Court Opinion

ID: 2823999
Source: CourtListenerOpinion
Date Created: 2015-08-10 20:18:49.959714+00
Date Added: 2024-06-11T11:31:11.747298
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 13-2176

ELDERBERRY OF WEBER CITY, LLC, a Virginia limited liability
company,

                Plaintiff - Appellee,

           v.

LIVING CENTERS – SOUTHEAST, INCORPORATED, a North Carolina
corporation; FMSC WEBER CITY OPERATING COMPANY, LLC, a
Delaware limited liability company; CONTINIUMCARE OF WEBER
CITY, LLC, a Florida limited liability company; MARINER
HEALTH CARE, INCORPORATED, a Delaware corporation,

                Defendants - Appellants.

Appeal from the United States District Court for the Western
District of Virginia, at Lynchburg.     Norman K. Moon, Senior
District Judge. (6:12-cv-00052-NKM-RSB)

Argued:   January 28, 2015                  Decided:   July 21, 2015

                     Amended:    August 10, 2015

Before MOTZ, GREGORY, and WYNN, Circuit Judges.

Affirmed   in  part,   vacated   in  part,   and  remanded with
instructions by published opinion.      Judge Gregory wrote the
opinion, in which Judge Motz and Judge Wynn joined.

ARGUED: James F. Segroves, HOOPER, LUNDY & BOOKMAN, PC,
Washington, D.C., for Appellants. James Strother Crockett, Jr.,
SPILMAN THOMAS & BATTLE, PLLC, Charleston, West Virginia, for
Appellee.     ON BRIEF: Lori D. Thompson, LECLAIRRYAN, PC,
Roanoke, Virginia,   for   Appellants.    Travis   A.   Knobbe,
M. Mallory Mantiply, SPILMAN THOMAS & BATTLE, PLLC, Roanoke,
Virginia, for Appellee.
GREGORY, Circuit Judge:

      Plaintiff-appellee         Elderberry            of      Weber     City,       LLC

(“Elderberry”) filed this civil action in the Western District

of Virginia alleging breach of a lease for a skilled nursing

facility      against       defendants-appellants              Living     Centers      –

Southeast, Inc. (“Living Centers”), FMSC Weber City Operating

Company,     LLC    (“FMSC”),         and     ContiniumCare       of     Weber      City

(“Continium”),       and     breach     of     a     guaranty    contract     against

defendant-appellant          Mariner        Health     Care,    Inc.     (“Mariner”).

Separately, in the Northern District of Georgia, Mariner filed a

declaratory       judgment     action        against     Elderberry,      seeking      a

declaration that it had no obligations under the guaranty.                           The

two     actions    were    consolidated        in     the    Western     District    of

Virginia.     The district court denied the parties’ cross motions

for summary judgment but held that the guaranty was enforceable

against Mariner.           Following a bench trial, the district court

entered judgment in favor of Elderberry on all counts, and found

the   appellants     jointly    and     severally       liable    for    accrued     and

future damages amounting to $2,742,029.50, plus pre- and post-

judgment interest at the rate of 0.13%.                      Because the district

court     erred    in     awarding     damages        that     accrued    after     the

termination of the lease, we vacate in part and remand for the

district court to recalculate damages for the appropriate time

period.
                                        I.

      At   the   center    of   this   lease   and   contract    dispute   is   a

skilled     nursing    facility    located     in    Weber   City,   Virginia.

Elderberry leased the facility to Living Centers in November

2000 for a 10-year term.               Initially, Living Centers was not

permitted to assign the lease without prior written permission

from Elderberry.          However, in 2006, the lease was amended to

allow Living Centers to assign the lease to FMSC or any of its

subsidiaries      or      affiliates     without     prior      approval   from

Elderberry so long as Living Centers first obtained a guaranty

from Mariner. 1    In accordance with the amendment, the lease reset

for a new 10-year term commencing at the completion of certain

construction and improvements to the facility, and thus a new

lease expiration date was set for April 2017.                     The required

guaranty was attached as Exhibit E to the lease amendment, and

was signed by then Executive Vice President and Chief Financial

Officer of Mariner, Boyd P. Gentry.

      On January 18, 2007, Living Centers assigned the lease to

FMSC.      FMSC, in turn, reassigned it to Continium in November

2011. 2    In the midst of the assignments and amendments, the

      1Living Centers is a wholly owned subsidiary of Mariner,
while FMSC is 75% owned by Mariner through subsidiaries.
      2Continium is owned and controlled by Avi Klein who was at
the time a manager of FMSC.

                                         3
facility     was    subject        to    numerous     problems,      including      being

listed as a “Special Focus Facility,” 3 nonpayment of utility

vendors, and interruptions of gas and phone service.

      Continium      ceased      making      rent    payments    after     March    2012.

Although     Elderberry          and     Continium        thereafter     attempted    to

negotiate rent reductions, Continium indicated in May 2012 that

it   was   no    longer     able    to    make    rent     payments.      Elderberry’s

attempts    to     locate    a     new   tenant     were    initially     unsuccessful

because of, among other problems, the facility’s placement on

the Special Focus Facility list.

      Eventually,        Elderberry         hired    Smith/Packett       Med-Com,    LLC

(“Smith/Packett”)         to       locate     a     new    tenant,     conduct      lease

negotiations, and provide asset management services.                           The two

entities signed an August 8, 2012 asset management agreement,

under which Elderberry agreed to pay Smith/Packett a $150,000

signing fee for securing a new tenant, a $375,000 value fee on

June 1, 2015, so long as the new tenant was not then in default

under the new lease, and a monthly management fee of 10% of the

new tenant’s rent payable.

      Subsequent to signing the asset management agreement, on

August     15,   2015,      Elderberry       sent    Living     Centers,    Continium,

      3Special Focus Facilities are “subject to more frequent
health and safety inspections.” J.A. 781.

                                              4
Mariner, and their attorneys at the Bernstein Law Firm a letter

demanding    immediate         payment     of    past     due    rent.      The     letter

indicated that if the payments were not made, Elderberry would

“be entitled to proceed with pursuit of its remedies under the

Lease, including, but not limited to, seeking damages in court,

termination       of    the    Lease,      and/or      taking     possession       of    the

Property.”       J.A. 201-02.           The requested past due rent payments

were not made.          Rather, on August 17, 2012, Continium discharged

the remaining residents and abandoned the facility.

     On    August       24,   2012,     Elderberry       mailed    the   appellants        a

letter    bearing       the   subject      line,    “LEASE      TERMINATION    NOTICE.”

J.A. 607.         The letter stated:               “this letter shall serve as

notice    that    the    Lease     is     hereby    terminated,      effective          12:00

midnight    EST    on    August     24,    2012.        [Elderberry]     reserves        all

rights and remedies related to Tenant’s default whether under

the Lease, at law or in equity.”                 J.A. 607.

     Elderberry          rehabilitated           the     nursing      facility           with

Smith/Packett’s help and eventually entered into a new lease

with Nova Healthcare Group, LLC (“Nova”) for a new 10-year term

beginning     January         1,   2013.         During    the     course     of    lease

negotiations, Nova secured from Elderberry a renovation budget

and working capital totaling $1.25 million.

     One week after Elderberry sent the termination letter to

the appellants, Mariner filed suit against Elderberry in the

                                             5
Northern District of Georgia, seeking a declaration that the

guaranty       was    unenforceable.               Thereafter,            Elderberry        filed    a

breach    of    lease           and   breach      of     contract         action        against    the

appellants      in        the    Western     District         of        Virginia.        Elderberry

sought damages for accrued and future rent, as well as “costs,

fees     and    expenses          incurred        by     Elderberry          to     preserve       and

rehabilitate          the       property;         fees       and        expenses    incurred        by

Elderberry       in        hiring       [Smith/Packett]                 . . .      to     locate     a

replacement          tenant;          sums     expended            by     Elderberry        to     pay

utilities,       insurance            premiums,        and    real       property        taxes;    and

attorney’s fees and expenses.”                     J.A. 7.          This consolidated civil

action followed.

       The parties filed cross motions for summary judgment on

Elderberry’s breach of lease and breach of contract claims, and

on Mariner’s claim that the guaranty issued in connection with

the lease assignments to FMSC and Continium was void under the

Georgia statute of frauds.                     Although the district court denied

both summary judgment motions, it held that the guaranty was

valid.      After the subsequent bench trial, the district court

ruled in favor of Elderberry on all claims, and concluded that

Elderberry           is     entitled         to        damages          in   the        amount      of

$2,742,029.50, plus pre- and post-judgment interest at the rate

of 0.13%.       J.A. 803-06.            The damages award includes:

                                                   6
       (1) unpaid rent for the period from April 2012 through
       August 2012 . . . ; (2) unpaid rent from the period
       September 2012 though February 2013 . . . ; (3) a rent
       shortfall   from    March  2013   though   April   2017;
       (4) unpaid taxes, utilities, and insurance premiums
       for the period from August 2012 through February 2013
       . . . ; (5) maintenance fees paid during that same
       period . . . ; (6) payments for architectural and
       construction services. . . to bring the Facility up to
       the fire code standards required by the fire marshal;
       (7). . . payments to Nova [for renovations and working
       capital]    . . . ;    (8)   [the    signing   fee    to
       Smith/Packett] . . . ; and (9) [the value fee to
       Smith/Packett].

J.A. 793 (footnote omitted).

       The appellants timely appealed.

                                    II.

       Our review of a district court’s grant of summary judgment

is de novo.       French v. Assurance Co. of Am., 448 F.3d 693, 700

(4th Cir. 2006).        “Summary judgment is appropriate when there is

no    genuine   issue   of   material   fact   and    the   moving    party    is

entitled to judgment as a matter of law.”                   Id.      And, “[w]e

review a district court’s judgment entered after a bench trial

under a ‘mixed standard of review.’                 Under this standard, we

review the district court’s findings of fact for clear error and

conclusions of law de novo.”        Perez v. Montaire Farms, Inc., 650

F.3d 350, 363 (4th Cir. 2011) (citation omitted).                 Our review of

the    district    court’s    conclusions      of     law   extends     to    its

interpretations of written contracts.               See FindWhere Holdings,

                                        7
Inc. v. Sys. Env’t Optimization, LLC, 626 F.3d 752, 755 (4th

Cir. 2010).

      The appellants make three arguments.                    First, they argue

that the district court erred in awarding damages that accrued

after Elderberry terminated the Lease. 4                   Second, they contend

that Virginia law precludes awards for speculative damages, and

thus the district court’s inclusion of the $375,000 value fee in

the   damage      award   was    erroneous.          Finally,    the    appellants

challenge      the    district    court’s      legal       conclusion    that       the

guaranty satisfies the Georgia statute of frauds.

                                        III.

      The   lease     states,    and    the    parties      agree,     that    it    is

governed by Virginia law.               We thus look to Virginia law to

construe    the      lease.      In    doing   so,    we    consider     two    broad

categories of damages flowing from the lease:                    rent, and non-

rent damages.

                                         A.

      We first address what portion of accrued or future rent

Elderberry is entitled to receive as part of its damages award.

This Circuit has previously observed that

      4“[Appellants] concede that Living Centers is liable for
unpaid rent for the period from April 2012 though August 24,
2012.” J.A. 794 n.14.

                                          8
      when a tenant abandons leased property during the
      term, the Supreme Court of Appeals of Virginia has
      held that the landlord is permitted, at his option,
      either (1) to refuse to accept the tenant’s surrender,
      do nothing and sue for accrued rents, or (2) to re-
      enter the premises and accept the tenant’s surrender,
      thereby terminating the lease and releasing the tenant
      from further liability on the lease.

tenBraak v. Waffle Shops, Inc., 542 F.2d 919, 924 (4th Cir.

1976) (footnote omitted) (citing Crowder v. Virginian Bank of

Commerce, 103 S.E. 578 (Va. 1920)).                 In other words, when a

tenant abandons a lease, a landlord may sue for rent due on the

balance   of    the   lease    term    only   if    the     landlord   does   not

terminate the lease.          See id.; Crowder, 103 S.E. at 579.              The

choice belongs to the landlord.             Crowder, 103 S.E. at 579 (“The

landlord [is] under no obligation to resume possession of the

premises which ha[ve] been wrongfully abandoned, and ha[s] the

right to refuse such possession and to hold the tenant liable

under the contract.”).

      Although Virginia law “thus does not provide for recovery

of   future    damages   for   the    lessor’s     losses    arising   from   the

abandonment of a contract of lease, . . . the parties are not

barred from providing for such a recovery through forfeiture

provisions in the lease.”            tenBraak, 542 F.2d at 924-25.            Any

such provisions “must be strictly construed.”                 Id. at 925.     As

the Virginia Supreme Court has stated, “[t]he prevailing rule is

that parties to a contract may provide the remedy that will be

                                        9
available to them in case a breach occurs so long as the remedy

provided is not contrary to the law or against public policy.”

Bender-Miller Co. v. Thomwood Farms, Inc., 179 S.E.2d 636, 638

(Va. 1971).     And “the remedy provided will be exclusive of other

possible    remedies   only   where    the   language    employed   in   the

contract clearly shows an intent that the remedy be exclusive.”

Id.     Additionally, “the intent of the parties as expressed in

their      contract    controls,”     and    “[i]t      is   the    court’s

responsibility to determine the intent of the parties from the

language they employ.”     Id. at 639.

      Here, the relevant provision of the lease, ¶ 7(3), reads as

follows:

      7.    RIGHTS IN DEFAULT.
      . . . .
           (3) The remedies of the Lessor for any Default
      by the Lessee shall include the following:
                 (a) Upon any Default by the Lessee and at
      any time thereafter, the Lessor may give written
      notice to the Lessee that the Lessor elects to
      terminate this Lease upon a specific date not less
      than thirty (30) days after mailing of such notice.
      This Lease shall then be terminated on the date so
      specified.
                (b) Upon an uncured Default by the Lessee,
      and notice from the Lessor, the Lessor may reenter and
      resume possession of the Property. The Lessor, at the
      Lessor’s option, may remove persons and property from
      the Property and may store the property in a public
      warehouse or elsewhere at the expense or for the
      account of the Lessee without liability for any damage
      on such removal.    The Lessor’s reentry shall not be
      deemed either an acceptance or a surrender of this
      Lease or a termination thereof.       It is expressly

                                      10
       understood and agreed that in the event of the reentry
       by the Lessor by reason of a default of the Lessee,
       the Lessee shall nevertheless remain liable for the
       Rent and also for the taxes and insurance premiums
       payable by the Lessee as provided in this Lease, for
       the balance of the term herein originally demised.
       . . . .
                 (d) The rights given to the Lessor herein
       are in addition to any rights which may be given to
       the Lessor by statute or otherwise.

J.A. 172.      Elderberry urges us to conclude that its rights under

the above provision are cumulative and that it thus had the

right to simultaneously (1) reenter and relet the facility, and

(2) terminate the lease and seek from the appellants rent due

for the balance of the term.               To be sure, the above excerpt

provides      that   Elderberry’s     rights   in    the    event      of    a    default

“shall   include       the   following.”       Id.      There     is    no       language

suggesting that Elderberry must choose either to terminate the

lease as provided by ¶ 7(3)(a), or to reenter the premises and

hold   the     tenant    liable    for   future      rent   and     other        fees    as

provided by ¶ 7(3)(b).            Nor are the various subparagraphs under

lease ¶ 7 separated by the disjunctive word “or.”

       That    said,    Elderberry’s     reading       of   the     lease        is     not

convincing.      First, remedy provisions providing for future rent

“must be strictly construed.”            tenBraak, 542 F.2d at 925.                     And

in construing remedy provisions, courts must have “due regard

for the rule that [the lease] must be construed most strongly

against the lessor.”          Va. Lumber & Extract Co. v. O.D. McHenry

                                         11
Lumber Co., 94 S.E. 173, 174 (Va. 1917).                        Here, ¶ 7(3) of the

lease does not affirmatively state that the remedial provisions

are cumulative.          Rather, ¶ 7(3)(b) explicitly provides:                       “The

Lessor’s reentry shall not be deemed . . . a termination” of the

lease.      J.A. 172 (emphasis supplied).                   And it is only under

¶ 7(3)(b),      “in   the   event   of   the        reentry,”      that    the    lessee

remains liable for future rent and fees.                         This language puts

¶ 7(3)(a) and ¶ 7(3)(b) in tension with one another.                             Whereas

¶ 7(3)(a)      explicitly   terminates        the    lease      contract,      ¶ 7(3)(b)

explicitly      leaves    the   terms    of    the       lease    contract      and    the

possibility of receiving future rent and fees in place.                          It does

not make sense to allow simultaneously the termination of the

lease    and    continued    application       of     the       lease.     The    better

reading, and the one we adopt here, is that upon exercising its

right to terminate the lease, Elderberry extinguished any right

that it had to future rent.

       Elderberry argues that we should follow the Virginia rule

that    a   remedy    provided     for   breach       of    a    contract      “will   be

exclusive of other possible remedies only where the language

employed in the contract clearly shows an intent that the remedy

be exclusive.”        Bender-Miller, 179 S.E.2d at 638.                   In advancing

its     argument,     Elderberry     focuses        on     whether       the   remedies

provided within the lease are exclusive of one another.                          Bender-

Miller, by contrast, focuses on whether the remedies provided in

                                         12
a contract are exclusive of extra-contractual remedies.                                    In that

case, the Virginia Supreme Court addressed whether the parties

“intended by virtue of” a certain contract provision “that the

remedy provided therein be exclusive of other remedies allowed

by law.”      Id. at 639 (emphasis added); see also Va. Dynamics Co.

v. Payne, 421 S.E.2d 421, 423 (Va. 1992) (observing that even if

a   lessor     could            “contract[]     away”          a    statutory       right,    “the

lessor’s      statutorily           created         right      . . .      would     have     to   be

expressly waived”); Atlas Mach. & Iron Works, Inc. v. Bethlehem

Steel    Corp.,        986      F.2d     709,   713      (4th      Cir.     1993)    (permitting

bankruptcy        as    a       remedy    to    a    breach        of     contract    where       the

contract did not explicitly state that the remedy stated therein

was exclusive).              Our reading of Virginia case law suggests that

there    is   a    presumption           against         excluding        statutory    or     legal

rights     absent           a    clear     waiver         of       such    rights,     and        our

construction of the lease here comports with that presumption.

Although our reading of the lease proscribes the collection of

future rent and other fees in the event of termination, it does

not proscribe the pursuit of any rights that Elderberry might

have outside of those provided in the lease itself.                                   Indeed, as

quoted above, ¶ 7(3)(d) provides that “[t]he rights given to the

Lessor herein are in addition to any rights which may be given

to the Lessor by statute or otherwise.”                            J.A. 172.

                                                    13
     In light of the foregoing, we hold that Elderberry lost its

right to rent that accrued after it terminated the lease on

August 24, 2012.        Elderberry is, however, entitled to any rent

that accrued prior to termination of the lease.

                                    B.

     We   turn   next   to   non-rent   damages.   A   landlord   may,   as

Elderberry does here, seek compensation for a tenant’s failure

to return a leased facility in the required condition.               See,

e.g., Sharlin v. Neighborhood Theatre Inc., 167 S.E.2d 334 (Va.

1969).    And the Supreme Court of Virginia long ago stated that

when an action for breach of lease covenant “is brought after

the end of the term, the measure of damages is still held to be

such a sum as will put the premises in the condition in which

the tenant is bound to leave them.”            Vaughan v. Mayo Milling

Co., 102 S.E. 597, 601 (Va. 1920) (quoting Watriss v. First

Nat’l Bank of Cambridge, 130 Mass. 343, 345 (1879)).          “[T]his is

true even if the repairs have not been made by the landlord.”

Sharlin, 167 S.E.2d at 338 (citing Vaughan, 102 S.E. at 602).

Virginia’s rule is in line with the general rule that

     where a lease contains a provision or option giving
     the right or privilege of cancellation and the
     agreement is canceled in pursuance of the right or
     privilege thus given, such cancellation does not
     extinguish liabilities that have already accrued under
     the lease, regardless of whether the liability is that
     of the party who exercised the option to cancel the
     agreement or is the liability of the party against
     whom cancellation was made.   Such cancellation of the

                                    14
      lease does, however, terminate liabilities to accrue
      in the future, such as rent, except where by express
      provision in the lease termination is not to affect
      the accrual of such liabilities.

49   Am.   Jur.   2d   Landlord   and    Tenant   § 204   (emphasis    added)

(footnote omitted).      Accordingly, upon termination of a lease, a

landlord is entitled to recover liabilities accrued up to the

point of termination.

     Aside from rent payments, the lease here includes covenants

requiring the lessee to pay for utility services, sales and use

taxes, general real estate taxes and special assessments, and

insurance premiums.       See J.A. 165 (Lease ¶ 3).            Moreover, the

lease provides:

      Lessee will keep the Property and any and all
      buildings and improvements (including inside and
      outside) which are now or may be erected or placed on
      said Property, in good order and repair subject to
      reasonable wear and tear at its sole cost and expense.
      All repairs and replacements shall be in quality and
      class at least equal to the original work.      Lessee
      will pay when due all costs associated with any such
      repairs, replacements or other work undertaken by it,
      and   will    not   suffer   any   mechanic’s   and/or
      materialmen’s liens to be maintained against the
      Property.

J.A. 166 (Lease ¶ 4(2)).          The lease additionally requires that

the premises be returned to Elderberry “in the same condition as

when demised to the Lessee, reasonable wear and tear and damage

by fire or other casualty insured against being excepted.”               J.A.

167 (Lease ¶ 4(5)).        Another provision states that the lessee

“will   comply    with   all   lawful    requirements     of   the   Board   of

                                        15
Health, Police Department, Fire Department, Municipal, State and

Federal authorities.”          J.A. 167 (Lease ¶ 4(6)).              Each of these

covenants serves as a source of damages that potentially accrued

prior to the termination of the lease.                      Indeed, the district

court relied on these provisions in determining several portions

of the damages award.

      Curiously, the appellants do not directly address whether

they challenge the district court’s inclusion of utility fees,

maintenance      fees,   and   the     like   in    the    damages    award.       They

merely ask this Court to reduce the judgment to $220,576.94, the

amount of unpaid rent that accrued prior to the termination of

the lease.         While this request could be seen as an indirect

challenge to the award of damages flowing from their breach of

the   covenants     listed     above    and   their       failure    to   return   the

nursing facility in the required conditions, the appellants did

not set forth arguments challenging the district court’s factual

findings    or     legal     conclusions      concerning        accrued     non-rent

damages.      They have thus waived any argument with respect to

those non-rent damages that accrued prior to termination of the

lease.     See Carter v. Lee, 283 F.3d 240, 252 n.11 (4th Cir.

2002) (“[T]his Court normally views contentions not raised in an

opening brief to be waived.”).

      In   light    of   the   foregoing,      we    hold    that    Elderberry     is

entitled to non-rent damages that accrued prior to termination

                                         16
of the lease.         We therefore remand this case for the district

court    to    recalculate    rent    and    non-rent      damages    that   accrued

prior to August 24, 2012. 5

                                        IV.

     The      appellants     argue    that    the   district    court    erred   in

finding       that   the   guaranty   satisfies      the    Georgia    statute   of

frauds. 6      Under Georgia law, “[t]he statute of frauds requires

     5 Because damages are restricted to those accruing prior to
termination of the lease, we need not address the appellants’
contention that the Smith/Packett $375,000 value fee is
speculative.   By its terms, that payment necessarily accrued
after termination of the lease and therefore cannot be part of
the damages award.    Indeed, Elderberry itself categorizes the
value fee as future damages. See Resp. Br. of Appellee 25 n.9.
     6 The choice of law provision in the guaranty at issue here
is blank.   Because we are exercising diversity jurisdiction in
this case, we must apply the choice of law principles of the
state in which the case was filed. Klaxon Co. v. Stentor Elec.
Mfg. Co., 313 U.S. 487, 496-97 (1941).          While Mariner’s
declaratory judgment claims regarding the guaranty were filed in
the Northern District of Georgia, those claims were transferred
to the Western District of Virginia, and Elderberry’s claims
concerning the guaranty were also filed in Virginia.     We need
not concern ourselves with whether Virginia or Georgia choice of
law rules apply, because under either analysis, we would
conclude that Georgia law applies.   This is because each state
applies the rule of lex loci contractus.    See Seabulk Offshore
Ltd. v. Am. Home Assurance Co., 377 F.3d 408, 419 (4th Cir.
2004) (observing that in Virginia, questions of “interpretation
of a contract are resolved according to the law of the state
where the contract was made”); Ferrero v. Associated Materials
Inc., 923 F.2d 1441, 1444 (11th Cir. 1991) (“[T]he Georgia
conflict of laws rule for contracts . . . is lex loci
contractus.”).   And the final act necessary to effectuate the
guaranty under either state’s law, the signature by Mariner’s
(Continued)
                                        17
that a promise to answer for another’s debt, to be binding on

the promisor, ‘must be in writing and signed by the party to be

charged therewith.’”     John Deere Co. v. Haralson, 599 S.E.2d

164, 166 (Ga. 2004) (citation omitted).        “This requirement has

been interpreted to mandate further that a guaranty identify the

debt, the principal debtor, the promisor, and the promisee.”

Id.; see also Lafarge Bldg. Materials, Inc. v. Thompson, 763

S.E.2d 444, 445 (Ga. 2014).     The guaranty here identifies and is

signed by the promisor:        Mariner.   However, as noted by the

appellants,   the   guaranty   includes   several   blanks   where   the

parties were to have identified the landlord, original tenant,

tenant, and the lease:

     FOR VALUE RECEIVED, and in connection with the
     assignment and transfer of the rights of tenant under
     a certain Lease agreement, dated [_________], between
     [LANDLORD]   (“Landlord”)  and   [TENANT]   (“Original
     Tenant”), as the same was assigned by Original Tenant
     to [NEW TENANT] (“Tenant”), pursuant to an Assumption
     and Assignment Agreement, dated [__________] (as
     further amended, modified or assigned, the “Lease”),
     covering certain premises known as [FACILITY NAME AND
     ADDRESS], Mariner Health Care, Inc., a Delaware

representative, took place in Georgia.    See Seabulk Offshore,
Ltd., 377 F.3d at 419 (“Under Virginia law, a contract is made
when the last act to complete it is performed.”); Christian v.
Bullock, 205 S.E.2d 635, 638 (Va. 1974) (applying law of state
in which contract was executed); Gen. Tel. Co. of the Se. v.
Trimm, 311 S.E.2d 460, 461 (Ga. 1984) (“In order to determine
where a contract was made, the court must determine where the
last act essential to the completion of the contract was
done.”). Neither party disputes the application of Georgia law.

                                  18
       corporation, the undersigned (hereinafter referred to
       as “Guarantor,” whether one or more) hereby guarantees
       unto Landlord the full and prompt payment of the rent
       and all other sums and charges payable by Tenant under
       the Lease (hereafter collectively referred to as
       “Obligations”).   Guarantor hereby covenants that if
       Tenant shall default in the payment of any of the
       Obligations, Guarantor shall pay the amount due to
       Landlord.

J.A. 196 (emphasis and blanks in original).                        The question is

thus   whether      the   guaranty    nonetheless         sufficiently     identifies

the debt, principal debtor, and promisee.

       The Supreme Court of Georgia’s recent decision in Lafarge

Building Materials examined a situation in which a guaranty was

“set off in a box at the bottom of the second page” of a credit

application.        763 S.E.2d at 445.            The guaranty identified the

principal debtor simply as “the Applicant identified on page 1

of this Application for Credit.”                 Id.      The guaranty, however,

incorporated       the    credit    application      by      reference.         Id.     In

reversing    the     Georgia   Court    of      Appeals’      conclusion        that   the

guaranty    did     not   satisfy    the    statue      of    frauds,     the    Georgia

Supreme     Court    read    the     guaranty     “in        conjunction    with       the

incorporated application, and with the word ‘applicant’ bearing

its usual and common meaning.”                  Id. at 447.        While the court

noted that “the better practice for lenders—the approach that

can forestall extended litigation like this case—is to simply

name the principal debtor directly in the guaranty,” the court

                                           19
nonetheless concluded that the guaranty satisfied the statute of

frauds.      Id.

       In addition to approving the use of incorporated documents

to sufficiently identify the terms of a guaranty, id. at 447,

the Georgia Supreme Court has also recognized that § 24-3-3(a)

of the Georgia code 7 “authorizes the use of contemporaneously

executed writings to provide necessary terms not contained in

the    document     at   issue,      or       to    correct     obvious         errors      in    the

document at issue.”            White House Inn & Suites, Inc. v. City of

Warm       Springs,      676     S.E.2d            178,       179    (Ga.        2009)           (“[A]

contemporaneously         executed            document        can    provide         a     property

description        missing     from       a    contract        for    the       sale       of    real

property;      establish       the    terms         of    a   purportedly         vague         option

agreement; establish and correct a misnomer; correct an ‘obvious

error’;      or    establish     that         the       acceptance        of    an       offer    was

conditional.”         (citations          omitted)).                 In        discussing         the

contemporaneous writings rule, the White House Inn court cited

with approval C.L.D.F., Inc. v. The Aramore, LLC, 659 S.E.2d 695

(Ga. Ct. App. 2008).            Id.       There, the Georgia Court of Appeals

construed a lease and guaranty together to correct a scrivener’s

error where “the Lease and the Guaranty were executed on the

same date, at the same time, and at the same location” and

       7   Formerly Ga. Code Ann. § 24-6-3.

                                                   20
“[t]he Guaranty was physically attached to the Lease and was

identified as a ‘special provision[] . . . attached . . . as

[an] exhibit and . . . made a part of th[e] Lease.’”                    C.L.D.F.,

Inc., 659 S.E.2d at 696.

       These   cases    and   Georgia’s         contemporaneous    writings      rule

suggest that omitting a required name or piece of information

from a guaranty does not render the guaranty unenforceable if

the omitted name or information can be readily ascertained when

the guaranty is read in conjunction with documents incorporated

by    reference,   or   with    documents         physically    attached    to   and

contemporaneously executed with the guaranty.                     The guaranty in

this case, though containing a significant number of blanks, is

attached as Exhibit E to the lease amendment.                       Thus, we can

construe the guaranty together with the lease amendment.                      And in

the   lease    amendment,     the   parties       agreed   that   Living    Centers

would be permitted to assign the lease to “Family Senior Care

Holdings LLC or any of its subsidiaries or affiliates” without

prior    written   permission       from    Elderberry     so   long   as   Mariner

agreed    to   guarantee      the    lessee’s       obligations.       J.A.      180.

Reading the blanks in the guaranty together with the lease and

the lease amendment, and giving the terms landlord, original

tenant, and tenant their usual and common meanings, the guaranty

sufficiently identifies Elderberry as the landlord and Living

                                           21
Centers as the original tenant. 8                   See Lafarge Bldg. Materials,

763 S.E.2d at 447.

      However, the blank in the guaranty representing the tenant

(i.e.,     principal      debtor)       is   not    filled       in    with    a    specific

entity, but rather with the descriptive phrase “Family Senior

Care Holdings LLC or any of its subsidiaries or affiliates.”

Because the phrase “Family Senior Care Holdings LLC or any of

its subsidiaries or affiliates” is, on its face, susceptible to

more than one meaning, we find it to be ambiguous.                             See Horwitz

v.   Weil,    569      S.E.2d    515,     516     (Ga.     2002)      (“Ambiguity       in   a

contract     is        defined    as     duplicity,            indistinctness         or     an

uncertainty of meaning or expression.”).                       And under Georgia law,

we   are     permitted      to     consult         parol       evidence       “to     explain

ambiguities       in     descriptions.”             L.     Henry      Enters.,      Ltd.     v.

Verifone,     Inc.,       614    S.E.2d      841,        844   (Ga.     Ct.    App.     2005)

(“[W]hile the Statute of Frauds prohibits using parol evidence

to supply completely missing terms, it does not prohibit using

parol evidence to explain ambiguities in descriptions.”).

      8We find it noteworthy that the appellants “volunteered or
offered to provide a guaranty of Mariner Health” and wanted to
“add that to the amendment in order to procure [Elderberry’s]
agreement to the assignment.”   J.A. 660; see also J.A. 663 (“A
guaranty was offered by Mr. Gentry.”). Not only that, but there
is uncontradicted testimony in the record that the guaranty was
actually “provided by Mr. Gentry” of Living Centers as part of
the lease amendment negotiations. J.A. 663.

                                             22
        Using the parol evidence rule here to consult extrinsic

evidence, it is clear that the principal debtor at the relevant

time was Continium.           Living Centers first assigned the lease to

FMSC,     evidenced      by    a     document       entitled     “Assignment    and

Assumption Agreement.”             J.A. 203.       A document cited and quoted

by the district court entitled “Assignment and Assumption of

Contracts” then demonstrates that FMSC assigned the lease to

Continium on November 1, 2011. 9             Elderberry of Weber City, LLC v.

Living Centers-Se., Inc., 958 F. Supp. 2d 623, 633 (W.D. Va.

2013).      As   shown   above,      Continium      stopped    paying   rent   after

March 2012 until Elderberry terminated the lease on August 24,

2012.     These are the relevant rent payments for which Continium

was   the   principal     debtor      and    for    which     Mariner   guaranteed.

Indeed, a September 9, 2011 letter sent to Elderberry by the

appellants’ attorneys reflects exactly that understanding.                      See

J.A. 199 (“Notwithstanding this proposed assignment [from FMSC

to Continium], it is intended that the Mariner Health Care, Inc.

Lease Guaranty executed in conjunction with the First Amendment

to the Lease Agreement dated June 19, 2006, shall remain in full

      9 We note that the parol evidence rule, unlike the
contemporaneous writings rule, does not require the extrinsic
evidence to have been prepared at the same time.   See, e.g.,
McKinley v. Coliseum Health Grp., LLC, 708 S.E.2d 682, 684–85
(Ga. Ct. App. 2011) (affirming the trial judge’s use of parol
evidence to grant summary judgment where parol evidence
consisted of deposition testimony taken subsequent to the
execution of the contract).

                                            23
force   and   effect   to   guaranty    the   obligations   of   assignee

Continium[].”).

     Given the Georgia Supreme Court’s most recent pronouncement

on that state’s statute of frauds, combined with Georgia’s parol

evidence rule, we hold that the guaranty satisfies the Georgia

statue of frauds.

                                   V.

     For the foregoing reasons, the judgment of the district

court is

                                  AFFIRMED IN PART, VACATED IN PART,
                                     AND REMANDED WITH INSTRUCTIONS.

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