207 So. 3d 698
Miss. Ct. App.2016Background
- Hederman Brothers (printer) and Bookmark Publishing (LLC managed by Paul Brown) entered a credit application; Brown signed a separate continuing guaranty personally for up to $45,000 plus interest and fees.
- The guaranty expressly stated it was a guaranty of payment (absolute and unconditional) and waived defenses that Bookmark might have against Hederman Brothers.
- Hederman printed calendars for Bookmark for 2011–2013; Bookmark fell behind, and parties agreed to a November 2012 payment plan (Bookmark to make installments; Hederman wrote off $3,000 interest and shipped 2013 calendars).
- Bookmark defaulted on the payment plan and never paid for the 2013 order; Hederman sued Brown individually on the guaranty (did not name Bookmark).
- The trial court granted summary judgment for Hederman on the guaranty claim (awarding $45,000 plus contractual interest and fees) and dismissed Brown’s counterclaims for lack of standing and insufficient evidence. Brown appealed.
Issues
| Issue | Plaintiff's Argument (Brown) | Defendant's Argument (Hederman) | Held |
|---|---|---|---|
| Whether Hederman had to obtain a judgment against Bookmark before suing Brown under the guaranty | Brown: guaranty is secondary; creditor must pursue principal first (relying on Brent) | Hederman: guaranty is absolute guaranty of payment; no condition precedent other than default | Court: Guaranty is an unconditional guaranty of payment; Hederman need not sue Bookmark first — affirmed |
| Whether Bookmark was in default when Hederman sued | Brown: credit application allowed 60 days; December 31 invoice not due by Feb 25 | Hederman: November 2012 payment plan superseded 60-day term; first installment due Jan 2, 2013 and was missed | Court: Payment plan created a binding contract; Bookmark defaulted by missing Jan 2 payment — affirmed |
| Whether Bookmark's potential defenses (poor workmanship, misrepresentation) bar enforcement against Brown | Brown: alleged defects and misrepresentations by Hederman justify nonpayment and require resolving principal's liability first | Hederman: Brown waived defenses in the guaranty; guaranty disclaims defenses available to principal | Court: Brown contracted away ability to assert principal’s defenses; those defenses do not relieve Brown — affirmed |
| Whether Brown had standing / produced evidence to support counterclaims (fraud, breach, mishandling property) | Brown: asserted fraud, poor performance, and mishandling of his slides/personal property | Hederman: counterclaims belong to Bookmark (the LLC); Brown lacks individual standing and failed to produce specific evidence | Court: Brown lacks standing for contract-based claims; his personal-property claim was inadequately pleaded and unsupported — summary judgment affirmed |
Key Cases Cited
- Brent v. National Bank of Commerce of Columbus, 258 So. 2d 430 (Miss. 1972) (discusses conditional guaranty vs. guaranty of payment)
- Wren v. Pearce, 12 Miss. 91 (Miss. 1845) (an absolute guaranty permits suit against guarantor without suing principal)
- Karpinsky v. American National Insurance, 109 So. 3d 84 (Miss. 2013) (summary-judgment burdens and burden-of-production rules)
- United States v. Vahlco Corp., 800 F.2d 462 (5th Cir. 1986) (contrast between guaranty of payment and guaranty of collection)
- Woods-Tucker Leasing Corp. of Ga. v. Kellum, 641 F.2d 210 (5th Cir. 1981) (absolute guarantor’s liability attaches upon debtor’s default)