Opinion ID: 3066064
Heading Depth: 2
Heading Rank: 5

Heading: The District Court Erred in Holding Melvin

Text: Shapiro Liable on His Personal Guaranty Because the Guaranty Operated Only Prospectively and There Was No Evidence of Spills Occurring After He Signed the Guaranty Melvin Shapiro, a co-founder and officer of SBIC, signed a guaranty when SBIC transferred the dry cleaning business to DCI. Under Nevada law, guaranty agreements are interpreted according to general contract interpretation principles. Dobron v. Bunch, 215 P.3d 35, 37 (Nev. 2009). By signing the guaranty at issue in this case, Melvin Shapiro personally guaranteed that DCI would perform all of SBIC’s VOGGENTHALER V. MARYLAND SQUARE 39 obligations, including the obligation to indemnify. The personal guaranty at issue here read as follows: The undersigned, jointly and severally, unconditionally guarantees performance by Assignee of each and every one of the obligations of tenant under the lease herein assigned . . . The date of the Assignment was August 31, 1984. A guaranty agreement is prospective unless it expressly states otherwise. 38A C.J.S. Guaranty § 59; Bank of Am. Nat. Trust & Sav. Ass’n v. Kelsey, 44 P.2d 617, 619 (Cal. Ct. App. 1935) (“It is a rule of very general application that all guaranties are prospective and not retrospective in operation, unless the contrary appears by express words or by necessary implication.”). Because this principle has not been addressed by the Nevada Supreme Court, we must predict how the Nevada Supreme Court would rule. Arizona Elec. Power Coop., Inc. v. Berkeley, 59 F.3d 988, 991 (9th Cir. 1995). Counsel for the previous owners commendably conceded at oral argument that such guarantees are generally only prospective. There is no reason to believe that Nevada would deviate from this widely-recognized rule for interpreting a guaranty. The previous owners did not identify any violation of the 1982 lease that occurred after the effective date of the Assignment. The only spills the previous owners referenced were those that occurred during SBIC’s operation of the facility. Because the violations occurred before Melvin Shapiro signed the guaranty, and it did not apply retroactively, the judgment against him must be reversed. 40 VOGGENTHALER V. MARYLAND SQUARE