MARIE CECILIA SEYMOUR V GARRY WEINBERG
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
MARIE CECILIA SEYMOUR,
UNPUBLISHED
May 17, 2005
Plaintiff-Appellant,
v
No. 251924
Oakland Circuit Court
LC No. 2002-041694-CK
GARRY WEINBERG,
Defendant/Third-Party PlaintiffAppellee,
v
DOUGLAS A. SEYMOUR,
Third-Party Defendant.
Before: Griffin, P.J., and Bandstra and Hoekstra, JJ.
PER CURIAM.
Plaintiff appeals as of right from a final order dismissing defendant’s third-party claims
without prejudice. Plaintiff raises issues related to orders denying her motion for summary
disposition and granting defendant’s motion for summary disposition. Specifically, plaintiff
argues that the trial court erred in holding that a personal guaranty (“the Guaranty”) signed by
defendant was ambiguous, and that even if it was ambiguous, the trial court erred in holding that
the ambiguity rendered the Guaranty unenforceable as a matter of law. We affirm.
I. Standards of Review
We review de novo a trial court’s decision on a motion for summary disposition made
under MCR 2.116(C)(10), which tests the factual support for a claim. Dressel v Ameribank, 468
Mich 557, 561; 664 NW2d 151 (2003). In reviewing a motion for summary disposition, we
consider the entire record in the light most favorable to the party opposing the motion, including
affidavits, pleadings, depositions, admissions, and other evidence submitted by the parties.
Corley v Detroit Bd of Ed, 470 Mich 274, 278; 681 NW2d 342 (2004).
We review de novo the proper construction and interpretation of a contract. Bandit
Industries, Inc v Hobbs Int’l, Inc (After Remand), 463 Mich 504, 511; 620 NW2d 531 (2001).
The primary goal of contract interpretation is to determine and enforce the parties’ intent by
-1-
reading the agreement as a whole and attempting to apply the plain language of the contract
itself. Old Kent Bank v Sobczak, 243 Mich App 57, 63; 620 NW2d 663 (2000). When a contract
is ambiguous, we may construe the agreement in an effort to find and enforce the parties’ intent.
Id. “In interpreting contracts capable of two different constructions, we prefer a reasonable and
fair construction over a less just and less reasonable construction.” Id., quoting Schroeder v
Terra Energy, Ltd, 223 Mich App 176, 188; 565 NW2d 887 (1997).
II. Analysis
The parties do not dispute the existence of the Guaranty, but rather, its scope. It is
undisputed that defendant executed a promissory note for $95,000 for the original loan, and that
defendant signed the Guaranty, which provides, in pertinent part:
In consideration of any credit or other financial accommodation extended by
MARIE CECILIA SEYMOUR, of Berkley, Michigan, (“Creditor”), to
SEYBERG CONSTRUCTION, LLC of Southfield, Michigan (“Debtor”), the
undersigned (“Guarantor”) absolutely, unconditionally, and irrevocably
guarantees prompt payment when due and at all times in the future of the
indebtedness evidenced by a certain promissory note dated the 25th day of
September, 1996 in the original principal amount of Ninety Five Thousand
Dollars ($95,000.00), executed by Debtor, and any extensions, renewals, and
modifications made to the Note, and all interest accrued on it (collectively the
“indebtedness”). The indebtedness includes all indebtedness and all obligations
owing now or in the future of Creditor by Debtor, regardless of whether any such
indebtedness or obligation is (a) not presently intended or contemplated by
Debtor, Creditor, or Guarantor; (b) indirect, contingent, or secondary; or (c)
unrelated to, or of a different kind or class from, any indebtedness or obligations
of Debtor to Creditor that are now owing or are committed or contemplated.
[Emphasis added.]
After examining the plain language of the Guaranty, we agree with the trial court’s ruling
that the Guaranty was ambiguous regarding its scope. A review of the first paragraph reveals its
ambiguous use of the term “indebtedness.” The Guaranty defines “indebtedness” in its first
sentence of the first paragraph to include plaintiff’s original $95,000 loan to Seyberg
Construction Company, L.L.C. (“Seyberg”), evidenced by the promissory note. The promissory
note refers only to the principal sum of $95,000, which defendant has already paid in full, with
interest. In its second sentence of the first paragraph, however, the Guaranty redefines
“indebtedness” to include “all indebtedness and obligations owing now or in the future to
Creditor by Debtor.” We reject the contention that the second sentence guaranteeing “all
indebtedness and obligations owing now or in the future” expands the definition of the
“indebtedness” in the first sentence. We find that the “indebtedness” for all future loans in the
second sentence “irreconcilably conflicts” with the “indebtedness” for the original $95,000 loan
in the first sentence creating ambiguity in the scope of the Guaranty. See Klapp v United Ins
Group Agency, Inc, 468 Mich 459, 467; 663 NW2d 447 (2003) (“if two provisions of the same
contract irreconcilably conflict with each other, the language of the contract is ambiguous”).
Indeed, the cases on which plaintiff relies to support her position recognize the principle that a
contract is ambiguous when its provisions are capable of conflicting interpretations. See Wilkie v
Auto-Owners Ins Co, 469 Mich 41, 47; 664 NW2d 776 (2003); Raska v Farm Bureau Mut Ins
-2-
Co of Michigan, 412 Mich 355, 361-362; 314 NW2d 440 (1982). As such, we hold that the trial
court properly found that the contradiction between the two sentences at issue created ambiguity
in the Guaranty. Wilkie, supra at 47; Raska, supra at 361-362.
Despite the ambiguity in the Guaranty, plaintiff insists that, pursuant to Wilkie and Raska,
this Court should “read [the] contract[] as a whole, giving harmonious effect . . . to each word
and phrase,” Wilkie, supra at 50 n 11, and that even an “inartfully worded or clumsily arranged”
contract may not be ambiguous or “fatally unclear” if it “fairly admits of but one interpretation.”
Raska, supra at 362.1 This may be particularly true where the case involves the resolution of
ambiguities in an insurance contract as in Wilkie and Raska. When an insurance contract
contains ambiguous terms, we must construe the contract against the drafter and in favor of the
insured. Steinmann v Dillon, 258 Mich App 149, 154; 670 NW2d 249 (2003).
This case, however, involves a guaranty contract. A guaranty contract, like a surety
contract, is a special kind of contract that must receive strict construction in favor of the surety.
Bandit, supra at 511. A strict construction of the Guaranty in favor of defendant requires only
the original $95,000 loan to fall within the precise definition of the term “indebtedness” in the
first sentence. Our Supreme Court in Bandit noted that “[t]he liability of a surety is not to be
extended by implication beyond the terms of his contract.” Id. at 511-512, quoting City of Ann
Arbor v Massachusetts Bonding & Ins Co, 282 Mich 378, 380; 276 NW 486 (1937). Further, the
Court noted that “assumption of another’s debt is a substantial undertaking, and thus the courts
will not assume such an obligation in the absence of a clearly expressed intention to do so.” Id.
at 512.
Here, the Guaranty ambiguously uses the term “indebtedness” throughout its provisions.
In addition to the phrase “indebtedness includes all indebtedness and obligations,” the Guaranty
refers to “the indebtedness or . . . other components of the indebtedness” in the fourth paragraph,
and “any indebtedness or any setoff” in the eleventh paragraph. Thus, it is unclear on the
Guaranty’s face whether the parties intended to include plaintiff’s subsequent loans beyond the
original $95,000 loan within the scope of Guaranty. At minimum, such ambiguity in the
language of the Guaranty does not evidence defendant’s “clearly expressed intention” to
guarantee plaintiff’s subsequent loans. Id. As such, we find that the trial court correctly
determined that the Guaranty is ambiguous regarding its scope.
1
We note that even reading the first and second sentences of the first paragraph of the Guaranty
in harmony as plaintiff urges does not provide plaintiff any relief. The first sentence clearly
defines the indebtedness to include the original promissory note, along with any “extensions,
renewals, and modifications” made to the note. Thus, the second sentence concerning “all
indebtedness” merely would apply to any further indebtedness arising out of such extensions,
renewals, or modifications to the original note. Because, as plaintiff admits, the later loans to the
business venture were not made pursuant to any such extensions, renewals, or modifications,
even the second sentence’s language regarding “all indebtedness” would not cover the contested
loans made here.
-3-
Plaintiff next argues that, even if the Guaranty was ambiguous, the trial court erred in
ruling that it was unenforceable as a matter of law. We disagree. Our Supreme Court in Bandit
made it clear that “a personal guarantee for the debt of another can arise only where such an
intent is clearly manifested.” Bandit, supra at 505. As discussed previously, defendant’s clearly
expressed or manifested intent to guarantee any future loans is absent because of the ambiguity
in the language of the Guaranty. Without defendant’s clearly manifested intent, the Guaranty is
invalid as a matter of law.
Plaintiff primarily relies on Klapp, supra at 469, to argue that the ambiguity in the
contract regarding the parties’ intent must be left for a jury to decide. However, plaintiff’s
argument is without merit because this case involves a guaranty contract where the need for the
guarantor’s “clearly manifested” intent is “more fundamental” than searching for the parties’
intent. Bandit, supra at 512-513. The Court in Bandit recognized the general principle that the
intention of the parties must be given effect. Id. at 513. However, the Court held that the more
fundamental principle of law that “[t]he rights of sureties are always favored in the law, and
persons standing in that relation in this class of obligations will not be held, unless an intention to
bind themselves is clearly manifested” must take precedence. Id., quoting The Columbus Sewer
Pipe Co v Ganser, 58 Mich 385, 391; 25 NW 377 (1885). Accordingly, absent a “clearly
manifested intent,” defendant cannot be held personally liable for plaintiff’s subsequent loans as
a matter of law, Bandit, supra at 505, and there is no further need for a jury to decide the
meaning of the ambiguous contract under Klapp, supra at 469.
Plaintiff further contends that Bandit is not applicable here because it deals with an issue
of contract formation, as opposed to contract interpretation. We disagree. Our Supreme Court in
Bandit, supra at 513, cited Columbus Sewer Pipe in its decision and made no distinction between
the contract formation issue in Bandit and the contract interpretation issue in Columbus Sewer
Pipe. The Bandit Court recognized that the principles enunciated in Columbus Sewer Pipe,
supra at 391 (that a guarantor is not liable beyond the express terms of his contract, and that the
terms are not to be construed technically to the disadvantage of the sureties and contrary to their
intent), have been in place in Michigan for over a century. Bandit, supra at 512-513. The Bandit
Court applied these principles to reach its decision that a guaranty contract cannot be implied
from language that fails to clearly manifest an intention to assume another’s debt. Bandit, supra
at 513-514. Thus, as the trial court found, plaintiff’s attempt to distinguish the contract
formation case and the contract interpretation case is “not compelling.” Columbus Sewer Pipe
and Bandit are applicable because this case deals with the similar issue of whether a guarantor’s
liability can be implied from the ambiguous language in the contract. Accordingly, we hold that
the trial court did not err in relying on Bandit and Columbus Sewer Pipe to support its holding
that absent “clearly manifested intent to be bound with regard to the subsequent debts,”
plaintiff’s claim to recover her subsequent loans to Seyberg must fail as a matter of law.
We affirm.
/s/ Richard Allen Griffin
/s/ Richard A. Bandstra
/s/ Joel P. Hoekstra
-4-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.