Court Opinion

ID: 9713565
Source: CourtListenerOpinion
Date Created: 2023-08-26 05:17:35.381162+00
Date Added: 2024-06-11T18:23:19.307288
License: Public Domain

JUSTICE DUNN, dissenting: I respectfully dissent. Initially, it should be noted that any conclusional matter offered in support of a motion for summary judgment is inadmissible and cannot be considered in deciding the motion. (107 Ill. 2d R. 191; Milwaukee Cheese Co. v. Cornerstone Inn, Inc. (1986), 142 Ill. App. 3d 840, 843, 492 N.E.2d 231, 233.) Both parties have submitted affidavits containing conclusional statements: Slowinski’s affidavit concludes that defendant signed the guaranty in an individual capacity; defendant’s affidavit concludes that he signed the guaranty in a representative capacity. Therefore, we should disregard the conclusional statements contained in the affidavits of the parties and look to the guaranty agreement to determine the intent of the parties. Generally, the rules of construction applicable to contracts apply to guaranty agreements. (Milwaukee Cheese Co., 142 Ill. App. 3d at 843, 492 N.E.2d at 233.) The meaning of a guaranty is a question of law which the court determines, and if the guaranty is unambiguous, it must be enforced as written. Milwaukee Cheese Co., 142 Ill. App. 3d at 843, 492 N.E.2d at 233. In construing the provisions of the guaranty agreement, I find persuasive the case of Kordick v. Merchants National Bank & Trust Co. (Ind. App. 1986), 496 N.E.2d 119, which has facts nearly identical to those of this case. In Kordiek, Nicholas Kordiek was president, chief executive officer, and sole stockholder of the Fortune Personnel Agency. Fortune obtained a loan from Merchants National Bank (bank) which was secured by Fortune’s corporate savings account. After several renewals, Fortune executed a promissory note and security agreement to secure its loan. Kordick executed a guaranty with the bank to secure payment of the promissory note. Kordick signed the guaranty “Nicholas Kordick President.” Kordick, 496 N.E.2d at 120-21. After Fortune defaulted on its promissory note, the bank filed suit against Kordick based on the guaranty agreement. Kordick argued that the guaranty was an obligation only of Fortune and not him personally. The Indiana Court of Appeals stated that three parties are required to execute a guaranty agreement: a borrower, lender, and guarantor. The court determined that Kordick’s construction of the guaranty agreement must fail because permitting Fortune to guarantee its own debt would render the guaranty meaningless. Additionally, by the express terms of the agreement, the guarantor’s obligation was not affected by the release of the borrower (Fortune). The court stated that if it construed the guaranty such that the borrower (Fortune) were the guarantor, it would create an obvious paradox. Kordick, 496 N.E.2d at 123-24. We should likewise conclude that it would be meaningless for National to guarantee its own debt because to do so would add nothing to its obligation to plaintiff. Furthermore, the guaranty agreement provides that the guarantor’s obligation shall be unaffected by the release of any person primarily or secondarily liable on the installment note. If we accept defendant’s assertion that National guaranteed the installment note, an obvious paradox would be created because National could be released from the note, yet bound to pay the note under the guaranty. We should decline to adopt such a strained construction of the guaranty agreement. To give the guaranty its proper meaning, it should be determined that defendant signed it in his personal capacity. (Compare Consolidated Beef Industries, Inc. v. Schuyler (1986), 239 Kan. 38, 716 P.2d 544; Roy v. Davidson Equipment (Fla. App. 1982), 423 So. 2d 496.) In construing the evidence strictly against plaintiff, defendant has failed to demonstrate a genuine issue of material fact with respect to the capacity in which he signed the guaranty. Consequently, I believe the trial court properly granted defendant’s motion for summary judgment. Defendant directs our attention to several other cases in support of 'his position; however, each of these cases is distinguishable. In both Kankakee Concrete Products Corp. v. Mans (1980), 81 Ill. App. 3d 53, 400 N.E.2d 637, and Wolfram v. Holloway (1977), 46 Ill. App. 3d 1045, 361 N.E.2d 587, the court determined the capacity in which the respective defendants signed certain notes, not a guaranty agreement. Therefore, both Kankakee Concrete Products and Wolfram are factually dissimilar from this case and unsupportive of defendant’s position. The majority relies heavily on Wottowa Insurance Agency, Inc. v. Bock (1984), 104 Ill. 2d 311, 472 N.E.2d 411. In that case, the defendants owned two corporations which obtained insurance coverage from the plaintiff. After the corporations fell behind in their premium payments, the defendants signed a guaranty agreement with the plaintiff. Both corporations’ names were affixed to the guaranty, and the defendants’ signatures on the guaranty were followed by their respective corporate title. The plaintiff filed a complaint which sought to enforce the guaranty agreement personally against the defendants. A jury found that the guaranty agreement was a corporate obligation, not a personal obligation. On appeal, plaintiff asserted that the trial court should have granted it a directed verdict because the guaranty agreement personally obligated the defendants as a matter of law. In rejecting the plaintiff’s contention, our supreme court stated that where the language in the body of the document conflicts with the corporate representative’s signature, an issue of fact arises as to the agent’s intent which the jury must determine. Wottowa, 104 Ill. 2d at 316, 472 N.E.2d at 413. Here, defendant asserts that he, like the defendants in Wottowa, raised an issue of fact as to the intent With which he signed the guaranty. I disagree. In Wottowa, it was conceivable that one of the corporations could have guaranteed the obligations of the other; hence, neither corporation would have guaranteed its own obligation. In this case, unlike Wottowa, it is clear that if defendant signed the guaranty in a representative capacity, National would have guaranteed its own debt. Therefore, the principles set forth in Wottowa do not apply to the facts of this case. Finally, I note that the parties have directed our attention to section 3 — 403 of the Uniform Commercial Code — Commercial Paper (UCC) (Ill. Rev. Stat. 1987, ch. 26, par. 3 — 101 et seq.). It is well settled that a loan guaranty agreement cannot be classified as a negotiable instrument. (See Federal Deposit Insurance Corp. v. Hardt (C.D. Ill. 1986), 646 F. Supp. 209, 211; Ishak v. Elgin National Bank (1977), 48 Ill. App. 3d 614, 617, 363 N.E.2d 159, 161.) Therefore, the provisions of the UCC do not apply to the guaranty agreement. Accordingly, for the reasons expressed above, I would affirm the trial court’s order granting the plaintiff’s motion for summary judgment.