60 So. 3d 1168
Fla. Dist. Ct. App.2011Background
- Chub Cay Club financed Bahamas development with two Cat Financial loans: Equipment Loan (Aug 7, 2006) and Construction Finance Agreement (CFA) (Sept 28, 2007) with a max $10.8 million; Personal Guaranties signed Sept 28, 2007 by Kaye Pearson and Bob Moss in Cat Financial’s favor; guaranties provided that guarantor “absolutely, irrevocably and unconditionally” guaranteed all indebtedness related to the CFA and related obligations; the guaranties contained liberal construction language in Cat Financial’s favor and Tennessee law governs interpretation; Chub Cay Club defaulted and Cat Financial demanded full payment totaling about $13.66 million; Cat Financial moved for summary judgment asserting the guaranties unambiguously covered all indebtedness under both loan agreements; the trial court granted summary judgment, holding the guaranties covered obligations under both loans; on appeal, the guarantors argued the guaranties did not reach the Equipment Loan and that the language was ambiguous; the court reversed and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Personal Guaranties unambiguously cover both loans | Pearson and Moss contend guaranties only cover CFA obligations, not the Equipment Loan. | Cat Financial argues guaranties are clear and unambiguous, covering all indebtedness arising under the CFA and related obligations. | Ambiguity exists; not unambiguously covering both loans; summary judgment improper. |
| Whether the guaranties are ambiguous so extrinsic evidence is permissible | Ambiguity requires consideration of definitions and related loan documents; language could mean only CFA. | Guaranties should be read plain and broad; no need for extrinsic definitions. | Ambiguity present; reversal and remand warranted. |
Key Cases Cited
- Palm Beach Pain Mgmt., Inc. v. Carroll, 7 So.3d 1144 (Fla. 4th DCA 2009) (contract terms control where unambiguous; ambiguity precludes summary judgment)
- Allstate Ins. Co. v. Watson, 195 S.W.3d 609 (Tenn. 2006) (cardinal rule of contract interpretation: ascertain intent from plain language)
- Johnson v. Johnson, 37 S.W.3d 892 (Tenn. 2001) (plain meaning controls if language unambiguous)
- Farmers-Peoples Bank v. Clemmer, 519 S.W.2d 801 (Tenn. 1975) (guaranties words taken strongly against guarantor)
- Lander v. Smith, 906 So.2d 1130 (Fla. 4th DCA 2005) (summary judgment standards; resolve doubts against movant)