FILED

November 25, 1998

Cecil W. Crowson

Appellate Court Clerk

CREATIVE RESOURCE )

MANAGEMENT, INC., )

)

Plaintiff/Appellant, ) Appeal No.

) 01-A-01-9808-CH-00016

v. )

) Davidson Chancery

BARRY SOSKIN, et al, ) No. 96-4024-III

)

Defendants/Appellees. )

COURT OF APPEALS OF TENNESSEE

APPEAL FROM THE DAVIDSON COUNTY CHANCERY COURT

AT NASHVILLE, TENNESSEE

THE HONORABLE ELLEN HOBBS LYLE, CHANCELLOR

WINSTON S. EVANS

PHILLIP BYRON JONES

Evans, Jones & Reynolds

1810 First Union Tower

150 Fourth Avenue, North

Nashville, Tennessee 37219

ATTORNEYS FOR PLAINTIFF/APPELLANT

THOR Y. URNESS

JULIE C. MURPHY

Boult, Cummings, Conners & Berry

414 Union Street, Suite 1600

P. O. Box 198062

Nashville, Tennessee 37219 

ATTORNEYS FOR DEFENDANTS/APPELLEES

REVERSED AND REMANDED

WILLIAM B. CAIN, JUDGE
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O P I N I O N

Creative Resource Management,Inc. appeals a summaryjudgment granted

in the trial court to the individual defendant, Barry Soskin.

The defendant, Nashville Pro Hockey, LLC, was a Limited Liability

Company under the laws of Tennessee, with personal liability of officers,

members, and other agents limited by Tennessee Code Annotated section 48-

217-101.

Creative Resource Management, Inc. was a corporation under the laws of

South Carolina qualified to do business in Tennessee. 

Barry Soskin was president of Nashville Pro Hockey, LLC which owned

the Nashville Nighthawks, a minor league professional hockey team.

On September 4, 1996, Nashville Pro Hockey, LLC contracted with

Creative Resource Management, Inc. whereby CRM, for fees and other

considerations set forth in the contract, provided employee leasing services to

Nashville Pro Hockey, LLC. This contract provided in section XI(f): "In the

body of the contract the pronouns 'we' and 'you' refer to 'CRM' and the 'client'

respectively."

The contract further provided in paragraph VII(d): "By affixing my hand

and seal to this agreement, I personally guarantee any and all payments payable

as represented and outlined in this agreement including but not limited to

payrolls, taxes (state and federal), insurance premiums, and all other fees

aforementioned in paragraph VII."

Barry Soskin signed the contract for the "client" Nashville Pro Hockey,

LLC. Thomas H. Demoss signed the contract for Creative Resource

Management, Inc. These signatures are reproduced as follows:
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Nashville Pro Hockey, LLC failed owing Creative ResourceManagement,

Inc. $29,626.41.

Creative Resource Management brought suit against Nashville Pro

Hockey, LLC and certain of its officers including Barry Soskin.

The complaint charged Soskin as a guarantor under the terms of the

agreement and thus individually liable for Nashville Pro Hockey, LLC debt for

$29,626.41.

Both parties filed motions for summary judgment, and after hearing, the

trial court granted the motion for summary judgment of Barry Soskin, thereby

holding that his signature on the contract was in a representative capacity only

and not in his individual capacity.

The only issue on appeal is whether or not Barry Soskin signed the

contract only in a corporate capacity and not as a guarantor.

We conclude from the language of the instrument itself that Barry Soskin

is a guarantor and is liable on his guaranty.

First of all, a specific provision of the contract provides that the pronouns

"we" and "you" refer specifically to "CRM" (Creative Resource Management,

Inc.) and "client" (Nashville Pro Hockey, LLC).

The contract contains no specified meaning of the terms "my hand" and "I"

as same appear in paragraph VII(d).
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Indeed, the well settled precedent in Tennessee suggests that a corporate

officer's signature preceeded by a corporation's name and followed by a

designation of the signer's corporate capacity is evidence that the signer was

acting as an agent of the corporation rather than individually. See Bill Walker

& Assoc., Inc. v. Parrish, 770 S.W.2d 764, 770 (Tenn. App. 1988); Anderson

v. Davis, 34 Tenn. App. 116, 120, 234 S.W.2d 368, 369-70 (1950). This rule,

however, must yield where the language of the contract compels a different

conclusion. Bill Walker & Assoc. v. Parrish, 770 S.W.2d 764 (Tenn. Ct. App.

1989).

The language of the contract involved in the case at bar distinguishes this

case from the general rule. This case concerns a contract which contains

personal guarantee language in the body of the contract. 

 

The words "I personally guarantee any and all payments payable as

represented and outlined in this agreement . . . " as same appear in paragraph

VII(d) of the contract reflect indisputably a guarantee by someone. Soskin

insists that he signed only as a representative of the limited liability company.

CRM insists that his signature imposes personal liability upon him.

This court has held that the very nature of a guarantee is the obligation of

a guarantor in addition to the obligation to be secured. Villines v. ParhamLindsey Groc. Co., 6 Tenn. App. 254 (1927).

"A guaranty obligating only the corporation would not in any way add

security to the obligation of the corporation, because the corporation was already

fully obligated as principal." Cone Oil Co., Inc. v. Green, 669 S.W.2d 662, 664

(Tenn. Ct. App. 1983).

The Cone court concludes that " . . . a guaranty of one's own obligation is

an exercise in futility." 669 S.W.2d 662, 664 (Tenn. Ct. App. 1983).

Cone finds strong support in other jurisdictions. In Kordick v. Merchants

National Bank & Trust Co. of Indianapolis, 496 N.E.2d 119, the Indiana Court
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of Appeals was called upon to determine whether or not the signature of

Nicholas Kordick as "president" bound him personally as guarantor of the debt

of his corporation "Fortune". The corporation defaulted and bankrupted and the

bank brought suit against Kordick individually on the guarantee. Relying on Roy

v. Davidson Equipment, 423 So.2d 496 (Fl. App. 1982), theKordick court held:

In the case at hand, it would likewise be meaningless for Fortune to

guarantee its own debt because it would add nothing to the existing

obligation to Merchants. Moreover, the guaranty obligation was

not affected by the release of the indebtedness of the borrower --

Fortune -- an obvious paradox if Fortune were the guarantor. Thus,

we must conclude the language of the guaranty specifically negates

the signature as having been made in a representative capacity, and

Kordick was personally obligated on the guaranty agreement.

496 N.E.2d 119, 124 (Ind. App. 1986).

Other cases applying the same rule are Beradi v. Hardware Wholesalers,

Inc., 625 N.E.2d 1259 (Ind. Ct. App. 1993); Roy v. Davidson Equipment, Inc.,

423 So.2d 496 (Fla. Dist. Ct. App. 1982); Ricker v. B-W Acceptance Corp., 349

F.2d 892 (10th Cir. 1965) and Dann v. Team Bank, 788 S.W.2d 182 (Tex. App.

1990).

In each of the foregoing cases the guaranty agreement was considerably

more detailed than the guaranty agreement in this case but the stark fact is that

the words "I personally guarantee" are meaningless if applied to Nashville Pro

Hockey, LLC and not to Barry Soskin individually. We would simply have

another Cone "exercise in futility".

Mr. Soskin attempts to argue that the placement of the guarantee language

is somehow deceptive in that it appears in the body of the contract as opposed to

the end of the agreement near the parties' signatures. In the case at bar we do not

find the location of the personal guaranty language inappropriate. The guaranty

language of paragraph VII(d) is not inconspicuous and hidden but rather in the

same format as all of the other provisions of the contract. One Stop Supply, Inc.

v. Ransdell, 1996 WL 187576 (Tenn. Ct. App. 1996). Parties who sign contracts

are presumed to know the contents of the documents they sign. See Beasley v.

Metropolitan Life Ins. Co., 190 Tenn. 227, 232, 229 S.W.2d 146, 148 (1950);
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DeFord v. National Life & Accident Ins. Co., 182 Tenn. 255, 166, 185 S.W.2d

617, 621-22 (1945).

"The law imputes to contracting parties an intention corresponding to the

reasonable meaning of their words and acts. Sutton v. First National Bank of

Crossville, 620 S.W.2d 526, 530 (Tenn. Ct. App. 1981)." Bill Walker & Assoc.

v. Parrish, 770 S.W.2d 764, 770 (Tenn. Ct. App. 1989).

In addition, courts must consider the entire contract when determining the

meaning of its terms. See Cocke County Bd. of Highway Comm'rs v. Newport

Utils. Bd., 690 S.W.2d 231, 237 (Tenn. 1985). We may not ignore any

contractual provisions, giving contractual terms their natural and ordinary

meaning, construing provisions harmoniously in order to give effect to all

provisions and avoiding the creation of internal conflicts. See Wilson v. Moore,

929 S.W.2d 367, 373 (Tenn. App. 1996). 

Since the words "I personally guarantee" cannot refer to Nashville Pro

Hockey, LLC and retain any meaning at all in the context of this agreement, they

must of necessity reflect the personal guarantee of Barry Soskin.

The judgment of the trial court is reversed and summary judgment granted

to Creative Resource Management, Inc., against Defendant Barry Soskin. The

case is remanded to the trial court for further proceedings with costs assessed to

the appellant.

________________________________

WILLIAM B. CAIN, JUDGE

CONCUR:

__________________________________

WILLIAM C. KOCH, JR., JUDGE

__________________________________

HENRY F. TODD, JUDGE