Business Insurance Brokers, Inc., Respondent, vs. Terrance P. Durkin, individually as guarantor, Appellant.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C8-03-248

 

Business Insurance Brokers, Inc.,

Respondent,

 

vs.

 

Terrance P. Durkin,

individually as guarantor,

Appellant.

 

Filed October 21, 2003

Affirmed
Klaphake, Judge

 

Hennepin County District Court

File No. CT0116452

 

Business Insurance Brokers, Inc., ATTN: Patrick McGovern, Northern Capital Insurance Group, P.O. Box 9396, Minneapolis MN 55440 (respondent)

 

Terrance P. Durkin, 920 Fair Oaks Avenue, Oak Park, IL  60302 (pro se appellant)

 

            Considered and decided by Klaphake, Presiding Judge, Peterson, Judge, and Minge, Judge.

U N P U B L I S H E D   O P I N I O N

KLAPHAKE, Judge

            Appellant Terrance P. Durkin signed a personal guaranty to pay a $28,096.60 debt of Twin City Technical Castings, Inc. (Twin Cast) to respondent Business Insurance Brokers, Inc.  Respondent sued to collect on the personal guaranty.  Appellant challenges the district court's conclusion that the personal guaranty is enforceable and the court's award of $465 in attorney fees to respondent for appellant's failure to appear at a pre-trial conference.  Because there was sufficient consideration for the personal guaranty and the guaranty is a valid and enforceable contract, we affirm the district court's determination that appellant is liable for the personal guaranty.  We also affirm the district court's award of attorney fees to respondent as within its discretion.

D E C I S I O N

I.

            Appellant argues that because there was no consideration for the personal guaranty, no contract was formed.  Whether a contract is supported by consideration is a question of law.  Brooksbank v. Anderson, 586 N.W.2d 789, 794 (Minn. App. 1998), review denied (Minn. Jan. 27, 1999).  We review questions of law de novo.  Frost-Benco Elec. Ass'n v. Minn. Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984).  A guaranty "is an independent contract between a guarantor and a creditor and is collateral to the contractual obligation between the creditor and a debtor."  Loving & Assocs., Inc. v. Carothers, 619 N.W.2d 782, 786 (Minn. App. 2000), review denied (Minn. Feb. 13, 2001).  It is "an undertaking or promise to pay on the part of one person that is collateral to a primary obligation and that binds the guarantor to performance in the case of the default of the one primarily bound."  Baker v. Citizens State Bank, 349 N.W.2d 552, 557 (Minn. 1984).  "Where a promissory note is given for a previously existing and past-due debt and is payable at a future date, the extension of time is sufficient consideration to support the guaranty of payment."  O'Neil v. Dux, 257 Minn. 383, 391, 101 N.W.2d 588, 594 (Minn. 1960).

            Here, appellant gave a personal guaranty for an indebtedness owed by Twin Cast to respondent for the purpose of extending Twin Cast's payment period.  We conclude as a matter of law that the personal guaranty is supported by sufficient consideration.

            Appellant argues that the district court erroneously held that the personal guaranty was a valid contract despite the June 22, 1995 letter referenced in the guaranty, which stated that payment would be made by a third party, Republic Acceptance Corporation (Republic).  He asserts that he "only guaranteed that Twin Cast would repay the debt by telling Republic to make payments to [respondent]."   

            A contract is a legally enforceable promise.  Cederstrand v. Lutheran Bhd., 263 Minn. 520, 529, 117 N.W.2d 213, 219 (Minn. 1962).  The "rules of [contract] construction are aimed at effectuating the intention of the parties."  North Star Universal, Inc. v. Graphics Unlimited, Inc., 563 N.W.2d 73, 75 (Minn. App. 1997).  "We must construe a contract in a manner designed to achieve the purpose of the contracting parties; if doubt still remains, we must construe the contract against the party who drafted it."  Beattie v. Prod. Design & Eng'g, Inc., 293 Minn. 139, 149, 198 N.W.2d 139, 144  (1972).  The primary purpose of the contract, which was drafted by appellant, was to create a personal guaranty by appellant for Twin Cast's indebtedness, so that respondent would extend the time of payment.  The manner in which payment would be made is secondary to the purpose of the contract.  The hope that Republic would pay the debt is not sufficient to alter appellant's responsibility under the contract.  We conclude that the district court did not err in holding that the personal guaranty was a valid contract.

II.

            Appellant challenges the district court's award of attorney fees to respondent. Appellant admits that it was unprofessional and inappropriate for him to miss the pretrial conference on July 9, 2002, but argues that because the hearing took place by phone rather than being rescheduled, and all matters were completed and appropriately handled, the court should not have ordered him to pay costs and attorney fees.

            "On review, this court will not reverse a trial court's award or denial of attorney fees absent an abuse of discretion."  Becker v. Alloy Hardfacing & Eng'g Co., 401 N.W.2d 655, 661 (Minn. 1987).  When a final pretrial conference is scheduled, at least one attorney conducting the trial for each party shall attend the conference.  Minn. R. Civ. P. 16.04. 

If a party or party's attorney fails to obey a scheduling or pretrial order, or if no appearance is made on behalf of a party at a . . . pretrial conference, . . . the court, upon motion or upon its own initiative, may make such orders with regard thereto as are just, including any of the orders provided in Rule 37.02 (b)(2), (3), (4).  In lieu of or in addition to any other sanction, the court shall require the party . . . to pay the reasonable expenses incurred because of any noncompliance with this rule, including attorney fees, unless the court finds that the noncompliance was substantially justified or that other circumstances make an award of expenses unjust.  

 

Minn. R. Civ. P. 16.06 (emphasis added). 

            Rule 16.06 specifically identifies failure to appear at a pretrial conference as grounds for sanctions, and requires the party to pay reasonable expenses, including attorney fees incurred because of the noncompliance.  Id.  We conclude that the district court did not abuse its discretion in awarding respondent attorney fees.

Affirmed.