Court Opinion

ID: 2798509
Source: CourtListenerOpinion
Date Created: 2015-05-05 13:12:56.962226+00
Date Added: 2024-06-11T11:26:13.684063
License: Public Domain

THIRD DIVISION
                             ANDREWS, P. J.,
                        DILLARD and MCMILLIAN, JJ.

                   NOTICE: Motions for reconsideration must be
                   physically received in our clerk’s office within ten
                   days of the date of decision to be deemed timely filed.
                              http://www.gaappeals.us/rules/

                                                                       May 4, 2015

In the Court of Appeals of Georgia
 A13A2160. HOUSE HASSON HARDWARE COMPANY, INC. v.
     LAWSON’S HOME CENTER, INC. et al.

      DILLARD, Judge.

      House Hasson Hardware Company, Inc. (“House Hasson”) sued Lawson’s

Home Center, Inc. (“LHC”) and its principals, Richard Lawson and Scott Lawson,

alleging that LHC defaulted on a promissory note and that the Lawsons were

personally liable for that note based on a written guaranty. After the parties filed

cross-motions for summary judgment, the trial court granted House Hasson’s motion

on its claim that LHC was liable for the debt but denied it as to the Lawsons, and

granted the Lawsons’ motion on the ground that the personal guaranty did not satisfy

the Statute of Frauds. House Hasson appealed, arguing that the trial court erred in

finding that the personal guaranty was unenforceable.
      In an unpublished opinion issued on February 26, 2014, this Court affirmed the

trial court’s judgment, holding that our prior precedents in this area of law—including

Thompson v. LaFarge Building Materials, Inc.1—“dictate[d] the result in this

case”—i.e., our conclusion that the personal guaranty did not identify the principal

debtor with sufficient specificity to satisfy the Statute of Frauds.2 But on October 20,

2014, the Supreme Court of Georgia granted House Hasson’s petition for certiorari,

vacated our judgment, and remanded the case to this Court for reconsideration3 in

light of its recent decision in LaFarge Building Materials, Inc. v. Thompson.4 In that

decision, the Supreme Court held that a personal guaranty, which incorporated the

subject credit application and described the party whose debt was guaranteed as the

      1
          323 Ga. App. 276, 280 (746 SE2d 908) (2013).
      2
        House Hasson Hardware Company, Inc. v. Lawson’s Home Center, Inc., Case
No. A13A2160 at 7-8 (decided February 26, 2014) (unpublished opinion) (“We reach
the foregoing conclusion fully cognizant that our Supreme Court recently granted a
petition for certiorari in LaFarge Building Materials, Inc. v. Thompson . . . to address
whether this Court erred in “holding that the guaranty agreement at issue here did not
identify the principal debtor with sufficient specificity to satisfy the Statute of
Frauds[.] Nevertheless, for the time being, the applicable precedents in this area of
law dictate the result in this case.”).
      3
       See House Hasson Hardware Co., Inc. v. Lawson’s Home Center, Inc., Case
No. S14C0976 (October 20, 2014).
      4
          295 Ga. 637 (763 SE2d 444) (2014).

                                           2
“applicant,” sufficiently identified the principal debtor to satisfy the Statute of

Frauds.5 And given this decision, we conclude that the personal guaranty at issue here

likewise sufficiently identified the principal debtor. Thus, we reverse the trial court’s

grant of summary judgment in favor of the Lawsons as to the enforceability of the

personal guaranty and its denial of summary judgment to House Hasson as to this

same issue.

      At the outset of our analysis, we note that summary judgment is proper “if the

pleadings, depositions, answers to interrogatories, and admissions on file, together

with the affidavits, if any, show that there is no genuine issue as to any material fact

and that the moving party is entitled to judgment as a matter of law.”6 If summary

judgment is granted by a trial court, it enjoys no presumption of correctness on

appeal, “and an appellate court must satisfy itself de novo that the requirements of

OCGA § 9-11-56 (c) have been met.”7 Indeed, in our de novo review of a trial court’s

grant of a motion for summary judgment, we are charged with “viewing the evidence,

      5
          See id. at 641 (2).
      6
          OCGA § 9-11-56 (c).
      7
          Cowart v. Widner, 287 Ga. 622, 624 (1) (a) (697 SE2d 779) (2010).

                                           3
and all reasonable conclusions and inferences drawn from the evidence in the light

most favorable to the nonmovant.”8

      So viewed, the record shows that on October 18, 1996, LHC completed a credit

application with House Hasson. At the top of the form, a line designated for the

“Individual, Partners, or Corporate Name” was left blank, but just below, a line

designated for the “Trade Name or Business Name” indicated “Lawson’s Home

Center, Inc.” The bottom of the form contains a paragraph that reads as follows:

      The undersigned, jointly and individually, guarantee any and all debts,
      direct or indirect, contingent or otherwise, whether now existing or
      hereafter incurred, of the above Applicant to House Hasson Hardware
      (HHH). This guaranty will continue in full force and effect until
      revocation in writing by the undersigned. Such revocation shall not
      release the undersigned from any liability owed prior to receipt by HHH
      of such revocation notice. The undersigned expressly waives notice of
      acceptance of the guaranty, diligence, presentment, demand for payment,
      any right to require proceedings first against Applicant, protest or
      notices of any kind.

Below this paragraph, Scott Lawson and Richard Lawson signed on lines above their

printed names, which were designated for guarantors.

      8
       Benefield v. Tominich, 308 Ga. App. 605, 607 (1) (708 SE2d 563) (2011)
(punctuation omitted).

                                        4
      On April 15, 2010, LHC executed a promissory note for $64,814.40 in favor

of House Hasson. But less than two years later, LHC defaulted on the note, and,

subsequently, House Hasson filed a lawsuit against LHC and the Lawsons, seeking

the amount due, interest, and attorney fees. Shortly after LHC and the Lawsons filed

an answer, House Hasson moved for summary judgment, arguing that both LHC and

the Lawsons were liable for the debt. Then, following LHC and the Lawsons’

separate responses, the trial court issued an order granting summary judgment in

favor of House Hasson as to its claim against LHC but denying it as to its claim

against the Lawsons on the ground that the guaranty did not satisfy the Statute of

Frauds.

      House Hasson, thereafter, filed a motion for reconsideration, which the trial

court denied. And a few months later, the Lawsons filed their own motion for

summary judgment, arguing that they could not be held personally liable for the debt

because the guaranty was unenforceable as a matter of law. House Hasson responded,

but the trial court granted summary judgment in favor of the Lawsons. This appeal

follows.

      House Hasson contends that the trial court erred in denying its motion for

summary judgment and granting the Lawsons’ motion for same. Specifically, it

                                         5
argues that the court erred in concluding that the personal guaranty contained in the

credit application was unenforceable as a matter of law because it did not comply

with the Statute of Frauds. As noted supra, given the Supreme Court’s recent decision

in LaFarge Building Materials, Inc. v. Thompson, we agree and, therefore, reverse

the trial court’s judgment.

      As we have previously explained “under the Statute of Frauds and cases

applying the Statute, a promise to answer for another’s debt is only enforceable

against the promisor if it identifies the debt, the principal debtor, the promisor, and

the promisee.”9 Indeed, it is well settled that a guaranty must “identify the principal

debtor by name.”10 And where a guaranty omits the name of the principal debtor, of

the promisee, or of the promisor, “the guaranty is unenforceable as a matter of law.”11

In fact, even where the intent of the parties is manifestly obvious, “where any of these

      9
       Legacy Communities Group, Inc. v. Branch Banking & Trust Co., 316 Ga.
App. 496, 497 (729 SE2d 612) (2012); see also Tampa Investment Group v. Branch
Banking & Trust Co., 290 Ga. 724, 728 (2) (723 SE2d 674) (2012); John Deere Co.
v. Haralson, 278 Ga. 192, 193 (599 SE2d 164) (2004); OCGA § 13-5-30 (2).
      10
       Legacy, 316 Ga. App. at 497; see also Builder’s Supply Corp. v. Taylor, 164
Ga. App. 127, 128 (296 SE2d 417) (1982).
      11
        Legacy, 316 Ga. App. at 498 (punctuation omitted); see also Dabbs v. Key
Equip. Finance, 303 Ga. App. 570, 572 (694 SE2d 161) (2010).

                                           6
names [are] omitted from the document, the agreement is not enforceable because it

fails to satisfy the Statute of Frauds.”12

      Furthermore, a court must “strictly construe an alleged guaranty contract in

favor of the guarantor,”13 and “the guarantor’s liability may not be extended by

implication or interpretation.”14 In addition, parol evidence is not admissible to

“supply any missing essential elements of a contract required to be in writing by our

Statute of Frauds.”15 Consequently, this Court is not at liberty to determine “the

identity of the principal debtor, of the promisee, or of the promisor by inference as

this would entail consideration of impermissible parol evidence.”16

      12
        Legacy, 316 Ga. App. at 498 (punctuation omitted); see also Dabbs, 303 Ga.
App. at 572.
      13
         Legacy, 316 Ga. App. at 498 (punctuation omitted); see also Dabbs, 303 Ga.
App. at 572; Caves v. Columbus Bank & Trust Co., 264 Ga. App. 107, 114 (589 SE2d
670) (2003).
      14
        Legacy, 316 Ga. App. at 498 (punctuation omitted); see also Dabbs, 303 Ga.
App. at 572-573; OCGA § 10-7-3.
      15
        Legacy, 316 Ga. App. at 498 (punctuation omitted); see also Dabbs, 303 Ga.
App. at 573.
      16
        Legacy, 316 Ga. App. at 498 (punctuation omitted); see also Dabbs, 303 Ga.
App. at 573.

                                             7
      That being said, here, the guaranty included at the bottom of the same page as

the credit application, which was clearly completed by Lawson’s Home Center, Inc.,

identifies the principal debtor by referring to “the above Applicant.” And it is

appropriate to define the term used to “identify the principal debtor in the guaranty

here—‘Applicant’—using its usual and common signification.”17 Indeed, to

understand a contract, we must “read and understand the words used in the contract[,

and] unless the contract indicates otherwise, we generally accept that contractual

terms carry their ordinary meanings.”18 Of course, “applicant” is ordinarily defined

as “[o]ne who applies or makes request.”19 Thus, when read in conjunction with the

incorporated application, and with the word “applicant” bearing its usual and

common meaning, the guaranty here identifies Lawson’s Home Center, Inc. as “the

party applying for credit, which plainly makes that company the ‘Applicant’ and

therefore the principal debtor.”20 Given these circumstances, the trial court erred in

      17
           Thompson, 295 Ga. at 640 (2).
      18
           Id. (punctuation omitted).
      19
       The Compact Oxford English Dictionary 64 (2d ed. 1991); see also
Thompson, 295 Ga. at 640 (2).
      20
           Thompson, 295 Ga. at 641 (2).

                                           8
denying House Hasson’s motion for summary judgment and in granting summary

judgment in favor of the Lawsons as to the enforceability of the personal guaranty.21

Accordingly, we reverse those judgments.

      Judgment reversed. Andrews, P. J., and McMillian, J., concur.

      21
          See id. at 640-41 (2); Capitol Color Printing, Inc. v. Ahern, 291 Ga. App.
101, 105-06 (1) (661 SE2d 578) (2008) (holding that personal guaranty was
enforceable because principal debtor was identified as “customer” on designated line
in credit application, guaranty referenced customer as purchaser, and defendants
admitted in discovery responses that principal debtor was the “customer” to whom
plaintiff was extending credit).

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