Tractor & Equipment Co. v. Dual Trucking & Transport, LLC
Tractor & Equipment Co. v. Dual Trucking & Transport, LLC
Opinion of the Court
SECTION: R
ORDER AND REASONS
Before the Court are cross motions for summary judgment on the validity of a surety agreement signed by Anthony Alford.
I. BACKGROUND
This action arises out of Dual Trucking and Transport, LLC’s (DTT) alleged default . under an open account agreement with Tractor and Equipment Co.
Dear Sirs:
*464 In reviewing the application for Credit you submitted, we find the Personal Guarantee portion was not signed. Please have the owner or officer of company [sic] sign the attached application as indicated, fax a copy to me at 406 651 8346 and drop the copy with original signature in the mail to PO Box 20158, Billings MT 59107.
Thank you for your help and consideration.
[Signature Block]6
Anthony Alford, a 50% owner of DTT,
In late 2013, Tractor and Equipment sued DTT and Anthony Alford in Montana state court, alleging that DTT had an unpaid account balance of $292,646.30.
The parties have filed cross motions for summary judgment,
II. LEGAL STANDARD
Summary judgment is warranted when “the movant shows that 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); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When assessing whether a dispute as to any material fact exists, the Court considers “all of the evidence in the record but refrain[s] from making credibility determinations or weighing the evidence.” Delta & Pine Land Co. v. Nationwide Agribusiness Ins.
If the dispositive issue is one on which the moving party will bear the burden óf proof at trial, the moving party “must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.” Int'l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991). The nonmov-ing party can then defeat the motion by either countering with evidence sufficient to demonstrate the existence of a genuine dispute of material fact, or “showing that the moving party’s evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party.” Id. at 1265,
If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party’s claim. See Celotex, 477 U.S. at 325, 106 S.Ct. 2548. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324, 106 S.Ct. 2548. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for trial. See, e.g., id.) Little, 37 F.3d at 1075 (“Rule 56 mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that partywill bear the burden of proof at trial.” (quoting Celotex, 477 U.S. at 322, 106 S.Ct. 2548)).
III. DISCUSSION
As noted, the parties do not dispute that Alford signed the “Personal Guarantee” section of a form application for credit and submitted it to Tractor and Equipment. The relevant section—contained in a separate box from the remainder of the form—reads as follows:
PERSONAL GUARANTEE
The undersigned, _, in consideration of your giving credit to the aforesaid applicant, jointly and severally guarantee(s) and agree(s) to pay to TRACTOR EQUIPMENT CO., N C MACHINERY CO., MACHINERY POWER & EQUIPMENT CO., N C POWER SYSTEMS CO. OR ANY OF THEIR RELATED OR AFFILIATED COMPANIES all monies which shall become due you from Dual Trucking and Transport LLC by reason of any credit you extended as credit you extend as [sic] herein requested, including late payment charges and all costs of collection and reasonable attorney’s fee for recovery of the debt if it is due whether it is incurred by the debtor or guarantor or both.20
Alford’s signature appears directly below this paragraph.
In Louisiana, “[a] contract of guaranty is equivalent to a contract of suretyship^ and t]he terms guaranty and suretyship may be used interchangeably.” DROR Int'l, L.P. v. Thundervision, L.L.C., 81 So.3d 182, 185 (La. App. 5 Cir. 2011) (citing Eclipse Telecommunications Inc. v. Telnet International Corp., 800 So.2d 1009, 1011 (La. App. 5 Cir. 2001)). In a surety contract “a person binds himself to a creditor to fulfill the’ obligation of another upon the failure of the latter 'to do so.” La. Civ. Code art. 3035, Surety agreements must be express and in writing. La. Civ. Code art. 3038. “The surety’s contract need not observe technical formalities, but must contain an absolute expression of intent to be bound.” Fleet Fuel, Inc. v. Mynex, Inc., 924 So.2d 480, 482 (La. App. 2 Cir. 2006).
Surety agreements “are subject to the same rules of interpretation as contracts in general.” Comar Marine, Corp. v. Raider Marine Logistics, L.L.C., 792 F.3d 564, 578 (5th Cir. 2015) (quoting Ferrell v. S. Cent. Bell Tel. Co., 403 So.2d 698, 700 (La. 1981)). “[Tjhe main goal of contract interpretation under Louisiana law is determining the common intent of the parties.” Franks Inv. Co. v. Union Pac. R. Co., 772 F.3d 1037, 1041 (5th Cir. 2014). Accordingly, courts must “give legal effect to all [surety] contracts according to the true intent of the parties, and this intent is to be determined by the words of the contract when these are clear and explicit and lead to no absurd consequences.” Comar Marine, 792 F.3d at 578.
, In this case, the Court finds, that the plain language of -the contract evinces “an absolute expression of intent- to be bound,” Fleet Fuel, 924 So.2d at 482, and the Court therefore need not look beyond the text of the agreement. Under the bolded, underlined heading reading, “Personal Guarantee”—and in a box separating the surety agreement from the remainder of the document—the paragraph in question clearly identifies the applicant or principal obligor (DTT) and the creditor (Tractor and Equipment).
To resist this conclusion, Alford and DTT argue that the guarantee applies only to DTT’s existing debt, not to any debts incurred after the guarantee was signed. This argument is based on a strained reading of the limiting clause discussed above. In essence, Alford and DTT argue that when the agreement refers to “credit you extended,”
First, the Court notes'that, contrary to defendants’ representations, an agreement binding a surety to future obligations is neither unusual nor suspect. See La. Civ. Code art. 3036 (“The principal obligation may be subject to a term or condition, may be presently existing, or may arise in the future.” (emphasis added)); Sizeler Prop. Inv’rs, Inc. v. Gordon Jewelry Corp., 550 So.2d 237, 244 (La. App. 4 Cir. 1989) (explaining that “[sjuretyship has historically been given for future obligations in Louisiana.”). Second, defendants’ argument ignores that the limiting clause specifically refers to credit as “herein requested.” This clear statement of what debts fall under the guarantee outweighs any asserted ambiguity caused by the use of a single past-tense verb. Third, in their myopic focus on the tense of a particular word, defendants ignore the document as a whole. That the guarantee is included as part of an application for credit strongly suggests that it-applies to obligations resulting from that application. See La. Civ. Code art. 2050 (“Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole.”); see also Am. Bank & Trust Co. of Houma v. Wetland Workover, Inc., 523 So.2d 942, 945 (La. App. 4 Cir. 1988) (“[T]he mortgage note and the guarantees must-be interpreted together and in a manner which will make the loan transaction effective and meaningful.”). Fourth, defendants’ interpretation violates this Court’s mandate to interpret contract clauses so as to give them some effect. See La. Civ. Code art. 2049 (“A provision susceptible of different meanings must be interpreted with a meaning that renders it effective and not with one that renders it ineffective.”). No party has suggested that DTT has any obligations to Tractor and Equipment that predate the March 19,2012, application for credit. Defendants’ attempt to limit the guarantee to past debts therefore “would render it nugatory,” and this interpretation must be rejected in favor of one that gives the agreement some effect; Franks Inv. Co., 772 F.3d at 1042.
Defendants’ also argue in the alternative that the agreement is wholly invalid. In support, defendants cite the Louisiana Supreme Court’s 1889 decision in Chretien v. Bienvenir, 6 So. 553 (1889). In that case, the court declared unenforceable á form contract so incomplete that the document contained “nothing defining or expressing any obligation whatsoever,” Id. at 554. Chretien does not, however, stand for the blanket proposition that all alleged surety contracts with unfilled blanks are invalid. In this case, for the reasons discussed above, the unfilled blanks in the credit application do nothing to obfuscate Alford’s clear expression of intent to be bound. Chretien therefore does not undermine the Court’s finding of a valid surety agreement.
Finally, defendants argue that the personal guarantee is invalid because Alford signed it in his representative capacity as an officer of DTT, rather than in his per-: sonal capacity. Alford asserts that he did not intend to be personally obligated for DTT’s debts, and submits an affidavit to that effect.
To resist the weight of this precedent, defendants cite a handful of Louisiana cases finding an issue of fact as to whether a guarantor signed in his representative or individual capacity. These cases are easily distinguishable. In Pelican State Wholesale, Inc. v. Mays, 15 So.3d 341, 341 (La. App. 2 Cir. 2009), a supplier sued a store owner’s widow and children to enforce an alleged personal guarantee. The store owner had signed a “new account” form that included a single sentence purporting to bind the signatory to a personal guarantee. Id. The store owner signed the form only once. Id. at 341-42. The trial court granted summary judgment in favor of the creditor, but the court of appeals reversed and remanded. Id. at 344. In doing so, the appellate court found that in the situation before it—where a single signature was alleged to bind both the corporation and the person—there existed a genuine issue of fact as to whether the store owner intended to sign in his personal capacity. IcL Here, by contrast, Alford signed only the separate box under the title “Personal Guarantee.”
Defendants also cite Eclipse Telecommunications Inc. v. Telnet Int’l Corp., 800 So.2d 1009 (La. App. 5 Cir. 2001). In that case, the Louisiana Fifth Circuit upheld the trial court’s dismissal of Mr. Anderson, an individual defendant, from a suit on an open account. Id. at 1010. The “Guarantor Agreement” at issue in Eclipse—which was a separate document from the underlying obligation—contained a “section requiring the name, address, telephone number, and social security number of the guarantor.” Id. at 1011. This section was entirely filled out with information corresponding to Telnet, the corporate defendant:
The guarantor’s name is listed as Telnet and the corporation’s address and telephone number are listed. The corporation’s tax number is entered in the blank which requests the guarantor’s social security number. The document is signed by “Chris Anderson, president.” There is no personal information on the document which pertains to Mr. Anderson.
For these reasons, the Court finds that the “Personal Guarantee” constitutes a valid surety agreement, and that Alford signed it in his personal capacity. Because the Court concludes that the common intent of the parties to personally bind Alford as surety is made clear and explicit by the words of the contract, the Court does not consider the extrinsic evidence submitted by either party.
IV. CONCLUSION
Tractor & Equipment’s motion for summary judgment is GRANTED. Defendants’ motion for summary judgment is DENIED. Tractor and Equipment’s motion in limine to exclude parol evidence is DENIED AS MOOT. The clerk is directed to enter judgment declaring the personal guarantee executed by Anthony Alford to be a valid and enforceable surety agreement.
. R, Doc, 16; R, Doc. 17.
. R. Doc. 19.
.R. Doc. 1 at 1 ¶ 1.
. R. Doc. 16-3 at 10.
. Id.
. R. Doc. 16-4 at 3.
. R. Doc. 16-5 at 1.
. R. Doc. 16-4 at 4; R. Doc. 18-1.
. Compare R. Doc. 16-3 at 10 with R. Doc. 16-4 at 4.
. Id.
. Id.
.Id.
. R. Doc. 1 at 3 ¶ 7.
. Id. at 4 ¶ 11.
. R. Doc. 5-4 at 10; R. Doc. 16-3 at 8-9.
. R. Doc. 16; R. Doc. 17.
. R. Doc. 18; R. Doc. 22.
. R. Doc. 26; R. Doc. 29.
. R. Doc. 19.
. R. Doc. 16-4 at 4.
. Id.
. R, Doc, 16-4 at 4.
. Id.
. Id.
. R. Doc. 18-1.
. R. Doc. 16-4 at 4.
. Id.
. R. Doc. 16-3 at 10.
. In Pelican Plumbing Supply, Inc. v. J.O.H. Const. Co., 653 So.2d 699 (La. App. 5 Cir. 1995), the Louisiana Fifth Circuit upheld a trial court’s finding that a similar agreement did not create a valid personal guarantee. This case is inapposite for the same reasons as Pelican State Wholesale.
. R. Doc. 16-4 at 4.
Reference
- Full Case Name
- TRACTOR AND EQUIPMENT CO. v. DUAL TRUCKING AND TRANSPORT, LLC, and Anthony Alford
- Status
- Published