Finance Authority of Maine v. GrimnesAnnotate this Case
The Supreme Judicial Court affirmed the judgment of the superior court against Appellant, guarantor of a promissory note held by Finance Authority of Maine (FAME), holding that the superior court correctly determined that neither of two of the default provisions contained in Article 9 of Maine’s Uniform Commercial Code - 11 M.R.S. 9-1607 and 9-1626 - required FAME to prove the reasonableness of its decision not to pursue the collateral before it could obtain a judgment against Appellant.
FAME extended a loan to Harbor Technologies, LLC. Harbor executed a promissory note and security agreement under which its assets were pledged as collateral to secure the note. Appellant executed a personal guaranty of Harbor's obligations to FAME. After Harbor defaulted on the loan, FAME sued Appellant on his guaranty for the entire amount due. The circuit court entered judgment in favor of FAME. The Supreme Judicial Court affirmed, holding that, in light of the independent and unconditional nature of Appellant's guaranty, the court was correct when it determined that neither section 9-1607 nor section 9-1626 imposed a burden on FAME to prove the commercial reasonableness of its decision not to pursue the collateral before it could obtain a judgment against Appellant.