e m i u m r e s u l t s f r o m l e n d e r

a c c e l e r a t i o n

. ” )

.

The App ellant s objec t to the aff idavit upon wh ich this figur e is bas ed. They clai m 4 that the affid avit is “conc lus ionar y [s ic] ” and pr ovide s “no explanat ion as to the reas oning or

me thod ology expla ining how the purpo rte d [D efe asa nce Amount] wa s calculat ed. ” While we agree the aff

idavit pr ovide s no expla natio n as to how it arr ived at the De fea san ce Amo unt, the App ellant s never sub mi tte d pr oof –or even clai m–t hat the tot al is inco rre ct. In fac t, Sec tio n 2.5. 4 of the Not e pr ovide s that t h e L e n d e r’s det erm inati on of the De fea san ce Amo unt is “bind ing and conc lus ive” on the par tie s “[ a]bs ent mat eria l and man ife st err or. ” Cons equent ly,

once U. S. Bank sub mi t t e d the aff idavit in ques tio n, the burd en shi ft ed to the App ellant s to
pr ovide c om pet ent sum mar y jud gmen t evide nce es tabl ish ing the exis tenc e of a genuine fac t iss ue. See Ma tsushi ta Ele c. Indus. Co. v. Zeni th Radi o Corp

. , 475 U. S. 574, 586- 87, 106 S. Ct. 1348, 1356 (198 6). Sinc e they pr ovide d no suc h evide nce, we acc ept U. S. Bank ’s ass ert ion that the De fea san ce Amo unt equals $75 4,65 6.59

.

The par tie s agree Texas sub st antive law governs t h is diver sit y sui t. See Eri e R.R

. 5 Co. v. T om pki ns , 304 U. S. 64, 58 S. Ct. 817 ( 1938)

.

4 Case: 10-50588 Document: 00511379522 Page: 4 Date Filed: 02/11/2011N o

. 1 0

- 5 0 5 8 8

I m p o r t a n t l y , T e x a s l a w d o e s n o t s t a t e t h a t a g r e e d

- u p o n p r e p a y m e n t

p e n a l t i e s a r e s u b j e c t t o a “ r e a s o n a b l e n e s s ” t e s t

. S e e , e

. g

. , T E X

. F I N

. C O D E A N N

. § 3 0 6

. 0 0 5 ( “ A c r e d i t o r a n d a n o b l i g o r m a y a g r e e t o a p r e p a y m e n t p r e m i u m ,

m a k e

- w h o l e p r e m i u m , o r s i m i l a r f e e o r c h a r g e

. ” ) ; B e a r d e n v

. T a r r a n t S a v

. A s s ’

n ,
6 4 3 S

. W

. 2 d 2 4 7
, 2 4 9 ( T e x

. A p p

. 1 9 8 2 ) ( f i n d i n g , u n d e r T e x a s l a w , n o r e q u i r e m e n t

f o r p r e p a y m e n t p e n a l t y t o b e r e a s o n a b l e )

. N o r d o w e f i n d e v i d e n c e t h a t T e x a s

c o u r t s a p p l y t h e r u l e s g o v e r n i n g l i q u i d a t e d d a m a g e s c l a u s e s t o i n v a l i d a t e

p r e p a y m e n t p e n a l t i e s u n d e r c o m m e r c i a l l o a n a g r e e m e n t s

. C o n s e q u e n t l y , A p p e l l a n t s ’ c h a l l e n g e t o t h e p r e p a y m e n t p e n a l t y i s m e r i t l e s s

. 6

T h e d i s t r i c t c o u r t t h u s p r o p e r l y d e n i e d A p p e l l a n t s ’ m o t i o n t o a m e n d

b e c a u s e a m e n d m e n t w o u l d h a v e b e e n f u t i l e

. S e e A v a t a r E x p l o r a t i o n , I

n c

. v

. C h e v r o n , U

. S

. A

. , I

n c

. , 9 3 3 F

. 2 d 3 1 4
, 3 2 1 ( 5 t h C i r

. 1 9 9 1 )

. T h e c o u r t a l s o c o r r e c t l y

c a l c u l a t e d d a m a g e s t o i n c l u d e t h e D e f e a s a n c e A m o u n t

. A F F I R M E D

.

App ellant s briefl y me ntio n in thei r brie f that the De fea san ce Amo unt “f ar excee d[ s] 6

a legal inte res t rat e.” While this sugges ts that App ellant s chall enge the De fea san ce Amo unt als o on ground s of usur y, the brie f doe s not me ntio n usur y in eit her its st atem ent of iss ues or its sum mar y of argum ent, nor doe s the brie f cit e autho rit y on the sub ject

. In f a c t
, the

sum mar y of argum ent a d v e r t s only to the argum ent that the De fea san ce Amo unt “c ons tit ute[ s] an unenf orc eable pena lty. ” Cons equent ly, any usur y argum ents have been

wa ived on app eal, and thus do not cons ide r them

. Sande rs v. Unum Lif e Ins. Co. of Am.

, 553 F

. 3 d 922, 926 (5t h Cir. 2008) (“ A par ty wa ives an iss ue if he fai ls to ade quate ly brie f i t o n app eal. ”) ( inte rnal quot atio n m ark s and cit atio n o mi tte d)

.

5 Case: 10-50588 Document: 00511379522 Page: 5 Date Filed: 02/11/2011