good morning and may please the court mr black and gary feinerman on behalf of the plaintiff appellant j p morgan chase bank as successor in interest to bank one the facts are very simple and november of two thousand and one the bank four the bank said a notice of default to earth foods and the three guarantors and in june of zero four the bank brought suit against both earth foods for breach of contract and against the guarantors for breach of the guarantee agreement of agree with that kind of set it aside it's a little bit different than your argument that there are clauses i think maybe it's going to be part of your argument that there are clauses in the in the contract itself but yeah i was there to be addressed as per your franco could benefit from the actor at least he's not for precluded from benefiting from the act i think the the source of the appellate court's confusion and it you may be addressing the passage that's on pages three twenty one the three twenty two of the of the official report or i think the appellate court confused assurity with a guarantee of collection and what we have here is a guarantee of payment surety is liable from the instant the surety ship is signed and regardless of whether there is a default a guarantee of payment a guarantor of payment is liable once there's of the fault and a guarantor of collection is liable not only when there's a default but also only after not also but only after the creditor actually sues the principal i thought it's important because although it's not  the waiver point which is whether the agreement waives the protections of the sureties act but i'll get to that i'll get to that right now i'll first note that mr franco did not raise this argument in the circuit court and to the contrary  verified pleading admitted that he is a guarantor so we raise the question whether mr franco can actually argue this point before this court but even if you put aside the judicial admission and put aside the for ure on the merits he's a guarantor as i mentioned a surety is libel from the get go there the creditor can go after the surety even if the principal doesn't default whereas a guarantor is liable only  one the first sense this is a guarantee of payment and not of collection on page twenty six of the appendix right above mr franco signature it says guarantor signatures and it says guarantee and i had knowledge under case the name given the instrument in the instrument is not the spaza tive but it's certainly relevant throughout the throughout that the time period before suit was brought in correspondence written by mr  points to paragraph six of the additional guarantee terms on page thirty four of the appendix the sentence reads in the event of any default in the payment or performance of all on any part of a no w agreement the loan agreement with the bank and that that is what makes him a guarantor and not a surety i mentioned earlier the first sentence of these additional guarantee terms this is the guarantee of payment and not of collection those are terms of arts i mentioned a guarantee of payment is libel upon the default the guarantee of collection a guarantor of collection is liable only after the creditor bring suit against the principal  position in two thousand and one precisely what he was signing so we believe that even if the issues now forfeited that this is a guarantee and not a surety understood that term to mean in eight hundred seventy four and we cited case law treatises dictionaries from the area from this state and from other states all providing that surety as are distinct from guarantors in the man should be respected if it warrants that in statutes where the general semele wrote that the statute pertains to both sureties and guarantors the inclusion of the word guarantor would be surplusage because of a surety surety there be no reason to include the word guarantor and equally important the distinction has been enforced by all in our courts both in the statutory and other contacts we've cited of a few cases hamilton versus thousand no seven the court held that while shirley's can take advantage of the statute of limitations that the principal had guarantors are not released by the statute of limitations so sometimes the law favors guarantors sometimes the law favor surety and that distinction has been respected it would also came into play in the vermont marble case where the court noted that an offer of guarantee is not binding until the creditor sends points mr franco raises a number of arguments we address those in iraq library i'd like to focus on two the first is his legislative acquiescence argument it's based on the cob case from the u s court of appeals for the first circuit back decided it was based on the premise that were there were no one or cases that would help solve the case the court didn't mention the gridley case harris hamilton or campbell all of which draw distinctions between sureties and guarantees and it held that guarantors are entitled to every equitable right of protection enjoyed by sure it is that's not true under the campbell case which held that guarantor surety is but not guarantor it can take advantage of the statute of limitations that applies to the guarantees guarantor sometimes a general simply protect surety these sometimes they protect both those choices should be respected and that's particularly salient given that in other done that over the last hundred thirty five years but it hasn't done so and the general somebodies choice here should be respected i'll proceed to my second point which is even assuming that mr de franco is covered by the surety zakk either by virtue of the fact that he's a surety or by virtue of the fact that the sureties act covers guarantors he waived whatever protections he had under the so long as that issue is is apparent from the record and here we have the guarantee agreement in the record so that's apparent there's a tougher issue is whether there's been a forfeiture by virtue of the fact that the bank  raise the waiver issue in the petition for leave to appeal is this court held in reland as g recently that's not a jurisdictional bar the court can consider the issue and in this case it's our submission that the court should consider the issue because the question of contractual waiver is inextricably intertwined with the question of whether mr de frank was covered by the surety zakk in the first place and u  the testimony of the evidence in question was not testimonial and therefore crawford in the confrontation clause didn't apply the court granted allowed leave to appeal that on the merits the state now restated  argument that crawford didn't apply but then presented to alternative arguments forfeiture by wrongdoing and hama said and the court acknowledged that there technically had been a waiver also acknowledge that it could reach those alternative arguments and as a reason for doing so stated that the question of forfeiture by ron doing and and harmless error were extremely intertwined with the question of whether the testimony was covered by crawford in the first place and i think we're directly on point there are the argument we made in r p a way is that the surety zakk does not apply to mr de franco and on the merits incorrect with respect to the failure to raise waiver in the circuit court in the appellate court he has a better argument with respect to the failure to raise in the petition for leave to appeal but we would ask the court for the same reason as in g to consider our waiver argument contractual waiver argument here should it become necessary to do so to reach that issue what the sureties act does is it allows the surety to transfer use me for interrupting but in this way everything go beyond where you you just did your position that they have waived the protections of the act based on the contract language and the additional guarantee terms is that right that's d the answer to question is there is no express reference to the on my statute but that doesn't matter because these these additional gary to terms do waive the protections of the o using different language and it's very clear in paragraph four mr de franco waves any rights who are quire bank one to make any present protest demand in connection with the no that's exactly he waived exactly what the surety zach would otherwise have allowed him to do also in progress for mr de franco waived any right to require bank one to first proceed directly against  against any person including the company which is earth foods again waiving exactly exactly what the surety zach would have otherwise allowed him to do which is right to the bank and say hey you have to proceed franco waived quote all other rights and defenses of a guarantor or surety all the rights or defenses of a guarantor surety that certainly conveys the surety zakk and then it goes on to say including without limitation those rights and defenses set forth in the arizona surety statute and as we noted in our brief the arizona surety statute is materially identical to the illinois surety statute except for one thing there is on a search surety so patch applies to  guarantors and of course were assuming since we're on the contractual waiver point that the illinois surety is the act applies to guarantors or at least to mr de franco so all those things including the express reference to a materially identical arizona statute we submit means that there has been a contractual waiver here but what about as paragraph five references arizona oklahoma and colorado but doesn't mention illinois their argument then on their side  including without limitation so it was just by way of example mentioning those four statutes and it wasn't meant to be exclusive and i know your time's right i just want to ask you one of the question there is that there's an argument in their briefs that these documents are not complete they're not the original documents what about that yeah there was no the bank couldn't find the original and i'll just give a little bit of history at that page thirty six of the record mr francophile the bill of particulars because the l appendix refers to additional guarantee term set forth on the reverse and mr franco noted correctly that the additional guarantee terms were not attached to just the complete my answer  i'm page one thirty four of the record the bank filed another copy this time more legible another copy the loan agreement and this time that included the additional guarantee terms on page five twelve of the record of the banks a bit in an no there i believe that that issue has been covered by the affidavit that the bank submitted which is that the original could not be found but here was the copy and then the copy cut saw on the additional guarantee terms it cuts off some tax at the bottom if you look at that that this taxes it's basically the integration clause in the contract mr de franco has not alleged at any point that whatever it is that's missing has anything to do with the contractual waiver with the terms of the guarantee thank you took loan documents that use the word guarantee and took a statutory provision that uses the word surety and said i'm going to enter a summary judgment because the surety it does not apply the appellate court looked at this case and in terms of statutory interpretation discussed decades of law concerning surety versus a guarantee it discussed how the terms have been intermixed for years discussed how essentially the matters boil down to a surety being the broader term and the guarantee being the more specific term that it guarantee is in fact subsumed within the surety that there is no practical reason to continue any differentiation there and it did also comment that in terms of the documents here the loan documents at the bank is relying upon if the bank continues to want this bright line demarcation between surety and guarantee in their own documents either events or rate any such distinction or show that mr frankel was a surety ok our posture here before this court has changed somewhat in that the bank has raised for the first time in briefing before this court and not in the p l a that the essential determination here of legislative intent must be what the legislature me intended in eight hundred seventy four when they passed this statute and then their corollary position that we can unequivocally determine what that is by a few cases that are out there including the gr during that time that we can definitively discern what that legislative intent was back then and that that legislative intent trumps everything else including one hundred thirty five years of the straw decisional law come and terry re statement including the fact that obviously our commercial system our banking system is dramatically different at the beginning of the twenty first century than it ever was in eight hundred seventy four so there are problems with this position that we have identified first and foremost they have the it ignores all of this case law that says basically the only distinction here is one of academic purposes and that essentially the surely and the guarantee both do one important thing and that is it guarantees the performance  the payment of debt of a third party the only real practical distinction is how that contractual relationship arises for what was traditionally deemed as a surety it arose in the first instance at the same time of contracting for what was a traditionally deemed as a gear and t it arose secondarily to the contracting in a rose because the guarantee would then that any practical to some chins between the two have long since gone by the wayside that in fact the surely is the broader term and the guarantee is subsumed within the term surety yes what the bank's argument also ignores is how can we definitively discern exactly what the legislative intent was an eight hundred seventy four and again how does that trump everything that's in it been in existence since then but also and perhaps most critically is that it doesn't take into proper account their own little documents their own documents containing specific language that as the appellate court is on that point there is a been a contention in the bank's reply brief that we have somehow abandoned our position in what the appellate court said in terms of how this matter arises and statutory interpretation we are fully on board with how the appellate court viewed this as a matter of statutory interpretation and the fact that there is no practical decision to the station anymore between the two but if we are to look at the documents themselves and how those documents are phrased and to look at the documents within the business credit application and agreement and that's a page begins of page eight twenty four of their appendix but it basically states that the confirmed alone terms along with the side business credit application agreement shall be collectively considered the note in security agreement significantly in this portion of the loan documents it ssion additional guarantee terms with or right above there and underneath mr frank was purported signature it states that every each parent for jointly several unconditionally geared to his payment at any time if the bank wants to still rely upon these distinctions between surety and guarantee i think we can kind of develop a checklist of what was by all the parties in that we have this language you're right up front that says jointly serve really and insulate oh that is strictly speaking what has been traditionally beamed surety language if we're going to continue to make that number one would be it is the cases have recognized the terms have been intermixed and then the two makes often it where they were utilized in this case not in terms of making a distinction between guarantor and a surety but to follow the documentation and the language that was contained within the the docket to the documents here but beyond of a that we still have contractual language here that says you're going to be jointly conditionally liable you've contract at the same time all the traditional in  anyone if we go back to our little checklist and there is actually going to be a distinction between a surety and a guarantee once again we're checking off surety because a surety is someone where there can be a proceeding without notice  let's then be come to this additional guarantee terms that gary in the bank has raised and we've raised several concerns with the additional guarantee terms and how the record may not be  fully fleshed out as these additional guarantee terms number one the additional guarantee terms were not attached as an exhibit to the complaint there was the demand of for a bill of particulars and what was received at that point was incomplete we don't know what if anything may still be said within the remainder of that additional guarantee terms because it cuts off at the bottom of the page we can't  else might be within that because we just simply don't know but more pointedly here the bank's own documents say that the entire loan agreement consists of the confirmed loan terms and the business credit application agreement and is completely silent as to anything else called additional guarantee terms  also no separate signatures on there but even more pointedly when the when the bank came back to try and say that that it had completely complied with providing the documents here it didn't attest to the accuracy of everything or that this was complete or didn't attest that this was part of it what they said was we ross the original so the problem here then becomes when we've got this waiver language that's subsumed within the additional guarantee terms with what is our record like in terms of reliance upon it the edition will guarantee terms as it exists today where we have documents that say the loan agreement is a and b and not c but in the records a b and c in c is incomplete beyond that if we're looking to the terms of the additional guarantee and if we're able to do so we can see that yes there  towards of already part of the moat and the release of one does not affect the liability of the other if we're still going down it shouldn't checklist once again we're checking surety it does state with the paragraph identified is that this particular issue of this contractual language was not what raised in the trial or was not raised to or addressed by the appellate court but most significantly was not included in their petition for leave to appeal i recognize that this setting in terms of omission from a petition for leave to appeal is more a restriction on the parties and certainly not an  definitive thing for this court here but the fact of the matter is there is clear case law out of this court in the case law is legion that if you don't raise the issue in the petition for leave to appeal you can't raise it for the first time before this court this is when they are raising this argument for the first time is in the briefing before this court and not in the petition for leave to appeal but going beyond that that waiver language itself we do have to no plethora of terms and words and documents that the bank has provided and that anything that the bank has provided here should and will be should be i won't be presented should be construed against the bank itself we have the case law that says that if it's going to be a valid contractual waiver it's got to be no involuntary it intentional and we submit that this little portion within a page of the additional guarantee terms that are incomplete of record and may perhaps not have been part of anything we don't know for certain does not constitute and in within the font that we're dealing with here can be waived what we have asserted a whore want to resort and response there is that the language in that case was far different and far more specific than what we have here the language annette case talks about you're the source specifically mentions waiver of diligence in collection section one of the surety act basically says using the term surety if you are aware that the primary is going to leave the state become insolvent those types of things you can give notice of that to the bank the bank then should proceed with due diligence once the cause of action accrues to collect that ok this language from some emotional bank vs reiman specifically mentions a an express waiver of diligence and collection i don't read all the additional guarantee terms here particularly this one that broadly states you waive any and all defenses that are available at law or in equity or were available to assure reason guarantees as a as a specific waiver of this assuming that this issue differentiate or point out there your honor is the statute certainly was enacted in eight hundred seventy four and i was there we don't have the benefit of legislative history or anything from back then the gridley case was decided yes in eight hundred seventy four was presidential but merely persuasive talking about this type of distinction and in gridley the distinction we believe did not have to be made under those circumstances and certainly was not made in reference when you sort of statutory right or defense gridley court just says a blanket statement without justification rationale or anything behind it and without citation if i'm recalling a correctly that just says surety is not a guarantee your guarantee is not a s is that what we have here is essentially a provision that says if you are contractually responsible for the death of another and you know that that party is going to become insolvent or is going to become or move out of the state i think is that the language you can give notice of that to the bank and i think the statute also talks about the timing of it being from the cruel of the cause of action and that's the point that the pool of court remanded for and if if if the person does that the net person can be just charge from the from the from the obligation in terms of how that statute comes about i've been i've heard bandied about surety versus guaranteed guarantee of collection versus guarantee of of payment but what is i guess significant to me is that this statute itself talks about better answer there is that when we have those contractual relationship for the payment of another party that or performance other parties obligation one arises primarily one that secondarily if you're giving if you're providing a party with the incentive to give notice of something  and the if the other party must act with due diligence and collection that there exists no reason to differentiate rights and responsibilities based upon surety versus guarantee i see the red light is on if there are any other questions  like the first address the question of mr franco signature it's on page twenty six of the appendix his signature appears in two places the first point is as an officer of earth and in the record at pages six nineteen and six thirty one mr de franco it made it in his deposition that these were his signatures with respect to the additional guarantee and whether they are part of this no the guarantee part of this page on an eight twenty six of the appendix reference in each guarantor also agrees  to some some matters and the additional guarantee terms set forth on the reverse which are incorporated here and by reference and when the original complaint was filed mr franco noted correctly that the additional guarantee terms were not included in the exhibits of the complaint and for that reason the bank submitted a more legible version of the loan document also one that included the additional guarantee terms so we have mr franco signature as a guarantor that references the additional guarantee terms which has all the waiver language that i addressed when i was here for my initial presentation with respect to going back to the first issue which is does the surety sacked cover guarantees we do this course precedents say very clearly that  appropriate inquiry is contemporary meaning to the general assembly that enacted the statute we don't have a legislative history from back then so really all we have are cases and dictionaries and treatises and none of those we cited those cases and there were four out of state cases that we cited for prior to that were decided prior to eight hundred seventy four those cases really aren't are matters of precedence  it's reflective of contemporary meaning and can't contemporary understanding both before eight hundred seventy four and eight hundred seventy four and after eight hundred seventy four everything that's been cited to this court indicates that it was commonly understood back then that there's a distinction between guarantees guarantors and surety use and that's the understanding that ought to be imputed to the general assembly when it inactive the statute in eight hundred seventy four it would be odd to suggest that contrary to the understanding of dictionaries and treatises and courts of that time the general assembly went on its own way on its own path without saying anything and said oh you know what we're what we're doing is when we use the word surety we're also we also need to include guarantee that just doesn't fit with the historical evidence that we have before us mr black is right there has been a lot of loose use of the terms over the years bailey that one of the treatise writers bailey back in the eight hundred complained about it but the point is is that bailey and the american law institute in the restatement third that we cited in our reply brief  all make the point that when the distinction is important between a surety and a guarantee it ought to be and is respected the hamilton case the clerk case the harris case that we  all turned on the distinction between a surety and a guarantor and what that shows is that yes people may use the terms loosely courts may use the terms loosely the restatement of security which mr black cited in his brief use the term loosely but the courts and the american lives have to always come back to the point that yeah yes yes sometimes these terms are used loosely but there is that the stench and it ought to be of a thirty for the of of the appendix that is cut off at the bottom as i mentioned this is an integration it's part of the agreement that's an integration clause there's been no allegation that it has anything to do with the terms of the guarantee itself or about the contractual waiver of rights under the guarantee mr de franco has not provided a copy i don't know whether he kept one or not if he didn't didn't provide and if he never got a copy in the first place when he signed the guarantee that should fall on him as well with respect to whether the loan document makes mr de franco a surety rather than a and the guarantors liable only after the principle the faults and that's plainly and section in paragraph six of the additional guarantee terms paragraph one says that this is a guarantee of payment and not collection it references joint several and soluto liability but that liability arises only after the default the bank didn't go after any of the guarantors prior to the time that ear defaulted thus recognizing what this instrument actually is which is a guarantee and there was no notice again the note the notice provisions of this guarantee come into effect only after there there's a default and that's really what distinguishes guarantees from surety is in terms of the agreement been construed against the bank the green it's very clear so even if that doctrine did apply it wouldn't matter but we're due in but it also bears mention that we're dealing with a very sophisticated guarantor here mr de franco is an attorney he teaches c l the classes on page c three sit six thirty four of the record he admitted in his deposition that he signed the document without reading it that's a choice that mr de franco may wish that he hadn't made but he did make the choice we have this agreement here it's very clear on its terms and the agreement ought to be enforced so we would ask that the court reverse the judgment of the polock or from the judgment of the circuit court thank you