The Wells Group, LLC v. Lonna Bishop
2021 CA 000086
| Ky. Ct. App. | Jan 19, 2022Background
- On March 12, 2015 Lonna Bishop, president of LMR Construction, LLC, signed a one‑page Wells Group credit application that included an “AGREEMENT” paragraph stating the undersigned “does personally and individually guarantee” payment of purchaser’s indebtedness and a signature block where Bishop signed and listed her title as “President.”
- LMR defaulted in 2017 owing $21,773.98; Wells obtained a default judgment against LMR and later sued Bishop individually to collect under the credit application’s guaranty.
- A default judgment was initially entered against Bishop, later set aside; Bishop then asserted she signed only in a representative capacity and that the guaranty language was inconspicuous or ambiguous.
- The Fayette Circuit Court denied Wells’s summary judgment motion, held after bench trial that Bishop was not personally liable (finding the guaranty insufficiently conspicuous and ambiguous because Bishop had added her title), and dismissed Wells’s complaint with prejudice.
- The Court of Appeals reversed, holding the guaranty language was clear, unambiguous, and sufficiently conspicuous and that Bishop’s signature with the title did not negate personal liability; it remanded with instructions to enter judgment for Wells.
Issues
| Issue | Plaintiff's Argument (Wells) | Defendant's Argument (Bishop) | Held |
|---|---|---|---|
| Enforceability of personal guaranty in the credit application | The Agreement plainly and unambiguously states the undersigned personally and individually guarantees payment; enforcing the written terms binds Bishop | Bishop intended to sign only as LMR’s president and not personally; the document’s layout and fine print made the guaranty inconspicuous | Enforced guaranty; language was clear and unambiguous—Bishop personally liable; summary judgment should have been granted to Wells |
| Does appending the title “President” create ambiguity about signing capacity | Title after name does not negate an explicit personal guaranty | The title shows she signed in a representative capacity, creating ambiguity that defeats personal liability | Title did not create ambiguity sufficient to avoid the unambiguous guaranty; representative-title argument rejected |
| Conspicuousness of guaranty language | The guaranty was conspicuous: labeled “AGREEMENT,” in bold heading, and legible; Kentucky requires no special form beyond clarity | The guaranty was in fine print/poor placement and not conspicuous enough to alert Bishop to personal liability | Guaranty was sufficiently conspicuous; no legal requirement for additional prominence; Bishop bound by opportunity to read the contract |
| Reviewability of denial of summary judgment on appeal | Leneave exception applies when facts undisputed and ruling is pure law; final judgment entered so denial is reviewable here | Denial was interlocutory and not reviewable earlier | Court applied Leneave exception—because facts were undisputed and issue was legal, denial of summary judgment reviewable and was erroneous in this case |
Key Cases Cited
- Transportation Cabinet v. Leneave, 751 S.W.2d 36 (Ky. App. 1988) (denial of summary judgment is not appealable except under a limited four‑part exception when facts are undisputed and ruling is purely legal)
- Hensley v. Gadd, 560 S.W.3d 516 (Ky. 2018) (contract interpretation must give effect to the instrument’s plain language; avoid imposing unexpressed intentions)
- Siler v. White Star Coal Co., 226 S.W. 102 (Ky. 1920) (contract interpretation focuses on parties’ expressed words to ascertain intent)
- Smithfield Farms, LLC v. Riverside Developers, LLC, 566 S.W.3d 566 (Ky. App. 2018) (absent ambiguity, courts interpret written instruments from the four corners without extrinsic evidence)
- Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381 (Ky. App. 2002) (plain contractual terms bind parties; subjective unexpressed intent insufficient to alter clear language)
- Browning v. Park Hill Realty Co., 93 S.W.2d 358 (Ky. 1936) (adding a title after a signature does not, by itself, unambiguously show representative signing and avoid personal liability)
- Cline v. Allis‑Chalmers Corp., 690 S.W.2d 764 (Ky. App. 1985) (a party who had opportunity to read a contract but did not is bound by its terms absent fraud)
- Buridi v. Leasing Group Pool II, LLC, 447 S.W.3d 157 (Ky. App. 2014) (unilateral mistake is insufficient to rescind a commercial guaranty)