IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

SUNDANCE, LLC, et al., )

 )

Plaintiffs, )

 )

v. ) CIVIL ACTION 14-0115-WS-C

 )

SE PROPERTY HOLDINGS, LLC, )

 )

Defendant. )

 ORDER

This matter is before the Court on the defendant’s motion for summary 

judgment as to its counterclaim. (Doc. 61). The parties have filed briefs and 

evidentiary materials in support of their respective positions, (Docs. 62, 63, 71-

73), and the motion is ripe for resolution.1 After careful consideration, the Court 

concludes the motion is due to be denied.

BACKGROUND

The defendant’s predecessor (“Vision”) loaned plaintiff Sundance, LLC 

(“Sundance”) the principal sum of $3 million, secured by a mortgage on certain 

townhomes in which Sundance had an interest. The three individual plaintiffs2

 1 Three plaintiffs jointly filed a 25-page brief in opposition. The fourth plaintiff 

filed a separate 25-page brief that appears to be a verbatim repeat. The point of this 

exercise is obscure, since the same effect could have been obtained with a one-sentence 

brief by either plaintiff that simply adopted the other brief. To the uncertain extent either 

brief may have some non-identical verbiage hidden somewhere within, the plaintiffs’ 

failure to point out such variation means they bear responsibility for it not being 

considered by the Court. See, e.g., Smith v. Secretary, Department of Corrections, 572 

F.3d 1327, 1352 (11th Cir. 2009) (“Judges are not like pigs, hunting for truffles buried in 

briefs.”) (internal quotes omitted). 

2 There is a fourth, but he has filed for bankruptcy, and the defendant’s motion 

does not extend to him. (Doc. 61 at 1 n.1).

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executed guaranties of the indebtedness. Litigation in this Court over the 

indebtedness resulted in a settlement, pursuant to the terms of which the plaintiffs 

agreed not to resist foreclosure against the collateral and further agreed to pay 

approximately $856,000 over time. The parties’ settlement is evidenced by an 

agreement (“the Settlement Agreement”) and a note (“the Settlement Note”). 

Seven of the townhome units serving as collateral had been constructed 

using Chinese drywall, and Sundance was a party to a class action lawsuit over 

Chinese drywall. Under the Settlement Agreement, Sundance assigned the 

“proceeds” of these claims to Vision, which proceeds would be applied as a credit 

against the balance owing under the Settlement Agreement.

Sundance executed a deed in lieu of foreclosure in favor of the defendant. 

The defendant thereafter sold to third parties the seven units containing Chinese 

drywall. The class action then settled, on terms that provided for remediation of 

affected properties but no cash payments. 

The plaintiffs filed this action, asserting that the defendant breached the 

Settlement Agreement and Settlement Note by selling the seven units (at 

substantially reduced prices) without first obtaining remediation pursuant to the 

Chinese drywall litigation. The defendant moved for summary judgment on the 

grounds that remediation did not constitute “proceeds” under the Settlement 

Agreement. (Doc. 36). The Court agreed, ruling that “proceeds” are limited to 

money and thus granting summary judgment to the defendant on the plaintiffs’ 

single claim. (Docs. 51, 52).

Meanwhile, the defendant filed a counterclaim against the plaintiffs for 

breach of contract. (Doc. 10). The counterclaim alleges that the plaintiffs are in 

breach of both the Settlement Agreement and the Settlement Note. The 

counterclaim asserts that both documents “contain attorney’s fee provisions,” and 

it demands “the attorney’s fees it will accrue in enforcing the Settlement Note 

and/or collecting or attempting to collect on the Settlement Note.” (Id. at 12). In 

its briefing, the defendant clarifies that the fees it seeks to recover are those it 

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incurred “[a]s a result of Plaintiff’s position and filing” in this lawsuit. (Doc. 62 at 

6). 

DISCUSSION

Summary judgment should be granted only if “there is no genuine dispute 

as to any material fact and the movant is entitled to judgment as a matter of law.” 

Fed. R. Civ. P. 56(a). The party seeking summary judgment bears “the initial 

burden to show the district court, by reference to materials on file, that there are no 

genuine issues of material fact that should be decided at trial.” Clark v. Coats & 

Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The moving party may meet its 

burden in either of two ways: (1) by “negating an element of the non-moving 

party’s claim”; or (2) by “point[ing] to materials on file that demonstrate that the

party bearing the burden of proof at trial will not be able to meet that burden.” Id. 

“Even after Celotex it is never enough simply to state that the non-moving party 

cannot meet its burden at trial.” Id.; accord Mullins v. Crowell, 228 F.3d 1305, 

1313 (11th Cir. 2000); Sammons v. Taylor, 967 F.2d 1533, 1538 (11th Cir. 1992). 

“When the moving party has the burden of proof at trial, that party must 

show affirmatively the absence of a genuine issue of material fact: it must support 

its motion with credible evidence ... that would entitle it to a directed verdict if not 

controverted at trial. [citation omitted] In other words, the moving party must 

show that, on all the essential elements of its case on which it bears the burden of 

proof, no reasonable jury could find for the nonmoving party.” United States v. 

Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 1991) (en banc) 

(emphasis in original); accord Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 

(11th Cir. 1993).

“If the party moving for summary judgment fails to discharge the initial 

burden, then the motion must be denied and the court need not consider what, if 

any, showing the non-movant has made.” Fitzpatrick, 2 F.3d at 1116; accord 

Mullins, 228 F.3d at 1313; Clark, 929 F.2d at 608. 

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“If, however, the movant carries the initial summary judgment burden ..., 

the responsibility then devolves upon the non-movant to show the existence of a 

genuine issue of material fact.” Fitzpatrick, 2 F.3d at 1116. “If the nonmoving 

party fails to make ‘a sufficient showing on an essential element of her case with 

respect to which she has the burden of proof,’ the moving party is entitled to 

summary judgment.” Clark, 929 F.2d at 608 (quoting Celotex Corp. v. Catrett, 

477 U.S. 317 (1986)) (footnote omitted); see also Fed. R. Civ. P. 56(e)(2) (“If a 

party fails to properly support an assertion of fact or fails to properly address 

another party’s assertion of fact as required by Rule 56(c), the court may ... 

consider the fact undisputed for purposes of the motion ....”).

In deciding a motion for summary judgment, “[t]he evidence, and all 

reasonable inferences, must be viewed in the light most favorable to the 

nonmovant ....” McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1243 

(11th Cir. 2003).

There is no burden on the Court to identify unreferenced evidence 

supporting a party’s position.3 Accordingly, the Court limits its review to the 

exhibits, and to the specific portions of the exhibits, to which the parties have 

expressly cited. Likewise, “[t]here is no burden upon the district court to distill 

every potential argument that could be made based upon the materials before it on 

summary judgment,” Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 599 

(11th Cir. 1995), and the Court accordingly limits its review to those arguments the 

parties have expressly advanced.

The parties agree that the threshold question is whether the attorney’s fee 

provision under the Settlement Agreement and/or the Settlement Note extends to 

the attorney’s fees the defendant incurred in this action. Both documents are 

 3 Fed. R. Civ. P. 56(c)(3) (“The court need consider only the cited materials, but it 

may consider other materials in the record.”); accord Adler v. Wal-Mart Stores, Inc., 144 

F.3d 664, 672 (10th Cir. 1998) (“The district court has discretion to go beyond the 

referenced portions of these [summary judgment] materials, but is not required to do 

so.”). 

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governed by Alabama law. (Doc. 44-3 at 3; Doc. 1-1 at 47). The Court in its 

order granting the defendant’s previous motion for summary judgment outlined 

some of the pertinent rules:

The “threshold issue” is “whether the contract is ambiguous.” 

Certain Underwriters at Lloyd’s, London v. Southern Natural Gas 

Co., 142 So. 3d 436, 453 (Ala. 2013) (internal quotes omitted). 

[footnote omitted] “If the trial court determines that there is no 

ambiguity, it must determine the force and effect of the terms of 

the contract as a matter of law.” Id. (internal quotes omitted). If 

the Court determines that the contract is ambiguous, “it must employ 

established rules of contract construction to resolve the ambiguity.” 

Id. at 454 (internal quotes omitted). Only “[i]f the application of 

such rules is not sufficient to resolve the ambiguity [do] factual 

issues arise.” Id. (internal quotes omitted).

“The issue whether a contract is ambiguous or unambiguous 

is a question of law for a court to decide.” American Resources 

Insurance Co. v. H & H Stephens Construction, Inc., 939 So. 2d 868, 

873 (Ala. 2006) (internal quotes omitted). “A contractual provision is 

ambiguous if it is reasonably susceptible of more than one meaning.” 

Doster Construction Co. v. Marathon Electrical Contractors, Inc., 32 

So. 3d 1277, 1283 (Ala. 2009) (internal quotes omitted). Conversely, 

“terms are unambiguous [when they are] susceptible of only one 

reasonable meaning.” Id. (internal quotes omitted).

(Doc. 51 at 4-5).

The Settlement Agreement says the following about attorney’s fees:

3. Attorney’s Fees. Sundance and the Guarantors 

agree that Vision may add to the amount due and owing under 

the Note accrued and earned attorney’s fees incurred in the [prior] 

District Court Case and the Bankruptcy Case in the approximate 

amount of $150,000.00. The parties agree that additional attorney’s 

fees will accrue in completing this settlement, conducting the judicial 

foreclosure in Florida, and concluding the [prior] District Court Case 

and the Bankruptcy Case. The parties agree that these additional fees 

will added [sic] to the Settlement Note described in Section 5 

and will be reasonable and not substantial. 

(Doc. 44-3 at 2).

Although the counterclaim invokes this provision, and although the 

defendant quotes the provision in its principal brief, (Doc. 62 at 4), it makes no 

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effort to demonstrate that the provision has any applicability to the present 

situation. The Court agrees with the plaintiffs that the provision unambiguously 

permits payment of only those attorney’s fees specified therein, all of which were 

incurred prior to the initiation of this litigation. As a matter of law, the defendant 

cannot recover the attorney’s fees it seeks in this action pursuant to this provision. 

The Settlement Note addresses attorney’s fees in this fashion:

5. Attorney Fees. Borrower and each endorser or guarantor 

of this Note agree to pay reasonable attorneys’ fees and costs incurred 

by the Holder hereof in collecting or attempting to collect this Note, 

whether by suit or otherwise. 

(Doc. 1-1 at 47). The critical issue, as the parties recognize, is whether the fees 

incurred in defending this lawsuit were incurred “in collecting or attempting to 

collect this Note.”

Despite the centrality of the issue, the defendant offers no analysis of it. 

Instead, it simply asserts that it was forced to incur attorney’s fees “in requiring 

the Counter-Defendants to abide by the terms of the Settlement Agreement and in 

enforcing SEPH’s right to payment under the Settlement Note.” (Doc. 62 at 7). 

But the question is whether such conduct constitutes “collecting or attempting to 

collect this Note” within the contemplation of the attorney’s fee provision. The 

defendant engages in no analysis of the phrase, proposes no construction of it, 

identifies no dictionary or other definitions of the words used, cites no cases

interpreting the phrase or applying it to a situation like the present one, and makes 

no other effort to carry its burden of showing that the phrase must be construed in 

its favor.

After the plaintiffs pointed out the inadequacy of the defendant’s treatment, 

the defendant in its reply argued that, had the plaintiffs’ suit been successful, it 

would have resulted in the extinguishment of their obligations under the 

Settlement Note (due to the credit they would receive from the remediation 

“proceeds”). (Doc. 73 at 3). Being first raised in a reply brief, the argument 

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comes too late to be considered.4 But even had it been timely raised, it would not 

rescue the defendant, because it fails to demonstrate that “collecting or attempting 

to collect this Note” reaches not only offensive acts (such as filing suit to force 

payment) but also defensive acts (such as resisting legal challenges to the 

obligation to pay).

In short, the defendant has failed to show either that the key phrase, 

“collecting or attempting to collect this Note,” unambiguously applies to 

defending this lawsuit or that, under Alabama rules of contract interpretation 

(which it ignores), any ambiguity should be resolved in its favor. 

CONCLUSION

For the reasons set forth above, the defendant’s motion for summary 

judgment is denied.

DONE and ORDERED this 8th day of May, 2015.

s/ WILLIAM H. STEELE

CHIEF UNITED STATES DISTRICT JUDGE

 4 “District courts, including this one, ordinarily do not consider arguments raised 

for the first time on reply.” Gross-Jones v. Mercy Medical, 874 F. Supp. 2d 1319, 1330 

n.8 (S.D. Ala. 2012) (citing cases and explaining rationale). The defendant offers, and 

the Court detects, no reason not to apply the general rule. 

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