Brewfab, LLC v. 3 Delta, Inc.Brewfab, LLC v. 3 Delta, Inc.
This matter comes before the Court upon consideration of Defendant George Russo‘s Motion for Summary Judgment (Doc. # 75) and Plaintiff BrewFab, LLC‘s Cross-Motion for Summary Judgment (Doc. # 76), filed August 5, 2021, and August 26, 2021, respectively. The parties have responded and replied to each Motion. (Doc. ## 81-82). For the reasons set forth below, BrewFab‘s Motion is granted, and Russo‘s Motion is denied.
I. Background
The parties each seek summary judgment exclusively on Count II of BrewFab‘s Amended Complaint -Russo‘s alleged breach of personal guaranty. (Doc. # 30; Doc. ## 75-76).
George Russo is the President of 3 Delta, Inc. (Doc. # 76-2 at 14). 3 Delta was formed to develop a water-based CBD
Turcotte worked with BrewFab at its St. Petersburg, Florida facility to build 3 Delta‘s machinery. (Doc. # 76-3 at ¶ 4). The parties agree that there was no formal contract in place with respect to the development of 3 Delta‘s machinery. (Doc. # 76-3 at ¶ 4; Doc. # 81-2 at ¶ 3). The parties instead proceeded under an oral agreement, wherein BrewFab would provide 3 Delta invoices for work performed that 3 Delta would pay in turn. (Doc. # 76-3 at ¶ 4). The first invoice was issued to 3 Delta in December 2018. (Id.).
The parties continued to collaborate and develop 3 Delta‘s machinery under the oral agreement until December
To resolve the issue, the parties held a conference call on January 30, 2020. (Doc. # 81-2 at ¶¶ 4-5). The call was attended by Russo, Zumpano, and BrewFab‘s president and co-owner, Rick Cureton. (Doc. # 81-1 at ¶ 4).
The parties provide conflicting reports of what was discussed on the call. Russo maintains that the purpose of the call was to address BrewFab‘s concerns of continuing work without a written agreement. (Id. at 5). On the other hand,
Following the conference call, Russo sent Rick Cureton the following text message:
As per our conversation on Jan 30th 2020 I george Russo from 3 Delta do promise to pay brew fab in full all outstanding bills as of this date and all agreed upon work done for 3 Delta future forward. I thank you for your patience.
(Doc. # 76-21). Relying on this text message, BrewFab carried on with shipping equipment and developing 3 Delta‘s machinery. (Doc. # 76-10 at 92:20-25; 93:1-9). Following BrewFab‘s persistence to collect on outstanding invoices, and after continuing to develop 3 Delta‘s machinery, 3 Delta instructed BrewFab to halt development on February 12, 2020. (Doc. # 76-3 at ¶ 14). By March 17, 2020, the machinery BrewFab helped fabricate for 3 Delta was in working order. (Doc. # 76-13 at 22:4-23:4).
On August 28, 2020, BrewFab filed the instant suit to recover their outstanding invoices issued to 3 Delta, which
II. Legal Standard
Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
An issue is genuine if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742 (11th Cir. 1996) (citing Hairston v. Gainesville Sun Publ‘g Co., 9 F.3d 913, 918 (11th Cir. 1993)). A fact is material if it may affect the outcome of the suit under the governing
If there is a conflict between the parties’ allegations or evidence, the non-moving party‘s evidence is presumed to be true and all reasonable inferences must be drawn in the non-moving party‘s favor. Shotz v. City of Plantation, 344 F.3d 1161, 1164 (11th Cir. 2003). If a reasonable fact finder evaluating the evidence could draw more than one inference from the facts, and if that inference introduces a genuine issue of material fact, the Court should not grant summary judgment. Samples ex rel. Samples v. City of Atlanta, 846 F.2d 1328, 1330 (11th Cir. 1988). But, if the non-movant‘s
Finally, the filing of cross-motions for summary judgment does not give rise to any presumption that no genuine issues of material fact exist. Rather, “[c]ross-motions must be considered separately, as each movant bears the burden of establishing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law.” Shaw Constructors v. ICF Kaiser Eng‘rs, Inc., 395 F.3d 533, 538-39 (5th Cir. 2004); see also United States v. Oakley, 744 F.2d 1553, 1555 (11th Cir. 1984) (“Cross-motions for summary judgment will not, in themselves, warrant the court in granting summary judgment unless one of the parties is entitled to judgment as a matter of law on facts that are not genuinely disputed[.]” (citation omitted)).
III. Analysis
A guaranty is a promise to pay the debt of another upon the default of the person primarily liable for payment or performance. Fort Plantation Invs., LLC v. Ironstone Bank, 85 So. 3d 1169, 1171 (Fla. 5th DCA 2012). In essence, a guaranty is a “collateral promise to answer for the debt or obligation
The parties dispute (1) whether the text is a personal guaranty, and (2) if so, whether that personal guaranty is enforceable against Russo. The Court addresses each dispute in turn.
A. Russo‘s Text Message is a Personal Guaranty
“Florida courts have consistently adhered to the general rule that an individual who executes a guarant[y] as an officer of a corporation by inserting his or her corporate title after their name on the document cannot defeat the purpose of the guarant[y] when, by its terms, the document
standing alone and without more, would be the classic example of a corporate officer signing in a representative capacity only. But here there is much more. The instrument to which the signature was affixed was a guarant[y] of the corporate indebtedness of Roy Energy Corporation. For a corporation to guarantee its own debt would add nothing to its existing obligation and would be meaningless.
423 So. 2d 496, 496-97 (Fla. 4th DCA 1982). Florida courts have instead declined to interpret agreements as personal guaranties where ambiguities arose from conflicting provisions of an agreement. See, e.g., ASD, 2010 WL 11596318, at *4-5 (declining to impose personal liability against a
Turning to the parties’ positions, Russo argues that he signed the text in his corporate capacity by signing his name “[G]eorge Russo from 3 Delta.” (Doc. # 75 at 8-9). Russo claims that
The absence of the critical terms “personal” or “guarant[y]” from the Text Message render it insufficient as a matter of law to constitute an enforceable personal guaranty. The Text Message likewise does not specifically state in clear and unambiguous language that Mr. Russo was acting in a personal capacity as opposed to a corporate representative capacity.
(Doc. # 81 at 3). Russo submits that there can be no personal guaranty as a matter of law absent this strict language. (Id.). BrewFab argues that Russo‘s signature as phrased creates a clear promise to finance 3 Delta‘s debts. (Doc. # 76 at 7-9). BrewFab further maintains that interpreting the text message as a corporate guaranty would result in an empty promise, as 3 Delta was already obligated to pay its outstanding invoices. (Id. at 9). Russo does not dispute that he authored and sent the text message. (Doc. # 75 at 3).
The operative language of the guaranty follows that Russo “do[es] promise to pay brew fab in full all outstanding
As such, the text message acknowledges that 3 Delta was already indebted to BrewFab for past invoices and that Russo would personally finance 3 Delta‘s past and future invoices for the company‘s benefit. See also Egyptian Nav. Co. v. Uiterwyk, No. 83-334 CIV-T-10, 1988 WL 70047, at *2 (M.D. Fla. Jan. 7, 1988) (“The wording of the document obligates Uiterwyk to personally pay a debt that Uiterwyk Corporation was already obligated to pay. Nothing in the document, including the signature, supports the conclusion that the document is anything other than a personal guaranty.“).
Additionally, if the Court were to follow Russo‘s reading of the text message, it would be interpreting the text message to permit 3 Delta to guarantee its existing
Although Susco‘s signature appears to be in his representative capacity only, that single signature, when considered with the language of paragraph nine, is sufficient to enforce the guaranty provision against him in his personal capacity. . . . To determine otherwise, that the individual was not personally obligated on the guaranty agreement, would render the guaranty agreement meaningless, as it does not make sense for the corporation to guarantee its own debt.
763 So. 2d at 510. See also Lab‘y Corp., 829 So. 2d at 314 (“The reason for the general rule is that ‘[t]o interpret the guaranty as being a corporate guaranty because the word president was added to [the] signature would result in the guaranty being meaningless and add nothing to the existing obligation of the corporation.‘“) (internal citations omitted); see also Cent. Nat. Bank of Miami v. Muskat Corp. of Am., Inc., 430 So. 2d 957, 958 (Fla. 3d DCA 1983) (collecting cases).
Interpreting Russo‘s guaranty as a corporate guaranty would create an “absurd result” that would render the guaranty null and void as the 3 Delta is already liable for its existing debts. Lab‘y Corp., 829 So. 2d at 314. When considered as a whole, the text message memorializes Russo‘s promise to
The Court finds that text message is a personal guaranty under Florida law, which Russo signed as an individual. The Court now turns to Russo‘s arguments that the personal guaranty is unenforceable against him for lack of consideration and non-compliance with Florida‘s statute of frauds. (Doc. # 75 at 5-6, 9-10).
B. The Guaranty Agreement is Supported by Consideration
Russo alternatively argues that the personal guaranty is unenforceable against him because BrewFab did not provide him consideration “in his personal capacity.” (Doc. # 75 at 9-10). In support, Russo highlights that no invoice was issued to him in his name and that BrewFab did not give him anything personally in exchange for the guaranty. (Doc. # 75 at 10). This argument fundamentally misconstrues Florida law regarding consideration.
Guaranty agreements require new consideration when they are executed after a principal obligation has been established. Lenbro Holding Inc. v. Falic, 503 F. App‘x 906, 908 (11th Cir. 2013). A promise, no matter how slight, can constitute consideration so long as a party agrees to do something they are not already bound to do. Ashby v. Ashby,
Here, Russo had no personal obligations to BrewFab before he sent the text message. Russo‘s promise to finance both 3 Delta‘s existing and future debts is certainly supported by consideration as he was under no prior obligation to pay for either. BrewFab‘s voluntary return to work and delivery of equipment unquestionably provided a benefit to 3 Delta. Florida law does not require that Russo personally receive consideration in exchange for his promise to bring 3 Delta‘s account up to date. LSQ, 879 F. Supp. 2d at 1330.
In light of Russo‘s promise to undertake 3 Delta‘s debts, BrewFab‘s continued labor, and the ultimate completion of the
C. Russo‘s Text Message is a Signed Writing That Satisfies Florida‘s Statute of Frauds
Finally, Russo argues that the personal guaranty is unenforceable against him as it fails to satisfy Florida‘s statute of frauds. (Doc. # 75 at 5). However, in raising the issue, Russo curiously argues that the text message he authored does not comply with the statute of frauds because BrewFab has not established the existence of a valid personal guaranty:
Here, [BrewFab] cannot even establish the existence of a valid contract with Mr. Russo that satisfies the Statute of Frauds. [BrewFab‘s] claim is not grounded upon any actual document or instrument entitled “Personal Guaranty” signed by Mr. Russo that was executed by Mr. Russo. Nor has [BrewFab] identified any such appropriated [sic] titled “Personal Guaranty” that was signed by Mr. Russo as an express guarantor in his personal capacity (as discussed further below). Indeed, the cursory, two-sentence Text Message that [BrewFab] relies upon entirely for its claim in Count II does not evidence any agreement or intent by Mr. Russo to personally guarantee the debts or financial obligations of 3 Delta. Glaringly missing from the Text Message is any language or reference to “personal guarantor” or “personally guarantee,” or any other language that plainly and unambiguously obligated Mr. Russo to personally guarantee the debts or financial obligations of 3 Delta.
Even had Russo developed his statute of frauds argument further, the Court is nonetheless persuaded that the text message qualifies as a signed writing creating an enforceable personal guaranty.
Florida‘s statute of frauds requires that a guaranty be memorialized in a signed writing by the party to be charged under the guaranty.
Florida‘s Electronic Signatures Act expressly permits that “[u]nless otherwise provided by law, an electronic signature may be used to sign a writing and shall have the same force and effect as a written signature.”
- A record or signature may not be denied legal effect or enforceability solely because the record or signature is in electronic form.
- A contract may not be denied legal effect or enforceability solely because an electronic record was used in the formation of the contract.
- If a provision of law requires a record to be in writing, an electronic record satisfies such provision.
- If a provision of law requires a signature, an electronic signature satisfies such provision.
- An electronic record or electronic signature is attributable to a person if the record or signature was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.
- The effect of an electronic record or electronic signature attributed to a person under paragraph (a) is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties’ agreement, if any, and otherwise as provided by law.
Other courts applying Florida law have found that signed emails are sufficient to comply with Florida‘s statute of frauds. See Bellinzoni, S.R.L v. Bell Italy Sol. Corp., No. 6:18-cv-1971-ACC-GJK, 2019 WL 5295121, at *3 (M.D. Fla. June 24, 2019) (finding that emails, a price sheet, and accompanying documents attached to the complaint were
Courts have also acknowledged that signed text messages can suffice as signed writings under the statute of frauds. See e.g., Taxinet Corp. v. Leon, No. 16-24266-CIV, 2020 WL 6882205, at *3-4 (S.D. Fla. Nov. 24, 2020) (discussing that certain text messages were insufficient to concretely establish a joint venture agreement that satisfied Florida‘s statute of frauds because they were not signed); Craig v. B. Riley FBR, Inc., No. 3:19-CV-0058-G, 2020 WL 6889018, at *11 n. 8 (N.D. Tex. Nov. 23, 2020) (“The court also notes that, although the text messages between Rosiak and Craig are a “writing,” the messages are not “signed” and do not contain all material terms of the alleged oral contract and, therefore, do not satisfy the Texas statute of frauds.“); Tayyib Bosque, Corp. v. Emily Realty, LLC, No. 17-CIV.-512(ER), 2019 WL 2502494, at *6 (S.D.N.Y. June 17, 2019) (“The Statute of Frauds requires Bosque to prove that LaFrieda
Here, the Court finds that Russo‘s text message is a signed writing that complies with Florida‘s statute of frauds. In enacting the UETA and the Electronic Signatures Act, the Florida Legislature has expressed its intent to treat electronic and traditional agreements equally under the law. “I [G]eorge Russo” expressly identifies Russo as the author, guarantor, and signatory of the promise memorialized in the text message. This typewritten phrase is a clear collection of letters and characters executed by Russo with an intent to authenticate the writing. See
Accordingly, it is hereby
ORDERED, ADJUDGED, and DECREED:
- Defendant George Russo‘s Motion for Summary Judgment (Doc. # 75) is DENIED.
- Plaintiff BrewFab, LLC‘s Cross-Motion for Summary Judgment (Doc. # 76) is GRANTED as set forth herein.
- As BrewFab, LLC‘s remaining claims against 3 Delta will proceed to trial, the Court will not enter judgment under Federal Rule of Civil Procedure 54(b) on the personal guaranty claim at this time.
DONE and ORDERED in Chambers in Tampa, Florida, this 14th day of January, 2022.
VIRGINIA M. HERNANDEZ COVINGTON
UNITED STATES DISTRICT JUDGE