United States District Court, S.D. Mississippi, Northern Division
CARLTON W. REEVES, District Judge.
Before the Court are cross-motions for partial summary judgment filed by Radian Asset Assurance and Madison County, Mississippi. Docket Nos. 167, 170. The motions are fully briefed and ready for adjudication.
I. Factual and Procedural History
In 2002, Madison County attempted to spur economic development in a 1, 050-acre area by creating the Parkway East Public Improvement District.
In 2005, the District issued bonds to finance improvements. The bonds were to be repaid by special assessments on the landowners within the District. Radian insured the bonds.
The subsequent collapse of the economy caused the District to fail. It was unable to attract the development necessary to make its bond payments.
Madison County had previously agreed to help cover the District's shortfall, at least to some extent. The scope of the contribution agreement between the County and the District is hotly contested. The relevant language - presented here in three parts, for ease of reading - states the following:
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.
The parties also agree that, in the event of a sale of a parcel of land for taxes (pursuant to Section 19-11-33 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.
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.
Docket No. 168-4, at 3-4.
To simplify, the first part means that if the County is satisfied with the District's performance, it will step in and pay the District's bonds if the District experiences an assessment shortfall. If the County makes such a payment, the second part means that the County can take the proceeds of tax sales to recoup the money it spent on bond payments. The third part means that the District has two years to reimburse the County for the County's bond payments.
When the District failed, Madison County made the District's bond payments between October 2011 and September 2013. The County then stopped, arguing that the contribution agreement required it to cover bond payments for only two years. As Madison County reads the agreement, it is now Radian's duty as insurer to step forward and repay the bonds.
Radian disagrees. It filed this suit seeking, among other things, a declaration that Madison County remains responsible for bond payments. The parties also differ on the meaning of Madison County's later receipt, from the District, of a large parcel of land called the "Landspan Property." In addition, a number of property owners within the ...