Tractor and Equipment Co. v. Dual Trucking and Transport, LLC et al, No. 2:2015cv05413 - Document 46 (E.D. La. 2017)
Court Description: ORDER AND REASONS granting 16 Tractor & Equipment's Motion for Summary Judgment; denying 17 Defendants' Motion for Summary Judgment. Tractor and Equipment's motion in limine to exclude parol evidence is DENIED AS MOOT. Signed by Judge Sarah S. Vance on 4/3/2017. (cg)
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Tractor and Equipment Co. v. Dual Trucking and Transport, LLC et al Doc. 46 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA TRACTOR AND EQUIPMENT CO. CIVIL ACTION VERSUS NO. 15-5413 DUAL TRUCKING AND TRANSPORT, LLC, AND ANTHONY ALFORD SECTION: R ORD ER AN D REAS ON S Before the Court are cross m otions for sum m ary judgm ent on the validity of a surety agreem ent signed by Anthony Alford. 1 In addition, Tractor and Equipm ent Co. has filed a m otion in lim in e to exclude an affidavit subm itted by Alford. 2 Because the Court finds that Alford’s intent to be bound as Dual Trucking and Transport, LLC’s surety is clear from the plain language of the “Personal Guarantee” agreem ent, Tractor and Equipm ent’s m otion for sum m ary judgm ent is granted, defendants’ corresponding m otion is den ied, and Tractor and Equipm en t’s m otion in lim ine is denied as m oot. I. BACKGROU N D This action arises out of Dual Trucking and Transport, LLC’s (DTT) alleged default under an open account agreem ent with Tractor and Equipm ent Co. 3 The core facts are not in dispute. On March 19, 20 12, a DTT em ployee sent Tractor and Equipm ent a form application for credit. 4 Tractor and Equipm ent’s application form consists of two parts, first a section requesting inform ation regarding the entity seeking credit, and secon d, a 1 2 3 4 R. Doc. 16; R. Doc. 17. R. Doc. 19. R. Doc. 1 at 1 ¶ 1. R. Doc. 16-3 at 10 . Dockets.Justia.com personal guarantee. 5 The day after DTT sent its application, a Tractor and Equipm ent em ployee sent a letter to DTT stating as follows: Dear Sirs: In reviewing the application for Credit you subm itted, we fin d the Personal Guarantee portion was not signed. Please have the owner or officer of com pany [sic] sign the attached application as indicated, fax a copy to m e at 40 6 651 8346 and drop the copy with origin al signature in the m ail to PO Box 20 158, Billings MT 5910 7. Thank you for your help and consideration. [Signature Block] 6 Anthony Alford, a 50 % owner of DTT, 7 signed the “Personal Guarantee” section of the credit application form supplied by Tractor and Equipm ent and returned it the following day. 8 The application for credit form Alford signed was identical to the copy DTT subm itted on March 19, except that the March 19 copy was, with the exception of the “Personal Guarantee” section, m ostly filled-out. 9 It was signed on the line requesting the signature of an owner, principal, or authorized officer or partner of the applicant. 10 By contrast, the form Alford signed had m any unfilled blanks. 11 It identified only the applicant’s corporate nam e and address, and it was not signed by a corporate representative. 12 5 6 7 8 9 10 11 12 Id. R. Doc. 16-4 at 3. R. Doc. 16-5 at 1. R. Doc. 16-4 at 4; R. Doc. 18 -1. Com pare R. Doc. 16-3 at 10 w ith R. Doc. 16-4 at 4. Id. Id. Id. 2 In late 20 13, Tractor and Equipm ent sued DTT and Anthony Alford in Montana state court, alleging that DTT had an unpaid account balance of $ 292,646.30 . 13 Tractor and Equipm ent also alleged that Alford had personally guaranteed DTT’s open account and was therefore jointly liable for the am ounts due under its open account agreem ent. 14 The Montana court dism issed the claim s against Alford for lack of personal jurisdiction, and later entered judgm ent against DTT in the am ount of $ 292,846.30 , plus interest, attorney’s fees, and costs. 15 After the Montana court dism issed Alford from that litigation, Tractor and Equipm ent filed this suit seeking a declaratory judgm ent that Alford’s surety contract is valid and enforceable. The parties have filed cross m otions for sum m ary judgm ent, 16 and corresponding responses 17 and replies. 18 Tractor and Equipm ent has also filed a m otion in lim ine to exclude an affidavit com pleted by Alford. 19 II. LEGAL STAN D ARD Sum m ary judgm ent is warranted when “the m ovant shows that there is no genuin e dispute as to any m aterial fact and the m ovant is entitled to judgm ent as a m atter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 10 69, 10 75 (5th Cir. 1994). When assessing whether a dispute as to any m aterial fact exists, the Court considers “all of the evidence in the record but 13 14 15 16 17 18 19 R. Doc. 1 at 3 ¶ 7. Id. at 4 ¶ 11. R. Doc. 5-4 at 10 ; R. Doc. 16-3 at 8-9. R. Doc. 16; R. Doc. 17. R. Doc. 18; R. Doc. 22. R. Doc. 26; R. Doc. 29. R. Doc. 19. 3 refrain[s] from m aking credibility determ in ations or weighing the evidence.” Delta & Pine Land Co. v. N ationw ide Agribusiness Ins. Co., 530 F.3d 395, 398 -99 (5th Cir. 20 0 8). All reasonable inferences are drawn in favor of the nonm oving party, but “unsupported allegations or affidavits setting forth ‘ultim ate or conclusory facts and conclusions of law’ are in sufficient to either support or defeat a m otion for sum m ary judgm ent.” Galindo v. Precision Am . Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at 10 75. “No genuine dispute of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-m oving party.” EEOC v. Sim baki, Ltd., 767 F.3d 475, 48 1 (5th Cir. 20 14). If the dispositive issue is on e on which the m oving party will bear the burden of proof at trial, the m oving party “m ust com e forward with evidence which would entitle it to a directed verdict if the eviden ce went uncontroverted at trial.” Int’l Shortstop, Inc. v. Rally ’s, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991). The nonm oving party can then defeat the m otion by either countering with evidence sufficient to dem onstrate the existen ce of a genuine dispute of m aterial fact, or “showin g that the m oving party’s eviden ce is so sheer that it m ay not persuade the reasonable fact-finder to return a verdict in favor of the m oving party.” Id. at 1265. If the dispositive issue is one on which the nonm oving party will bear the burden of proof at trial, the m oving party m ay satisfy its burden by m erely pointing out that the eviden ce in the record is insufficient with respect to an essential elem ent of the nonm oving party’s claim . See Celotex, 477 U.S. at 325. The burden then shifts to the nonm oving party, who m ust, by subm itting or referring to eviden ce, set out specific facts showing that a genuin e issue exists. See id. at 324. The nonm ovant m ay not rest upon the pleadings, but m ust identify specific facts that establish a genuine issue for trial. See, 4 e.g., id.; Little, 37 F.3d at 10 75 (“Rule 56 m andates the entry of sum m ary judgm ent, after adequate tim e for discovery an d upon m otion, against a party who fails to m ake a showing sufficient to establish the existence of an elem ent essential to that party’s case, an d on which that party will bear the burden of proof at trial.” (quoting Celotex, 477 U.S. at 322)). III. D ISCU SSION As noted, the parties do not dispute that Alford signed the “Personal Guarantee” section of a form application for credit and subm itted it to Tractor and Equipm ent. The relevant section—contained in a separate box from the rem ain der of the form —reads as follows: PERSON AL GU ARAN TEE The undersigned, _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ , in consideration of your giving credit to the aforesaid applicant, jointly and severally guarantee(s) and agree(s) to pay to TRACTOR & EQUIPMENT CO., N C MACHINERY CO., MACHINERY POWER & EQUIPMENT CO., N C POWER SYSTEMS CO. OR ANY OF THEIR RELATED OR AFFILIATED COMPANIES all m onies which shall becom e due you from Dual Trucking and Transport LLC by reason of any credit you extended as credit you extend as [sic] herein requested, including late paym ent charges and all costs of collection and reasonable attorney’s fee for recovery of the debt if it is due whether it is in curred by the debtor or guarantor or both. 20 Alford’s signature appears directly below this paragraph. 21 Despite this clear language, Alford and DTT argue that the purported guarantee does not bind Alford because: (1) the guarantee applies only to existing debt, not to any debts incurred after the guarantee was signed; (2) the personal guarantee is an invalid surety agreem ent under Louisiana law, and (3) Alford signed the guarantee in his representative capacity as an officer of DTT, 20 21 R. Doc. 16-4 at 4. Id. 5 rather than his personal capacity, and did not intend to be personally bound to pay DTT’s debts. The Court begin s by considering Louisiana surety law, and then considers each of defendants’ argum ents in turn. In Louisiana, “[a] contract of guaranty is equivalent to a contract of suretyship[, and t]he term s guaranty and suretyship m ay be used interchangeably.” DROR Int’l, L.P. v. Thundervision, L.L.C., 81 So. 3d 182, 185 (La. App. 5 Cir. 20 11) (citing Eclipse Telecom m unications Inc. v. Telnet International Corp., 80 0 So. 2d 10 0 9, 10 11 (La. App. 5 Cir. 20 0 1)). In a surety contract “a person binds him self to a creditor to fulfill the obligation of another upon the failure of the latter to do so.” La. Civ. Code art. 30 35. Surety agreem ents m ust be express and in writing. La. Civ. Code art. 30 38. “The surety’s contract need not observe technical form alities, but m ust contain an absolute expression of intent to be bound.” Fleet Fuel, Inc. v. My nex, Inc., 924 So. 2d 480 , 482 (La. App. 2 Cir. 20 0 6). Surety agreem ents “are subject to the sam e rules of interpretation as contracts in general.” Com ar Marine, Corp. v. Raider Marine Logistics, L.L.C., 792 F.3d 564, 578 (5th Cir. 20 15) (quoting Ferrell v. S. Cent. Bell Tel. Co., 40 3 So.2d 698, 70 0 (La. 1981)). “[T]he m ain goal of contract interpretation under Louisiana law is determ ining the com m on intent of the parties.” Franks Inv. Co. v. Union Pac. R. Co., 772 F.3d 10 37, 10 41 (5th Cir. 20 14). Accordingly, courts m ust “give legal effect to all [surety] contracts according to the true intent of the parties, an d this intent is to be determ ined by the words of the contract when these are clear and explicit and lead to no absurd consequences.” Com ar Marine, 792 F.3d at 578. In this case, the Court finds that the plain language of the contract evinces “an absolute expression of intent to be bound,” Fleet Fuel, 924 So. 2d at 482, and the Court 6 therefore need not look beyond the text of the agreem ent. Under the bolded, underlin ed heading reading, “Personal Guarantee”—and in a box separating the surety agreem ent from the rem ainder of the docum ent—the paragraph in question clearly identifies the applicant or principal obligor (DTT) and the creditor (Tractor and Equipm ent). 22 The contract also states Alford’s agreem ent to guarantee and pay the creditor “all m onies” due from the principal obligor “by reason of any credit you exten ded as credit you extend as [sic] herein requested.”23 Although this lim iting clause appears to contain a drafting error, the m istake does not underm ine the plain m eaning of the agreem ent: DTT is applying for credit, and, if Tractor and Equipm ent extends DTT credit based on that application, Alford agrees to guarantee DTT’s obligations to Tractor and Equipm ent. To resist this con clusion, Alford and DTT argue that the guarantee applies only to DTT’s existing debt, not to any debts in curred after the guarantee was sign ed. This argum ent is based on a strained reading of the lim iting clause discussed above. In essence, Alford and DTT argue that when the agreem ent refers to “credit you extended,”24 it lim its the operative effect to past debts. This interpretation fails for several reasons. First, the Court notes that, contrary to defendants’ representations, an agreem ent binding a surety to future obligations is neither unusual nor suspect. See La. Civ. Code art. 30 36 (“The principal obligation m ay be subject to a term or condition, m ay be presently existing, or m ay arise in the future.” (em phasis added)); Sizeler Prop. Inv’rs, Inc. v. Gordon Jew elry Corp., 550 So. 2d 237, 244 (La. App. 4 Cir. 1989) (explaining that “[s]uretyship has historically been given for future obligations in Louisiana.”). Secon d, 22 23 24 R. Doc. 16-4 at 4. Id. Id. 7 defendants’ argum ent ignores that the lim iting clause specifically refers to credit as “herein requested.” This clear statem ent of what debts fall under the guarantee outweighs any asserted am biguity caused by the use of a single past-tense verb. Third, in their m yopic focus on the tense of a particular word, defendants ignore the docum ent as a whole. That the guarantee is included as part of an application for credit strongly suggests that it applies to obligations resulting from that application. See La. Civ. Code art. 20 50 (“Each provision in a contract m ust be interpreted in light of the other provisions so that each is given the m eaning suggested by the contract as a whole.”); see also Am . Bank & Trust Co. of Houm a v. W etland W orkover, Inc., 523 So. 2d 942, 945 (La. App. 4 Cir. 1988) (“[T]he m ortgage note and the guarantees m ust be interpreted together and in a m anner which will m ake the loan transaction effective and m eaningful.”). Fourth, defendants’ interpretation violates this Court’s m andate to interpret contract clauses so as to give them som e effect. See La. Civ. Code art. 20 49 (“A provision susceptible of different m eanings m ust be interpreted with a m eanin g that renders it effective and not with one that renders it ineffective.”). No party has suggested that DTT has any obligations to Tractor and Equipm ent that predate the March 19, 20 12, application for credit. Defendants’ attem pt to lim it the guarantee to past debts therefore “would render it nugatory,” and this interpretation m ust be rejected in favor of one that gives the agreem ent som e effect. Franks Inv. Co., 772 F.3d at 10 42. Defendants’ also argue in the alternative that the agreem ent is wholly invalid. In support, defendants cite the Louisiana Suprem e Court’s 1889 decision in Chretien v. Bienvenir, 6 So. 553 (1889). In that case, the court declared unenforceable a form contract so incom plete that the docum ent contained “nothing defining or expressing an y obligation whatsoever.” Id. at 554. Chretien does not, however, stand for the blanket 8 proposition that all alleged surety contracts with unfilled blanks are invalid. In this case, for the reasons discussed above, the unfilled blanks in the credit application do nothing to obfuscate Alford’s clear expression of intent to be bound. Chretien therefore does not underm ine the Court’s finding of a valid surety agreem ent. Finally, defendants argue that the personal guarantee is invalid because Alford signed it in his representative capacity as an officer of DTT, rather than in his personal capacity. Alford asserts that he did not intend to be personally obligated for DTT’s debts, and subm its an affidavit to that effect. 25 This argum ent is m eritless. If Alford signed in a representative capacity on behalf of DTT, then the “person al guarantee” serves only to bind DTT as its own surety. This interpretation renders the guarantee both absurd and worthless. Louisiana courts have rejected such argum ents for this reason. See Veteran s Com m ercial Properties, LLC v. Barry ’s Flooring, Inc., 67 So. 3d 627, 631 (La. App. 5 Cir. 20 11) (construing surety agreem ent as personally binding the signatory where “[t]o construe otherwise would render the guaranty worthless”); Am . Bank & Trust Co. of Houm a, 523 So. 2d at 945 (finding that sureties signed in personal capacity because “to construe the signatures as indicating that the guarantors executed the guarantees in their corporate capacity, thus binding only the corporation, would render the docum ents m eaningless.”); McKesson Chem . Co. v. Tideland Chem . Co., 471 So. 2d 812, 815 (La. App. 3 Cir. 198 5) (rejecting personal-capacity argum ent and stating: “We shall not interpret the letter of guarantee in a way as to render its effect worthless.”); Am . Cas. Co. v. How ard, 175 So. 2d 355, 356 (La. App. 4 Cir. 1965) (rejecting person al-capacity argum ent 25 R. Doc. 18 -1. 9 because “[i]f the individuals signed the guarantee for the Agen cy, the Agency would have guarantee[d] perform ance of an agreem ent on which it was already bound.”). To resist the weight of this precedent, defendants cite a handful of Louisiana cases finding an issue of fact as to whether a guarantor signed in his representative or individual capacity. These cases are easily distinguishable. In Pelican State W holesale, Inc. v. May s, 15 So. 3d 341, 341 (La. App. 2 Cir. 20 0 9), a supplier sued a store owner’s widow and children to enforce an alleged personal guarantee. The store owner had signed a “new account” form that included a single sentence purporting to bind the signatory to a personal guarantee. Id. The store owner signed the form only once. Id. at 341-42. The trial court granted sum m ary judgm ent in favor of the creditor, but the court of appeals reversed and rem anded. Id. at 344. In doing so, the appellate court found that in the situation before it—where a single signature was alleged to bind both the corporation and the person—there existed a genuine issue of fact as to whether the store owner intended to sign in his personal capacity. Id. Here, by contrast, Alford sign ed only the separate box under the title “Personal Guarantee.”26 He did not sign on the line designated for a corporate representative. 27 That line had been signed by another DTT officer on DTT’s original application for credit. 28 Pelican State W holesale’s reasoning therefore does create an issue of fact in this case. 29 26 R. Doc. 16-4 at 4. Id. 28 R. Doc. 16-3 at 10 . 29 In Pelican Plum bing Supply , Inc. v. J.O.H. Const. Co., 653 So. 2d 699 (La. App. 5 Cir. 1995), the Louisiana Fifth Circuit upheld a trial court’s finding that a sim ilar agreem ent did not create a valid personal guarantee. This case is inapposite for the sam e reasons as Pelican State W holesale. 27 10 Defendants also cite Eclipse Telecom m unications Inc. v. Telnet Int’l Corp., 8 0 0 So. 2d 10 0 9 (La. App. 5 Cir. 20 0 1). In that case, the Louisiana Fifth Circuit upheld the trial court’s dism issal of Mr. Anderson, an individual defendant, from a suit on an open account. Id. at 10 10 . The “Guarantor Agreem ent” at issue in Eclipse—which was a separate docum ent from the underlying obligation—contained a “section requiring the nam e, address, telephone num ber, and social security num ber of the guarantor.” Id. at 10 11. This section was entirely filled out with inform ation corresponding to Telnet, the corporate defendant: The guarantor’s nam e is listed as Telnet and the corporation’s address and telephone num ber are listed. The corporation’s tax num ber is entered in the blank which requests the guarantor’s social security num ber. The docum ent is signed by “Chris Anderson, president.” There is no personal inform ation on the docum ent which pertains to Mr. Anderson. Id. at 10 11-12. The court in Eclipse found these indicia that Mr. Anderson signed in a corporate capacity sufficient to support dism issal. But no sim ilar corporate inform ation is present in Alford’s guarantee. DTT is listed as the applicant, but nothing identifies DTT as the guarantor. 30 Accordingly, Eclipse does not disturb the Court’s reasoning. For these reasons, the Court finds that the “Personal Guarantee” constitutes a valid surety agreem ent, and that Alford signed it in his personal capacity. Because the Court concludes that the com m on intent of the parties to personally bind Alford as surety is m ade clear and explicit by the words of the contract, the Court does not consider the extrinsic evidence subm itted by either party. 30 R. Doc. 16-4 at 4. 11 IV. CON CLU SION Tractor & Equipm ent’s m otion for sum m ary judgm ent is GRANTED. Defendants’ m otion for sum m ary judgm ent is DENIED. Tractor and Equipm ent’s m otion in lim ine to exclude parol eviden ce is DENIED AS MOOT. The clerk is directed to enter judgm ent declaring the personal guarantee executed by Anthony Alford to be a valid and enforceable surety agreem ent. New Orleans, Louisiana, this _3rd_ _ day of April, 20 17. __ _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 12
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