Wells Fargo Bank, N.A. v. Ortega

FILED
United States Court of Appeals
Tenth Circuit
August 21, 2012
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
WELLS FARGO BANK, N.A.,
Plaintiff - Appellee, No. 11-8060
v. (D. Wyoming)
ANTONIO I. ORTEGA, (D.C. No. 2:09-CV-00241-WFD)
Defendant - Appellant.
ORDER AND JUDGMENT *
Before HARTZ, ANDERSON, and O’BRIEN, Circuit Judges.
Wells Fargo Bank sued Antonio Ortega in the United States District Court
for the District of Wyoming for breach of contract, alleging that he had defaulted
on a promissory note and a guaranty with The Jackson State Bank & Trust (the
Bank), Wells Fargo’s predecessor-in-interest. The district court granted summary
judgment in favor of Wells Fargo. Mr. Ortega now appeals. He argues that the
district court erred (1) in rejecting his promissory-estoppel defense, (2) in
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent except under the doctrines of law of the case, res judicata,
and collateral estoppel. It may be cited, however, for its persuasive value
consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
refusing to reduce the judgment by the amount of Wells Fargo’s winning bid at a
postjudgment foreclosure sale of property securing the loan guaranteed by
Mr. Ortega, and (3) by setting the postjudgment interest rates on the loan and
guaranty at the contract rates rather than the statutory rate. We have jurisdiction
under 28 U.S.C. § 1291 and affirm.
I. BACKGROUND
In 2007 Mr. Ortega signed a promissory note with the Bank for a line of
credit not to exceed $2 million. The note required Mr. Ortega to make regular
payments and a final balloon payment on the maturity date of April 2, 2008,
which was later extended to November 19, 2008. In November 2008, Mr. Ortega
ceased making payments. Wells Fargo, by then the successor to the Bank,
demanded payment in full, without success.
Also in 2007, Mr. Ortega signed a guaranty of a $13.5 million loan from
the Bank to Tatanka Hotel Development Partners, LLC, in which he had an
ownership interest. The loan required monthly interest payments, with the
principal due in full on April 2, 2009. It was secured by a mortgage on land
owned by Tatanka in Teton County, Wyoming (the Property). Tatanka ceased
making payments on the loan in November 2008 and Wells Fargo demanded
payment in April 2009, but both Tatanka and Mr. Ortega refused to pay.
Wells Fargo then filed its breach-of-contract action against Mr. Ortega,
seeking the amount owed under the promissory note and the guaranty. It moved
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for summary judgment but Mr. Ortega raised several defenses, including a
promissory-estoppel argument that oral promises by the Bank barred the suit. He
submitted his affidavit asserting that in agreeing to the loan and guaranty he
relied upon promises by the Bank’s senior representatives that the maturity dates
for the loans would be extended as long as the value of the Property exceeded the
aggregate of the loan balances.
The district court granted summary judgment, ruling that the promissory
note and guaranty were unambiguous and should be enforced according to their
terms. In particular, it stated that Mr. Ortega’s promissory-estoppel argument
failed because it was “based upon ‘advice’ and ‘promises’ allegedly made by the
President of [the Bank] . . . prior to the execution of the Ortega Promissory Note
and the Tatanka Guaranty.” Aplt. App. at 191 n.2. The court awarded
$2,295,485.62 for breach of the promissory note and $17,343,446.93 for breach of
the guaranty, with postjudgment interest set at the contract interest rates. In
December 2010, following entry of judgment, Wells Fargo foreclosed on the
Property. At the foreclosure sale it was the successful buyer, purchasing the
Property with a $13.5 million credit bid. On January 28, 2011, Wells Fargo filed
a Partial Satisfaction of Judgment in the amount of $13.5 million to reflect its bid.
Meanwhile, on January 18, 2011, Mr. Ortega had filed a motion requesting
that the district court reduce the amount of the judgment by the amount of the
Wells Fargo bid. The court denied the request as “unnecessary.” Id. at 348.
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II. DISCUSSION
We review the grant of summary judgment de novo, applying the same
legal standard that the district court should apply. See In re Universal Serv. Fund
Tel. Billing Practice Litig., 619 F.3d 1188, 1202 (10th Cir. 2010). Summary
judgment is appropriate when “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(a).
A. Promissory Estoppel
The elements of promissory estoppel are (1) “a clear and definite
agreement,” (2) reasonable reliance by the party claiming estoppel, and (3)
“equities supporting the enforcement of the agreement.” Baker v. Ayres & Baker
Pole & Post, Inc., 170 P.3d 1247, 1250 (Wyo. 2007). Mr. Ortega acknowledges
that Wyoming law requires his claim of promissory estoppel to be based on
promises made by the Bank after he executed the loan agreement and the
guaranty. See id. at 1251 (promissory estoppel applies only when there is no
contract, although it “may arise from the conduct of parties after the execution of
a written contract”); Patel v. Harless, 926 P.2d 963, 965 (Wyo. 1996) (“When the
provisions of a contract are not ambiguous or uncertain, the document speaks for
itself, and parol evidence which tends to show that a prior or contemporaneous
oral agreement or tacit understanding was made with respect to the terms of the
agreement is inadmissible.”). Mr. Ortega contends that the Bank promised to
extend the loans after they were advanced and that he reasonably relied on those
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promises. The record, however, does not support the contention. He relies on the
following statement in his affidavit:
In around July 2008, and several times thereafter, Jim Ryan of [the
Bank] called me to ask if I would agree to secure the $2.0 million
part of the Loan through a lien on the . . . Property. I agreed to this
request, and Ryan promised to send over the necessary paperwork for
my execution. Based upon Ryan’s repeated representations and in
reliance on my agreement with [the Bank], I did not undertake any
effort to find replacement financing and awaited the necessary paper
work from [the Bank]. Because the Property’s value continued to
exceed the total advances for the Loan, I was not initially concerned
about the formal paperwork, as I believed that [the Bank] would
continue to honor its promises.
Aplt. App. at 156–57. But this statement does not allege that any promise was
made after the execution of the promissory note or the guaranty. Mr. Ortega does
not explain, nor can we fathom, how the Bank’s (later abandoned) request that he
collateralize his loan with the Property constituted a promise by the Bank or how
he could have relied to his detriment on the request. The district court did not err
in concluding that Mr. Ortega failed to create a genuine issue of material fact on
his promissory-estoppel defense.
B. Reduction of the Judgment
Mr. Ortega contends that the district court should have reduced the damage
award in the original judgment by the amount of Wells Fargo’s bid at the
foreclosure sale for the Property. But Wells Fargo had already properly filed a
Partial Satisfaction of Judgment reflecting the bid. The court therefore did not err
in ruling that modification of the judgment was unnecessary.
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C. Rates of Postjudgment Interest
Mr. Ortega contends that the district court erred in setting the postjudgment
interest rates at the contract interest rates because 28 U.S.C. § 1961(a) establishes
the postjudgment rate. See Soc’y of Lloyd’s v. Reinhart, 402 F.3d 982, 1004 (10th
Cir. 2005). He complains that the interest rate on the promissory note was 6.5%
and the rate on the guaranty was 18%, whereas the applicable statutory interest
rate would have been merely 0.3%.
As pointed out by Wells Fargo, however, this contention was not raised
below. Although Mr. Ortega requested a reduction of the amount of the award
and argued in his brief in opposition to summary judgment about the interest rate
Wells Fargo charged during default, he never raised § 1961(a) or challenged the
postjudgment interest rate.
Because Mr. Ortega failed to raise the issue in district court, we review
only for plain error. See Somerlott v. Cherokee Nation Distribs., Inc.,
No. 10-6157, 2012 WL 3055566, at *3 (10th Cir. July 27, 2012). We will reverse
only if (1) there was error, (2) the error is plain, (3) it affects substantial rights,
and (4) it “seriously affects the fairness, integrity, or public reputation of judicial
proceedings.” Id. at *5. Here, Mr. Ortega has failed to persuade us that the
fourth prong of plain error has been satisfied because he does not “identify any
particular injustice beyond the loss of [his] possibly meritorious claim.” Id. at *6.
We therefore must affirm.
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III. CONCLUSION
We AFFIRM the judgment of the district court.
ENTERED FOR THE COURT
Harris L Hartz
Circuit Judge
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