Assured Guaranty Corp. v. Madison County Ex Rel. Board of Supervisors

Case: 16-60303 Document: 00514013472 Page: 1 Date Filed: 05/31/2017

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
No. 16-60303 May 31, 2017
Lyle W. Cayce
Clerk
ASSURED GUARANTY CORPORATION, Successor in interest to Radian
Asset Assurance Incorporated,

Plaintiff–Appellee,

v.

MADISON COUNTY, MISSISSIPPI, acting by and through its duly elected
Board of Supervisors,

Defendant–Appellant.

Appeals from the United States District Court
for the Southern District of Mississippi
USDC No. 3:13-CV-686

Before KING, JOLLY, and PRADO, Circuit Judges.
PER CURIAM:*
This case stems from a dispute over the interpretation of a Contribution
Agreement between Appellant Madison County, Mississippi (“the County”),
and Parkway East Public Improvement District (“Parkway East”), a
Mississippi special-purpose government entity. Appellee Assured Guaranty
Corporation (“Assured”) insured bonds issued by Parkway East. Assured seeks

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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No. 16-60303
a declaratory judgment finding the Contribution Agreement valid and
obligating the County to advance bond payments regardless of whether
Parkway East reimburses the County within the two-year period described in
the contract. The district court found in favor of Assured, and the County now
appeals. Because the plain language of the Contribution Agreement conditions
the County’s advancement obligation on Parkway East’s performance of its
obligations, we REVERSE and REMAND for further proceedings consistent
with this opinion.
I. FACTUAL AND PROCEDURAL BACKGROUND
On November 22, 2002, the County created a special-purpose
government entity called Parkway East under Mississippi Code § 19-31-1. 1
“Parkway East was created for the purpose of financing and managing the
acquisition, construction, and operation of capital infrastructure
improvements within the 1,050 acres of land that comprise” the district.
Landowners within Parkway East are responsible for “all costs and expenses
to be incurred by Parkway East in the construction and financing of the
District Project and/or in the furtherance of Parkway East’s purposes.” To this
end, in July 2005, Parkway East issued special assessment bonds in an
aggregate principal amount of $27,770,000. The final maturity date of the
bonds is 2030. Proceeds from the bonds are to be used to cover construction
costs, and Parkway East is required to make bond payments by levying special
assessments on parcels of land within the district.
On July 27, 2005, Parkway East and the County entered into a
Contribution Agreement to help Parkway East market the bonds at a lower

1 Two years later, Parkway East was divided into two districts—Parkway South and
the Parkway East that now exists. When we refer to Parkway East in this opinion, we are
referring to the newer iteration of that district.
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interest rate. 2 The Contribution Agreement begins with a set of “whereas”
provisions establishing the facts underlying the agreement. Among other
things, this portion of the contract includes a paragraph describing the purpose
of the Contribution Agreement as “memorializ[ing] [the parties’] mutual
understanding with respect to the joint participation of the County and
Parkway East in the financing of public infrastructure improvements and
facilities to be located within the County and Parkway East.” These
paragraphs are then followed by seventeen numbered sections describing a
series of “mutual covenants and promises.”
Section 3 of the Contribution Agreement, which is at issue in this case,
describes three obligations by which the County and Parkway East are bound.
The parties disagree about the following portions of Section 3: (1) a promise
that the County advance funds when Parkway East cannot make bond
payments if the County is satisfied with Parkway East’s performance of its
obligations under the Contribution Agreement, and (2) a requirement that
Parkway East reimburse the County for such advances within two years of
when they are made.
In connection with its issuance of bonds, Parkway East also purchased a
bond insurance policy from Radian Asset Assurance, Inc. (“Radian”). During
this litigation, Radian was purchased by Assured. Thus, Radian’s assets and
obligations became the assets and obligations of Assured. 3 As bond insurer,
Assured only makes bond payments if a shortfall remains after applying funds
from special assessment collections and any contribution made by the County.

2 Assured also posits that the Contribution Agreement made the bonds eligible for
bond insurance.
3 Hereinafter, for convenience, we will refer to the bond insurer as “Assured”

regardless of whether Radian or Assured actually took the action(s) being described.
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Unfortunately, the anticipated commercial development of Parkway
East never materialized. And in October 2011, Parkway East, being unable to
make its regularly scheduled bond payments, requested that the County,
pursuant to Section 3 of the Contribution Agreement, advance payment to
service the debt. The County advanced bond payments four times—in October
2011, April 2012, October 2012, and April 2013. On October 18, 2013, the
County refused to make any further advance payments because Parkway East
had failed to reimburse the County within two years, an obligation the County
alleged had to be fulfilled before the County was required to make advances.
Since November 2013, Assured has, and continues to, advance funds to cover
any bond payment deficiencies.
On November 1, 2013, Assured sued the County seeking, among other
things, a declaration that the County is obligated to continue advancing funds
under the Contribution Agreement regardless of whether Parkway East
reimburses the County within two years. 4 On November 21, 2014, both parties
filed motions for partial summary judgment. In April 2015, the district court
entered an order granting in part and denying in part Assured’s motion and
denying the County’s motion. As relevant to this appeal, the district court held
that the two-year reimbursement requirement in Section 3 of the Contribution
Agreement was not a condition precedent to the County’s obligation to advance
bond payments. That said, the court did acknowledge the conditional nature of
the County’s obligation to make bond payments and agreed with the County
that Parkway East’s reimbursement obligation was binding on it. The district
court also determined that the County’s obligation to make such advance
payments lasted for the life of the bonds.

4 Assured can sue for enforcement of the contract as a third-party beneficiary to the
Contribution Agreement.
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In March 2016, Assured filed a second motion for partial summary
judgment, which the district court granted on April 27, 2016. In its order, the
district court once again found that the County was obligated to advance
payments so long as the bonds remained outstanding, regardless of whether
Parkway East reimbursed the County within two years. The court further
ordered the County to pay Assured $3,160,616.70—$1,153,211.47 to reimburse
Assured for payments it made servicing the debt, and $2,007,405.23 to
replenish Parkway East’s Debt Service Reserve Fund. This appeal followed.
II. DISCUSSION
This Court reviews a grant of summary judgment de novo using the same
standard as the district court. Fireman’s Fund Ins. Co. v. Murchison, 937 F.2d
204, 207 (5th Cir. 1991). Summary judgment is appropriate where “there is no
genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56.
This Court also reviews de novo the initial determination of whether a
contract is ambiguous. Clardy Mfg. Co. v. Marine Midland Bus. Loans Inc., 88
F.3d 347, 352 (5th Cir. 1996). Where a contract is unambiguous, interpretation
of that contract is likewise a question of law reviewed de novo. Id. But if a
contract is ambiguous and its interpretation requires the Court to consider
extrinsic evidence, we review for clear error. Id. The applicable rules of contract
interpretation are furnished by state law—here, that of Mississippi. Id.
The Mississippi Supreme Court has laid out the following tiered
approach to contract interpretation:
First, the “four corners” test is applied, wherein the reviewing
court looks to the language that the parties used in expressing
their agreement. Second, if the court is unable to translate a clear
understanding of the parties’ intent, the court should apply the
discretionary “canons” of contract construction. Finally, if the
contract continues to evade clarity as to the parties’ intent, the
court should consider extrinsic or parol evidence. It is only when
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the review of a contract reaches this point that prior negotiations,
agreements and conversations might be considered in determining
the parties’ intentions in the construction of the contract.
Tupelo Redevelopment Agency v. Abernathy, 913 So. 2d 278, 284 (Miss. 2005)
(citations omitted). When looking at the language of a contract, a court must
“read the contract as a whole, so as to give effect to all of its clauses.” Royer
Homes of Miss., Inc. v. Chandeleur Homes, Inc., 857 So. 2d 748, 752 (Miss.
2003).
The controversy in this case centers on Section 3 of the Contribution
Agreement:
County Contribution. [1] Provided that the covenants, agreements
and obligations of Parkway East as stated herein are performed
and/or provided to the County’s satisfaction, the County hereby
agrees that in the event Parkway East fails, for any reason, to levy
and/or collect (or have collected) a sufficient amount of Special
Assessments from the owners of land within Parkway East in
order to satisfy any Debt Service Payment, the County shall
advance to the paying agent, and/or the Bond trustee, the
outstanding amount required to satisfy the deficient Debt Service
Payment. [2] The parties also agree that, in the event of a sale of
a parcel of land for taxes (pursuant to Section 19-31-33 of the Act)
upon which a Special Assessment was levied but not collected, the
County shall be immediately reimbursed for the County’s advance
to such deficiency with the proceeds of such tax sale. The Amount
of such reimbursement shall be equal to the amount the County
advanced to the paying agent, and/or the Bond trustee, pursuant
to this Section 3, including any interest accrued thereon at the
statutory rate. [3] Notwithstanding the above, Parkway East
hereby covenants and agrees to provide full reimbursement to the
County, no later than two (2) years from the date the deficient Debt
Service Payment is made, for the amounts the County provides to
the paying agent, and/or the Bond trustee, pursuant to this Section
3, regardless of the source of the Parkway East funds to pay such
reimbursement. 5

5 To aid in explanation we have numbered this provision and will hereinafter refer to
Parts 1, 2, and 3.
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In essence: Part 1 obligates the County to advance bond payments when
Parkway East cannot make them; Part 2 provides that when a parcel of land
is sold for taxes, Parkway East shall immediately use that money to reimburse
the County for any advances it has made; and Part 3 otherwise requires
Parkway East to reimburse the County for bond-payment advances within two
years of when the advances were made.
The parties agree that the Contribution Agreement is unambiguous, but
disagree about the import of Part 3. The County argues that Part 3’s
reimbursement provision is a condition precedent to its obligation to advance
funds for bond payments. In other words, the County contends that if Parkway
East fails to reimburse it for bond-payment advances within two years of when
the advances are made, it is no longer required to make any future advance
payments. Assured, however, argues that Part 3’s reimbursement provision is
separate and removed from any conditional language in Part 1 and accordingly
that reimbursement is not a condition precedent to the County’s obligation to
make advance payments under Part 1. Thus, Assured posits that the County
is obligated to make bond-payment advances as long as the bonds remain
outstanding, regardless of whether Parkway East ever reimburses the County.
Section 12 of the Contribution Agreement provides that the agreement shall
last for “the duration of any Bonds issued by Parkway East.”
A. The Plain Text of the Contribution Agreement
As an initial matter, both parties agree that the plain meaning of the
words “provided that,” which begin Part 1, is to create a condition. See
Provided, Webster’s New Collegiate Dictionary (1975) (defining “provided” to
mean “on condition that”). But the parties disagree over which “covenants,
agreements and obligations” are included in the condition created by Part 1.
Assured argues that the covenant set forth by Part 3 is not one of the
covenants to which Part 1 refers because Parts 1 and 3 are both spatially and
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syntactically separated from one another. Assured argues that: (1) there is no
connection between Parts 1 and 3 because the two are separated by several
sentences, and (2) the words “[n]otwithstanding the above,” which begin Part
3, “carve out” the reimbursement provision from any condition created by Part
1.
Assured’s arguments are unpersuasive. The plain text of the contract
does not suggest that the “covenants, agreements and obligations” referred to
in Part 1 are limited to any particular set of covenants provided in the contract.
Rather, the condition in Part 1 refers generally to any covenant in the
Contribution Agreement to which Parkway East agreed. Moreover, use of the
word “notwithstanding” in Part 3 does not carve out any promise created by
the sentence that follows. The plain meaning of “notwithstanding” is “in spite
of” or “despite.” Notwithstanding, Webster’s New Collegiate Dictionary (1975);
see also Adams v. Baptist Mem’l Hosp.-Desoto, Inc., 965 So. 2d 652, 656 (Miss.
2007) (defining “notwithstanding” to mean “(1) In spite of; (2) Nevertheless; (3)
In spite of the fact that”). Consistent with this definition, there is also general
agreement among courts that “a ‘notwithstanding’ clause clearly signals the
drafter’s intention that the provisions of the ‘notwithstanding’ section override
conflicting provisions of any other section.” Cisneros v. Alpine Ridge Grp., 508
U.S. 10, 18 (1993); see also, e.g., Warberg Opportunistic Trading Fund, L.P. v.
GeoResources, Inc., 973 N.Y.S.2d 187, 191 (N.Y. App. Div. 2013) (“It is well
settled that trumping language such as a ‘notwithstanding’ provision ‘controls
over any contrary language’ in a contract.”); cf. Adams, 965 So. 2d at 656
(holding that “notwithstanding” language in a subsection of a state statute
overrode a specifically identified conflicting subsection). We agree with this
interpretation.
Given that the plain meaning of “notwithstanding” is “in spite of,” logic
dictates that the word “notwithstanding” implies some contradiction regarding
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what it refers to. Thus, Assured is only correct that the reimbursement
covenant in Part 3 is carved out from the remainder of the provision at issue if
Part 3 contradicts both Parts 1 and 2. However, only Part 2—requiring
immediate reimbursement by Parkway East under certain circumstances—
conflicts with the two-year reimbursement requirement of Part 3. Part 1, on
the other hand, is wholly consistent with Part 3. There is no tension between
a requirement that the County advance bond payments when Parkway East is
unable to make them if Parkway East satisfies its obligations under the
Contribution Agreement (Part 1) and a requirement that Parkway East
reimburse the County for such advances within two years of when they are
made (Part 3). Accordingly, we find that the language “notwithstanding the
above” does not carve out Parkway East’s obligation to reimburse the County
from the obligations referred to in Part 1.
Assured also argues that requiring Parkway East to reimburse the
County for bond-payment advances is nonsensical because if Parkway East is
unable to make bond payments and the County then advances payment,
Parkway East clearly cannot afford to reimburse the County. This argument
is unpersuasive for two reasons. First, the event triggering the County’s
obligation to advance bond payments is Parkway East’s failure to “levy and/or
collect (or have collected) a sufficient amount of Special Assessments from the
owners of land within Parkway East.” But Parkway East is required to
reimburse the County within two years of an advance “regardless of the source
of . . . funds.” Accordingly, it is entirely possible that Parkway East would be
unable to levy or collect a sufficient amount of funding from special
assessments to cover the bond payments but would be able to use other funding
sources to reimburse the County. For example, in at least one instance,
Parkway East used money from the Revenue Fund, at the County’s request, to
make bond payments in November 2009 because insufficient special
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assessments had been levied/collected. Second, as the County points out in its
reply brief, the reimbursement provision gives Parkway East two years to
recover its financial footing. Indeed, Part 2 of the provision clearly illustrates
one way in which this could occur—Parkway East could have collected
insufficient special assessments when bond payments became due but later
could have sold a parcel of land, giving it the ability, and obligation, to
reimburse the County immediately for a previous advance. Thus, there is
nothing necessarily illogical about requiring Parkway East to reimburse the
County for bond-payment advances within two years.
B. The Amortization Approval Certificate
1. The Language
Assured also argues that the Amortization Approval Certificate (“the
Certificate”), signed by the County at bond closing, unambiguously shows that
the reimbursement provision is not one of the covenants on which the County’s
obligation to advance bond payments is conditioned. Under Mississippi law, a
court can construe several documents together to form a single instrument
where “they are executed at the same time, by the same parties, as part of the
same transaction.” Avakian v. Citibank, N.A., 773 F.3d 647, 652 (5th Cir. 2014)
(quoting Sullivan v. Mounger, 882 So. 2d 129, 135 (Miss. 2004)). This is true
even where the documents do not “include a written provision which
specifically recites that all documents are part of an integrated, or global,
transaction.” Id. (quoting Sullivan v. Protex Weatherproofing, Inc., 882 So. 2d
256, 259–60 (Miss. 2005)). Because the Certificate and Contribution
Agreement meet these requirements, we construe them together.
The Certificate, signed by a County representative, provides the
following:
I, Paul Griffin, President of the Board of Supervisors of Madison
County, Mississippi (the “County”), pursuant to and as required by

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Sections 5 and 7 of that certain Contribution Agreement dated
July 27, 2005 (the “Contribution Agreement”) by and between the
County and the Parkway East Public Improvement District (the
“District”), for and on behalf of the County do hereby approve the
bond amortization and debt service schedule attached as Exhibit
A hereto in connection with the District’s $27,770,000 Special
Assessment Bonds, Series 2005, dated July 27, 2005, and further
state, for and on behalf of the County, that the covenants,
agreements and obligations of the District as stated in the
Contribution Agreement have been performed and/or provided to
the County’s satisfaction.
Assured argues that the language in the Certificate describing Parkway East’s
“covenants, agreements and obligations” that must be performed to “the
County’s satisfaction” 6 evinces a limitation on what conditions are specified by
this language. Given that the Certificate was signed at bond closing, Assured
claims it would not make sense for the County to agree that Parkway East’s
obligations had been performed to the County’s satisfaction where Parkway
East would not yet have had the opportunity to perform—for example, in the
case of the reimbursement requirement. 7 Accordingly, Assured contends that
the “covenants, agreements and obligations” to which the Certificate refers
only include those that would have been performed at the time of bond closing.
Because the Certificate and Part 1 of the Contribution Agreement contain
near-identical condition of satisfaction clauses, Assured concludes that the
condition created in Part 1 of the Contribution Agreement provision likewise
only refers to the conditions Parkway East would have performed at the time
of the bond closing. Thus, according to Assured, the County’s duty to advance
bond payments is not be conditioned on Parkway East’s promise to reimburse.

6 We will also refer to this language as a “condition of satisfaction clause” or “condition
of satisfaction language.”
7 In fact, the County enumerates seven other obligations Parkway East bore under

the Contribution Agreement and that Parkway East would not have performed at bond
closing.
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Assured’s argument falls short. While Assured is correct that the
condition of satisfaction language in the Certificate must only have related to
the covenants Parkway East was able to perform before bond closing, an
identical understanding cannot extend to the Contribution Agreement. As the
County outlines in its reply brief, under Assured’s interpretation, none of the
post-closing covenants in the Contribution Agreement could serve as
conditions precedent to the County’s obligation to make advance payments.
Parkway East could “sell land for taxes and not reimburse the County, sell
land for residential purposes and not use proceeds to redeem bonds, refuse to
allow the County to have parcels appraised, not maintain a construction
contingency fund, or fail to reimburse the County for its advances” and the
County would still be required to advance bond payments. Because Assured’s
interpretation makes Part 1’s conditional language superfluous, the condition
of satisfaction language in Part 1 must unqualifiedly refer to all the
“covenants, agreements and obligations” created by the Contribution
Agreement. See S. Ry. Co. v. Anderson & Fuller, 130 So. 743, 744 (Miss. 1930)
(holding that all contract provisions must be given effect).
This interpretation is also consistent with the Certificate’s language. It
is possible that both the Certificate and Contribution Agreement require the
County to be satisfied that Parkway East is performing its obligations under
the contract, but that these evaluations occur at different times and thus
inherently include different obligations. While the Certificate requires the
County to assess its satisfaction with Parkway East’s conduct at the time of
bond closing, the Contribution Agreement requires the County to do the same
when Parkway East is unable to make a bond payment. Accordingly, we
conclude that the Contribution Agreement unambiguously conditions the
County’s obligation to advance bond payments on Parkway East’s performance

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of all its covenants under the Contribution Agreement—including its promise
to reimburse the County.
2. Quasi-Estoppel
Finally, Assured contends that the Certificate serves to estop the County
from asserting that it is dissatisfied with Parkway East’s performance and
accordingly suspending bond payments. Mississippi’s doctrine of quasi-
estoppel “precludes a party from asserting, to another’s disadvantage, a right
inconsistent with a position [it has] previously taken.” Bailey v. Estate of Kemp,
955 So. 2d 777, 782 (Miss. 2007) (alteration in original) (quoting Bott v. J.F.
Shea Co., Inc, 299 F.3d 508, 512 (5th Cir. 2002)). Quasi-estoppel “applies when
it would be unconscionable to allow a person to maintain a position
inconsistent with one to which he acquiesced, or from which he accepted a
benefit.” Id. (quoting Bott, 299 F.3d at 512).
Assured’s quasi-estoppel argument is only compelling if the County
signed the Certificate intending to agree that it was satisfied with Parkway
East’s performance of all its obligations under the Contribution Agreement—
including those that Parkway East could not possibly have performed by bond
closing. Because such an interpretation makes little sense, we hold that the
County is not estopped from arguing that Parkway East’s performance was
unsatisfactory and suspending bond payments.
III. CONCLUSION
For the foregoing reasons, we hold that Section 3 of the Contribution
Agreement unambiguously conditions the County’s duty to advance bond
payments on Parkway East’s reimbursement of such advances within two
years. Accordingly, we REVERSE the district court’s grant of summary
judgment and REMAND the case for further proceedings consistent with this
opinion.

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