Opinion ID: 170364
Heading Depth: 3
Heading Rank: 1

Heading: Prior Expenses

Text: Mr. Weiss and Vernal Properties were responsible for receiving and disbursing the loan proceeds for the real estate development project in Stuttgart, Germany. Mr. Weiss prepared an itemized accounting of the receipt and disbursement of the funds for the project. That accounting reflects that Mr. Weiss used loan proceeds to reimburse himself for $16,814.52 of expenses that he incurred between September and December 2004. Mr. Hirsch argues that Mr. Weiss personally received a benefit from these loan funds because these expenses were incurred prior to December 15, 2004, the date they entered into the loan agreement. In support of his argument, Mr. Hirsch points to language in the loan agreement, which states that the Borrowers “need additional operating capital.” Aplt Br. at 12 (quoting Aplt. App. at 88). He argues that the plain meaning of “additional” in this context is to cover “future” expenses, and that this was his understanding when he entered into the loan agreement. The district court concluded that “[t]he simple and unambiguous meaning of the Loan Agreement is that [the Borrowers] were adding to the money they needed to do -5- the project, i.e., they needed more money to do the project. It has no reference to the date any particular project obligation was incurred.” Aplt. App. at 114. Moreover, in order to defeat summary judgment, Mr. Hirsch needed to provide evidence that these previously incurred expenses were not project expenses, but were for Mr. Weiss’ personal benefit. Mr. Hirsch has provided no evidence of this. The simple fact that Mr. Weiss incurred expenses prior to the execution of the loan agreement does not give rise to an inference that those expenses were for his personal benefit. In an attempt to further support his argument that these previously incurred expenses were for Mr. Weiss’ personal benefit, Mr. Hirsch contends that Mr. Weiss failed to get authorization from the lender’s representative for these expenses as contemplated by the loan agreement. Again, any alleged failure by Mr. Weiss to get authorization for these expenses does not give rise to an inference that these funds were therefore used for his personal benefit. According to Mr. Hirsch’s affidavit, Mr. Weiss did not get authorization for “any” of the disbursements of the loan proceeds, see Aplt. App. at 101 ¶10, yet Mr. Hirsch did not argue that all of the loan proceeds were disbursed for Mr. Weiss’ personal benefit. Mr. Hirsch has not provided evidence as to how any alleged failure to get authorization for these previously incurred expenses establishes that they were used for Mr. Weiss’ benefit. Finally, it is not clear why Mr. Hirsch is even complaining about this issue on appeal because the district court deducted these -6- prior expenses, which totaled $16,814.52, from Mr. Hirsch’s one-third share of the debt.