IN THE SUPREME COURT

STATE OF NORTH DAKOTA

2021 ND 228

American Federal Bank, Plaintiff and Appellee

v.

William Grommesh and Jon W. Pansch, Defendants and Appellants

No. 20210080

Appeal from the District Court of Cass County, East Central Judicial District, 

the Honorable Steven E. McCullough, Judge.

AFFIRMED.

Opinion of the Court by Crothers, Justice.

John M. Krings, Jr. (argued) and Asa K. Burck (on brief), Fargo, ND, for

plaintiff and appellee.

Joel M. Fremstad, Fargo, ND, for defendants and appellants.

FILED 

IN THE OFFICE OF THE 

CLERK OF SUPREME COURT 

DECEMBER 23, 2021 

STATE OF NORTH DAKOTA
1

American Federal Bank v. Grommesh

No. 20210080

Crothers, Justice.

[¶1] Defendants William Grommesh and Jon Pansch appeal from summary 

judgment entered in favor of American Federal Bank in its action to enforce 

four guaranties. The defendants argue the district court erred in granting 

summary judgment because the court misinterpreted the guaranties and 

genuine issues of material fact exist regarding the defendants’ defenses. We 

affirm.

I

[¶2] In 2012, Sarah and Jerret Julsrud started Jerret’s Plumbing, L.L.C.

(“Jerret’s”). The Julsruds obtained financing from American Federal to start

Jerret’s, including a $20,000 operating loan and a $200,000 loan to purchase

assets. Grommesh, Jerret Julsrud’s father, and Pansch, Sarah Julsrud’s father,

each signed two guaranties related to the loans, one guaranty up to $15,000 

and a second guaranty up to $125,000. The promissory note for the operating 

loan stated it was for a revolving line of credit. Terms of the operating loan

were modified multiple times, including increasing the principal balance and 

extending the maturity date.

[¶3] Jerret’s loans went into default and in 2019 American Federal sued the 

defendants to enforce all four guaranties, alleging the defendants guaranteed

payment and performance of Jerret’s outstanding indebtedness to American 

Federal. American Federal claimed the amount of Jerret’s outstanding 

obligations exceeded the guaranty amounts and requested the district court 

enter judgment in its favor against the defendants, jointly and severally, for

$135,000.1 The defendants filed a joint answer, disputing American Federal’s

claims and asserting various defenses.

1 American Federal’s complaint and motion for summary judgment requested the district court enter 

judgment in its favor against the defendants for $135,000. American Federal stated the guaranties 

were limited to $15,000 and $120,000. We assume this is a typographical error because the two 
2

[¶4] American Federal moved for summary judgment, arguing Jerret’s had 

multiple outstanding loans with a combined total balance of $160,312.26 plus 

interest, Jerret’s outstanding obligations were in default, the defendants 

guaranteed Jerret’s outstanding indebtedness up to $140,000 each, the 

defendants never revoked their guaranties, and judgment should be entered 

as a matter of law in favor of American Federal. The defendants opposed

American Federal’s motion and moved for summary judgment in their favor, 

arguing the guaranties for $125,000 related to the asset loan, the asset loan 

was paid in full and never extended or renewed, and the guaranties ended 

when the loan was paid off. The defendants also argued the $15,000 guaranties 

were limited to the operating loan, the operating loan was paid down to zero,

and the loan went away when it matured in June 2013. They asserted various 

defenses apply and genuine issues of material fact exist relating to their 

defenses. After a hearing on the motions and additional time for discovery, the 

parties filed supplemental briefs on the motions.

[¶5] The district court granted summary judgment in favor of American 

Federal. The court considered the language of the guaranties and determined 

the guaranties are unambiguous. The court concluded the guaranties are 

continuing guaranties, and they cover debt acquired by Jerret’s after the initial 

operating and asset loans. The court found the total owed to American Federal 

as of January 2021 was $148,875.78, each of the defendants guaranteed 

$140,000 of Jerret’s debt, and American Federal was entitled to a summary 

judgment against each defendant for $140,000. Judgment was entered.

II

[¶6] The standard for reviewing a district court’s decision on a motion for 

summary judgment is well-established:

“Summary judgment is a procedural device under N.D.R.Civ.P. 

56(c) for promptly resolving a controversy on the merits without a 

trial if there are no genuine issues of material fact or inferences 

guaranties each defendant signed total $140,000 and American Federal referred to the correct 

amounts in later filings.
3

that can reasonably be drawn from undisputed facts, or if the 

only issues to be resolved are questions of law. The party seeking

summary judgment must demonstrate there are no genuine issues 

of material fact and the case is appropriate for judgment as a 

matter of law. In deciding whether the district court appropriately 

granted summary judgment, we view the evidence in the light 

most favorable to the opposing party, giving that party the benefit 

of all favorable inferences which can reasonably be drawn from 

the record. A party opposing a motion for summary judgment

cannot simply rely on the pleadings or on unsupported conclusory 

allegations. Rather, a party opposing a summary judgment motion 

must present competent admissible evidence by affidavit or other 

comparable means that raises an issue of material fact and must, 

if appropriate, draw the court’s attention to relevant evidence in 

the record raising an issue of material fact. When reasonable 

persons can reach only one conclusion from the evidence, a 

question of fact may become a matter of law for the court to decide. 

A district court’s decision on summary judgment is a question of 

law that we review de novo on the record.”

Solberg v. McKennett, 2021 ND 44, ¶ 6, 956 N.W.2d 767 (quoting Aftem Lake 

Dev., Inc. v. Riverview Homeowners Ass’n, 2020 ND 26, ¶ 8, 938 N.W.2d 159).

III

[¶7] The defendants argue the district court erroneously concluded the 

guaranties are unambiguous. The defendants claim the guaranties refer to the 

“Note” and define “Note” as the specific 2012 loans, which limits the guaranties 

to covering only Jerret’s 2012 loans. They contend the original debt was paid 

off, any after-acquired debt is not covered by the guaranties, and they are not 

liable to American Federal under the guaranties. They also claim there was 

evidence from the defendants, the Julsruds, and former American Federal 

President Donald Abarr that the parties’ intent was to limit the guaranties to 

cover only specific debts.

[¶8] Generally, the interpretation of a written contract to determine its legal 

effect is a question of law. Discover Bank v. Hornbacher, 2020 ND 260, ¶ 3, 952 

N.W.2d 83. We apply the general rules of contract construction to interpret 

guaranties. See Big Pines, LLC v. Baker, 2020 ND 64, ¶ 7, 940 N.W.2d 616.
4

[¶9] We ascertain the parties’ intent from the writing alone if possible. Big 

Pines, 2020 ND 64, ¶ 7; N.D.C.C. § 9-07-04. “The language of a contract is to 

govern its interpretation if the language is clear and explicit and does not 

involve an absurdity.” N.D.C.C. § 9-07-02. “When a contract’s language is plain 

and unambiguous and the parties’ intentions can be ascertained from the 

writing alone, extrinsic evidence is not admissible to alter, vary, explain, or 

change the contract.” Big Pines, ¶ 7 (quoting Hallin v. Inland Oil & Gas Corp., 

2017 ND 254, ¶ 9, 903 N.W.2d 61). A contract is ambiguous if rational 

arguments can be made for different interpretations of the term, phrase, or 

clause in question. Estate of Seidel v. Seidel, 2021 ND 6, ¶ 16, 953 N.W.2d 636. 

Extrinsic evidence may be considered to determine the parties’ intent if a 

contract is ambiguous. Id. A contract is interpreted as a whole to give effect to 

every part if practicable. N.D.C.C. § 9-07-06. Several contracts related to the 

same matter between the same parties, made as part of substantially one 

transaction, are to be read and construed together. N.D.C.C. § 9-07-07. “The 

execution of a contract in writing, whether the law requires it to be written or 

not, supersedes all the oral negotiations or stipulations concerning its matter 

which preceded or accompanied the execution of the instrument.” N.D.C.C. §

9-06-07.

[¶10] Undisputed evidence established Grommesh and Pansch each signed 

two guaranties related to Jerret’s debt to American Federal. They each signed 

one guaranty for up to $15,000 related to Jerret’s operating loan and a second 

guaranty for up to $125,000 related to Jerret’s asset loan. The four guaranties 

contain identical language, except for the guarantor’s name, the limit on the 

amount of the guarantor’s liability, and references to a specific loan number or 

promissory note.

[¶11] The defendants’ guaranties state, “For good and valuable consideration, 

Guarantor absolutely and unconditionally guarantees full and punctual 

payment and satisfaction of Guarantor’s Share of the Indebtedness of 

Borrower to Lender, and the performance and discharge of all Borrower’s 

obligations under the Note and the Related Documents.”
5

[¶12] The defendants’ guaranties for the operating loan define “Note” as “the 

promissory note dated June 1, 2012, in the original principal amount of 

$20,000.00 . . . together with all renewals of, extensions of, modifications of, 

refinancings of, consolidations of, and substitutions for the promissory note or 

agreement.” The guaranties for the asset loan include the same definition, 

except they refer to the promissory note “dated June 14, 2012, in the original 

principal amount of $200,000.00.”

[¶13] This definition of “Note” refers to the initial loan, but also renewals, 

extensions, and modifications. The plain language of the guaranties required 

the defendants to guarantee the performance and discharge of Jerret’s

obligations under these two notes and any renewals, extensions, and 

modifications of those notes.

[¶14] The guarantors also unconditionally guaranteed payment of the 

guarantor’s share of the borrower’s indebtedness. The guaranties define 

“Indebtedness” as:

“[A]ll of the principal amount outstanding from time to time and 

at any one or more times . . . arising from any and all debts, 

liabilities and obligations of every nature or form, now existing or 

hereafter arising or acquired, that Borrower . . . owes or will owe 

Lender. ‘Indebtedness’ includes, without limitation, loans, 

advances, debts, overdraft indebtedness, credit card indebtedness, 

lease obligations, . . . other obligations, and liabilities of Borrower, 

and any present or future judgments against Borrower, future 

advances, loans or transactions that renew, extend, modify, 

refinance, consolidate or substitute these debts, liabilities and 

obligations . . . .”

“Guarantor’s share of the Indebtedness” is defined as:

“[A]n amount not to exceed Fifteen Thousand & 00/100 Dollars 

($15,000.00) of all the principal amount, interest thereon to the 

extent not prohibited by law, and all collection costs, expenses and 

reasonable attorneys’ fees whether or not there is a lawsuit, and if 

there is a lawsuit, any fees and costs for trial and appeals.”
6

The guaranties related to the asset loan include the same language and define 

the guarantor’s share of the indebtedness as an amount not exceeding

$125,000. The guarantor’s share of indebtedness is limited in total dollars, but 

no language limits the guaranties to only the original loan. The guaranties

expressly includes other debts, including debts arising in the future.

[¶15] The guaranties further state:

“THIS IS A ‘CONTINUING GUARANTY’ UNDER WHICH 

GUARANTOR AGREES TO GUARANTEE THE FULL AND 

PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION 

OF THE GUARANTOR’S SHARE OF THE INDEBTEDNESS OF 

BORROWER TO LENDER, NOW EXISTING OR HEREAFTER 

ARISING OR ACQUIRED, ON A CONTINUING BASIS. 

ACCORDINGLY, ANY PAYMENTS MADE ON THE 

INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH 

GUARANTOR’S OBLIGATIONS AND LIABILITY UNDER THIS 

GUARANTY FOR ANY REMAINING AND SUCCEEDING 

INDEBTEDNESS EVEN WHEN ALL OR PART OF THE 

OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE 

FROM TIME TO TIME.”

The plain and unambiguous language states that the guaranties apply to 

existing and future indebtedness, and that the guarantor’s obligations and 

liability will not terminate even when the outstanding indebtedness has a zero 

balance.

[¶16] The terms also address the duration of the guaranties and allow 

revocation of the guaranty, stating:

“This Guaranty will take effect when received by Lender without 

the necessity of any acceptance by Lender, or any notice to 

Guarantor or to Borrower, and will continue in full force until all 

the Indebtedness incurred or contracted before receipt by Lender 

of any notice of revocation shall have been fully and finally paid 

and satisfied and all of Guarantor’s other obligations under this 

Guaranty shall have been performed in full. If Guarantor elects to 

revoke this Guaranty, Guarantor may only do so in writing. . . . It 

is anticipated that fluctuations may occur in the aggregate amount 
7

of the indebtedness covered by this Guaranty, and Guarantor 

specifically acknowledges and agrees that reductions in the 

amount of the indebtedness, even to zero dollars ($0.00), shall not 

constitute a termination of this Guaranty.”

The guaranties unambiguously did not terminate if the amount of the 

indebtedness is reduced to zero dollars.

[¶17] The guaranties authorize the lender to make additional loans, extend 

additional credit, or alter the terms of the loans, all without giving the 

guarantor notice and without reducing the guarantor’s liability. The 

guaranties provide:

“Guarantor authorizes Lender, either before or after any

revocation hereof, without notice or demand and without lessening 

Guarantor’s liability under this Guaranty, from time to time: (A) 

prior to revocation as set forth above, to make one or more 

additional secured or unsecured loans to Borrower . . . or otherwise 

to extend additional credit to Borrower; (B) to alter, compromise, 

renew, extend, accelerate, or otherwise change one or more times 

the time for payment or other terms of the Indebtedness or any 

part of the Indebtedness . . . .”

[¶18] All four of the defendants’ guaranties are continuing. A “continuing 

guaranty” is “a guaranty relating to a future liability of the principal under 

successive transactions which either continue the liability or from time to time 

renew it after it has been satisfied.” N.D.C.C. § 22-01-01. “Where a guaranty 

is continuing and absolute, the guarantor is not entitled to notice of each 

transaction in order to bind him. The statement that the guaranty is 

unconditional waives notice unless it is specifically provided for in writing.” 

First Nat’l Bank and Trust Co. of Dickinson v. Meyer Enters., Inc., 427 N.W.2d 

328, 330 (N.D. 1988) (quoting State Bank of Burleigh Cty. v. Porter, 167 N.W.2d 

527, 536 (N.D. 1969)). The plain language of the guaranties apply to all of 

Jerret’s indebtedness and authorize American Federal to make additional 

loans or extend additional credit to Jerret’s without reducing the defendants’ 

liability under the guaranties and without giving notice to the defendants.
8

[¶19] Read as a whole, the guaranties are not ambiguous. The clear meaning 

of the words of a guaranty cannot be ignored, and unless the guaranty is 

ambiguous, its interpretation is governed by the writing alone. Meyer Enters., 

427 N.W.2d at n.3. Because the guaranties are unambiguous, extrinsic 

evidence about whether the guaranties were to terminate when the initial 

loans were paid off or whether they applied to future loans was not admissible. 

The plain language of the guaranties did not limit their application to the 

original loans, and they did not terminate when the initial loans were paid off. 

The district court did not err in deciding the guaranties are unambiguous.

IV

[¶20] The defendants argue several defenses preclude summary judgment in 

favor of American Federal. They contend genuine issues of material fact exist 

about the defenses, and the district court erroneously granted summary 

judgment dismissing their defenses.

A

[¶21] The defendants argue the district court impermissibly weighed 

testimony and cherry-picked facts in dismissing their defenses. They contend 

parol evidence may be considered where there are allegations of mistake and 

fraud, and the court erred in determining as a matter of law that there was no 

genuine issue of material fact about mistake or fraud. They contend evidence 

of mistake or fraud was presented from Donald Abarr, the former President of 

American Federal and the loan officer for Jerret’s operating and asset loans, 

Jerret Julsrud, and the two defendants.

[¶22] American Federal argues admission of parol evidence about fraud and 

mistake was not admissible because the guaranties are unambiguous, the 

defendants did not plead these affirmative defenses, they did not make any 

argument about fraud or mistake until they filed a supplemental brief months 

after the summary judgment hearing, and American Federal objected to the 

attempts to argue the unpled affirmative defenses at that time.
9

[¶23] The defendants did not include an affirmative defense or claim of fraud 

or mistake in their answer, and they did not move to amend their pleading. 

They did not meet the particularity requirement of N.D.R.Civ.P. 9(b) (“In 

alleging fraud or mistake, a party must state with particularity the 

circumstances constituting fraud or mistake.”). They also did not argue fraud 

or mistake in their motion for summary judgment, but they claimed it was 

permissible to look at extrinsic evidence, citing Citizens State Bank-Midwest v.

Symington, 2010 ND 56, ¶¶ 20-21, 780 N.W.2d 676. American Federal 

responded arguing the defendants did not argue fraud or mistake in their brief 

and the district court does not have authority to order reformation when the 

borrower has not asserted grounds for reformation. The defendants expressly

raised the issue of mutual mistake for the first time in their supplemental brief 

on the motions for summary judgment, arguing reformation would be 

warranted on the basis of mutual mistake. American Federal also filed a 

supplemental brief arguing the evidence confirmed the guaranties were not 

limited to the 2012 loans, the defendants did not allege fraud or mistake or 

seek reformation in all prior briefs or pleadings, and the court had no authority 

to order reformation when defendants failed to demonstrate grounds that 

support reformation.

[¶24] The district court considered the defendants’ mistake argument. The 

court explained “While the Defendants have provided citations to the record 

where Abarr indicates he believes The Guaranties covered only the initial debt, 

AFB has cited to Abarr’s deposition testimony where he admits he did not tell 

the Defendants that The Guaranties did not cover future debts incurred by 

Jerret’s.”

[¶25] Under the facts of this case, it is unnecessary to decide whether a 

defendant can rely on an unpled defense of fraud or mistake during the 

summary judgment stage of litigation. Throughout these proceedings

American Federal objected to the district court considering the defenses. 

Therefore, the defenses were not considered by the court with the consent of 

the parties, and any existence of unpled defenses did not prevent the court 

from granting summary judgment in favor of American Federal. 
10

B

[¶26] The defendants contend American Federal did not move for summary 

judgment on the affirmative defenses of breach, failure of consideration, 

impossibility, frustration of purpose, failure to mitigate damages, payment, 

estoppel, and waiver. They contend it was improper to grant summary 

judgment without the defendants being allowed to brief the issues.

[¶27] American Federal moved for summary judgment requesting the district 

court enter a judgment in its favor for the balances outstanding on Jerret’s 

indebtedness. American Federal asserted there were no genuine issues of 

material fact and it was entitled to judgment in its favor against each 

defendant for $140,000. It also claimed the defendants raised various 

affirmative defenses in their answer to the complaint and the defenses were 

meritless. American Federal specifically argued the defenses of unjust 

enrichment, laches, accord and satisfaction, unclean hands, setoff, lack of 

consideration, and guarantor exoneration should be stricken. The defendants 

also moved for summary judgment, arguing judgment should be granted in 

their favor. They argued American Federal failed to challenge some of the

affirmative defenses and they were entitled to a trial on those defenses.

[¶28] The party moving for summary judgment has the burden of showing that 

there are no genuine issues of material fact and that they are entitled to 

judgment as a matter of law. Swenson v. Raumin, 1998 ND 150, ¶ 9, 583 

N.W.2d 102. The party opposing the motion may not simply rely on the 

pleading and unsupported, conclusory allegations; rather, they must present 

competent admissible evidence raising an issue of material fact and must draw 

the court’s attention to relevant evidence in the record raising a material fact. 

Id. “Summary judgment is proper against a party who fails to make a showing 

sufficient to establish the existence of an element essential to the party’s case 

and on which that party will bear the burden of proof at trial.” Id. “On any 

matter ‘constituting an avoidance or affirmative defense’ under NDRCivP 8(c), 

the party asserting it has the responsibility to set forth specific facts showing 

that there is a genuine issue for trial on that defense.” Gress v. Kocourek, 427 

N.W.2d 815, 816 (N.D. 1988).
11

[¶29] American Federal argued no genuine issues of material fact existed and 

it was entitled to judgment as a matter of law. The defendants had the burden 

to raise issues of material fact related to their defenses and to argue the

defenses applied to American Federal’s claim. The defendants generally 

argued to the district court that American Federal did not move to strike the 

defenses of breach, failure of consideration, impossibility, frustration of 

purpose, failure to mitigate damages, payment, estoppel, or waiver; and 

therefore they were entitled to a trial on those defenses. However, they did not 

present further argument or set forth specific facts showing that there was a 

genuine issue of material fact for trial on those defenses. The defendants had 

an opportunity to brief these defenses and they failed to show there were issues 

of material fact related to the defenses. The district court did not err in 

dismissing these defenses.

C

[¶30] The defendants argue there are genuine issues of material fact about the 

defense of laches because American Federal continued to extend lines of credit 

to Jerret’s and did not give the defendants notice.

[¶31] A “stale claim” may be barred by laches, an equitable affirmative 

defense. Stenehjem ex rel. State v. Nat’l Audubon Soc’y, Inc., 2014 ND 71, ¶ 12, 

844 N.W.2d 892. Laches is a delay of time in commencing an action that 

disadvantages or prejudices the adverse party because of a change in 

conditions during the delay. Id. “Laches does not arise from a delay or lapse of 

time alone, but is a delay in enforcing one’s rights which works a disadvantage

to another.” Id. (quoting Sall v. Sall, 2011 ND 202, ¶ 14, 804 N.W.2d 378). “The 

party against whom laches is sought to be invoked must be actually or 

presumptively aware of his rights and must fail to assert them against a party 

who in good faith permitted his position to become so changed that he could 

not be restored to his former state.” Stenehjem, ¶ 12 (quoting Bakken v. 

Duchscher, 2013 ND 33, ¶ 19, 827 N.W.2d 17). The party asserting laches as a 

defense has the burden to prove he was so prejudiced during the delay that he 

cannot be restored to the status quo. Stenehjem, ¶ 12.
12

[¶32] The defendants claim they would have had an opportunity to protect 

themselves from any ongoing liability if American Federal provided them 

notice it was continuing to extend credit to Jerret’s. The plain language of the 

guaranties authorized American Federal to make additional loans or extend 

additional credit to Jerret’s without giving the defendants notice and without 

limiting the defendants’ liability. The defendants failed to show a genuine issue 

of material fact related to their laches defense.

D

[¶33] The defendants argue disputed factual issues exist relating to their 

accord and satisfaction defense.

[¶34] Accord and satisfaction is an affirmative defense, and the party asserting 

the defense has the burden of proving the defense. State by Workforce Safety 

and Ins. v. Oden, 2020 ND 243, ¶ 44, 951 N.W.2d 187. Accord and satisfaction

is “[a] method of discharging a contract or cause of action by which the parties 

agree to give and accept something in settlement of a claim or demand of one 

against the other, where they thereafter perform such agreement.” In re Estate 

of Sande, 2020 ND 125, ¶ 14, 943 N.W.2d 826. “An essential element of ‘accord 

and satisfaction’ is an agreement evidencing the parties’ mutual assent.” Oden, 

¶ 45. “Summary judgment is appropriate when a party bearing the burden of 

proof at trial fails to establish the existence of a material factual dispute on an 

essential element.” Id.

[¶35] The defendants claim the defense applies because evidence shows 

American Federal accepted new guaranties from Sarah and Jerret Julsrud for 

subsequent loans, American Federal did not require new guaranties from the 

defendants, and subsequent loan agreements indicated the defendants were 

not guarantying those loans. The defendants failed to present any evidence of 

an agreement between American Federal and the defendants settling a claim. 

The district court did not err in dismissing this defense.
13

E

[¶36] The defendants argue factual issues exist relating to their unclean hands 

defense. They claim there was evidence Jerret Julsrud forged Sarah Julsrud’s 

signature on documents in the presence of American Federal employees, 

American Federal never gave the defendants notice of repeated extensions of 

credit to Jerret’s, and a current bank employee told Jerret Julsrud that the 

defendants had no further obligations in 2017 after the asset loan was paid in 

full.

[¶37] “A person cannot take advantage of that person’s own wrong.” N.D.C.C. 

§ 31-11-05(8). Generally, “the doctrine of unclean hands is applicable only 

where the party seeking to invoke it was injured by the alleged wrongful acts 

of the other party.” Jacobsen v. Pedersen, 190 N.W.2d 1, 4 (N.D. 1971).

[¶38] The guaranties are unambiguous and apply to future loans without 

notice to the defendants and do not terminate when the initial loans have a 

zero balance. Although the defendants claim American Federal was aware 

Sarah Julsrud’s name was forged on some loan documents, they do not allege 

American Federal committed wrongful acts relating to the guaranties. Cf. 

Advanced Irrigation, Inc. v. First Nat’l Bank of Fargo, 366 N.W.2d 783, 785 

(N.D. 1985) (holding bank was not barred from recovering from plaintiff on 

promissory notes under doctrine of “unclean hands” even though a jury found 

the bank guilty of fraud and deceit, where verdict indicated bank’s deceit was 

not related to the loans the bank made to the plaintiff). The defendants have 

not presented evidence that they are the victims of American Federal’s alleged 

wrongdoing. The district court did not err by granting summary judgment

dismissing this defense.

F

[¶39] The defendants argue evidence created a factual issue about their 

defense of lack of consideration. They claim the guaranties were not entered 

into at the same time as the original loan obligations, and therefore the original 

obligations were not consideration for the guaranties.
14

[¶40] Whether consideration existed is a question of law. Frontier Fiscal Servs., 

LLC v. Pinky’s Aggregates, Inc., 2019 ND 147, ¶ 19, 928 N.W.2d 449. Good 

consideration is any benefit conferred on the principal obligor or detriment 

suffered by the creditor. Id. Separate consideration is not necessary when the 

guaranty is entered into at the same time or is a part of the same transaction 

as the principal obligation. N.D.C.C. § 22-01-03; First Bank of N.D. (N.A.) 

Jamestown v. Scherbenske, 375 N.W.2d 156, 158 (N.D. 1985). “A guaranty, 

although executed subsequently to the creation of the principal obligation, if 

given in fulfillment of an agreement on the faith of which the principal 

obligation was created, is deemed contemporaneous in effect and requires no 

other consideration.” Porter, 167 N.W.2d at 531.

[¶41] The defendants contend factual issues exist about whether the 

guaranties were entered at the same time as the original obligation. They cite 

facts showing some guaranties were undated and others were dated days after 

the loan. As is relevant to this action, the defendants’ $15,000 guaranties are 

dated June 1, 2012, and the initial $20,000 operating note was dated June 1, 

2012. The defendants’ $125,000 guaranties are dated June 14, 2012, and the 

initial $200,000 asset note is dated June 14, 2012. The business loan 

agreements required the guaranties from the defendants before disbursement 

of the loan proceeds. The guaranties were part of the same transaction as the 

initial loans. See Porter, 167 N.W.2d at 531 (considering N.D.C.C. § 22-01-03 

and holding no other consideration was required when note was dated 

September 4 and guaranty was executed on September 17); 38A C.J.S. 

Guaranty § 28 (2021) (explaining a guaranty may be supported by the same 

consideration as the principal contract even if the guaranty was executed after 

the principal contract if it was executed pursuant to a prior understanding and 

was an inducement to the execution of the principal contract). The district 

court did not err in dismissing this defense.

G

[¶42] The defendants argue genuine issues of material fact exist relating to 

their exoneration defense. They argue their obligations ceased when the two 

original loans were paid off. They contend the language of the guaranties 
15

stating they did not expire when the balance was reduced to zero only applied 

during the term of the initial loan.

[¶43] A guarantor may be exonerated under N.D.C.C. § 22-01-15, which 

provides:

“A guarantor is exonerated, except insofar as the guarantor may 

be indemnified by the principal, if, by any act of the creditor 

without the consent of the guarantor:

1. The original obligation of the principal is altered in any 

respect; or

2. The remedies or rights of the creditor against the principal in 

respect thereto are impaired or suspended in any manner.”

[¶44] The guaranties were continuing, unambiguously applied to future loans,

and did not expire until revoked by the guarantors. Under the terms of the 

guaranties, the defendants consented to the guaranties applying to extensions 

of the initial loans and new loans without notice from American Federal. See 

Porter, 167 N.W.2d at 536-37 (holding guarantors consented to renewals and 

were not exonerated because guaranty was a continuing guaranty). The 

district court did not err in dismissing this defense.

V

[¶45] We conclude the guaranties are unambiguous and there were no genuine 

issues of material fact about any of the defendants’ asserted defenses. The 

district court’s judgment is affirmed.

[¶46] Jon J. Jensen, C.J.

Daniel J. Crothers

Lisa Fair McEvers

Jerod E. Tufte

I concur in the result.

Gerald W. VandeWalle