UNITED STATES of America, Appellee, v. Charles David SCHRADER, Appellant.
No. 91-1694.
United States Court of Appeals, Eighth Circuit.
Decided Aug. 21, 1992.
Rehearing Denied Oct. 8, 1992.
974 F.2d 623
Submitted Dec. 10, 1991.
The essence of [the guarantors‘] argument is that there is no debt due and owing from the principal debtor since the obligation was “extinguished.” As a result, the condition precedent has not been satisfied and the guarantors should not be liable.
... While it is true that the court in [the declaratory judgment action brought by the principal obligor mortgagor] stated in a footnote that the mortgagee‘s purchase at the foreclosure sale “extinguished” [the guarantors‘] indebtedness under the mortgage, it is obvious that the court used the word “extinguished” in a general sense (as a synonym for the words discharged or released) and did not intend the word “extinguished” to be the central holding of the case. It is also clear that the court did not intend that the “extinguishment” affect any party other than the mortgagor ... and the SBA, or any obligation other than that owed by [the mortgagor] to the SBA. Indeed, the present plaintiff guarantors were not even parties to the [mortgagor‘s] case and, as a result, the question of the liability of the guarantors was simply not an issue in that case. The only issue before the court in [the mortgagor‘s case] was the liability of the mortgagors....
[The guarantors‘] argument is really based more upon semantics than it is upon substance. Whether the obligation of the mortgagor ... was released, discharged, or “extinguished” is really of no significance since the [guarantors] unconditionally guaranteed their obligation regardless of what happened to the obligation owed by the mortgagor....
Id. at 76-77.
We are aware of the general rule that the release or discharge of the principal obligor also discharges the guarantor unless the right of recourse against the guarantor is expressly reserved in the guaranty agreement. Here, however, the language contained in the guaranty agreement clearly provides for the unconditional liability of the guarantors, regardless of whether the obligation of the principal debtor has been released, discharged or altered in any manner. The term “extinguishment,” as used in the bankruptcy plan, was not intended to affect any party other than TBI and the SBA, nor any obligation other than that owed by TBI to the SBA.
Accordingly, we hold based on a reasonable interpretation of the clear and unambiguous language contained in SBA Form 148, that as a matter of federal law the release of the principal debtor did not discharge the obligation of the guarantors under their guaranty agreements.
Accordingly, we affirm the judgment of the district court.
Robert A. Mandel, Asst. U.S. Atty., Rapid City, S.D. (Diana Ryan), Asst. U.S. Atty., argued on the brief), for appellee.
Before BEAM, Circuit Judge, HEANEY, Senior Circuit Judge, and LOKEN, Circuit Judge.
HEANEY, Senior Circuit Judge.
Charles David Schrader pleaded guilty to escaping from a halfway house. On April 28, 1989, the district court sentenced Schrader to twelve months’ imprisonment, to be followed by three years of supervised release, the maximum supervised release permitted under the statute.
Schrader began serving his term of supervised release on January 23, 1990, immediately after his prison term for the escape charge expired. On January 22, 1991, Schrader‘s probation officer filed a petition asking the court to revoke Schrader‘s supervised release. After a hearing, the district court rejected the probation officer‘s request and continued Schrader on supervised release. The probation officer filed a second petition to revoke Schrader‘s supervised release on March 5, 1991. On March 22, 1991, the court determined that Schrader had violated the conditions of supervised release. The court ordered “that the defendant be committed to the custody of the Attorney General or his duly authorized representative for a period of 6 months.” It further ordered that:
the supervised release will continue thereafter on the same terms and conditions as imposed in the Judgment dated April 28, 1989, the Amended Judgment dated May 8, 1989 and the Order Modifying the Terms of Supervised Release dated October 23, 1990. The period of supervised release will terminate on January 22, 1993.
January 23, 1993 was the date on which Schrader would have completed his three-year term of supervised release had he not violated the conditions of his supervised release. Thus, the practical effect of the court‘s order is that Schrader will be serving six months of the time that he was to serve on supervised release in prison.
Schrader appeals. Relying on a line of cases beginning with United States v. Behnezhad, 907 F.2d 896 (9th Cir.1990), Schrader claims that the district court did not have the power to order him to serve part of the remainder of his term of supervised release in prison. We disagree. In our view, the district court‘s action is consistent with
(e) Modifications of conditions of revocation. The court may ...
(3) revoke a term of supervised release, and require the person to serve in prison all or part of the term of supervised release without credit for time previously served on postrelease supervision, if it finds by a preponderance of the evidence that the person violated a condition of supervised release, pursuant to the provisions of the Federal Rules of Criminal Procedure that are applicable to probation revocation and to the provisions of applicable policy statements issued by the Sentencing Commission....
This subsection permits a sentencing judge to revoke an offender‘s term of supervised release, and to require the offender to serve in prison all or part of the term of supervised release without credit for time previously served on post-release supervi-
We acknowledge that the issue is not free from doubt, particularly in those circumstances in which the defendant‘s new term of prison and supervised release together is longer than the original term of supervised release, and where the new combined term would extend beyond the expiration date of the original term of supervised release. See United States v. Williams, 958 F.2d 337, 338 (11th Cir.1992) (defendant originally ordered to serve three years supervised release, the maximum allowable; district court revoked defendant‘s original term of supervised release soon after it began, ordered defendant to serve six months in prison, and imposed a new three-year term of supervised release; district court reversed); United States v. Holmes, 954 F.2d 270, 271 (5th Cir.1992) (defendant originally sentenced to three years supervised release, the maximum allowable; after the defendant served five months on his original term of supervised release, the court revoked supervised release, ordered the defendant to serve an additional thirteen months in prison, and ordered the defendant to serve an additional thirty-one months of supervised release after his release from prison; district court reversed). But see United States v. Boling, 947 F.2d 1461 (10th Cir.1991) (defendant originally sentenced to two years supervised release; district court revoked supervised release after ten months, ordered the defendant to serve fifteen months imprisonment and an additional fourteen months of supervised release; district court affirmed). Cf. United States v. Cooper, 962 F.2d 339 (4th Cir.1992) (defendant originally ordered to a five-year term of supervised release; district court revoked supervised release after five months, sentenced the defendant to two months of intermittent confinement to be followed by a four and one-half year term of supervised release); Behnezhad, 907 F.2d at 897 (defendant originally sentenced to three years supervised release; approximately four months into his term of supervised release, the district court revoked the term, ordered the defendant to serve ten months in prison, and ordered the defendant to serve an additional two years on supervised release; district court reversed). We need not and do not reach the question, however, of whether the district court can revoke a defendant‘s term of supervised release and impose a new term of prison and supervised release that together is longer than the original term of supervised release and extends beyond the expiration date of the original term of supervised release. We simply hold that if a district court finds that an offender has violated the terms of his supervised release, the district court can, as here, require the offender to serve a portion of the time remaining on the term of supervised release in prison and the remaining time on supervised release.
BEAM, Circuit Judge, concurring.
I concur only in the result.