Opinion
No. A06-1081.
Filed April 10, 2007.
Appeal from the District Court, Hennepin County File No. 27-CV-04-015889.
Robert A. Judd, Jeffrey S. Nicolet, Wagner, Falconer Judd, Ltd., Minneapolis, MN 55402 (for respondent).
David Bradley Olsen, Court J. Anderson, Henson Efron, P.A., Minneapolis, MN 55402 (for appellant).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
On appeal from a judgment in favor of respondent following a court trial in a lawsuit to collect on guaranties, appellant argues that the district court erred by (1) construing the written guaranty contrary to its unambiguous terms; (2) finding that appellant did not intend that the personal guaranty expire on a particular date; and (3) concluding that the personal guaranty was signed on a particular date rather than on the date written in the agreement. We affirm.
FACTS
Respondent Weekes Forest Products, Inc. is a supplier of lumber and other building materials. Respondent's CFO is Gary Schulz. Appellant Ronald Wald is the former CEO of Windsor Homes, Inc (Windsor). Over the course of several years, Windsor purchased materials, primarily lumber, from respondent on credit terms. On May 20, 2002, appellant signed a personal guaranty for products purchased on credit by Windsor from respondent, which included a handwritten notation that "Unless renewed in writing this Guaranty shall expire on 5/19/03." Appellant testified that it was his practice to limit all personal guaranties to a one-year term to ensure that no indefinite obligations were created. In June 2003, during a review of Windsor's accounts due to Windsor's declining financial position, Schulz discovered that the May 2002 personal guaranty had expired. Schulz testified that on July 9, 2003, he faxed a new personal guaranty to appellant to sign. On July 15, after receiving no response to the fax, Schulz contacted appellant. During the conversation, appellant asked Schulz why he should sign the personal guaranty. Schulz informed appellant that no further credit would be extended without a signed guaranty. That same day, a signed personal guaranty was faxed back to Schulz, along with the original cover sheet. The signed guaranty and cover sheet reflected the machine-printed date and time of the fax transmission from Schulz to appellant on July 10 on each page. The signed guaranty included a handwritten notation that the guaranty "Expires 1 year from Date signed."
Schulz testified that he faxed the guaranty on July 9; however, the fax transmission shows that it possibly occurred on July 10. The result is the same regardless of the date.
Between May 2004 and July 2004, Windsor accrued an unpaid balance of $62,390.01. After numerous attempts to get Windsor to pay the outstanding amounts, respondent filed a complaint against Windsor and appellant based on the personal guaranty. The district court granted summary judgment in favor of respondent against Windsor for $62,390.01. But the district court found that a genuine issue of material fact existed as to whether the personal guaranty appellant signed was in effect. Following a trial, the district court found appellant jointly and severally liable for the amount already awarded to respondent against Windsor. The district court denied appellant's motion for amended findings, and this appeal follows.
DECISION
Whether a contract is ambiguous — reasonably susceptible to more than one construction — is a question of law, to which the reviewing court owes no deference to the district court's determination. Blackburn, Nickels Smith, Inc. v. Erickson, 366 N.W.2d 640, 643-44 (Minn.App. 1985), review denied (Minn. June 24, 1985). "The construction and effect of a contract are questions of law for the court, but where there is ambiguity and construction depends upon extrinsic evidence and a writing, there is a question of fact for the [fact-finder]." Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979); see also Donnay v. Boulware, 275 Minn. 37, 44, 144 N.W.2d 711, 716 (1966) (stating if a writing is ambiguous, the court may look to extrinsic evidence and construction then becomes a question of fact, "unless such evidence is conclusive"). While there was no specific finding by the district court that the guaranty was ambiguous, it is clear from the district court's analysis that it believed that there was an ambiguity. "On appeal, we must decide whether the [district] court was correct in finding ambiguity and, if so, whether proper interpretation was given to the language used by the parties." ICC Leasing Corp. v. Midwestern Mach. Corp., 257 N.W.2d 551, 554 (Minn. 1977).
Date guaranty signed
Appellant argues that the district court erred in finding that the guaranty was signed on July 15, 2003, because the guaranty is dated "2/15/03" and includes a handwritten provision that it "Expires [one] year from Date signed." Due to the dispute regarding whether the document is dated "2/15/03 or "7/15/03" and when appellant actually signed the document, the district court was correct in conducting an analysis regarding an existing ambiguity.
It is undisputed that Schulz faxed a blank personal guaranty to appellant on either July 9 or 10. When he received no response, Schulz contacted appellant on July 15. While on the phone, appellant asked Schulz why he should sign the guaranty, to which Schulz replied that he would no longer extend credit to Windsor without the signed guaranty. That same day, the signed guaranty was faxed back to Schulz. The top of the signed guaranty contains fax-transmission information showing that the signed guaranty was the same blank guaranty that Schulz faxed to appellant several days earlier. Appellant testified that he did not sign the document on July 15, 2003, but did not remember when he signed it and failed to present any evidence regarding when it actually was signed. Appellant also claimed that the date on the document is "2/15/03" not "7/15/03." Finally, appellant testified that it is not his practice to backdate documents and this statement was confirmed by other evidence.
Based on the fax-transmission information on the guaranty, the district court concluded that the guaranty was signed sometime between July 9 and July 15. If the document is in fact dated "2/15/03" as appellant claims, then appellant backdated the guaranty, in direct contradiction to his claim that it is not his practice to do so. Further, based on appellant's question to Schulz during their July 15 conversation regarding why he should sign the document, and the fact that the signed guaranty was faxed back to Schulz later that same day, it is reasonable to conclude that the guaranty was signed on July 15. The district court also concluded that appellant's testimony was not credible, and credibility determination are left to the fact-finder's discretion. See Minn. R. Civ. P. 52.01 (stating that "due regard" must be given to the district court's credibility determinations). Finally, based on all of the other evidence, the fact that the document was signed on the 15th of the month under either party's argument weighs in favor of the document being signed on July 15 rather than February 15.
Because the fax-transmission information shows that the guaranty was sent and received sometime between July 9 and July 15, 2003, and because no credible evidence was presented to support a claim that it was signed at any other time, it is reasonable to conclude that appellant signed the document on July 15. Therefore, the district court did not err in finding that the guaranty was signed on July 15.
Intention regarding effective date of guaranty
Appellant argues that the district court erred in finding that appellant did not intend the personal guaranty to expire on February 15, 2004, pursuant to the handwritten notation on the guaranty that it "Expires one year from Date signed." Respondent argues that appellant's intention that the guaranty expired on February 15, 2004, is not found in the guaranty. Because there is a discrepancy regarding whether the document is dated "2/15/03" or "7/15/03," an ambiguity exists regarding what appellant intended by the handwritten notation, "Expires one year from Date signed."
Appellant claims that he intended, by the plain language of the guaranty, that the guaranty would be effective for one year beginning on February 15, 2003. However, appellant offers no explanation for why he would have dated the guaranty "2/15/03" when the first guaranty did not expire until May 19, 2003. Further, with the fax-transmission information on the guaranty showing that it was signed sometime between July 9 and July 15, 2003, appellant offers no explanation to the contradiction in his testimony that the document is dated "2/15/03" and that it is not his practice to backdate documents. Appellant also argues that if the guaranty was dated "7/15/03" as respondent claims, then there was no personal guaranty in effect from May 19, 2003, when the first guaranty expired, to July 15, 2003. Appellant contends that this is in direct contradiction with Schulz's testimony that he would not extend credit if there was no personal guaranty in place. However, the district court found Schulz's testimony that the continued shipments were an oversight because he did not realize that the guaranty had expired, to be credible. And the district court found that appellant's testimony regarding when he signed the guaranty and his intentions regarding the handwritten notation "Expires [one] year from Date signed" was not credible. See Minn. R. Civ. P. 52.01 (stating that "due regard" must be given to the district court's credibility determinations). Finally, if appellant intended the document to expire on February 15, 2004, he could have so noted in the same way he did in the May 20, 2002 personal guaranty — "Unless renewed in writing this Guaranty shall expire on 5/19/03."
Because the evidence supports the conclusion that appellant signed the document between July 9 and July 15, and the district court's finding that appellant's testimony was not credible, the district court did not err in finding that there was no credible evidence to support appellant's claim that he intended the document to be effective from February 15, 2003 to February 15, 2004.
Guaranty effective as of date signed
Appellant argues that the district court erred in finding that the guaranty was effective from the date the document was signed on July 15, 2003. As previously stated, it was reasonable to conclude that the guaranty was signed on July 15, 2003. Further, there is no credible evidence to support appellant's claim that the date on the document is "2/15/03," and that he intended the guaranty to be effective from February 15, 2003, to February 15, 2004. Based on the plain language of appellant's handwritten notation on the guaranty, it "Expires [one] year from Date signed," which would be one year from July 15, 2003 — the date appellant signed the guaranty. The district court did not err in finding that the guaranty was effective as of the date signed — July 15, 2003.