142 So. 3d 91
La. Ct. App.2014Background
- Broussard-Baehr Holdings, LLC executed a $150,000 mortgage and promissory note in favor of N.E.N.H., LLC; Troy Broussard and Ann Baehr signed the instruments as managing members.
- The note’s signature blocks also included the words “Personal Guarantor” under Broussard’s and Baehr’s names, and the note stated the makers were "jointly, severally and in solido" liable.
- N.E.N.H. sued Broussard-Baehr Holdings, Broussard, and Baehr for default on the note; procedural steps included exceptions, a default motion, and later answers.
- Broussard and Baehr moved for summary judgment arguing they signed only in a representative capacity; N.E.N.H. moved for summary judgment seeking enforcement of the note against all signatories.
- The trial court granted summary judgment for N.E.N.H., holding Broussard-Baehr Holdings and Baehr jointly, severally and in solido liable for the debt; Baehr appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Baehr can be held personally liable on the note | Note and signatures show Baehr agreed to personal liability as guarantor | Baehr signed only as an LLC member; LLC law shields her from personal liability | Held: Baehr signed both as member and as personal guarantor; valid written guaranty creates personal liability |
| Whether LLC member protections bar enforcement of the guaranty | LLC protections don’t cover an express personal guaranty | LLC shield negates personal obligation where instruments indicate only LLC liability | Held: LLC protections do not extend to an express personal guaranty signed by member |
| Whether the note/guaranty is ambiguous such that extrinsic evidence is needed | Note language is clear showing individual and LLC liability | Apparent contradiction between mortgage (referencing only LLC) and the word "Personal Guarantor" creates ambiguity | Held: Instrument is clear and unambiguous on its face; interpretation is a question of law resolved on summary judgment |
| Whether summary judgment was proper (genuine issue of material fact) | No genuine issue; four-corners of the instruments show liability | There are factual issues about capacity and intent requiring trial | Held: No genuine issue; mover entitled to judgment as a matter of law; summary judgment affirmed |
Key Cases Cited
- Favre v. Boh Bros. Const. Co., L.L.C., 90 So.3d 481 (La. App. 5 Cir. 2012) (standard for appellate review of summary judgment)
- DROR Intern. L.P. v. Thundervision, L.L.C., 81 So.3d 182 (La. App. 5 Cir. 2011) (summary judgment favored to secure just, speedy, inexpensive determinations)
- Veterans Commercial Properties, LLC v. Barry’s Flooring, Inc., 67 So.3d 627 (La. App. 5 Cir. 2011) (guaranty and suretyship rules; guaranty must be express and in writing)
- First Bank and Trust v. Redman Gaming of Louisiana, Inc., 131 So.3d 224 (La. App. 5 Cir. 2013) (contract interpretation: clear, unambiguous instruments construed from four corners; issue of law for summary judgment)