United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 07-3619/08-1200

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Cardinal Health 110, Inc., *

formerly known as Whitmire *

Distribution Corporation, *

*

Appellee, *

*

 v. *

*

Cyrus Pharmaceutical, LLC, * Appeal from the United States

also known as Cyrus Pharmaceutical * District Court for the

Co., LLC, doing business as * Western District of Missouri.

Cyrus Pharmacy; Kian Shafe; *

Judith J. Shafe, *

*

Appellants, *

*

Kendallwood Investment, LLC; *

Kendallwood Retirement Homes, Inc., *

*

Defendants. *

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Submitted: October 17, 2008

Filed: March 31, 2009

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Before RILEY, BOWMAN, and COLLOTON, Circuit Judges.

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1

The Honorable Scott O. Wright, United States District Judge for the Western

District of Missouri.

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RILEY, Circuit Judge.

Cardinal Health 110, Inc. (Cardinal) sued Cyrus Pharmaceutical, LLC (Cyrus),

Judith Shafe (Ms. Shafe) and Kian Shafe (Mr. Shafe) (collectively, Shafes),

Kendallwood Investment, LLC (KI), and Kendallwood Retirement Homes, Inc. (KRH)

based upon a Credit Application and Agreement (Credit Agreement) for Cardinal’s sale

of pharmaceuticals to Cyrus. The district court1

 granted Cardinal summary judgment

on claims of breach of contract, breach of guarantee, and action on account, and

awarded Cardinal costs and attorney fees. Cyrus and the Shafes now appeal. We

affirm.

I. BACKGROUND

In 2001, Cardinal and Cyrus entered into a contract in which Cardinal agreed to

supply pharmaceuticals to Cyrus’s nursing homes. The contract provided a security

agreement for Cardinal. By January 2006, Cyrus owed Cardinal $135,000 on the

contract. In light of this outstanding balance, Cardinal and Cyrus renegotiated their

agreement by executing (1) a letter agreement extending the time for Cyrus to pay the

outstanding $135,000 (Dating Agreement), and (2) a Credit Agreement.

Under the Dating Agreement, Cardinal agreed “to provide [Cyrus] with extended

dating for a period of six (6) months in order to assist [Cyrus] in the expansion of its

current business operations and assist with the impact of the new Medicare part D

program.” In return, Cyrus agreed to make payments of $45,000 each on May 15,

2006; June 15, 2006; and July 15, 2006. The Shafes accepted the Dating Agreement

by signing it as the “owner/President” of Cyrus. Although the Shafes did not date their
2

The Dating Agreement states it applies to invoices up to January 20, 2006.

Cardinal’s Manager of Underwriting testified, and Cyrus and the Shafes admitted, the

Dating Agreement was negotiated in January 2006, which would require execution by

January 31, 2006.

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signatures on the Dating Agreement, the record before us places the Dating Agreement

execution between January 20, 2006, and January 31, 2006.2

Under the Credit Agreement, Cardinal agreed to supply pharmaceuticals to

Cyrus on credit. However, the Credit Agreement involved three provisions in the event

Cyrus failed to pay on the credit. First, Cyrus agreed to “pay all out-of-pocket

expenses, including attorneys’ fees and disbursements, incurred by Cardinal to collect

any amounts due under [the Credit Agreement] or to otherwise enforce any of the terms

of [the Credit Agreement].” Second, Cyrus granted Cardinal a security interest in all

of Cyrus’s “goods, equipment, inventory, accounts, accounts receivable and all general

intangibles, books and records, computer programs and records, and other personal

property, tangible or intangible, related to the foregoing.” Finally, the Credit

Agreement provided a section entitled “Guarantee” which set forth the following:

The undersigned Principal(s) of Applicant, by reason of their interest in

Applicant and as an inducement for Cardinal Health to extend credit to

Applicant, hereby jointly and severally, irrevocably, and unconditionally

guarantee to Cardinal Health and it subsidiaries, affiliates and successors

(each a Guarantee Party) and assigns the prompt and full payment (and

not merely the ultimate collectability) and performance of all obligation

of Applicant to each Guaranteed Party, whether now existing or hereafter

arising. The undersigned authorize Cardinal Health to verify this

information and/or additional information by obtaining data from a credit

reporting agency. If Applicant or its business is hereafter sold, this

guaranty shall continue to all credit hereafter made available to that

Applicant or its business (as the case may be) until such time as Cardinal

Health has received 5 days advanced written notice (via certified mail,

return receipt requested) that Applicant and/or Principal(s) will no longer
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be responsible for credit thereafter made available with the respect to that

Applicant or its business.

THE UNDERSIGNED ACKNOWLEDGES THAT HIS/HER

INDIVIDUAL CREDIT HISTORY MAY BE A FACTOR IN THE

EVALUATION OF THE CREDIT HISTORY OF THE APPLICANT

AND HEREBY CONSENTS AND AUTHORIZES THE USE OF A

CONSUMER CREDIT REPORT ON THE UNDERSIGNED BY

CARDINAL HEALTH FORM TIME TO TIME AS CARDINAL

HEALTH MAY DEEM NECESSARY IN ITS CREDIT

EVALUATIONS.

(spelling and grammar unaltered).

The Credit Agreement was executed on January 25, 2006, through three sets of

signatures by both Ms. Shafe and Mr. Shafe. The first set of signatures were styled as

an “Authorized Signature” which accepted the terms of the Credit Agreement,

including the expenses and attorney fees provision, on behalf of Cyrus. The second

set of signatures authorized Cardinal’s security interest in Cyrus’s goods and was

executed as Cyrus’s “owner/President.” The third set of signatures executed the

guarantee and was signed “By” the Shafes as “Principals.”

In reliance on the Dating Agreement and Credit Agreement, Cardinal continued

to fill Cyrus’s orders. Cyrus never paid the Dating Agreement payments, and failed

to pay Cardinal for the new orders. As a result, Cardinal sued Cyrus and the Shafes

asserting claims of breach of contract against Cyrus, breach of guarantee against the

Shafes, action on account against Cyrus, fraud against Cyrus, and alter ego against KI

and KRH.

Cardinal moved the district court for partial summary judgment on the breach

of contract, breach of guarantee, and action on account claims. On June 20, 2007, the

district court granted the motion finding (1) the Credit Agreement and Dating
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Agreement were one valid contract which made Cyrus liable on the contract and

account, and (2) the Shafes were personally liable for all Cyrus’s debt because the

“Guarantee” was unambiguous, signed by the Shafes in their personal capacity,

supported by consideration, and valid. Cardinal then moved the district court to

dismiss Cardinal’s remaining two claims without prejudice, and the district court

granted the motion on October 31, 2007. That same day, an entry was made on the

case’s docket which read: “(Court only) ***Civil Case Terminated. (Morse, Judy)

(Entered: 10/31/2007).”

On November 15, 2007, Cyrus and the Shafes filed a notice of appeal on the

partial summary judgment motion, stating final judgment in the case had been entered

on October 31, 2007. Five days later, on November 20, 2007, the district court entered

judgment in the case. Cardinal then moved, on December 4, 2007, for costs and

attorney fees under the Credit Agreement in the amount of $5,540.33 and $88,221.65,

respectively. Cardinal’s motion asserted final judgment was entered on November 20,

2007. On January 9, 2008, the district court partially granted Cardinal’s motion and

awarded Cardinal $5,540.33 in costs and $65,000 in attorney fees. The Shafes have

now appealed the district court’s grant of summary judgment to Cardinal on the breach

of guarantee claim, and Cyrus and the Shafes challenge the district court’s award of

costs and attorney fees.

II. DISCUSSION

A. Breach of Guarantee Claim

The Shafes argue the district court erred in granting summary judgment on

Cardinal’s breach of guarantee claim because the district court (1) improperly stated

and applied Missouri law, (2) misstated the facts and wrongly interpreted the guarantee

to demonstrate unambiguously the Shafes’ intent to be personally bound, and (3)

erroneously found the guarantee was supported by consideration for Cyrus’s

preexisting debt of $135,000. “We review de novo a district court’s grant of summary

judgment, as well as its interpretation of state law and the terms of a contract.” Ace
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Elec. Contrs., Inc. v. Int’l Broth. of Elect. Workers, 414 F.3d 896, 899 (8th Cir. 2005)

(citation omitted).

1. Interpretation of Missouri Law

The Shafes first urge this court to reverse the district court’s grant of summary

judgment because the district court improperly relied upon dicta from Standard Meat

Co. v. Taco Kid of Springfield, Inc., 554 S.W.2d 592 (Mo. Ct. App. 1977), to create

a rule of strict liability in Missouri law that a signatory who signs a guarantee as a

“principal” has unambiguously signed the guarantee in his or her personal capacity.

The Shafes contend the district court’s interpretation was erroneous because Missouri

law does not have a rule of strict liability, but rather requires a court to analyze an

individual’s intent to be personally bound by a guarantee. The Shafes argue the district

court’s interpretation of Missouri law was an error of law which, by definition,

constituted an abuse of discretion and requires reversal.

The Shafes’ argument regarding the district court’s interpretation of Taco Kid

is misplaced. On de novo review, we interpret Missouri law independent of the district

court, see Ace, 414 F.3d at 899, and can affirm the district court’s grant of summary

judgment based upon any reason supported in the record, see Christoffersen v. Yellow

Book USA, 536 F.3d 947, 949 (8th Cir. 2008). We therefore address, under our own

interpretation of Missouri law, whether the district court properly found there was no

genuine issue of material fact regarding the Shafes’ personal liability under the

Guarantee.

2. Intent of Personal Liability

Missouri subscribes to the following general rule regarding signatory liability

on a guarantee:

[W]here the principal is disclosed and the capacity in which the individual

signs is evident, e.g., president, secretary, agent, the liability is the
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principal’s and not the individual signing for the principal. The

presumption, in such cases, is, that it was the agent’s intention to bind his

principal and not to incur personal liability, and an agent will not be

bound personally, except upon clear and explicit evidence of an intention

to be bound. Of course, where the circumstances surrounding the

transaction disclose a mutual intention to impose personal responsibility

on the individual executing the agreement, the individual may be

personally liable even though the form of the signature is that of the

agent.

. . . .

The determinative issue here is whether, in view of the form of the

signature to the agreement, the language of the so called guaranty clause

is sufficient to manifest a clear and explicit intent by [the signatory] to

assume a personal guaranty contract.

. . . .

[Missouri] therefore adopt[s] the policy that in order to hold a corporate

officer individually liable in signing a contract of guaranty . . . the officer

should sign the contract twice–once in his corporate capacity and once in

his individual capacity. If the parties have mutually agreed and intended

that the officer executing the contract for his corporation is to assume

personal obligations thereunder, the simple but unequivocal act of

manifesting such intent can be accomplished by having the officer also

sign in his individual capacity.

Wired Music, Inc. of the Great Midwest v. Great River Steamboat Co., 554 S.W.2d

466, 468–71 (Mo. Ct. App. 1977) (citations and quotations omitted).

In Taco Kid, 554 S.W.2d at 593–94, the Missouri Court of Appeals found

signatory liability on a two-sided document which included a credit application on one

side and a guarantee on the other side. The guarantee required “a principal of the

business” to guarantee payment of outstanding debts. Id. at 594. In two separate
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The Shafes also take issue with the version of the Guarantee which the district

court used. According to the Shafes, the district court used a modified or corrected

version of the Guarantee, modified by the district court or corrected by Cardinal,

which was inconsistent with the true language of the Guarantee. Similar to the

Shafes’ argument regarding the district court’s interpretation of Taco Kid, this

argument is misplaced. Upon de novo review, the version of the Guarantee used by

the district court is irrelevant. See Ace, 414 F.3d at 899. We address, under our

interpretation of the actual Guarantee, whether the district court properly found there

was no genuine issue of material fact regarding the Shafes’ intent to be personally

bound.

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instances, the guarantee was signed by shareholders and directors of the corporation

who denoted themselves as either “president of Taco Kid of Springfield Mo, Inc.” or

“Pres.” Id. The court held these identifiers did not engender any ambiguity, and the

signatories had executed the guarantee in their individual capacities because the

guarantee was completed by a “principal of the business” and there was no attempt or

intent to enter the guarantee on behalf of the corporation. Id. at 595–96. The court

also stated this interpretation was reasonable because an interpretation of the contract

which would result in the corporation guaranteeing its own debt would be “redundant,

illusory, absurd, and therefore unreasonable.” Id. at 596 (citations and quotations

omitted).

The Shafes claim the district court erred in granting summary judgment because

the Guarantee does not evidence the Shafes’ intent to be bound personally. The Shafes

contend (1) the signature block in the Guarantee contains “By: Principals” language

which evinces corporate capacity signatures, (2) the Guarantee does not contain

personal pronouns indicative of personal liability, and (3) the Guarantee has “spelling

errors, verb tense and/or conjugation errors, improper sentence structure and improper

and/or confusing placement of modifiers and modifying phrases” which create

ambiguities regarding the Shafes’ intent, and such ambiguities should be construed

against the drafter, Cardinal. The Shafes assert these deficiencies raise issues of fact

regarding the Shafes’ intent, which precludes summary judgment. We disagree.3
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Under Missouri law, a contract is interpreted with its plain and ordinary

meaning, and will only be declared ambiguous if there is more than one reasonable

interpretation of the contract. See Kelly v. State Farm Mut. Auto. Ins. Co., 218 S.W.3d

517, 522 (Mo. Ct. App. 2007). If there is no ambiguity, external evidence cannot be

used to interpret the contract. Id.

The plain and ordinary meaning of the Guarantee evidences the Shafes’ intent

to be bound personally. In the signature block, the Shafes’ did not sign the Guarantee

with reference to their corporate capacities. This is distinctly different from the

Shafes’ other sets of signatures in the Credit Agreement and Dating Agreement which

had the Shafes signing as either an “Authorized Signature” or on behalf of Cyrus as its

“owner/President.” The Shafes simply signed the Guarantee as “Principals” of Cyrus.

See Taco Kid, 554 S.W.2d at 595–96. The Shafes did not designate their corporate

capacity when signing the Guarantee, and we have not been presented with any

evidence in this record to indicate the Shafes attempted to do so. See id. at 596

(finding personal liability on a guarantee even though the signatories, in their own

handwriting, designated their capacities as president). Similarly, the Guarantee was

a separate section of the Credit Agreement and contained the Shafes’ fourth set of

signatures in the Credit Agreement and Dating Agreement, which presumes the Shafes

signed the Guarantee as a “simple but unequivocal act of manifesting” intent to be

bound personally. Wired Music, 554 S.W.2d at 471.

The language of the Guarantee also supports interpreting the contract to bind the

Shafes personally. The Guarantee states it was entered by the Shafes as a “principal”

of Cyrus and “by reason of their interest” in Cyrus. (Emphasis added). The Guarantee

notes the extension of credit to Cyrus may depend upon “his [Mr. Shafe’s]/her [Ms.

Shafe’s] individual credit history.” The use of these pronouns in the Guarantee section

strongly suggests personal liability; if the language was being used to bind Cyrus, it

is more likely the Guarantee would have used traditional entity references like “it” or

“its.”
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Although the Shafes contend the Guarantee language contains errors which

make its intent ambiguous, the grammatical errors the Shafes identify do not reflect

upon their intent. Based upon the facts in this record surrounding the Guarantee, these

errors are inaccuracies, not ambiguities. See Donovan v. Boeck, 116 S.W. 543, 547

(Mo. 1909) (reasoning, “[t]he language may be inaccurate, but if the court can

determine the meaning of this inaccurate language without any other guide than a

knowledge of the simple facts upon which, from the nature of language in general, its

meaning depends, the language, though inaccurate, could not be ambiguous”).

Finally, the structure of the Credit Agreement evinces the Guarantee’s purpose

to bind the Shafes personally. The Credit Agreement grants Cardinal a security interest

in Cyrus in the event Cyrus fails to pay. If we were to interpret the Guarantee to bind

Cyrus, the Guarantee would grant Cardinal a right it already possessed under its

security interest and would have Cyrus guaranteeing its own debt. This interpretation

would be “redundant, illusory, absurd, and therefore unreasonable.” Taco Kid, 554

S.W.2d at 596 (citations and quotations omitted). Thus, the district court did not err

in finding no genuine issue of material fact regarding the Shafes’ personal liability

under the Guarantee.

3. Consideration for Preexisting Debt

The Shafes ultimately contend, even if the Guarantee were signed in their

personal capacity, the district court erred in granting summary judgment as to the

Shafes’ guarantee of all Cyrus’s debt. The Shafes claim the lack of a date on the

Guarantee, and the failure of the Guarantee, Credit Agreement, and Dating Agreement

to reference each other, create fact questions regarding whether there was adequate

consideration to enforce the Guarantee on Cyrus’s $135,000 preexisting debt. The

Shafes’ argument is not convincing.

Under Missouri law, a guarantee is a contract which requires separate

consideration. See Kurtz v. Fischer, 600 S.W.2d 642, 646 (Mo. Ct. App. 1980). “An

agreement to extend the time for payment of an existing debt or a promise to forbear
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collection, even for an indefinite time, is sufficient consideration for a guarantee of the

debtor’s obligation.” Id. (citation omitted). “Where the contract of guaranty and the

original contract creating the liability guaranteed are contemporaneously made, the two

contracts are regarded as integrated and the consideration supporting the original

contract also supports the guarantee.” Id. (citation omitted).

Missouri courts have held a guarantee can be deemed contemporaneous with an

original contract even if the guarantee is not made on the same day as the original

contract. See Centennial State Bank v. S.E.K. Const. Co., Inc., 518 S.W.2d 143, 150

(Mo. Ct. App. 1974) (holding a guarantee was legally contemporaneous with a

promissory note even though the guarantee was given ten days after the promissory

note was entered). To be contemporaneous, Missouri courts tend to focus on whether

the guarantee was part of an overall “single transaction” involving the original contract.

See Edwards v. Heidelbaugh, 574 S.W.2d 25, 28 (Mo. Ct. App. 1978).

The Dating Agreement provides the consideration needed to tie the Guarantee

to the $135,000 preexisting debt. Cyrus agreed under the Dating Agreement to make

three payments of $45,000 to satisfy the debt. Cardinal’s promise to allow Cyrus an

additional six months to repay the existing debt was sufficient consideration for the

Guarantee. See Kurtz, 600 S.W.2d at 646. The Guarantee was also made

contemporaneously with the Dating Agreement. The Guarantee states it applies to all

debt of Cyrus “now existing,” and the Guarantee was made as part of the single

transaction between Cardinal and Cyrus to renegotiate Cyrus’s existing debt and

continue their business relationship through a line of credit. See Edwards, 574 S.W.2d

at 28. Thus, there is no genuine issue of material fact whether the Guarantee applies

to Cyrus’s preexisting debt through the Dating Agreement, and the district court did

not err in granting summary judgment to Cardinal on the breach of guarantee claim.

B. Award of Costs and Attorney Fees

Cyrus and the Shafes also challenge the district court’s award of costs and

attorney fees. “Factual determinations concerning an award of attorney’s fees are
4

The Shafes’ attempt to liken this case to Reyher v. Champion Int. Corp., 975

F.2d 483 (8th Cir. 1992), is ineffective. In Reyher, id. at 486–87, a panel of this court

held entry of final judgment was entered under Fed. R. Civ. P. 58 when a district court

issued a separate document styled a “Judgment in a Civil Case” reporting a jury

verdict and declaring “judgment is hereby entered.” Based upon the record in this

case, the district court’s October 31, 2007 order and docket entry are not at all similar

to Reyher.

5

At oral argument, Cyrus and the Shafes presented, for the first time, an

alternative argument that the district court lacked jurisdiction because it failed to keep

the judgment open for amendment under Fed. R. App. P. 4 and Jones v. UNUM Life

Ins. Co. of Am., 223 F.3d 130 (2d Cir. 2000). We choose not to consider this

argument. See Stillmunkes v. Hy-Vee Employee Benefit Plan and Trust, 127 F.3d

767, 769-70 n.6 (8th Cir. 1997) (“We refuse to consider an argument presented to this

court for the first time at oral argument.”).

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reviewed under a clearly erroneous standard, while the district court’s determination

of the amount of the fee award is reviewed for abuse of discretion. Interpretation of

an unambiguous fee-shifting clause, however, is one of law to be reviewed de novo by

this court.” Litton Microwave Cooking Prod. v. Leviton Mfg. Co., Inc., 15 F.3d 790,

795 (8th Cir. 1994).

Cyrus and the Shafes first argue the district court was without jurisdiction to

enter an award of costs and attorney fees because Cardinal’s motion for costs and

attorney fees was filed more than fourteen days after entry of final judgment on

October 31, 2007, and thus was untimely under the fourteen day deadline of Fed. R.

Civ. P. 54(d)(2)(B)(i). Cyrus and the Shafes incorrectly calculate entry of final

judgment based upon the district court’s order and docket entry of October 31, 2007.4

Under Fed. R. Civ. P. 58(a), entry of judgment must be “set out in a separate

document” before it is final. The district court fulfilled this requirement when the clerk

entered final judgment on November 20, 2007. Cardinal filed its motion on December

4, 2007, which was within 14 days of entry of final judgment, and the district court had

jurisdiction for its award.5
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The Shafes next assert the Guarantee does not contain the attorney fees provision

in the Credit Agreement. Under Missouri law, a party is not allowed attorney fees

unless provided by contract, statute, or equity. See Moore v. Weeks, 85 S.W.3d 709,

723 (Mo. Ct. App. 2002). Section III of the Credit Agreement explicitly provides for

Cardinal to recoup costs and attorney fees. Because the Guarantee also insures the

Credit Agreement, the attorney fees provision of the Credit Agreement is incorporated

by the Guarantee, and the Shafes are personally bound by the attorney fees provision.

See Ulreich v. Kreutz, 876 S.W.2d 726, 730 (Mo. Ct. App. 1994) (determining a

guarantee of a contract includes payment of attorney fees authorized by the contract).

Finally, Cyrus and the Shafes argue the district court’s award of costs and

attorney fees was an abuse of discretion. Cyrus and the Shafes assert Cardinal’s

attorney fees are outrageous and unreasonable because they are higher than the local

rate, involved an excessive amount of hours and frivolous claims, and were expended

on claims Cardinal ultimately voluntarily dismissed. The district court substantially

reduced Cardinal’s award of attorney fees to $65,000 from Cardinal’s original request

of $88,221.65. In this case, the amount of costs and attorney fees is not unreasonable

to recover on a claim resulting in a $451,644.43 judgment. The district court did not

abuse its discretion.

III. CONCLUSION

The district court’s judgment is affirmed.

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