Weingarten Realty Investors, a Texas Real Estate Investment Trust v. Miller, No. 4:2011cv02522 - Document 30 (S.D. Tex. 2011)
Court Description: OPINION on Motion to Arbitrate. (Signed by Judge Lynn N. Hughes) Parties notified. (ghassan, )
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Weingarten Realty Investors, Plaintiff, Civil Action versus H-11,2522 Stewart A. Miller, Defendant . Opinion on Motion to Arbitrate I. Introduction A third-party guarantor of a debt has asked this court to compel arbitration. Because his agreement with the lender does not include arbitration, he will not prevail. 2. Background In 2004, WeingartenRealty Investors and Miller Sheriden, LLC, created ajoint venture. Miller Sheriden is controlled by Stewart A. Miller. In 2006, Weingarten lent $75,000,000 to the joint venture for the construction of a shopping center. Under Section 7.21 of the Loan Agreement, disputes between Weingarten and the joint venture are to be resolved by arbitration. Miller was not an individual signatory on the Loan Agreement. Miller Sheriden, and Miller individually, signed a third,party guarantee for the loan; they together guaranteed half of the $75,000,000. T h e Limited Guaranty has no arbitration. T h e Loan Agreement's definition of Loan Document does not include the Limited Guaranty. In April and December of 2010, Weingarten and the joint venture changed the promissory note, but did not change the Loan Agreement. Miller as a guarantor ratified these changes. In the 2010 agreements, the recitals included Miller's guaranty to Weingarten as a "Loan Document." O nJune I 5,201 I, the promissory note became due, and the joint venture did not pay. Weingarten then demanded Miller Sheriden and Miller honor their guaranty. 3. Arbitration T h e Loan Agreement allows "any party to a Loan Document" to arbitrate. Miller argues that because the 2010 loan modifications call his guarantee a Loan Document, the guarantee is now covered by the Loan Agreement and that he may ask for arbitration. T h e loan modifications do not change the Loan Agreement. T h e April agreement changed the promissory note's definition of "True Principal Balance" and affirmed the note's maturity date. T h e December agreement extended the note's maturity date. T h e recitals in the defined terms section ofboth modifications include the Limited Guaranty as a Loan Document, but neither modification changes the Loan Agreement's substantive definition of Loan Document. Since Miller's guarantee is not covered by the arbitration provision in the Loan Agreement, he may not arbitrate. His dispute arises out of the Limited Guaranty; it is without arbitration. 4. Conclusion Miller's motion to arbitrate will be denied. Signed on September 26, 2011, at Houston, Texas. Lynn N. ~ u g h e ; United States District Judge
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