Court Opinion

ID: 2802732
Source: CourtListenerOpinion
Date Created: 2015-05-21 19:03:53.659833+00
Date Added: 2024-06-11T11:44:04.640840
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                              No. 13-2467

CRESCOM BANK, successor by merger to Community FirstBank,

                Plaintiff – Appellee,

          v.

EDWARD L. TERRY,

                Defendant – Appellant,

          and

HARRIS STREET LLC, now known as CCT Reserve LLC; SUGARLOAF
MARKETPLACE LLC; CCT RESERVE LLC,

                Defendants.

                              No. 13-2549

CRESCOM BANK, successor by merger to Community FirstBank,

                Plaintiff – Appellant,

          v.

EDWARD L. TERRY,

                Defendant – Appellee,

          and

HARRIS STREET LLC, now known as CCT Reserve LLC; SUGARLOAF
MARKETPLACE LLC; CCT RESERVE LLC,

                Defendants.
Appeals from the United States District Court for the District
of South Carolina, at Charleston. Patrick Michael Duffy, Senior
District Judge. (2:12-cv-00063-PMD)

Argued:   January 27, 2015                 Decided:   May 21, 2015

Before MOTZ and DIAZ, Circuit Judges, and DAVIS, Senior Circuit
Judge.

Affirmed in part, vacated in part, reversed in part, and
remanded by unpublished opinion. Judge Diaz wrote the opinion,
in which Judge Motz and Senior Judge Davis joined.

ARGUED: Daniel Francis Blanchard, III, ROSEN, ROSEN & HAGOOD,
LLC, Charleston, South Carolina, for Appellant/Cross-Appellee.
Meredith Long Coker, ALTMAN & COKER, LLC, Charleston, South
Carolina, for Appellee/Cross-Appellant.  ON BRIEF: Richard S.
Rosen, ROSEN, ROSEN & HAGOOD, LLC, Charleston, South Carolina,
for Appellant/Cross-Appellee.    Charles S. Altman, ALTMAN &
COKER, LLC, Charleston, South Carolina, for Appellee/Cross-
Appellant.

Unpublished opinions are not binding precedent in this circuit.

                                2
DIAZ, Circuit Judge:

       CresCom Bank brought suit in the district court to enforce

four promissory notes against borrower CCT Reserve, LLC, and to

enforce   guaranty    agreements    executed   by   CCT   Reserve’s     sole

member, Edward L. Terry.          After CresCom’s claims against CCT

were resolved in CCT’s bankruptcy proceedings, CresCom and Terry

each moved for summary judgment on the guaranty agreements.              The

district court substantially granted CresCom’s motion, finding

Terry liable under the agreements and awarding CresCom damages

of $2,171,211.04.     However, the district court denied CresCom’s

motion with respect to attorney’s fees, agreeing with Terry that

CresCom could not recover those fees because it did not give

adequate notice of its intent to seek them under Georgia law.

       Terry appeals the district court’s ruling on liability and

its calculation of damages, and CresCom has cross-appealed on

the issue of attorney’s fees.        For the reasons that follow, we

substantially   affirm   the   district    court’s    grant   of   summary

judgment to CresCom but vacate its award of late fees on the

full    outstanding   principal    and   reverse    its   denial   of   the

attorney’s fees CresCom incurred in CCT’s bankruptcy.

                                    I.

       Although the basic facts of this case are not in dispute,

we view them in the light most favorable to Terry as the non-

                                     3
prevailing party below, and resolve any factual ambiguities in

his favor.      White v. BFI Waste Servs., LLC, 375 F.3d 288, 294

(4th Cir. 2004).        Terry, a citizen of Florida, is a developer

who   maintains   his    office   in    Georgia     and    has   undertaken      real

estate projects throughout the Southeast.                  Between February and

October 2006, CresCom 1 made three loans to Terry’s wholly owned

corporation, CCT Reserve, LLC, 2 for real estate developments in

South     Carolina.     The   financing     was    extended      in   exchange    for

promissory     notes    and   mortgages     in    favor    of    CresCom   on     the

properties being developed.

      On    February    1,    CresCom     loaned     CCT    $1,275,000      for    a

development called the “Maybank Tract,” and CCT delivered Note

No. 145002622 (“Note 2622”) to CresCom.                   On April 12, CresCom

loaned CCT $841,260 for another development called the “Baker

Tract,” and CCT delivered Note No. 145002718 (“Note 2718”) to

CresCom.     Finally,    on    October      25,    CresCom       loaned    CCT     an

additional $881,250 for a development called the “Parker Tract,”

      1
       CresCom was at the time doing business as Community
FirstBank.   In 2011, Community FirstBank merged with Crescent
Bank to create CresCom Bank, a South Carolina entity with twelve
locations in the state.
      2
       At the time the loans were extended in 2006, Terry’s
wholly owned corporations were known as Harris Street LLC and
Sugarloaf Marketplace LLC. In 2011, Harris Street and Sugarloaf
Marketplace merged into CCT, with CCT as the surviving entity.
We refer to Terry’s businesses collectively as CCT.

                                        4
and CCT delivered Note No. 145002911 (“Note 2911”) to CresCom.

All three loans were “interest only,” meaning that CCT was only

required to pay the monthly interest on the loans until they

reached maturity.

        In addition to executing the notes and mortgages on behalf

of CCT, Terry also guaranteed all three loans in his personal

capacity.       He signed the notes, loan agreements, mortgages, and

guaranty agreements at his office in Georgia and mailed them to

CresCom’s office in South Carolina.

      After     CCT    renewed    the    loans      several   times,    the     final

maturity date for all three notes was July 25, 2009.                         In early

2009,    with   maturity    approaching,       CCT    began   having    difficulty

making its monthly interest payments.                   To avoid default, the

parties executed a Commitment Letter in June 2009 under which

CresCom agreed to loan CCT an additional $750,000 to help CCT

pay the interest on the earlier loans, as well as property taxes

and   other     expenses   related      to    the   real   estate    securing       the

loans.      In exchange, the Commitment Letter required that the

earlier loans be amended to include cross-collateralization and

cross-default provisions, providing that in the event of CCT’s

default on any of the notes, CresCom “at its option and [with]

ten (10) days written notice may declare all of the loans in

default.”       J.A.    265–70,   ¶ 9.        The    Commitment     Letter    was    to

survive the closing of the new $750,000 loan and become binding

                                          5
together with the other loan documents.                        Id. ¶ 26.         Terry signed

the Letter as CCT’s representative and in his personal capacity

as guarantor.

       On       June     25,    2009,     pursuant        to   the   Commitment         Letter,

CresCom loaned CCT $750,000 and CCT delivered to CresCom Note

No. 145003572 (“Note 3572”), with a maturity date of June 18,

2011. 3         As with the earlier loans, Note 3572 was secured by a

mortgage         in    favor    of   CresCom     on   CCT’s     real    estate      in    South

Carolina and was also personally guaranteed by Terry.

       The parties memorialized their new agreement in a written

contract titled “Amendment to Loan Agreements and Mortgages to

Provide for Cross-Default” (the “Loan Amendment”).                                     The Loan

Amendment provided that if CresCom “determines to exercise its

rights          [under    the    cross-default            provision]        it   shall     give

Borrowers no less than ten (10) days written notice from the

date       of    the     receipt     of    the    notice       to    cure    default,”      and

specified         that    notice     be   given      by    certified    mail      or    another

method that provides proof of delivery.                         J.A. 310–12.           The Loan

       3
        The parties also signed a written addendum to the
Commitment Letter stating that the maturity dates for the first
three loans would be extended to coincide with Note 3572’s
maturity date of June 18, 2011, and reinforcing the cross-
default and cross-collateralization provisions.   On August 19,
2009, the parties formally executed loan modification agreements
to that effect.

                                                 6
Amendment was signed by Terry only in his capacity as CCT’s

representative, and not in his personal capacity.

     Four days before the loans were scheduled to mature, on

June 14, 2011, CresCom sent letters to CCT and its predecessors

to inform them that full payment would be due on the notes on

June 18, 2011, and that there would be no further forbearance or

other   arrangements.            The    letters         were    sent    by       regular    and

certified mail to a number of addresses CresCom had on file for

the Borrowers, although none were the Marietta, Georgia address

specified in the Loan Amendment.                   Neither CCT nor Terry paid the

debt and on June 18, 2011, the principal of all four loans

remained outstanding.

     After CCT and Terry failed to pay the debt, CresCom filed a

complaint    in   the    district       court       seeking     to     enforce      the    four

notes against CCT and the guaranty agreements against Terry.

Terry answered and filed a motion to dismiss, which the district

court denied.

     While    this      action    was     pending,        CCT       filed    a    Chapter    11

Petition in the U.S. Bankruptcy Court for the Northern District

of   Georgia.           CresCom        participated            in     CCT’s       bankruptcy

proceedings as a creditor and the bankruptcy court ultimately

ordered    that   the     properties       securing        CCT’s       loans       be   deeded

directly     to   CresCom.             After       an    evidentiary         hearing,       the

bankruptcy court issued an order establishing the value of those

                                               7
properties      and     crediting      that     value,    $2,551,000,          against      the

principal owed on the loans.                    CCT conveyed the properties to

CresCom and at the conclusion of the proceedings, the bankruptcy

court    found    that       the    remaining     value    of     CresCom’s       unsecured

claim    against       CCT    was     $1,121,029,        based    on     the     amount         of

principal remaining outstanding.                    CresCom did not appeal the

bankruptcy court’s rulings.

      Following a period of discovery, CresCom and Terry filed

cross-motions for summary judgment in the case at bar.                                CresCom

argued that Terry breached the guaranty agreements by failing to

pay the outstanding balance on the notes after CCT defaulted,

and sought a judgment of $2,142,861.25 in principal, interest,

and   late    fees,     plus       attorney’s     fees    and    continuing          per   diem

interest against Terry.              In Terry’s motion for summary judgment,

he    claimed     that        (1)    his   obligations           under     the       guaranty

agreements       were    discharged        because       CresCom       failed        to    give

written notice of default and an opportunity to cure the default

as required by the parties’ contracts, (2) CresCom could not

collect attorney’s fees because it failed to give notice and an

opportunity to cure as required under Georgia law, and that in

any   event,     (3)    his    liability      was   capped       at    $1,121,029          as    a

result of the bankruptcy court’s order.

        The   district       court    granted     CresCom’s       motion       for    summary

judgment on liability, finding that the guaranty agreements were

                                              8
valid and enforceable against Terry.                    It also held that the

bankruptcy court’s determination of the value of CresCom’s claim

in   CCT’s    bankruptcy    did     not       discharge    Terry’s       independent

obligation to guarantee the full amount of CresCom’s debt.

     However,     the   district    court       denied    CresCom’s      motion   and

granted Terry’s motion on the issue of attorney’s fees.                           The

court   found    that   because     Georgia       law     governs    the    guaranty

agreements, CresCom’s failure to provide notice of its intent to

seek attorney’s fees as required under Ga. Code Ann. § 13-1-

11(a)(3) bars it from collecting any attorney’s fees from Terry.

     After      ordering   supplemental          briefing     on    damages,      the

district     court   awarded      CresCom      $2,171,211.04        in     principal,

interest, and fees (after subtracting the value of the conveyed

properties).     This appeal followed.

                                      II.

     Terry raises a number of arguments on appeal that can be

distilled into two primary issues:               first, whether the district

court erroneously granted summary judgment to CresCom on the

issue of Terry’s liability under the guaranty agreements; and

second, whether the district court erred in its calculation of

damages.     Additionally, we consider CresCom’s contention that

the district court erred by applying Georgia law to the guaranty

                                          9
agreements          and   thus    refusing    to    award    any    attorney’s       fees

incurred by CresCom.

       We review the district court’s award of summary judgment de

novo, applying the same legal standards as the district court

did.      Motor Club of Am. Ins. Co. v. Hanifi, 145 F.3d 170, 174

(4th Cir. 1998).            Summary judgment is appropriate only if there

is   no    genuine        dispute    of   material    fact    and    the    movant    is

entitled to judgment as a matter of law.                    Fed. R. Civ. P. 56(a);

Anderson       v.    Liberty     Lobby,   Inc.,     477   U.S.     242,    247   (1986).

Neither party argues that there are material facts in dispute in

this case, and we therefore review each of the district court’s

legal conclusions de novo.

                                             A.

       We first consider Terry’s claim that the district court

erred     by   finding      him     liable    to   CresCom    under       the    guaranty

agreements he signed in connection with Notes 2622, 2718, 2911,

and 3572.           Terry maintains that under the parties’ June 2009

Commitment      Letter,      Addendum,       and   Loan   Amendment,       CresCom    was

required to provide him, as guarantor, with ten days’ written

notice and an opportunity to cure before declaring any of the

loans in default.            Citing Georgia law for the proposition that

breach of a contractual notice of default provision discharges a

party’s contractual obligations, he argues that he is not liable

                                             10
to CresCom because CresCom failed to give proper notice.                     We

disagree.

     Under Georgia law, 4 the enforcement of unambiguous terms in

a guaranty agreement presents an issue appropriate for summary

judgment.        Cong. Fin. Corp. v. Commercial Tech., Inc., 910 F.

Supp. 637, 641 (N.D. Ga. 1995).                   Georgia courts have readily

enforced unambiguous guaranty agreements, noting that competent

parties may “choose, insert, and agree to whatever provisions

they desire in a contract,” provided they do not contravene the

law or public policy.          Core LaVista, LLC v. Cumming, 709 S.E.2d

336, 341 (Ga. Ct. App. 2011) (quoting Brookside Cmtys., LLC v.

Lake Dow N. Corp., 603 S.E.2d 31, 33 (Ga. Ct. App. 2004)).

Georgia     law    thus   recognizes        the    enforceability   of   blanket

waivers of defenses in guaranty agreements.                  See Branch Banking

& Trust Co. v. Envtl. Tech., Inc., No. 5:12-CV-115, 2013 WL

4505884,    at    *9   (M.D.   Ga.   Aug.    22,    2013).    Although   Georgia

courts have held that notice of default provisions in contracts

must be strictly followed, In re Colony Square Co., 843 F.2d

    4
       As explained infra in Part II.C., we agree with the
district court’s conclusion that Georgia law applies to the
guaranty agreements between Terry and CresCom because we
construe their ambiguous choice of law provisions against the
drafter, CresCom. However, because most of the other agreements
between CresCom and CCT (including the Commitment Letter and all
of the loan agreements) contained explicit choice of law
provisions selecting South Carolina law, South Carolina law
governs all other documents referenced herein.

                                        11
479, 481 (11th Cir. 1988), they have not held that failure to

give proper notice discharges independent agreements with non-

parties, including guarantors.

       As the district court observed, the guaranty agreements in

this case are absolute and relatively unambiguous.                      They provide

that the signatory (Terry, in his personal capacity) “hereby

absolutely and unconditionally guarantees to Lender the full and

prompt    payment   when     due,    whether   at    maturity      or    earlier   by

reason of acceleration or otherwise, of the debts, liabilities

and obligations” of the notes guaranteed.                    J.A. 74 (emphasis

added).    They further state that the guarantor “acknowledges and

agrees    with   Lender”     that    “[n]o   act    or    thing    need    occur    to

establish the liability of the Undersigned hereunder, and no act

or thing, except full payment and discharge of all indebtedness,

shall in any way exonerate the Undersigned.”                       J.A. 74.        The

guaranty     agreements       also     specifically        provide        that     the

guarantor’s liability will be unaffected by any failure to give

notice, and the lender need not seek payment from the borrower

before    asserting    its    rights    under       the   guaranty       agreements.

Finally, by signing the guaranty agreements, Terry waived “any

and all defenses, claims and discharges of Borrower . . . except

the defense of discharge by payment in full.”                J.A. 75.

       The loan agreements themselves are similarly clear.                          In

each   agreement,     CCT    agrees    that    default      will    occur     if   it

                                        12
“fail[s] to make a payment on time or in the amount due.”                    J.A.

189.    Under the loan agreements, the only trigger required for

the loans to be in default is the failure to make a timely

payment, at which time CresCom may demand immediate payment of

the entire amount owed.           The loan agreements contain no notice

requirement and no requirement that a loan be formally declared

in default after a missed payment.

       Against this backdrop, Terry argues that he is nonetheless

excused    from    his    obligations    under     the   guaranty     agreements

because CresCom was required to provide him, in his personal

capacity, with ten days’ written notice and an opportunity to

cure any default before enforcing the agreements against him.

For support, he points primarily to the notice provisions found

in   the   parties’      2009   Commitment    Letter     and   Loan   Amendment,

through which CresCom and CCT negotiated a cross-default and

cross-collateralization           provision      concurrently         with    the

extension     of   $750,000      of   additional     credit     to    CCT.    To

understand Terry’s argument, a brief explanation of the terms of

those documents is necessary.

       The first page of the Commitment Letter defines the term

“Borrower”:

       Borrower: A to-be-named entity owned 100% by Edward L.
       Terry. The term “Borrower” as used herein shall be
       deemed to include any person named as an endorser,
       grantor or surety in connection with the proposed
       loan.

                                        13
J.A. 265.   The Letter also separately addresses Terry’s role as

guarantor, stating under the heading “Guaranty Agreement” that

“Edward L. Terry (hereinafter referred to as ‘Guarantors’) shall

guarantee payment of the Loan and other sums advanced for the

Borrower’s account under the loan documents.”       J.A. 266.     The

Commitment Letter later provides as follows, under the heading

“Cross-Collateralization/Cross-default of Existing Loans”:

     As part of the transaction contemplated herein, (i)
     Borrower, will cause [the existing Loans to] be
     amended to provide in the event of a payment default
     on any of those loans or a payment default on the
     [new] Loan, the Bank, at its option and ten (10) days
     written notice may declare all of the loans in
     default . . . .
J.A. 266.    The Commitment Letter was signed by CresCom, CCT

(through Terry as its representative), and Terry in his personal

capacity under the heading “Guarantor.”

     After Note 3572 was finalized, CresCom and CCT memorialized

their new agreement by signing the Loan Amendment.         Terry was

not a party to this agreement in his personal capacity, and the

Loan Amendment makes no reference to him as guarantor.        In its

introductory   paragraph,   the   Amendment   identifies   only   two

parties: (1) the Lender (CresCom Bank), and (2) the Borrowers

(Terry’s wholly owned companies).      The Loan Amendment contains

the following notice provision:

     [I]n the event     of a payment default on either the
     Previous Loans    or the New Loan . . . the Lender may
     declare some or    all of the Previous Loans or the New
     Loan in default   and require the immediate repayment of

                                  14
      those loans . . . . In the event Lender determines to
      exercise its rights hereunder it shall give Borrowers
      no less than ten (10) days written notice from the
      date of the receipt of the notice to cure the default.

J.A. 311.       The Loan Amendment states that all notices to the

Borrower     should      be   directed    to   Edward    Terry   at     his   business

address in Marietta, Georgia.

      Terry contends that despite the unambiguous terms of the

guaranty agreements, CresCom was required under the Commitment

Letter    and     Loan    Amendment      to    provide   him,    in   his     personal

capacity as guarantor, with notice and an opportunity to cure

before    enforcing       the     guaranty     agreements      against    him.       He

stresses that the notice provisions in the Commitment Letter and

Loan Amendment were drafted “such that CresCom is required to

address      and      deliver      the    notice        of    default     to     Terry

individually.”           Appellant’s Br. at 20.              Because no notice of

default was provided to Terry, he argues that his obligations

under the guaranty agreements have been discharged.

      Terry’s argument is unavailing for two independent reasons.

First, the notice of default provisions in the Commitment Letter

and   Loan   Amendment        refer   only     to   CresCom’s    exercise      of   its

rights    under    the    newly    negotiated       cross-collateralization         and

cross-default provisions.             Both provisions state that “in the

event of payment default” on any loan, CresCom may declare any

other loan in default with ten days’ written notice.                      The notice

                                          15
provisions themselves thus presuppose that a “payment default”

occurs automatically, before any notice requirement kicks in.

This    interpretation       is    consistent        with    the    loan    agreements,

which    make     clear    that    default        occurs    immediately      upon    non-

payment.          The     Loan    Amendment’s        notice        provision    further

clarifies that it refers to CresCom’s option to “exercise its

rights hereunder,” referring to the new cross-default provision.

        On June 18, 2011, each of the loans matured independently.

Because    full    payment       was   not   made,    all    of     CCT’s    loans   were

immediately, automatically in default under the clear terms of

the loan agreements.              Thus, we find that no resort to cross-

default     was     necessary          because      all     of     the      loans    were

independently in default.              Because CresCom had no obligation to

provide notice in the event of an ordinary payment default, the

district court correctly found that Terry was owed no notice.

       Terry’s argument also fails because, even if the notice

provisions did require CresCom to provide CCT with ten days’

notice of an ordinary default, neither the Commitment Letter nor

the Loan Amendment provides for notice to Terry in his personal

capacity as guarantor.             As an initial matter, Terry is not a

party to the Loan Amendment.                 See J.A. 310-14.            Therefore, his

claim    relies    on     language     in    the    parties’      Commitment    Letter.

Specifically, Terry focuses on the definition of “Borrower” in

the Commitment Letter, which states that the Borrower is a “to-

                                             16
be-named entity owned 100% by Edward L. Terry.”                      The provision

goes       on   to    say   that   “as   used     herein,”   the   term    “Borrower”

includes “any person named as endorser, grantor or surety in

connection with the proposed loan.” 5                  J.A. 265.       Terry argues

that this language, in combination with the notice requirement’s

reference to the “Borrower,” indicates that CresCom was required

to give him notice and an opportunity to cure before enforcing

the guaranty agreements.

       Even if the notice requirement applied to all defaults, the

other terms of the Commitment Letter make clear that Terry was

not a “Borrower” under that agreement and was not owed notice

under this provision.              Initially, paragraph 1 defines “Borrower”

as an entity owned by Terry.                  In paragraph 11, the Commitment

Letter separately provides for Terry personally as guarantor:

       11. Guaranty Agreement: Edward L. Terry (hereinafter
       referred to as “Guarantors”) shall guarantee payment
       of the Loan and other sums advanced for the Borrower’s
       account under the loan documents, and performance of
       Borrower’s      obligations    under      the     loan
       documents . . . .

J.A. 266.            Finally, the last paragraph of the Letter provides

that       Terry      is    signing    “on   behalf    of    Borrower,      Brentwood

Homes . . . ,          Sugarloaf      Marketplace,    LLC,   Whipple      Development

       5
       Under South Carolina law, which governs the Commitment
Letter, there is no distinction between a surety and a
guarantor. See Carolina Hous. & Mortg. Corp. v. Orange Hill A.
M. E. Church, 97 S.E.2d 28, 31 (S.C. 1957).

                                             17
Corporation and Harris Street, LLC.”                      J.A. 270.           On a lower

line, he signs separately as “Edward L. Terry, Individually”

under the heading “Guarantor.”

     Examining      each       of    these     provisions       and     the     Commitment

Letter as a whole, the term “Borrower” simply cannot be read to

include    Terry    in    his       personal      capacity      without       inviting   an

absurd result.       By way of example, in the above-quoted “Guaranty

Agreement” passage, it would mean that the guarantor and the

borrower are one and the same.                 Additionally, paragraph 3 of the

agreement   refers       to    “the     Bank’s    loans    to     the   Borrower,”       but

there are no loans in this case to Terry personally.                                 Still

other sections would be redundant if the “Borrower” was Terry

personally, for example, paragraph 25, requiring “Borrower and

guarantor[]” to provide annual financial statements.                          J.A. 268.

     Moreover, as the district court observed, CresCom’s claim

against Terry is not based on CCT’s breach of the promissory

notes or Commitment Letter or any other agreement between those

parties;    it     is    based       on   Terry’s        breach    of     the     guaranty

agreements.      Under the unambiguous and absolute terms of those

agreements, notice is not a prerequisite to liability.                           See J.A.

81 (“No act or thing need occur to establish the liability of

the Undersigned hereunder . . . .”); J.A. 82 (“The Undersigned

waives presentment, demand for payment, notice of dishonor or

nonpayment,        and        protest     of       any     instrument           evidencing

                                             18
Indebtedness.”).           Therefore,     even        if    CresCom       failed    to     give

proper notice of default to CCT, Terry’s obligation to guarantee

the loans would be unaffected.                   See J.A. 82 (“The Undersigned

waives     any     and     all     defenses,      claims           and     discharges       of

Borrower . . . except            the   defense    of       discharge       by     payment    in

full.”).           Because        Terry’s        guaranty          obligations           arose

automatically upon CCT’s failure to pay, we find that they have

not been discharged.

                                            B.

       Having found that the district court correctly concluded

that Terry is liable under the guaranty agreements, we turn to

Terry’s claim that the district court’s computation of damages

was     erroneous.         Specifically,         he        assigns       error     to    three

different    aspects       of    the   district       court’s       award.         First,    he

argues that the district court erred by failing to cap CresCom’s

damages at $1,121,029, the value the bankruptcy court assigned

to    CresCom’s    remaining       unsecured      claim       at     the    conclusion      of

CCT’s    Chapter     11    proceedings.          Second,        he       argues    that     the

bankruptcy       court’s    valuation       of    the       properties          conveyed    to

CresCom in CCT’s bankruptcy was improperly low, and that the

district court erroneously adopted that figure.                              Third, Terry

argues that the district court erred by awarding CresCom a “late

                                            19
fee” on the entire unpaid balance of the notes.                         We address

Terry’s arguments in turn. 6

                                          1.

      Terry first contends that the district court was obligated

to   cap     damages     at   $1,121,029,      which   reflects   the   bankruptcy

court’s assessment of the value of CresCom’s claim against CCT

after subtracting the value of the properties deeded to CresCom.

Terry       stresses     that   because     “[a]    guarantor’s    liability    is

commensurate with the outstanding indebtedness of the principal

debtor,” Appellant’s Br. at 29, he cannot be responsible for

more than the amount that CCT owed CresCom in its bankruptcy.

This argument, however, misapprehends CCT’s actual indebtedness

to CresCom and misapplies settled bankruptcy law.

      Under the guaranty agreements, Terry is obligated to pay

CCT’s entire outstanding debt to CresCom, including interest and

fees,       “even      though   any   other        person   obligated     to   pay

Indebtedness, including Borrower, has such obligation discharged

        6
       Terry also contends that the district court erred by
applying the parties’ contractual default interest rate to all
interest accruing after the loans reached maturity despite
CresCom’s failure to formally declare them in default.        As
explained above, we find that default occurred automatically
upon nonpayment under the terms of the loan agreements.
Therefore, no formal declaration of default was necessary
(either to CCT or to Terry personally) for the default interest
rate to apply, and default interest is appropriately part of the
Indebtedness guaranteed by Terry.

                                          20
in bankruptcy.”             J.A. 82 ¶¶ 7, 8.               This result is consistent

with 11 U.S.C. § 524(e), under which the discharge of a debt in

bankruptcy “does not affect the liability of any other entity

on, or the property of any other entity for, such debt.”                                   As the

district court explained in its order, creditors are not barred

by res judicata or any other doctrine from seeking the full

amount       of    remaining         debt    against        a     guarantor         unless    the

bankruptcy court has made a specific finding releasing claims

against third parties.               No such finding was made in this case.

       Terry      nonetheless         argues     that      even    if    the    discharge       of

CCT’s debt in bankruptcy does not relieve him of his guaranty

obligations,        those      obligations         are     limited      to    the    $1,121,029

value of CresCom’s deficiency claim.                        He stresses that § 524(e)

does not preclude the bankruptcy court from releasing a non-

debtor       as   part   of     a     debtor’s      bankruptcy       plan,      nor    does     it

prevent      a    finding      that    a    debt    has     been    wholly      or    partially

satisfied because of a debtor’s bankruptcy plan.                               However, Terry

also acknowledges that the bankruptcy court “credited [the value

of     the    transferred           properties]       against       CresCom’s         claim     in

partial satisfaction of the debt,” Appellant’s Br. at 28, and

does    not       contend      (nor    could       he)     that    the       value    of     those

properties        was    not    subtracted          from    the    amount       he    now     owes

CresCom.

                                               21
      The critical fact overlooked by Terry is that the amount

CresCom could seek in CCT’s bankruptcy proceedings was less than

the full amount it was owed.                 As Terry notes in his brief,

CresCom’s claim in CCT’s bankruptcy “was allowed in the amount

of    $3,747,314    plus     costs   and     attorneys’       fees      through     the

Petition   Date.”         Appellant’s   Br.     at    27    (emphasis     added     and

internal quotation marks omitted).              But that figure represented

only the principal of the loans in question; CresCom’s claim in

the bankruptcy court did not include any interest or fees.                          At

the time the properties were conveyed to CresCom in June 2013,

the actual amount of CCT’s debt to CresCom, including interest

and   fees,   was   $4,663,294.70.           Therefore,       although      CresCom’s

outstanding    unsecured       claim       at   the        conclusion     of      CCT’s

bankruptcy    was    only     $1,121,029,       CCT    actually      owed      CresCom

$2,112,294.70,      the    total   indebtedness       less    the    value     of   the

conveyed properties.

      Contrary to Terry’s suggestion that CresCom will enjoy a

windfall if it is allowed to recover more than $1,121,029 under

the guaranty agreements, it is clear from the record that CCT’s

actual indebtedness to CresCom exceeded $2 million after the

value of the conveyed properties was applied.                    Under the clear

language of § 524(e) and the terms of the guaranty agreements,

Terry remains liable for CCT’s entire indebtedness regardless of

the discharge of any of CCT’s obligations in bankruptcy.                             We

                                        22
therefore     reject       Terry’s   contention     that     the       district     court

erred by awarding more than $1,121,029 to CresCom. 7

                                          2.

      Terry    next    argues     that    the    district        court’s    award     was

excessive because it improperly adopted the bankruptcy court’s

valuations of the properties transferred to CresCom.                            He points

out that the loan documents CresCom submitted to the district

court for calculation of damages included appraised values of

the   properties      from    2009   that   totaled       well    over     $4    million,

significantly more than the $2,551,000 value determined by the

bankruptcy    court.         If   the    district    court       had    adopted     those

figures, Terry argues, the debt would have been fully satisfied

upon transfer of the properties.                Although the value assigned to

the   properties      by    the   bankruptcy      court    was     undoubtedly       more

favorable to CresCom than its internal valuations, we find no

error in the district court’s use of this figure because Terry

      7
       We observe that the bankruptcy court and the district
court differed in their estimations of the outstanding principal
balance because the bankruptcy court did not take into account
that a small portion of the principal (approximately $75,000)
was paid off prior to the default.    Thus, the bankruptcy court
appears to have allowed CresCom to claim slightly more than the
outstanding principal it was owed.         However, because the
district court had a more complete record before it and
correctly stated the outstanding principal in its damages order,
this inconsistency did not affect CresCom’s final award or lead
to a double recovery.

                                          23
provided no alternative evidence of the properties’ value at the

time of their conveyance in 2013.

       The bankruptcy court arrived at its valuations in March

2013 after a two-day hearing during which it heard testimony

from three different appraisers (two offered by CresCom and one

offered by CCT).          Although Terry’s wholly owned entity was a

party to those proceedings, we agree with Terry that because he

was not a party in his personal capacity, the valuations are not

directly binding on him in this case.                   Understanding that the

bankruptcy court’s findings were not binding, CresCom proposed

to    stipulate    to   the        findings   for   purposes    of    the   district

court’s calculation of damages.                 Although Terry stresses that

CresCom “offered no evidence in the district court to establish

the    values     of    the     properties”     other    than     proffering        the

bankruptcy court’s orders, Appellant’s Br. at 25, CresCom was

not    required    to     present      additional     evidence       to   propose    a

stipulation.

       Notably, the only evidence Terry presented to contradict

the     bankruptcy       court’s        valuations      were     CresCom’s        2009

appraisals.       Terry submitted no affidavits or other evidence to

the   district    court       to    support   his   assertion    that     the   figure

reached by the bankruptcy court was inaccurate.                   His reliance on

outdated, one-line notations in CresCom’s loan documents does

not create a genuine issue of fact because it does not bear on

                                          24
the only valuation relevant in these proceedings: the value of

the properties in 2013.

      As the district court explained in its order on damages,

“[t]here is no evidence in the record to support a finding that

the old appraised value noted in the payment records reflects

the   value       of        the   properties         at   the   time    of    conveyance,”

particularly           in     light     of     the    bankruptcy       court’s       thorough

examination of the evidence and consideration of testimony from

both sides.        CresCom Bank v. Terry, No. 2:12-cv-00063-PMD, Dkt.

No.   73,    at    5        n.5   (D.   S.C.     Nov.     25,   2013).        Because     the

bankruptcy proceedings contained the only evidence before the

district court regarding the 2013 value of the properties, the

district court did not err by adopting the bankruptcy court’s

findings and concluding that Terry had not created a genuine

issue of material fact.

                                                3.

      Finally, Terry objects to the award of contractual “late

fees” of five percent on the entire principal due at the time of

the default.           He argues that the terms of the loan agreements

make clear that the parties intended late fees to apply only to

missed      monthly          interest        payments     and    not     to    the     entire

principal, and further, that a late fee on the entire principal

constitutes       an        unenforceable       penalty.        CresCom       devotes    only

three sentences of its brief to this issue, simply stating that

                                                25
late       fees   are   an   “accepted     business      practice”   that   do   not

violate the lending laws or public policy of South Carolina or

Georgia. 8        Appellee’s Br. at 28.           While we agree with CresCom

that late fees are a permissible and unremarkable element of the

parties’ agreement when applied to monthly interest payments, it

is evident from the loan documents and Commitment Letter that

the parties did not intend the five percent late fee to apply to

the entire outstanding principal.

       The late fees agreed upon by the parties are described in

three different documents: the loan agreements, the Commitment

Letter, and the loan modification agreements executed after the

Commitment        Letter     and   final   loan   were    finalized.    The      loan

agreements provide that “[i]f a payment is not made within 10

days days [sic] after it is due, [Borrower] agree[s] to pay a

late charge of 5.00% of the late payment.”                  See, e.g., J.A. 26. 9

Under a separate heading labeled “Payments,” the loan agreements

describe both “Interest” and “Principal,” establishing monthly

interest payments due on the first of each month and a single

       8
        While the parties cite cases from a number of
jurisdictions, we reiterate that South Carolina law governs the
loan agreements in which the late fee provisions are found. See
supra note 4.
       9
        Later loan renewals altered this language slightly to
provide that the late charge would be “5.00% of the late payment
or $25.00 whichever is greater.”   See, e.g., J.A. 29 (emphasis
added).

                                           26
date on which the principal would be due.              In June 2009 when the

parties signed the Commitment Letter, they addressed the issue

of late fees more specifically:

     Late Charge: The note shall impose a late charge of
     five (5%) percent of the current monthly interest
     installments if the payment is not received within ten
     (10) days of its due date.

J.A. 266 (emphasis added).         Although Note 3572 (closed six days

after the Commitment Letter was signed) used the same standard

late charge provision as the other loan agreements, the parties

agreed that the terms of the Commitment Letter would survive the

closing of the new loan and the modifications to the existing

loans.      The   subsequent   modifications       essentially     incorporated

the standard language in the earlier loan agreements, specifying

that if a payment is ten days late or more, the Borrower “will

be charged 5.00% of the unpaid portion of the payment amount or

$25.00, whichever is greater.”          J.A. 46.

     Given    the   binding    nature    of   the     Commitment    Letter,   we

cannot agree with the district court that a late charge on the

entire principal is supported by the loan documents because Note

3572 “broadened the late charge language to cover all payments.”

J.A. 742.     Rather, we find that to the extent the late charge

provision    in   the   loan   agreements     might    previously    have   been

ambiguous in scope, that confusion was eliminated by the clear

language of the Commitment Letter, the terms of which explicitly

                                     27
survived Note 3572 and the modifications to the existing loans.

See J.A. 269 (providing that the Letter “shall survive the loan

closing    and      become   binding      together        with    all   other    loan

documents”).        Moreover, although the terms of the Commitment

Letter only directly applied to Note 3572, the language used in

Note 3572 regarding late charges was identical to the language

used in the other notes.           Because there is no indication that

the parties intended identical late charge provisions in the

four notes to be interpreted differently, we read the language

of   the   Commitment     Letter   as    an    indication        that   the   parties

intended to limit the five percent late charge to outstanding

monthly    interest      under   all    of    the   notes.       Accordingly,      the

assessment     of    a    late   charge       on    the    multi-million        dollar

outstanding principal is impermissible. 10                   We therefore vacate

      10
        Terry cites a body of non-precedential case law to
support his argument that even if the parties did intend the
late fee to apply more broadly, a five percent late fee on the
entire principal amounts to an unenforceable penalty.        See
Appellant’s Br. at 47–51.     However, neither his brief nor the
district court’s opinion cites any relevant cases decided under
South Carolina law. Although it appears that at least one court
in our circuit has refused to award a five percent late charge
on the entire principal due upon a loan’s maturity, see Mountain
1st Bank & Trust v. Holtzman, No. 7:11-cv-01433, 2012 WL
3126833, at *3 (D.S.C. July 31, 2012) (providing no reasoning
but “declin[ing] to grant Plaintiff” over $10,000 in late
charges after the defendant failed to pay the principal of
$200,000 when due), we need not decide whether the late charge
was an unenforceable penalty under South Carolina law because we
find that the parties’ contracts only provide for late charges
on monthly interest payments.

                                         28
the district court’s award of a five percent late fee on the

full outstanding principal.                Because the outstanding principal

to which the improper fee was applied totaled $3,672,029.78, we

direct    the     district    court   to    reduce       CresCom’s       award    by   five

percent of that amount, or $183,601.49.

                                           C.

       We now turn to CresCom’s sole basis for appeal--that the

district       court    improperly     refused         to   award    attorney’s        fees

because      it   found    that    Georgia       law    applies     to     the   guaranty

agreements and bars recovery of those fees for lack of notice.

CresCom alternatively contends that even if Georgia law does

apply, the district court still erred by refusing to reimburse

CresCom for the attorney’s fees it incurred as a result of CCT’s

bankruptcy.        Although we agree with the district court that the

guaranty agreements are governed by Georgia law, we also agree

with   CresCom      that     the   attorney’s      fees     it    incurred       in    CCT’s

bankruptcy are a part of the underlying “Indebtedness” and their

recovery is therefore not barred by Georgia law.

       The    parties      agree   that    the    loan      agreements,      promissory

notes,       mortgages,     and    Commitment      Letter        contain    unambiguous

choice of law clauses selecting South Carolina law.                              However,

the choice of law provision in the guaranty agreements is less

clear:

                                           29
       This guaranty shall be effective upon delivery to
       Lender, without further act, condition or acceptance
       by     Lender,    shall    be    binding    upon  the
       Undersigned . . . and shall inure to the benefit of
       Lender    and   its    participants,   successors and
       assigns. . . . This guaranty shall be governed by the
       laws of the State in which it is executed. The
       Undersigned waives notice of Lender’s acceptance
       hereof.

J.A. 75 (emphasis added).               Terry argues that Georgia law governs

the guaranty agreements because the agreements were “executed”

when    he     signed    them      at     his        office    in     Georgia.        CresCom

disagrees, maintaining that the agreements were “executed” when

they became        effective      (i.e.,        upon    delivery        to   its   office    in

South       Carolina),    and     moreover           that     the     parties’     course    of

dealing       demonstrates      that      the        entire     transaction        (including

Terry’s personal guaranty) was intended to be governed by South

Carolina law.

       As    the   district       court    observed,          the     term   “executed”      is

problematic here.           Black’s Law Dictionary defines “execute” to

mean either (1) “[t]o make (a legal document) valid by signing,”

or (2) “to bring (a legal document) into its final, legally

enforceable form.”          Black’s Law Dictionary 609 (10th ed. 2014).

It further defines “executed” to mean a document “that has been

signed.”       Id.      It is thus unclear whether the state “in which

[the guaranty] is executed” is the state in which it was signed

by   Terry     (Georgia)     or    the    state        in     which    it    became   legally

enforceable        (South     Carolina).                A     clear     contractual         term

                                                30
susceptible           to        more     than      one        reasonable        interpretation

constitutes a patent ambiguity appropriate for resolution by the

court.         Am. Trucking Ass’n, Inc. v. Fed. Highway Admin., 51 F.3d

405, 412 & n.9 (4th Cir. 1995); Ward v. Dixie Nat’l Life Ins.

Co., 257 F. App’x 620, 627 (4th Cir. 2007) (unpublished).

          Under basic principles of either South Carolina or Georgia

contract         law,      we     construe       the     ambiguity        in     the     parties’

agreement         strictly       against     the       drafter,    CresCom.            Duncan   v.

Little, 682 S.E.2d 788, 791 (S.C. 2009); J & E Builders, Inc. v.

R    C    Dev.,      Inc.,      646     S.E.2d   299,     301     (Ga.     Ct.       App.   2007).

Although CresCom argues strenuously that the parties’ course of

dealing demonstrates that South Carolina was the “home base” for

all transactions, the guaranty agreements are legally distinct

instruments, made with a private citizen of Florida from his

office in Georgia.                 Notably absent in the guaranty agreements

are the clear South Carolina choice of law clauses found in each

of       the   parties’         other    documents.            Therefore,       because     Terry

signed         the    guaranty          agreements       in     Georgia        and     reasonably

believed that they were consequently covered by Georgia law, we

find that Georgia law applies.

          Under Georgia law, a party may not seek attorney’s fees

unless it complies with the requirements of Ga. Code Ann. § 13-

1-11(a)(3), which provides that obligations to pay attorney’s

                                                 31
fees     are   valid     and     enforceable      subject      to   the      following

condition:

       [T]he holder of the note or other evidence of
       indebtedness . . . shall,   after   maturity of   the
       obligation, notify in writing the maker, endorser, or
       party sought to be held on said obligation that the
       provisions relative to payment of attorney’s fees in
       addition to the principal and interest shall be
       enforced and that such [party] has ten days from the
       receipt of such notice to pay the principal and
       interest without the attorney’s fees.

CresCom concedes, and we agree, that under Georgia law it would

not be entitled to attorney’s fees incurred in this litigation

because it did not provide Terry proper notice.                         But CresCom

argues that Georgia law does not bar it from recovering the

attorney’s fees it incurred participating in CCT’s bankruptcy,

because those fees are a part of the underlying indebtedness and

are not covered by Georgia law.               We find that CresCom’s argument

is supported by the loan and guaranty agreements, and that the

district court erred by refusing to award CresCom this portion

of its attorney’s fees.

       Although CresCom’s enforcement of the guaranty agreements

against Terry is governed by Georgia law, CCT’s obligations to

CresCom (and thus, the total “indebtedness” CresCom can seek

from Terry) are governed by South Carolina law by virtue of the

unambiguous      choice    of     law   clauses    in    the    loan        agreements.

Unlike    Georgia,       South    Carolina     does     not    have     a    provision

requiring      CresCom    to     give   notice    of    its    intent       to   collect

                                         32
attorney’s fees.         The loan agreements between CCT and CresCom

make clear that CCT is liable for reasonable attorney’s fees and

costs    incurred   as    part   of   CresCom’s   collection     of   the   debt,

including in bankruptcy proceedings.              J.A. 250.       The guaranty

agreements also define the “Indebtedness” of the borrower for

which the guarantor is responsible to include “post-bankruptcy

petition interest and attorneys’ fees,” even if those fees are

discharged in bankruptcy.         J.A. 77.

     Because the loan agreements made CCT liable for CresCom’s

attorney’s fees upon default, the expenses that CresCom incurred

due to its participation in CCT’s bankruptcy (before any efforts

to enforce the guaranty agreements and before Terry personally

became a party) were not governed by the guaranty agreements or

by Georgia law.          Rather, CresCom’s attorney’s fees from those

proceedings became a part of the underlying indebtedness owed to

it by CCT under the loan agreements, which are governed by South

Carolina law and do not require notice.                Because the fees are a

part of CCT’s indebtedness, they are guaranteed absolutely by

Terry.     We   therefore     partially      reverse    the   district   court’s

grant of summary judgment to Terry and remand with instructions

                                        33
to award CresCom attorney’s fees stemming from its participation

in CCT’s bankruptcy. 11

                              III.

     For the reasons given, we affirm the district court’s grant

of summary judgment to CresCom with respect to Terry’s liability

under the guaranty agreements.        We vacate the district court’s

award of a five percent late fee to CresCom on the outstanding

principal of the loans, reverse its refusal to award CresCom the

attorney’s fees it incurred in CCT’s bankruptcy proceedings, and

remand for recalculation of attorney’s fees.

                                 AFFIRMED IN PART, VACATED IN PART,
                                     REVERSED IN PART, AND REMANDED

     11
         The “Affidavit of Indebtedness” and “Affidavit of
Attorney’s Fees” submitted by CresCom describe $51,156.00 in
attorney’s fees related to CCT’s bankruptcy, but also reference
unallocated fees of over $22,000 paid to the Falcone Law Firm
and the Annino Law Firm.    J.A. 589–93.   Because it is unclear
from the record whether those fees were expended in the instant
action or in CCT’s bankruptcy proceedings, we remand for the
district court to recalculate CresCom’s attorney’s fees.

                                 34