Filed: Mar. 10, 2014
Latest Update: Mar. 02, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-1767 U. S. BANK NATIONAL ASSOCIATION, Trustee, successor to Wells Fargo Bank, N. A., As Trustee for the registered holders of CD2007-CD4 Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series CD 2007-CD4, Plaintiff - Appellee, v. HOSSEIN K. ZARRABI; MANSOUR K. YAZDANI, Defendants - Appellants. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. T. S. El
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-1767 U. S. BANK NATIONAL ASSOCIATION, Trustee, successor to Wells Fargo Bank, N. A., As Trustee for the registered holders of CD2007-CD4 Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series CD 2007-CD4, Plaintiff - Appellee, v. HOSSEIN K. ZARRABI; MANSOUR K. YAZDANI, Defendants - Appellants. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. T. S. Ell..
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-1767
U. S. BANK NATIONAL ASSOCIATION, Trustee, successor to
Wells Fargo Bank, N. A., As Trustee for the registered
holders of CD2007-CD4 Commercial Mortgage Trust, Commercial
Mortgage Pass-Through Certificates, Series CD 2007-CD4,
Plaintiff - Appellee,
v.
HOSSEIN K. ZARRABI; MANSOUR K. YAZDANI,
Defendants - Appellants.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. T. S. Ellis, III, Senior
District Judge. (1:12-cv-01376-TSE-TRJ)
Submitted: February 27, 2014 Decided: March 10, 2014
Before KING and FLOYD, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
James P. Campbell, CAMPBELL FLANNERY, PC, Leesburg, Virginia,
for Appellants. Matthew G. Summers, BALLARD SPAHR LLP,
Wilmington, Delaware; Michelle M. McGeogh, BALLARD SPAHR LLP,
Baltimore, Maryland, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Hossein K. Zarrabi and Mansour K. Yazdani (the
“Guarantors”) appeal the district court’s order granting U.S.
Bank’s motion for summary judgment in a proceeding seeking full
payment from the Guarantors of a loan. On appeal, the
Guarantors contend that the district court erred by not invoking
the doctrines of collateral estoppel and judicial estoppel to
bar U.S. Bank’s deficiency claim against them. The Guarantors
further argue that the district court erroneously held that the
certificate of satisfaction did not release the Guarantors as a
matter of law. Finally, the Guarantors argue that the district
court erred in holding that Illinois law did not preclude U.S.
Bank’s action against the Guarantors. We affirm.
We review the district court’s determination regarding
collateral estoppel de novo. See United States v. Fiel,
35 F.3d
997, 1005 (4th Cir. 1994). “Collateral estoppel forecloses the
relitigation of issues of fact or law that are identical to
issues which have been actually determined and necessarily
decided in prior litigation in which the party against whom
issue preclusion is asserted had a full and fair opportunity to
litigate.” Sedlack v. Braswell Servs. Group, Inc.,
134 F.3d
219, 224 (4th Cir. 1998) (brackets and internal quotation marks
omitted). To apply collateral estoppel, a party must show that
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(1) the issue or fact is identical to the one
previously litigated; (2) the issue or fact was
actually resolved in the prior proceeding; (3) the
issue or fact was critical and necessary to the
judgment in the prior proceeding; (4) the judgment in
the prior proceeding is final and valid; and (5) the
party to be foreclosed by the prior resolution of the
issue or fact had a full and fair opportunity to
litigate the issue or fact in the prior proceeding.
In re Microsoft Corp. Antitrust Litig.,
355 F.3d 322, 326 (4th
Cir. 2004). With these standards in mind, we have reviewed the
parties’ briefs and the record and find no reversible error on
this issue.
“Judicial estoppel is a principle developed to prevent
a party from taking a position in a judicial proceeding that is
inconsistent with a stance previously taken in court.” Zinkand
v. Brown,
478 F.3d 634, 638 (4th Cir. 2007). Federal law
controls the application of this principle, because “it relates
to protection of the integrity of the federal judicial process.”
Allen v. Zurich Ins. Co.,
667 F.2d 1162, 1168 n.4 (4th Cir.
1982). We review a district court’s decision whether to apply
judicial estoppel for abuse of discretion. King v. Herbert J.
Thomas Mem’l Hosp.,
159 F.3d 192, 198 (4th Cir. 1998).
“Three elements must be satisfied before judicial
estoppel will be applied.”
Zinkand, 478 F.3d at 638. First,
the party to be estopped must be advocating a position
inconsistent with one taken in prior litigation.
Id. “Second,
the prior inconsistent position must have been accepted by the
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court.”
Id. Finally, the party against whom judicial estoppel
is asserted must have intentionally misled the court in order to
gain unfair advantage.
Id. Applying these standards, we again
have reviewed the parties’ briefs and the record and find no
reversible error.
Under Virginia law, a certificate of satisfaction
operates “as a release of the encumbrance as to which such
payment or satisfaction is entered and, if the encumbrance be by
deed of trust, as a reconveyance of the legal title as fully and
effectually as if such certificate of satisfaction were a formal
deed of release duly executed and recorded.” Va. Code Ann.
§ 55-66.3(C) (2007). “The purpose of a certificate of
satisfaction under Virginia law is to release a deed of trust
from realty in the land records.” In re Green,
175 B.R. 609,
611 (Bankr. E.D. Va. 1994). Paragraph 2.7 of the guaranties
specifically provides that the release of any property connected
to the debt is not a release of the Guarantors’ obligations
under the guaranty contracts. Accordingly, we affirm the
district court’s conclusion that the certificate of satisfaction
does not extinguish the Guarantors’ liability.
The guaranties contain a choice of law provision
requiring that they be interpreted under Illinois law. In that
state, a guaranty is a contract subject to the usual rules of
contract interpretation. See McHenry Sav. Bank v. Autoworks of
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Wauconda, Inc.,
924 N.E.2d 1197, 1205 (Ill. App. Ct. 2010).
Contracts should be interpreted to give effect to the parties’
intent in entering the contract.
Id. Under Illinois law, a
guaranty may expressly provide for the guarantor’s continuing
liability even after the release of the primary obligor. See
815 Ill. Comp. Stat. 115/6 (West 2013). Article Two of the
guaranties at issue contains such a provision, noting that the
Guarantor’s obligations would not be released, diminished, or
otherwise adversely affected by any modifications, adjustments,
compromises, or releases between the Borrower and the Lender.
Moreover, the guaranties state that “it is the unambiguous and
unequivocal intention of Guarantor that Guarantor shall be
obligated to pay the Guaranteed Obligations . . . which [] shall
be deemed satisfied only upon the full and final payment and
satisfaction of the Guaranteed Obligations.” Moreover, the
Stipulated Order of September 15, 2011, specifically reserved
U.S. Bank’s right to pursue its claims against other parties,
which would include the Guarantors. Accordingly, we affirm the
district court’s judgment.
We dispense with oral argument because the facts and
legal contentions are adequately presented in the materials
before the court and argument would not aid the decisional
process.
AFFIRMED
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