302 So.3d 115
La. Ct. App.2020Background
- In 2014 Joseph D. Sando signed a written "Commercial Guaranty" personally guaranteeing Carbine Motorcars’ indebtedness to Hancock Whitney Bank (Whitney).
- In 2015 Carbine Motorcars executed a $1,000,000 promissory note to Whitney and later defaulted; demand for payment was made in October 2017 and no payments were made.
- Whitney sued Sando in February 2018 to enforce the guaranty; Sando filed a reconventional demand alleging oral promises and other torts against Whitney and two former Whitney employees.
- The trial court sustained peremptory exceptions (no cause of action and prescription) against Sando’s reconventional demand, refused leave to amend, and quashed Sando’s deposition notices for the former employees.
- Whitney’s motion for summary judgment was granted: the court awarded Whitney the unpaid principal ($934,063.31), interest, costs and fees; Sando’s subsequent motion for new trial was denied and he appealed.
Issues
| Issue | Plaintiff's Argument (Whitney) | Defendant's Argument (Sando) | Held |
|---|---|---|---|
| 1. Whether the trial court erred by refusing to allow Sando to amend after a peremptory exception of no cause of action | The reconventional demand fails as a matter of law because it alleges only oral agreements and the Louisiana Credit Agreement Statute requires written agreements for credit/guaranty claims; amendment would be futile. | Sando contended he should be given leave to amend to cure pleading defects. | Denied — amendment would be vain/useless because the statute requires a written credit agreement/guaranty; no abuse of discretion. |
| 2. Whether the court abused its discretion in quashing deposition notices of former Whitney employees | Depositions were unnecessary because Sando admitted signing the guaranty and the debt was undisputed; no factual dispute would be resolved by those depositions. | Sando argued the depositions were needed to develop facts related to the loan and guarantees. | No abuse of discretion — discovery properly limited where no genuine disputed material fact exists. |
| 3. Whether summary judgment should have been denied because material factual disputes exist | Whitney: undisputed written guaranty and existence of debt entitle it to judgment as a matter of law. | Sando: asserted there were material issues of fact and law precluding summary judgment. | Affirmed — no genuine issue of material fact; clear, unambiguous guaranty and admitted default make Whitney entitled to judgment. |
| 4. Whether Sando’s liability is limited by guaranty language (scope/continuing obligation) | Guaranty expressly creates an absolute, unconditional, joint and several (solidary) continuing obligation; guarantor liable for full indebtedness. | Sando argued limits/defenses to liability (generally asserted factual disputes). | Held for Whitney — guaranty language is clear; Sando is solidarily liable for the debt. |
| 5. Whether impairment of collateral extinguished the suretyship under La. C.C. art. 3062 | Whitney: Sando is a commercial surety and any modification/impairment extinguishes liability only to the extent of prejudice; moreover Sando waived rights to contest disposition of collateral. | Sando: argued he was (effectively) an ordinary surety or that collateral was impaired without his consent, extinguishing his obligation. | Rejected — Sando is a commercial surety; no evidence collateral was impaired and he expressly consented to lender’s dealing with collateral; claim fails. |
Key Cases Cited
- Badeaux v. Southwest Computer Bureau, Inc., 929 So.2d 1211 (La. 2006) (peremptory exception of no cause of action tests legal sufficiency of petition)
- Delta Bank & Trust Co. v. Lassiter, 383 So.2d 330 (La. 1980) (court must consider only facts alleged on face of petition when ruling on no-cause exception)
- Gulf Coast Bank & Trust Co. v. Elmore, 57 So.3d 553 (La. App. 4 Cir. 2011) (lender summary-judgment practice against guarantors when guaranty and debt are proven)
- Murphy v. Savannah, 282 So.3d 1034 (La. 2019) (summary judgment standards and de novo review)
- Stolzle v. Safety & Systems Assur. Consultants, Inc., 819 So.2d 287 (La. 2002) (trial court has broad discretion over discovery matters)