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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

GE Franchise Finance Commercial LLC, 

Plaintiff, 

v. 

Hollis Wormsby, an individual; and Sidney 

Vernal Wormsby, an individual, 

Defendants. 

No. CV-15-01924-PHX-NVW

ORDER 

GE Franchise Finance Commercial LLC (“GE Franchise”) seeks to hold Hollis 

and Sidney Wormsby liable as guarantors of a defaulted loan. Before the Court is GE 

Franchise’s Motion for Summary Judgment (Doc. 36) and the parties’ accompanying 

statements of facts and briefs. For the reasons that follow, the Motion will be granted. 

I. LEGAL STANDARD 

A motion for summary judgment tests whether the opposing party has sufficient 

evidence to merit a trial. Summary judgment should be granted if the evidence reveals no 

genuine dispute about any material fact and the moving party is entitled to judgment as a 

matter of law. Fed. R. Civ. P. 56(a). A material fact is one that might affect the outcome of 

the suit under the governing law, and a factual dispute is genuine “if the evidence is such that 

a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty 

Lobby, Inc., 477 U.S. 242, 248 (1986). 

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The movant has the burden of showing the absence of genuine disputes of material 

fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). However, once the movant shows 

an absence of evidence to support the nonmoving party’s case, the burden shifts to the party 

resisting the motion. The party opposing summary judgment must then “set forth specific 

facts showing that there is a genuine issue for trial” and may not rest upon the pleadings. 

Anderson, 477 U.S. at 256. To carry this burden, the nonmoving party must do more than 

simply show there is “some metaphysical doubt as to the material facts.” Matsushita Elec. 

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). 

In deciding a motion for summary judgment, the Court must view the evidence in the 

light most favorable to the nonmoving party, must not weigh the evidence or assess its 

credibility, and must draw all justifiable inferences in favor of the nonmoving party. Reeves 

v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 255. 

Where the record, taken as a whole, could not lead a rational trier of fact to find for the 

nonmoving party, there is no genuine issue for trial. Matsushita, 475 U.S. at 587. 

II. MATERIAL FACTS 

A. Loans, guaranty, and default 

GE Franchise’s Statement of Facts (Doc. 37) recounts as follows: 

On July 16, 2008, GE Franchise made two loans to Little Giant Enterprises, LLC.1

 

The first loan was documented in an agreement labeled “Contract No. 15341001,” which 

the parties refer to as the “1001 Loan Agreement.” (Doc. 37-2 at 2–51.) That loan was 

for $2,324,595, plus interest. The second loan was documented in an agreement labeled 

“Contract No. 15341002,” which the parties refer to as the “1002 Loan Agreement.” (Id.

at 52–86.) That loan was for $2,223,405, plus interest. 

 1

 More precisely, General Electric Capital Corporation made the loans and later 

assigned its rights in the loans to GE Franchise. The Wormsbys do not challenge this 

assignment. For all practical purposes, GE Franchise is the lender and will be referred to 

as such. 

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The Wormsbys are members of Little Giant Enterprises. On the day the loans 

were made, they signed a written guaranty. At the bottom of each page were the words 

“Contract No. 15341001.” (Doc. 37-3 at 2–8.) The second paragraph referred to a loan 

of $2,324,595. (Id. at 2.) This guaranty will be hereafter referred to as the “1001 

Guaranty.” This is the only guaranty attached to GE Franchise’s Statement of Facts. 

On May 1, 2015, GE Franchise notified Little Giant Enterprises and the 

Wormsbys that the loans were in default. Later that month, Little Giant Enterprises filed 

for bankruptcy. In October 2015, the bankruptcy court auctioned off substantially all of 

Little Giant Enterprises’ assets for $1,000,000. That amount (minus the costs of sale) 

was applied to the debt owed to GE Franchise. In December 2015, additional collateral 

was sold for $15,500, which was also applied to the debt owed to GE Franchise. 

B. Lawsuit and revelation of a second guaranty 

GE Franchise filed this action against the Wormsbys on September 24, 2015. 

(Doc. 1.) It claims the Wormsbys guaranteed the 1001 Loan Agreement and the 1002 

Loan Agreement. It further claims that as of January 31, 2016, the Wormsbys owed 

$495,356.24 pursuant to those agreements, consisting of: (1) $334,011.40 of principal, 

(2) $52,529.98 of interest, (3) $13,236.06 in late charges, and (4) $95,578.80 in fees 

incurred in the bankruptcy case. Accordingly, it moves for summary judgment in this 

amount, plus further interest accrued and fees and costs incurred in this matter. (Doc. 

36.) 

In their response, the Wormsbys raise only one objection. (Doc. 40.) They say 

the 1001 Guaranty applies only to the 1001 Loan Agreement, not the 1002 Loan 

Agreement. They point out that the guaranty identifies only one loan—$2,324,595—and 

refers to only one loan agreement—Contract No. 15341001. In addition, Sidney 

Wormsby says he had a discussion with the lender about the different purposes and 

interest rates of the two loans. Based on this discussion and the language of the guaranty, 

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the Wormsbys claim they reasonably believed the 1001 Guaranty applied only to the 

1001 Loan Agreement. 

In reply, GE Franchise presents a copy of a second guaranty, signed by the 

Wormsbys on the same day as the 1001 Guaranty. (Doc. 45-1.) At the bottom of each 

page of this second guaranty are the words “Contract No. 15341002.” (Id. at 2–8.) The 

second paragraph refers to a loan of $2,223,405. (Id. at 2.) This guaranty will be 

hereafter referred to as the “1002 Guaranty.” GE Franchise says the 1002 Guaranty 

debunks the Wormsbys’ claim that they did not guarantee the 1002 Loan Agreement.2

In light of this revelation, the Court allowed GE Franchise to amend its complaint 

to include a reference to, and copy of, the 1002 Guaranty. (Doc. 48.) The Court also 

allowed the Wormsbys to file a sur-reply, “limited to addressing” the amended complaint. 

(Id.) 

In sur-reply, the Wormsbys make three arguments. (Doc. 50.) First, they object to 

the timeliness of GE Franchise’s introduction of the 1002 Guaranty. They say GE 

Franchise should have produced this guaranty along with the 1001 Guaranty during 

discovery, not in its reply brief on a summary judgment motion. 

Second, the Wormsbys object to the authenticity of the 1002 Guaranty. 

Specifically, Sidney Wormsby swears in a declaration that he “do[es] not recall signing” 

the 1002 Guaranty and that he “ha[s] concerns about the authenticity of the signature.” 

(Doc. 51-3 at 3.) His “concerns” are that three of the letters in his signature on the 1002 

Guaranty are “different” from his signature in other loan documents and that “the 

signature in general is not how [he] signs [his] name.” (Id.) Hollis Wormsby, however, 

has not contested the authenticity of his signature on the 1002 Guaranty. 

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 GE Franchise also argues, in the alternative, that the 1001 Guaranty 

unambiguously applies to both loan agreements. The Court does not address this 

argument. 

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Third, the Wormsbys criticize GE Franchise’s previous behavior toward Little 

Giant Enterprises. They claim that (1) in 2012 GE Franchise refused to allow Little Giant 

Enterprises to refinance one of its loans at a lower interest rate, and (2) in 2014 GE 

Franchise applied one of Little Giant Enterprises’ payments to the loan with the lower 

interest rate, contrary to Little Giant Enterprises’ instruction, thereby contributing to 

Little Giant Enterprises’ ultimate bankruptcy. 

Oral argument was held on July 26, 2016. At oral argument, it became clear that 

Sidney Wormsby was not affirmatively denying that he signed the 1002 Guaranty, but 

was simply requiring GE Franchise to prove authenticity. Accordingly, the Court 

allowed GE Franchise to file proof of authenticity and allowed the Wormsbys to 

respond.GE Franchise has filed a sworn declaration of its Vice President, stating that the 

signed copy of the 1002 Guaranty had been kept in the ordinary course of business and 

that the Wormbsys’ signatures on that document appear to match their signatures on other 

loan documents. (Doc. 55-1.) In response, Sidney Wormsby has filed another sworn 

declaration, criticizing GE Franchise’s declaration and reiterating that he “recall[s]” 

signing only one guaranty. (Doc. 56-1.) 

III. ANALYSIS 

A. Consideration of the second guaranty is proper, despite the Wormsbys’ 

objections to timeliness and authenticity. 

1. Timeliness 

GE Franchise’s failure to produce a copy of the 1002 Guaranty during discovery 

does not prevent the Court from considering it now. Discovery deadlines are not 

sacrosanct. See 6A Charles Alan Wright, Arthur R. Miller, et al., Federal Practice and 

Procedure § 1522.2 (3d ed., Apr. 2016 update) (noting “courts have allowed scheduling 

orders to be amended” to “extend discovery deadlines”). 

Here, there is good reason to consider the 1002 Guaranty even though it was 

introduced after discovery. First, there is no indication that GE Franchise’s delay was 

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intentional. Omission of the 1002 Guaranty from the record does not benefit GE 

Franchise. Indeed, GE Franchise appears not to have known of this omission until the 

Wormsbys pointed it out in response to GE Franchise’s summary judgment motion. 

Once GE Franchise learned of this oversight, it promptly produced a copy. 

Second, consideration of the 1002 Guaranty does not unfairly prejudice the 

Wormsbys. The Court gave the Wormsbys plenty of time for a sur-reply, as well as oral 

argument on the matter. Cf., e.g., Sanden v. Mayo Clinic, 495 F.2d 221, 228 (8th Cir. 

1974) (trial court did not abuse discretion in scheduling deposition of defendant two days 

before civil trial). 

Third, the 1002 Guaranty is an important document in this case. It directly refutes 

the Wormsbys’ argument that they did not guarantee the 1002 Loan Agreement, which is 

the only argument they made in response to GE Franchise’s summary judgment motion. 

The Court should not ignore an essential document based on a technicality. 

2. Authenticity 

The Wormsbys’ objection to the authenticity of the 1002 Guaranty also fails. In 

an ordinary case, disagreement as to the genuineness of a signature might well prevent 

summary judgment. But this is not an ordinary case. 

Sidney Wormsby does not actually deny signing the 1002 Guaranty. This was 

made clear during questioning of the Wormsbys’ counsel at oral argument: 

 COURT: I take it you have nothing more than what 

you -- your client has said so far in his affidavit, which is “I 

don’t remember this --” 

 COUNSEL: Correct. 

 COURT: “-- something’s different from some of my 

other” -- as I said, that does not look to me like a denial. That 

doesn’t look -- tell me how that would be sufficient to create 

a disputable -- disputed question of fact as to the authenticity 

of the signature. 

 COUNSEL: Well, it has to be authenticated to be 

admitted. That’s the first step. 

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 COURT: That’s a different point, though, and I 

understand your point on that. Your point is [opposing 

counsel] hasn’t carried his burden. But suppose I get to the 

next question. How -- how would it be a contradiction, if he 

had carried his burden, for [your client] to say “I don’t 

remember and this isn’t exactly the same as some of my other 

signatures.” Doesn’t look like that’s an issue of fact, either. 

 COUNSEL: No. 

 COURT: So -- all right. Go ahead. Whatever you’d 

like to say. 

 COUNSEL: There’s really nothing else to say, Your 

Honor. It’s all in the brief. No, that’s it, Your Honor. Thank 

you. 

Sidney Wormsby says he does not “recall” signing the 1002 Guaranty, but one would not 

expect him to recall signing each of several documents in a loan transaction six years ago. 

He also says he “ha[s] concerns about the authenticity of the signature,” but the concerns 

are based on minor variations between that signature and his signature on other loan 

documents. Such variations are entirely normal. Indeed, even among his signatures on 

other loan documents, there are variations. (Compare Doc. 37-2 at 27 with id. at 44, id.

at 50, id. at 77, id. at 85, Doc. 37-3 at 8, and Doc. 51-3 at 5.) Having compared those 

signatures with the signature on the 1002 Guaranty (Doc. 45-1 at 8), the Court finds that 

they are remarkably similar and the signature on the 1002 Guaranty does not stand out in 

a suspicious way. If anything, the slight variation between that signature and the other 

signatures shows that it was not traced from a nearby document. 

In addition, the circumstances surrounding the 1002 Guaranty confirm the 

signature’s authenticity. It is undisputed that on July 16, 2008, GE Franchise agreed to 

make two substantial loans to Little Giant Enterprises, of which the Wormsbys were 

members. It is also undisputed that on that same day, the Wormsbys signed a guaranty 

for the first loan. In this context, it is reasonable to infer that the Wormsbys also signed a 

guaranty for the second loan. This is especially so because only Sidney Wormsby is 

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demanding further proof of authenticity. The other signer, Hollis Wormsby, has not 

objected to the authenticity of his signature on the 1002 Guaranty. 

Now that GE Franchise has offered credible evidence of the 1002 Guaranty’s 

authenticity, the Wormsbys cannot defeat summary judgment simply by pointing to the 

absence of a specific memory and the presence of normal variations in signatures. See

Nieves v. Hess Oil Virgin Islands Corp., 819 F.2d 1237, 1252 (3d Cir. 1987) (affirming 

summary judgment despite plaintiff’s forgery claim, where district court found the 

signature “remarkably similar to the signatures of the plaintiff that appear on numerous 

exhibits attached to his opposition to the motion for summary judgment”); accord

Jackson v. Allstate Ins. Co., 441 F. Supp. 2d 728, 735 (E.D. Pa. 2006) (granting summary 

judgment where plaintiff alleging forgery “only testified that she does not remember 

whether she signed” and not “that she distinctly remembers not signing”). To allow the 

Wormsbys to avoid summary judgment without actually denying authenticity would 

effectively allow any loan guarantor to avoid summary judgment despite a signed 

agreement. That cannot be right. Defeating summary judgment does not require much, 

but it requires more than “some metaphysical doubt as to the material facts.” Matsushita 

Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). 

Thus, the Court considers the 1002 Guaranty for purposes of summary judgment. 

By its terms, the 1002 Guaranty obliges the Wormsbys to repay the second loan and its 

associated debts. Therefore, summary judgment will be granted against the Wormsbys as 

to the remaining $495,356.24 owed to GE Franchise, plus further accrued interest. 

B. Consideration of the Wormsbys’ claims against GE Franchise raised in 

their sur-reply is improper. 

The Court authorized the Wormsbys to file a sur-reply “limited to addressing” GE 

Franchise’s amended complaint. GE Franchise amended its complaint in only one 

respect: adding a reference to, and copy of, the 1002 Guaranty. Nevertheless, the 

Wormsbys used the sur-reply as an opportunity to criticize GE Franchise’s past behavior 

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toward Little Giant Enterprises. Specifically, the Wormsbys claim that (1) in 2012 GE 

Franchise did not allow Little Giant Enterprises to refinance one of its loans, and (2) in 

2014 GE Franchise applied one of Little Giant Enterprises’ payments to the loan with the 

lower interest rate, contrary to Little Giant Enterprises’ instruction. 

These claims exceed the scope of the sur-reply. Moreover, the Wormsbys do not 

explain how these claims refute GE Franchise’s summary judgment motion, nor do they 

identify any other purpose for which the Court may consider claims introduced in a final 

brief on a summary judgment motion. 

C. GE Franchise is not entitled to full attorney fees and costs. 

GE Franchise seeks not only the repayment of the $495,356.24 debt and interest, 

but also attorney fees and costs pursuant to its contracts with the Wormsbys and A.R.S. 

§ 12-341.01. GE Franchise anticipates filing “a separate application for fees and costs 

detailing the amount of attorneys’ fees and costs that it has incurred in this matter up to 

the date of entry of the judgment.” (Doc. 36 at 7–8.) 

Under the loan agreements and guaranties, GE Franchise is entitled to 

reimbursement for “reasonable” attorney fees and costs. (Doc. 37-2 at 22, 77; see also

Doc. 37-3 at 2; Doc. 45-1 at 2.) Likewise, A.R.S. § 12-341.01 authorizes an award of 

“reasonable” attorney fees. The statute gives the Court discretion whether to award fees, 

but the contractual provisions are mandatory. Chase Bank of Arizona v. Acosta, 179 

Ariz. 563, 575, 880 P.2d 1109, 1121 (Ct. App. 1994). Thus, the Court will award GE 

Franchise reasonable fees and costs. 

Various factors bear on the reasonableness of a requested attorney fee award, 

including the time and labor required of counsel, novelty and difficulty of the questions 

presented, and any other matters deemed appropriate under the circumstances. LRCiv 

54.2(c)(3). In this case, GE Franchise failed to produce a copy of the 1002 Guaranty 

during discovery. The absence of this guaranty was the basis of the Wormsbys’ 

opposition to summary judgment as well as subsequent filings and oral argument. GE 

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Franchise should not be rewarded for its mistake. Therefore, attorney fees incurred after 

the filing of GE Franchise’s summary judgment motion are not reasonable and will not be 

awarded. 

IT IS THEREFORE ORDERED that GE Franchise’s Motion for Summary 

Judgment (Doc. 36) is granted. 

IT IS FURTHER ORDERED that GE Franchise submit proof or stipulation as to 

the commencement date, rate, and amount of pre-judgment interest not included in the 

$495,356.24 debt identified in its motion. Post-judgment interest will accrue at the 

applicable federal rate. 

IT IS FURTHER ORDERED that GE Franchise may submit a separate application 

for specific fees and costs in compliance with LRCiv 54.1 and 54.2. 

Dated this 8th day of August, 2016. 

Neil V. Wake

Senior United States District 

Judge

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