Opinion ID: 1620172
Heading Depth: 2
Heading Rank: 2

Heading: Was the summary judgment proper?

Text: Our standard of review for a summary judgment is as follows: We review the trial court's grant or denial of a summary-judgment motion de novo, and we use the same standard used by the trial court to determine whether the evidence presented to the trial court presents a genuine issue of material fact. Bockman v. WCH, L.L.C., 943 So.2d 789 (Ala.2006). Once the summary-judgment movant shows there is no genuine issue of material fact, the nonmovant must then present substantial evidence creating a genuine issue of material fact. Id. `We review the evidence in a light most favorable to the nonmovant.' 943 So.2d 795 We review questions of law de novo. Davis v. Hanson Aggregates Southeast, Inc., 952 So.2d 330 (Ala.2006). Smith v. State Farm Mut. Auto. Ins. Co., 952 So.2d 342 (Ala.2006). `In a breach of contract action, a summary judgment is properly entered only where the contract is unambiguous and the facts are undisputed.' Bank of Brewton, Inc. v. International Fid. Ins. Co., 827 So.2d 747, 752 (Ala.2002)(quoting Britt v. Gonzalez, 710 So.2d 928, 930 (Ala.Civ.App.1998)). McCollough argues that the trial court should not have granted Regions Bank's motion for a partial summary judgment because, he says, the contract between Regions Bank and McCollough was ambiguous. (McCollough's brief, pp. 4-7.) This Court stated in FabArc Steel Supply, Inc. v. Composite Construction Systems, Inc., 914 So.2d 344, 358 (Ala.2005): `[I]f the trial court finds the contract to be ambiguous, it must employ established rules of contract construction to resolve the ambiguity. Voyager Life Ins. Co. v. Whitson, 703 So.2d 944, 948 (Ala.1997). If the application of such rules is not sufficient to resolve the ambiguity, factual issues arise: `If one must go beyond the four corners of the agreement in construing an ambiguous agreement, the surrounding circumstances including the practical construction put on the language of the agreement by the parties to the agreement, are controlling in resolving the ambiguity. ` Id. at 949. Where factual issues arise the resolution of the ambiguity becomes a task for the jury. McDonald v. U.S. Die Casting & Dev. Co., 585 So.2d 853 (Ala.1991).'  Alfa Life Ins. Corp. v. Johnson, 822 So.2d 400, 405 (Ala.2001). The issue, therefore, is whether the commercial guaranty contract between McCollough and Regions Bank was ambiguous. This Court has discussed ambiguity of contracts on several occasions. In Warren v. Rasco, 457 So.2d 399, 401 (Ala.1984), this Court stated: According to Black's Law Dictionary, language in a contract is `ambiguous' if it is `reasonably capable of being understood in more than one sense,' citing City of Sioux Falls v. Henry Carlson Company, Inc., 258 N.W.2d 676, 679 (S.D.1977). In other words, `[a]n ambiguity exists where a term is reasonably subject to more than one interpretation.' Ex parte Awtrey Realty Co., 827 So.2d 104, 107 (Ala.2001) (quoting Cannon v. State Farm Mut. Auto. Ins. Co., 590 So.2d 191, 194 (Ala.1991)). Conversely, `[a]n instrument is unambiguous if only one reasonable meaning clearly emerges.' Ex parte Gardner, 822 So.2d 1211, 1217 (Ala.2001) (quoting Reeves Cedarhurst Dev. Corp. v. First Amfed Corp., 607 So.2d 184, 186 (Ala.1992), quoting in turn Vainrib v. Downey, 565 So.2d 647, 648 (Ala.Civ. App.1990)). The commercial guaranty contract between McCollough and Regions Bank contains the following relevant provisions: AMOUNT OF GUARANTY. This is a guaranty of payment of 20.000% of the Note, including without limitation the principal Note amount of Two Million One Hundred Thousand & 00/100 Dollars ($2,100,000.00). GUARANTY. For good and valuable consideration, E GAYLON MCCOLLOUGH (`Guarantor') absolutely and unconditionally guarantees and promises to pay to REGIONS BANK (`Lender') or its order, in legal tender of the United States of America, 20.000% of the Indebtedness (as that term is defined below) of MEDICAL VISIONS OF ALABAMA, LLC (`Borrower') to Lender on the terms and conditions set forth in this Guaranty. Guarantor agrees that Lender, in its sole discretion, may determine which portion of Borrower's indebtedness to Lender is covered by Guarantor's percentage guaranty. . . . . INDEBTEDNESS GUARANTEED. The indebtedness guaranteed by this Guaranty includes the Note, including (a) all principal, (b) all interest, (c) all late charges, (d) all loan fees and loan charges, and (e) all collection costs and expenses relating to the Note or to any collateral for the Note. Collection costs and expenses include without limitation all of Lender's attorneys' fees. . . . . GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time . . . to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose. . . . . . . . DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Guaranty. . . . . Indebtedness. The word `indebtedness' means Borrower's indebtedness to Lender as more particularly described in this Guaranty. . . . . Note. The word `Note' means the promissory note dated September 28, 2001, in the original principal amount of $2,100,000.00 from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. . . . . GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THE COMMERCIAL GUARANTY AND GUARANTOR AGREES TO ITS TERMS. THIS COMMERCIAL GUARANTY IS DATED SEPTEMBER 28, 2001. THIS GUARANTY IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS GUARANTY IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. (Capitalization in original.) McCollough argues that this contract is ambiguous in its discussion of the indebtedness; whether the indebtedness to which the contract refers is the original principal of $2.1 million or the principal remaining after the collective limited guarantors paid their portion, leaving approximately $1.4 million in principal. He cites Kirkland & Co. of Anniston v. A & M Food Service, Inc., 579 So.2d 1278, 1282 (Ala.1991), to support his position. In Kirkland, the contract was a rental agreement that contained two different provisions concerning when rent was payable. Paragraph one unambiguously states that rent was due to be paid to Kirkland on the first day of each month. Had the lease contained nothing more concerning the time when payment was due, no ambiguity would exist. However, paragraph four provides only that the rent was `payable monthly, in advance.' It is not certain from a reading of this phrase that the rent was due on the first of the month. We conclude that the contract is ambiguous and is susceptible of more than one meaning. . . .  579 So.2d at 1282. Because the two provisions concerning when the rent was to be paid differed, this Court held that the contract was ambiguous. Here, however, the commercial guaranty contract is not ambiguous. The contract mentions the principal owed numerous times, and all references are consistent. First, in the Amount of Guaranty section, the contract states that McCollough will pay 20% of the principal note amount of $2.1 million. The second time the contract mentions the amount McCollough owes, it states that McCollough absolutely and unconditionally guarantees and promises to pay . . . 20.000% of the Indebtedness (as that term is defined below). . . . In the Indebtedness Guaranteed section, the contract states that [t]he Indebtedness guaranteed by this Guaranty includes the Note, including (a) all principal. . . . McCollough argues that the Indebtedness Guaranteed section of the contract causes the contract to be ambiguous because, he says, it is unclear as to whether the principal on the note refers to the $2.1 million or the $1.4 million amount. However, McCollough fails to recognize the definition of Note that is clarified in the last section of the contract. The definition of Note as the promissory note dated September 28, 2001, in the original principal amount of $2,100,000.00 from Borrower to Lender clarifies that the contract is referring to the principal amount of $2.1 million. [2] Therefore, there is no ambiguity concerning the amount McCollough owed. Furthermore, another clause in the contract also clarifies what McCollough owes Regions Bank and refutes McCollough's theory. The contract states: Guarantor authorizes Lender, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time . . . to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose. (Emphasis added.) The without lessening clause clarifies that McCollough's liability is not lessened by Regions Bank's dealing with other guarantors, such as the payment made by the collective limited guarantors to cover their 30% portion of the indebtedness. Therefore, McCollough owed 20% of the original amount of the note, and the commercial guaranty contract was not ambiguous. We note that the result McCollough seeks would be an illogical conclusion for this Court to draw based on the contract. In Ex parte Awtrey Realty, 827 So.2d at 107-08, this Court stated: `The words of a contract are to be given their ordinary meaning, and the intention of the parties is to be derived from the provisions of the contract.' Smith v. Citicorp Person-To-Person Fin. Ctrs., Inc., 477 So.2d 308, 310 (Ala. 1985), citing Food Serv. Distribs., Inc. v. Barber, 429 So.2d 1025 (Ala.1983); Sisco v. Empiregas, Inc., 286 Ala. 72, 237 So.2d 463 (1970). `Ambiguities will not be inserted into contracts by strained and twisted meaning where no such ambiguities exist.' P & S Business, Inc. v. South Cent. Bell Tel. Co., 466 So.2d 928, 931 (Ala.1985). . . .  If this Court were to twist this contract to conclude that the contract was ambiguous as to the amount McCollough owed Regions Bank, we would be agreeing with McCollough that the contract may mean that he owed only 20% of the amount remaining after the collective limited guarantors had paid their portion of the indebtedness. This conclusion simply does not make sense. Were the principal each of the guarantors owed reduced every time another guarantor paid his portion, then everyone would wait for the others to pay first. This would also be illogical because Regions Bank would not get the full 100% of what it had lent the parties, but only a portion of the $2.1 million. We refuse to accept an interpretation of the commercial guaranty contract that could lead to this conclusion. Therefore, based on the plain language and the definitions in the contract, the without lessening clause, and the logical conclusion of what the parties intended in making this contract, there is but one reasonable meaning: that McCollough owed 20% of the original principal amount of $2.1 million. Therefore, the commercial guaranty contract is not ambiguous, and the trial court was correct in granting Regions Bank's motion for a partial summary judgment. Because we hold that the summary-judgment motion was properly granted, we need not address the issue of unjust enrichment as an alternative theory of recovery. AFFIRMED. NABERS, C.J., and SEE, HARWOOD, and STUART, JJ., concur.