United States Court of Appeals For the Seventh Circuit ____________________ No. 21-2894 ERIC D. HOVDE and STEVEN D. HOVDE, Plaintiffs-Appellants, v. ISLA DEVELOPMENT LLC and JEFFREY T. RIEGEL, Defendants-Appellees. ____________________

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:18-cv-07323 — Franklin U. Valderrama, Judge. ____________________

ARGUED APRIL 13, 2022 — DECIDED OCTOBER 24, 2022 ____________________

Before ROVNER, WOOD, and ST. EVE, Circuit Judges. ROVNER, Circuit Judge. Jeffrey Riegel sought to build a con- dominium development in Isla Mujeres, and toward that end he formed ISLA Development LLC (“ISLA”) and secured a loan of millions of dollars from Steve and Eric Hovde. That project, however, ultimately failed, and more than ten years later, the Hovdes filed suit seeking to recover their funds from ISLA and Riegel. 2 No. 21-2894

Riegel formed ISLA in 2004 and acted as its manager and sole member. In exchange for the loan from the Hovdes, ISLA promised to pay the Hovdes a 25% interest rate, and Riegel agreed to act as a guarantor. Financial problems eventually shut down the project and the Hovdes sued ISLA and Riegel. The district court granted summary judgment to the defend- ants as to the claim based on the Mortgage Note (“Note”), holding that the claim was brought beyond the expiration of the ten-year statute of limitations period. That left the claim against Riegel based on his status as a guarantor. The district court initially held that the case could proceed as to Riegel, but a different district court judge who subsequently took over the case determined that the statute of limitations could be asserted in the action against the guarantor as well, hold- ing that a waiver did not operate to block that defense and the claim against Riegel was therefore untimely. The Hovdes now appeal those grants of summary judgment. We turn first to the claim based on the obligations under the Note. By its terms, the Note provided that the principal and interest on the loans would be due in June 2007, but the Note’s event-of-default acceleration clause provided that if an Event of Default occurred, “the outstanding unpaid principal balance of the Note, the accrued interest thereon and all other obligations of the Borrower to the Bank under the Loan Doc- uments shall automatically become immediately due and payable,” thus triggering the ten-year statute of limitations. One such “Event of Default” specified in the contract was if an “Act of Bankruptcy shall occur,” and “Act of Bank- ruptcy” is defined in the contract to include if ISLA or Riegel “admit in writing its inability to pay its debts as they mature.” The district court properly held that two emails sent by Riegel No. 21-2894 3 to the Hovdes constituted an admission in writing of an ina- bility to pay the debts and therefore an event of default. In an email on August 7, 2008, to Steven Hovde, Riegel revealed that a tax bill of $137,000 had to be paid by August 18, that he had been buying time with the tax officials most of the spring and summer but that it was now absolute and non-negotiable, and that he needed an advance of $250,000 just to make it until an anticipated closing in mid-September. Steven Hovde re- sponded on August 11 that he had no more money to give and that the last time he lent money he had told Riegel to shut the project down and that they would not lend any additional amounts. On September 2, Riegel sent another email, stating that he had pursued financing options but that “[a]t this point in time, my resources are exha