Opinion ID: 769991
Heading Depth: 3
Heading Rank: 2

Heading: The Tri-County Operating Agreement, Security Agreement, and Guaranty

Text: 11 In connection with Wallace Hardware's sale of hardware inventory to Tri-County, these two corporate entities executed a New Account Application and Operating Agreement dated August 9, 1991. Under this Agreement, Wallace Hardware extended a line of credit to enable Tri-County to purchase hardware goods and services. Both Lonnie and Bill Abrams signed the Agreement on behalf of Tri-County. Through their signatures, the Abrams brothers agree[d] to be jointly, severally, and individually responsible forthe payment of any and all goods and services furnished by Wallace Hardware Company, Inc. to our firm or to us individually. (J.A. at 52.) 12 To secure this line of credit, Tri-County executed an August 9, 1991 Security Agreement, granting Wallace Hardware a security interest in [a]ny and all inventory purchased by [Tri-County] from Wallace or otherwise [f]inanced by Wallace. (J.A. at 58.) Lonnie Abrams signed this security agreement on behalf of Tri-County as its president. The agreement's definitional section referred to Tennessee's enactment of the Uniform Commercial Code (UCC) as the source for resolving any questions as to the meaning of terms. Finally, the security agreement provided that the validity, interpretation, construction and enforcement of this Security Agreement, the obligations of [Tri-County] and the rights of Wallace hereunder, and any question which may arise concerning this Security Agreement or the transactions contemplated hereby, shall be governed in all respects by the law (including laws, statutes and case law) of the State of Tennessee. (J.A. at 59.) 13 In addition to this security agreement, Wallace Hardware also sought personal guaranties from both of the Abrams, in which they agreed to accept individual liability for Tri-County's indebtedness to Wallace Hardware. Accordingly, on August 21, 1991, Wallace Hardware tendered a Guaranty Agreement for signature by both Lonnie and Bill Abrams. Although both brothers' signatures appear on this Guaranty, Bill Abrams denies that he signed this document, and he has proffered the opinion of a handwriting expert that his purported signature is a forgery. For his part, Lonnie Abrams admits that he signed the Guaranty. 14 Under the terms of the Guaranty Agreement, the Abrams brothers unconditionally guarantee[d] and promise[d] to pay to Wallace . . . any and all indebtedness owed by Tri-County to Wallace Hardware. (J.A. at 61.) The guarantors' liability was unlimited, continuing, and encompassed any indebtedness incurred by Tri-County, including that arising under successive transactions which shall either continue the indebtedness or from time to time renew it after it has been satisfied. (Id.) The obligations assumed by the guarantors were independent of Tri-County's obligations, and were not affected by resort on the part of Wallace to any other security or remedy for the collection of said indebtedness. (Id.) Moreover, the guarantors waive[d] any defense arising by reason of any disability or other defense of [Tri-County] or by reason of the cessation from any cause whatsoever of the liability of [Tri-County] for the indebtedness. (Id.) Finally, by its terms, the Guaranty Agreement was to be governed by and construed in accordance with the laws of the State of Tennessee. (Id.) 15