LaFarge Building Materials, Inc. v. Pratt
307 Ga. App. 767
| Ga. Ct. App. | 2011Background
- LaFarge supplied building materials on projects in Gwinnett and Hall Counties; Pratt Residential, LLC (LPR) and Lowell F. Pratt signed a credit application and a separate continuing guaranty.
- Application For Credit is unsigned on its face; the Authorized Signature line is blank and no credit terms are approved in the Office Use Only section.
- Guaranty on the second page unconditionally guaranties all indebtedness of the Applicant, defined as the party applying for credit, but the term 'Applicant' is not defined in the Application.
- LPR is a construction company with Pratt as a member/manager; Carriage Station subdivision appears on the Application but the projects at issue were different locations.
- LaFarge filed a verified complaint seeking payment; Pratt moved for partial summary judgment arguing the Guaranty is unenforceable for lack of identification and other defects.
- Trial court concluded the Guaranty was unenforceable as a matter of law for failure to identify the principal debtor; judgment entered for Pratt.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Guaranty properly identify the principal debtor per the statute of frauds? | LaFarge argues the Application and Guaranty together identify LPR as principal debtor. | Pratt contends the Guaranty fails to identify the principal debtor by name and cannot be read with the Application. | Guaranty unenforceable for failure to identify the principal debtor. |
| Can the Application and Guaranty be construed contemporaneously to satisfy the statute of frauds? | LaFarge contends the two writings can be read together because they concern the same transaction. | Pratt maintains the writings cannot be read together since the Guaranty does not incorporate the Application and the Application is unsigned. | Contemporaneous writings rule inapplicable; no parol-evidence remedy; Guaranty unenforceable. |
Key Cases Cited
- Dabbs v. Key Equip. Finance, 303 Ga.App. 570 (Ga. Ct. App. 2010) (parol evidence cannot supply missing contract elements under the statute of frauds)
- John Deere Co. v. Haralson, 278 Ga. 192 (Ga. 2004) (guarantee must identify debt, principal debtor, promisor, promisee)
- Fontaine v. Gordon Contractors Bldg. Supply, 255 Ga.App. 839 (Ga. Ct. App. 2002) (guaranty language and lack of explicit identity prevents construction with application)
- Roden Elec. Supply v. Faulkner, 240 Ga.App. 556 (Ga. Ct. App. 1999) (identity issues in guaranty not supplied by parol evidence)
- Sysco Food Svcs. v. Coleman, 227 Ga.App. 460 (Ga. Ct. App. 1997) (parol evidence limits in guaranty construction)
- Coleman, 227 Ga.App. 461 (Ga. Ct. App. 1997) (contemporaneous writings and integration principles in statute of frauds)
- Baker v. Jellibeans, Inc., 252 Ga. 458 (Ga. 1984) (contemporaneous writings must be signed)
- Turner v. Lorillard Co., 100 Ga. 645 (Ga. 1897) (significance of contemporaneous writings in contract formation)