Note the "and" in "to protect the Lender's interest in the Property and rights under this Security Instrument".

The lender got a judgment against the home owners in their bankruptcy case and asked for an award of attorneys' fees for its trouble. The bankruptcy and district courts said no, that "and" means "and", that it doesn't mean "and/or". But the Fifth Circuit reversed:

[W]e find that consideration of Section 9 [in the deed of trust] as a whole requires construing "and" to mean "either or both: to effectuate the clear intent of the parties.   Section 9 specifically lists contemplated actions that can be undertaken by the lender.  It states that "Lender's actions can include, but are not limited to . . . paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding." (emphasis added).  In light of this language, it is clear that the Deed of Trust contemplates entitlement to attorney's fees incurred to protect Countrywide's interest in the property or rights under the Deed of Trust.  Consequently, "and" does not strictly mean "both" in the phrase "Lender may do and pay for whatever is reasonable or appropriate to protect Lender’s interest in the Property and rights under this Security Instrument."  (emphasis added).  To interpret Section 9 otherwise would impermissibly render portions of the agreement meaningless and frustrate the intentions of the parties as made clear by Section 9 as a whole.

Valasquez v. Countrywide Home Loans Servicing, Inc., No. 10-20609, slip op. at 9 (5th Cir. Oct. 17, 2011) (per curiam).

Just why the panel thought that "and" meant "and/or" in a contract that used "and/or" when it meant and/or baffles Blawgletter. Didn't the lender write the deed of trust? Don't ties go to the debtor?

But what do we know. As Lewis Carrol wrote:

"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean — neither more nor less."

"The question is," said Alice, "whether you can make words mean so many different things."

"The question is," said Humpty Dumpty, "which is to be master — that's all."

And some wonder why OWS swells.

Bonus: Two months ago, a different Fifth Circuit panel ruled against the lender on the same issue. See Wells Fargo Bank v. Collins, 2011 WL 3568910 (5th Cir. Aug. 15, 2011) (per curiam). The new panel "respectfully disagree[d]" with the old one but didn't say why. Valesquez, slip op. at 9 n.5.


Our thanks to WaveCult for the lovely flickr image.