Opinion ID: 2354364
Heading Depth: 1
Heading Rank: 1

Heading: The trial court erred in holding the personal guaranty contracts were valid and enforceable.

Text: In their first point on appeal, appellants argue that the legislature did not grant ADFA authority to execute personal guaranties. A review of the Arkansas Development Finance Authority Bond Guaranty Act [the Act] is necessary before addressing appellants' contention. The Act was passed by the legislature in 1985. The rationale for the Act was articulated in Ark.Code Ann. § 15-5-402 (Repl.2000), which provides in part: (a) The General Assembly finds: (1) That there exists severe economic instability in traditional national and international markets for goods and services produced by the citizens of the State of Arkansas. This instability has caused serious economic distress among the citizens of our state and is manifest in the increasing number of business failures and bankruptcies, both personal and corporate, and the extraordinarily high levels of unemployment in agricultural business and industrial enterprises    (b) For these reasons, the General Assembly finds that there exists in the state an immediate and urgent need to provide the means and methods for providing financing and enhancing and supporting the credit of such financing to: (1) Restore and revitalize existing agricultural business and industrial enterprises for the purpose of retaining existing employment within the state; (2) Promote and develop the expansion of existing and the establishment of new agricultural business and industrial enterprises for the purpose of further alleviating unemployment within the state and for providing additional employment; (3) Promote and target resources of the state to further the development of export trade of Arkansas products for the purpose of the economic development of the state and for providing additional employment therefrom;    (c) It is declared to be the public policy and responsibility of this state to promote the health, welfare, safety, morals, and economic security of its inhabitants through the retention of existing employment and alleviation of unemployment in all phases of agricultural business and industrial enterprises.    (d) The General Assembly finds that the public policies and responsibilities of the state as set forth in this section cannot be fully attained without the use of public financing and that such public financing can best be provided by the creation of a means of enhancing and supporting the credit of such public financing by establishing a bond guaranty procedure to be administered by the Arkansas Development Finance Authority. Id. Pursuant to the Act, ADFA was chosen to administer a bond guaranty procedure. The Act outlined when bonds may be guaranteed and described certain provisions to be included in the guaranty agreement. See Ark.Code Ann. § 15-5-405 and 412 (Repl.2000). Additionally, the Act granted ADFA broad authority to perform its duties. Specifically, Ark.Code Ann. § 15-5-413 (Repl.2000), in relevant part states: (a) The Arkansas Development Finance Authority is authorized and directed to conduct such investigation as it may determine necessary for the promulgation of regulations to govern the operation of the guaranty program authorized by this subchapter, which regulations shall include the restriction and conditions imposed by this subchapter, including particularly those set forth in §§ 15-5-405 and 15-5-412, and which may include such other and additional provisions, restrictions, and conditions as the authority, after the investigation referred to above, shall determine to be proper to achieve the most effective utilization of the guaranty program authorized by this subchapter, including, without limitation, a detailing of the remedies that must be exhausted by the bondholders or a trustee acting in their behalf prior to calling upon the authority to perform under its guaranty agreement and the subrogation or other rights of the authority with reference to the project and its operation in the event the authority makes payment pursuant to the applicable guaranty agreement. (b) In this regard, the authority is expressly authorized to take such action and enter into such agreements and otherwise take such action as may be necessary to exercise the authority conferred by this subchapter or to evidence the exercise thereof. Id. (emphasis added). Informed by the relevant statutory provisions, we turn to appellants' challenge to ADFA's authority. On this issue, the trial court found: The Leoffler defendants argued that ADFA did not have the capacity to contract nor require personal guaranties. There is clearly no prohibition of such in the Act. Although personal guaranties are not specifically authorized under the Act, A.C.A. 15-5-413 gives ADFA the authority to promulgate regulations to govern the operation of its bond guaranty program and make reasonable lending requirements, including that of personal guaranties. The trial court's findings are not clearly erroneous. As it correctly noted, Ark.Code Ann. § 15-5-413(b) expressly grants ADFA unrestricted authority to take such action and enter into such agreements and otherwise take such action as may be necessary to exercise the authority conferred by this subchapter or to evidence the exercise thereof. Id. We conclude that it is clear through the use of such language that the legislature did not limit the authority of ADFA to take what actions it deemed fit and proper to fulfill the statutory mandate to assist the development of Arkansas business and industry through bonds and loans. Accordingly, the trial court did not err in finding that ADFA had authority to require individual guaranties.
Next, appellants argue that even if ADFA had authority to require personal guaranties, it failed to comply with the statutory authority it was clearly given, namely, evaluating financial responsibility of the borrower prior to making a loan. That failure was a negligent misrepresentation to appellants justifying release of their personal guaranties. This issue is not properly before this court because appellants failed to obtain a final ruling on this matter. We have repeatedly held that a party's failure to obtain a ruling is a procedural bar to our consideration of an issue on appeal. Dovers v. Stephenson Oil Co, Inc., 354 Ark. 695, 128 S.W.3d 805 (2003). Appellants briefly mentioned the idea of negligent misrepresentation during closing argument, but never sought or received a ruling from the trial court. Accordingly, we do not consider this issue.