Tenet Healthsystem TGH, Inc. v. Silver

oversight judicial concluding that P.3d 786 correct inadequacy -willresult ground gross INC., TGH, an HEALTHSYSTEM TENET non-judicial being paid at higher prices Healthsys- corporation; Tenet Arizona ¶ may It be accurate Op. 23. foreclosures. WRF, Inc., corporation, an Arizona tem today’s protect decision will to conclude that Plaintiffs/Appellants, affecting rights of lend- debtors without “throwing into disorder and trustees or ers Silver, Margot N. Richard A. SILVER procedures” of trustee’s the well-established wife; Orthopaedic Tucson husband Op. 37. sales. P.C., Surgery, Arizona and Fracture hand, Arizona amicus 53 On the Defendants/Appellees. corporation, (the Association), Association, Inc. Trustee 2001-0172. No. CA-CV asserting imposing a may be correct to determine fairness burden on trustees Appeals Arizona. Court far-reaching economic conse- bids will have Aug. sales, chilling quences, will have a effect reluctant and will make third bidders knowing can be set participate, a sale The Association

aside at some later date. arguing that the ab- may correct bidding sales competitive

sence of will reduce deficiency

prices and result more

ments, It which will turn harm debtors. today’s holding will make be trae

property purchased at trustee’s sales much

less marketable. pretend I to know which do arguments carry day. Pre-

these should

sumably, types are the of concerns that these legislature took into consideration Any fur- adopting the Act.

balanced before balancing competing interests

ther of these legislature. undertaken

should be

E. reasons, respect- foregoing 55 For

fully dissent. extinguished

trustee’s sale the Silvers’ liabili- ty by denying and erred property for a writ of attachment on by awarding Silvers owned and them attor- ney’s fees. We reverse.

Background ¶ 2 We view the facts of this case Tenet, light party op- most favorable to posing summary judgment. Nestle Ice Fuller, Cream Co. v. (App.1996). Tenet owned former Tuc- Hospital

son General in December agreed to sell it to Tucson Clinical Care (TCC). transaction, part As promissory part executed a note million purchase price, sixty days due in by hospital. secured deed of trust on time, guaranteed At the same obligation million of TCC’s Tenet $1.5 agree- under the note and several other guaranty agreement provided, ments. The in part: guarantee[

2. [The Silvers] ] timely perform does not or [TCC] [the due, ... in full when note] [the] Silverfs] shall, [Tenet], upon by demand forthwith note]____[The satisfy liabili- [the Silvers] Roca, LLP, Charles, by Lewis & Rob Pa- Agreement under this shall continue Norris, Tucson, Page, tricia K. Kristin M. until and until One Mil- plaintiffs/appellants. ... lion Dollars or more has made outstanding principal balance Rosen, by Law Offices of Dennis A. Dennis Agreement the Note. This Rosen, Tucson, Gayle Reay, A. D. for defen- punctual performance pay- due and dants/appellees. merely guarantee ment and is not collection. OPINION ESPINOSA, Judge. hereby: Chief [The Silvers] (a) appeal may, 1 This arises from an action for without ] [Tenet] Consentí breach of a executed defendants affecting enforceability or effectiveness Orthopaedic Surgery, Tucson and Fracture Agreement of this ... and without affect- (collec- P.C., Silvers], Margot and Richard and Silver ... ... at [the Silvers) tively, plaintiffs any favor of time ... and without notice or demand TGH, Inc., HealthSystem and Tenet Health- Tenet). WRF, System (collectively, Inc. (i) delay any Waive or the exercise granted

trial motion for rights [TCC] of its or remedies partial summary judgment in Tenet’s action entity; any person or other or and entered to enforce the 54(b), Ariz.R.Civ.P., pursuant to Rule (iv) [TCC], A.R.S., appeal, Apply payments Pt. 2. On Tenet contends [Silvers], entity erroneously person or the trial court found that Tenet’s Obligations; and purchase property credit of the secured at a to the Guaranteed (b) ruling sum- with vented it from Waive[ ] all notices whatsoever mary judgment motions. See 11 U.S.C. respect Agreement.... to this 362(a). stay February was lifted liability of [the Silvers] 4. The proceeded with its deed of and Tenet absolute, Agreement unconditional sale, purchased the at which Tenet trust irrevocable, regard without to the lia- hospital its credit bid of million. bility guarantor[] and shall hospital for that amount. Tenet later sold by any not in manner be affected reason of result, supplemented their As a [Tenet], by any action taken or not taken summary judgment, con- cross-motion for or inaction is herein consent- which action tending “obligation been sat- ha[d] that their to, by partial agreed ed and nor or agreed The trial court and entered isfied.” unenforceability invalidity complete or partial summary judgment in their favor. any surety agree- other or appeal by Tenet followed. This rights ... [Tenet’s] ment. All of and reme- dies shall be cumulative.... of Review Standard summary judg appeal On from may bring prosecute 7. [Tenet] ment, we review de novo whether the trial separate against [the action or actions Sil- correctly applied Hahn v. the law. [TCC], any whether or not other vers] County, Pima 200 Ariz. 24 P.3d 614 any joined guarantor, person or other is (App.2001). statutory interpre Contract separate such action or a action or subject questions are of law tation issues [TCC], any brought against actions are our de novo review. Bothell v. Two Point guarantor, person or for Inc., Acres, (App. 192 Ariz. 965 P.2d 47 any part all [note].... or of the 1998) (interpretation provision); of release (Underlining original.) & Indem. v. Federal Accident Hartford 3 TCC failed to make the first Co., (App. Ins. 172 Ariz. 834 P.2d 827 million, payment January due 1992)(statutory interpretation). January payment On Tenet demanded from TCC and notified the Silvers of TCC’s Guaranty The Silvers’ later, days default. Ten Tenet demanded whether, 6 We first address as the Sil- payment February, from the Silvers. In be- argued implicitly vers and the trial court made, payment cause no had been Tenet found, proceeds from the Tenet received against this suit filed TCC on the note and hospital extinguished sale of the against guarantors, the Silvers and other argues guaranty. Tenet guaranteed who had mil- an additional $3.5 guaranty agree- under the terms of obligation, guaranties.1 lion of TCC’s ment, partial could can- September, par- Tenet filed a motion for liability only timely cel the Silvers’ Silvers, tial voluntarily made. The Silvers counter that arguing that their was fixed any partial principal payment in excess of $1 guaranty. The Silvers filed a cross-motion million, including involuntary summary judgment, arguing their obli- foreclosure, extinguishes trustee’s sale gation extinguished had because recently given had notice of a trustee’s sale hospital property, of the the value of which ¶ 7 The nature and extent of a discharge exceeded the Silvers’ limit of $1 guarantor’s liability depends upon the terms million. guaranty contract. Nat’l Provident Sbrocca, October, petition in 180 Ariz. 4 In TCC filed a the Assurance Co. any question Chapter (App.1994). P.2d 152 As with United States District Court under Bankruptcy interpretation, goal to ef 11 of the Code. of contract our United States intent, stay parties’ giving effect to The trial court ruled that the automatic fectuate the Id.; entirety. resulting filing petition pre- the contract in its see from the appeal. guarantors are to this 1. Neither TCC nor the other loan Co., respec- on their Taylor v. State Farm Mut. Auto. Ins. (1993). And, guaranties giving notice of a tive Ariz. P.2d 1134 property until the trustee’s sale of the although generally construe a sold, hospital and the sale occurred guarantor’s liability, give must limit a principal payment made on the had been unambiguous terms. effect to its clear and then, ap- question, what effect note. The Roofing Supply & Consolidated plication post-default should Grimm, (App. Ariz. 682 P.2d 457 liability, which in turn have on the Silvers’ 1984). party Neither contends the depends discernable intent ambiguous; they merely suggest alternate executing Taylor. Farm interpretations. See Millar v. State Co., Fire & Cos. Contrary guaranty’s express (a contractual term “is provision that had induced Tenet merely ambiguous ... because one hospital by assuring TCC’s to sell the to TCC amount, assigns meaning to it in accor up discharge a different “performance” interest”); suggests dance with his or her owm see the Silvers’ Taylor. Tenet to collect on intended to allow only if guaranty it could not Silvers’ ¶ Preliminarily, disagree with of the recover at least the amount presents case an issue the Silvers that this discharge through limit a trustee’s sale or 33-814(C). § that can be resolved A.R.S. effect, proceedings. the Sil- foreclosure “If ... a provides part: That statute contend that the intended vers held, liability person of a trustee’s sale is secondary, perhaps agreement their be a and deficiency who is not a trustor for the tertiary, guaranty of a collection of pursuant to subsection A of this determined underlying obligation. million of the first $1 deficiency any judgment for the section and express language of But this contravenes the against person be reduced in accor shall guaranty: Agreement is a “This A As dance with subsection of this section.” punctual performance due and of subsection, deficiency anticipated by merely guarantee a payment [sic] and is not principal debtor “shall added.) (Emphasis As other of collection.” equal of the be for an amount sum declares, guaranty in the the Sil- beneficiary of the total amount owed the “absolute, un- agreed vers was sale, by the court date of the as determined irrevocable,” language indica- conditional price less ... the sale at the trustee’s sale.” collection, guaranty but a tive not of a of 33-814(A). Although agree § Manage- AMA guaranty payment. of requires § reduction of Silvers that 33-814 Strasburger, Corp. v. 309 S.C. due, does principal amount the statute (a S.E.2d prop price a not address whether the sale payment “is an absolute or unconditional necessarily erty sale extin at a trustee’s pay particular if it is not promise to a debt guishes guarantor’s like that of the a due); paid by debtor” at the time it is under the here. Center, v. Indoor RV CIT Fin. Servs. Herb’s guaranty clearly recites that the 9 The Inc., (App. 795 P.2d 118 Idaho an induce- “agreed 1990) (“An to execute” “as prom- unconditional Agree- ment to to execute the Sale [Tenet] guarantor the debt or ise contem- ment and to close the transactions obligation upon default without perform the Agreement.” plated by the Sale Under party to first exhaust requiring the secured would be [principal obligor].”); liable against its remedies (Third) payment Suretyship Million Dollars million “until One and Guar- Restatement 15(b) (1995) (“In the outstand- anty § ... or more has been made on emt. d absence Note,” indicating the con- circumstance balance desig- obligation’s express acknowledged trary as the expressly [such collection], the sec- performance.” As a punctual “due and nation as one of earlier, obligation agreement [the simultaneously ondary ac- is the filed noted severally jointly and liable promissory guarantor] note to be against tions breach]____”). agreement, payment from other source obligor’s A [principal for the hand, collection, on the other them The Silvers guaranty of would not affect guarantor to collect from a permits authority proposition a creditor for the cite obligor is insolvent or if the complete its Trust- Tenet decided “[o]nce underlying pay the obli- cannot otherwise Sale, obtaining a ee’s 15(b). gation. Restatement Silver, Guaranty provisions of the In- longer applicable.” Agreement were no with Tenet that the Silvers’ We terms, together, deed, guaranty’s read guaranty of interpretation would vitiate the only nonapplicable provision provision thereby render the payment reflect that the substantially meaningless, if discharge following was the TCC’s default illusory. interpretation conflicts Such an the record shows provision. Because most fundamental rules of with some of our million on the loan before TCC defaulted interpretation. Egar, contract See Ash obligation paid, had underlying (1975) (“A 72, 76, Ariz.App. 541 P.2d guaranty at- under the will, possible, be construed written contract qualification when Tenet de- tached without Kirkeby-Natus parts.”); give so as to effect to all its from the Silvers. See manded Kramlich, Ariz.App. rp. Co Ass’n v. Bank America Nat’l Trust & Sav. (1970) (“It true Ill.App.3d 239 Ill.Dec. gives effect to all that a construction which (1999). adopt will not 714 N.E.2d 20 We portions preferred to an of contract to be un- different interpretation which leaves one or some clearly agree- parties made such less effect.”). parts without Their Provident Nat’l Assurance Co. ment. guaranty’s language that the also vitiates the ¶ promised punctual perfor Although have no Arizona “due and 14 found obligation jurisdictions directly point, mance” of their because it would cases on liability contingent on make their guaranties containing that have considered despite subsequent actions the fact that the to the one at issue similar already triggered was Silvers’ guarantor that the remains context have held express agreement. terms of the despite the of trustee’s sale bound proceeds. The most recent or foreclosure ¶ The makes clear There, holding the de- case so is Schulson. contemplating it executed TCC’s guaranteed a million loan fendants inability potential prin- to make scheduled its Bank of America had made to the defen- also, guaran- cipal payments but because the partnership. guaranties The dants’ limited obligations covered several TCC’s note, provided that each defendant “unconditional- money purchase addition to the payment ly guaranteed] prompt the full and possibility might gener- that a trustee’s sale obligations, at an fully repay when due” of the debtor’s ate insufficient funds TCC’s million, obligation. guar- but “re- Under section seven amount not to exceed $3 anty, expressly acknowledged equal an amount to 36% of duced that Tenet’s recourse was not limited to an respect principal payments made with to the guarantors. or the other action 714 N.E.2d Liabilities.” Id. 239 Ill.Dec. Moreover, agreed in section four defaulted, After the debtor of Tenet’s that their was guarantor notice of the bank sent each possible together, Taken several remedies. payment un- and demanded debtor’s default the terms of the show that guaranties, then filed a lawsuit der the intended they pay. against them when refused upon attach TCC’s default. would voluntary bankruptcy petition, debtor filed eventually in the sale of its which resulted contrary argument to the Silvers’ In counter- for about million. collateral ignores plain claims, sought declarations well, including the covenants that as by application liability was reduced “any that their action taken or not taken” consented op- proceeds. The bank of the collateral by Tenet and under section three of modified, 295 S.C. (App.1987), and moved for sum- posed the counterclaims aff'd (1988); Ridge Fin. trial court denied. Preston mary judgment, which the 368 S.E.2d 908 (Tex. Corp. Tyler, v. Servs. S.W.2d Appellate of Illinois re- 15 The Court LaBonte, Ins. App.1990); Crown Life issue, finding versed the (1983); 111 Wis.2d 330 N.W.2d cf. parties’ in- guaranties that the reflected the Michalenoick, 138 N.H. BankEast [wejre guarantors’ “obligations tent that the (1994) (foreclosure pro sale A.2d default.” Id. 239 triggered upon the debtor’s applied extinguish ceeds first reaching N.E.2d at 27. In Ill.Dec. “ guarantee shall be provided: ‘This which decision, recognized, do the court as we its any principal pay- reduced to the extent here, guarantors’ ”). Obligations.’ down on the in- nullify specific guaranty provisions, guarantors’ promise provide cluding the sum, recover the Tenet’s actions to “ ” payment’ upon the debt- prompt ‘full and be- did not affect debt Id. 239 Ill.Dec. 714 N.E.2d or’s default. they had executed a of “due cause that the at 25. The court also found merely a punctual” payment and “not “ ” and ties’ of the terms ‘absolute’ use LaBonte. guarantee of collection.” See [sic] “ ” comparable to a ‘unconditional’ made complied with its The record shows 462, 714 payment, id. 239 Ill.Dec. initially obligation to demand contractual is not N.E.2d at under which a creditor upon its default. Once payment from TCC the debtor or on the required to collect from and demanded Tenet had done so enforcing collateral before Silvers, guaranty obligation from recognize, Although Schulson; as the dissent Their fixed. LaBonte. borrowing relation suggests, ongoing that an subsequent perform promptly and refusal to ship the debtor probably existed between not extin- delay this action do caused we believe the dis and creditor accordingly guish reverse We aspect. unduly emphasizes that factual sent summary judgment in favor of grant of court made It is notable Schulson remand this matter the Silvers and a case on between that case and distinction partial enter trial court with directions to relied, Savings Loan Telegraph & which it judgment in favor Tenet.2 Co., 67 Guaranty Bank & Trust Ass’n v. N.E.2d 97 Ill.App.3d 24 Ill.Dec. 385 Writ of Attachment (1978), the in which there is no indication guaranty, Tenet Relying 19 ongoing and creditor had an borrow debtor Septem of attachment applied for a writ ing relationship. The court never Schulson property. After against the Silvers’ ber 2000 Savings Loan Telegraph & theless followed declined to issue the hearing, the trial court that, holding guaranties the because writ, underlying finding obli that TCC’s parties the had intended issue showed “fully The court later gation was secured.” only voluntary payments could release the attorney’s fees. Tenet awarded the Silvers proceeds guarantors, collateral were are erroneous. both orders contends purposes of re “principal payments” for the N.E.2d at 26. 239 Ill.Dec. lease. ¶20 of at- A issue writs trial if the debt in a contract action the same tachment courts have reached 17 Other personal real or fully secured “is not agreements similar to the ones conclusion on 12-1521(1). Although § property.” A.R.S. Telegraph Savings & at issue unsecured, See, guaranty was Loan, the e.g., MacCulley v. Fi- Silvers’ and here. orders uphold the trial court’s ask us to Savings Loan Ass’n Oca- delity Federal & securing the deed of trust la, Tenet’s (Fla.App.1976); TMG because 335 So.2d Life generated have suffi- Ashner, principal debt would Kan.App.2d Ins. Co. v. But guaranty. the the (1995); funds to secure Trust cient Bank & P.2d 1145 Southern guaranty: principle of a ignore a basic 410 Silvers Harley, 292 356 S.E.2d S.C. course, may may they actually pay, amount maximum amount of 2. We that while the note breach, guaranty. of the the not be the full amount fixed Silvers' the But, princi- analysis. its I agreement separate important to because it is an from the Grocers, intent pal of fact exists on the Howard v. Associated conclude an issue debt. (1979); agreement, to parties 601 P.2d of the the distinc- Ariz. Provident Moreover, important here. Nat’l tion is Assurance again purpose ignore and ¶24 contracts, goal As with our that, guaranty, guarantors, guaranty is to construing a determine subject ability would not to Tenet’s guaranty at the intent of the time the through losses sale of recover its a trustee’s Taylor v. Mut. ivas executed. State Farm light forego- foreclosure. of this and the Co., 148, 153, P.2d 175 Ariz. Auto. Ins. discussion, the trial court both erred (1993); see also Nat’l Provident denying application of at- Tenet’s for a writ Sbrocca, Assurance Co. in granting attor- tachment rules (applying 885 P.2d Accordingly, ney’s those or- fees. vacate guaranty); Re- of contract Any simply rewrite ders. result would (Second) § of Contracts 202 cmt. b statement parties’ abrogate Tenet’s (1981) (“In interpreting con- the words and rights guaranty. contract, duct of to a a court guaranty put position they 21 Pursuant to the itself in the occu- terms of the seeks to made.”) 12-341.01, § grant pied If at the time contract was A.R.S. attorney’s upon reasonably request appeal its fees on 21, Ariz.R.Civ.App.P., compliance susceptible interpretation, with Rule we can 17B construe as a matter law. A.R.S. Taylor, 175 Ariz. at P.2d at But, are DRUKE, the terms of a Presiding Judge, E. when WILLIAM susceptible in- reasonably to more than one concurring. terpretation, parol evidence is admissible HOWARD, Judge, dissenting. intent, order true to determine agree completely majori- 22 I with the and the of that determination intent ty’s 158-59, analysis question A.R.S. 33-814 and its of fact. See id. at reasoning disposition concerning at 1144-45. respectfully writ of attachment. But I dis- argue according majority’s sent from conclusion the terms of the guaranty precludes applied outstanding ceeds that were collateral balance on the note also to the limita- submit that the tion of their reasonably susceptible to both inter- sep- releases the from in two pretations accordingly, summary that (1) arate circumstances: when the Silvers

judgment have should been denied. paid million of have the “Guaranteed $1.5 (2) Preliminarily, disagree Obligations”; “payment I the ma- or with when of One jority’s viewing light the in most ... or made evidence the Million Dollars more has been Tenet, opposing outstanding principal party favorable to as the the balance of judgment. appropri- Although summary cap While that the is Note.” million contains summary reviewing grant language requiring payments by the specifically ate of Silvers, satisfy inappropriate obligation, ment the the the the to is Silvers to $1 determining require- grant whether million limitation contains no similar instance, require to Tenet. In the not million that ment. It does the $1 light by any partic- be viewed in most to be made facts should the reduction Silvers, any manner, opposing person, particular the or at favorable to the ular request summary judgment. any particular time. And has that Arizona law Fuller, recognized involuntary payment an Nestle Ice Cream Co. that payment. Be- Ice (App.1996). 924 P.2d still be considered Nestle Co., 523-24, majority Ariz. at cause the construes the Cream law, Accordingly, the as a matter of the is not the difference 1042-43. susceptible guaranty provision does the stat- guaranty reasonably to the Sil- 28 Nor interpretation. vers’ affected the Silvers’ is not that by by or Tenet “any action taken not taken” Furthermore, contrary to ar- Tenet’s interpretation unreason- render the Silvers’ interpretation not gument, the does lan- phrase able. That the modified any provision guaranty mean- render herein guage, action or inaction is “which ingless or ineffective. The entire term of ninety agreed less to.” In the TCC’s million note was than consented $7 days. guaranty contains refer- agreed several that could be sued code, bankruptcy ences to the and the Ten- to the collateral and that without resort clearly might contemplated that TCC default desired, simultaneously could, et if it collect on the note. At the time the was against guarantors. collateral the the legal signed, right Tenet received the to sue the But does not state that the or the Silvers without resort collateral have to agreed that Tenet did not primary obligor, right This could the TCC. against apply proceeds of the that collection if very to Tenet filed a beneficial fact, the limitation. In that is petition bankruptcy and Tenet was unable to very interpretation involved issue pursue the collateral TCC. The Silvers’ —that limitation if million majority that I with prior ceeds are received susceptible to reasonably provisions them —does not eviscerate these interpretation. disagree with But Tenet’s right. or diminish this valuable Further- implicit majority’s conclusion that more, interpretation, agree- this inter- is the reasonable payment, majority pretation. The relies on several ty of collection. support conclusion. cases to its out-of-state claims, however, the se- 27 Tenet Trust & Sav- Bank America National quence of events here render ings Ill.App.3d Ass’n v. prompt payment provisions nugatory and (1999), 239 Ill.Dec. 714 N.E.2d guaranty merely into a turn the guarantors’ liabil- guaranty provided that the sequence collection. Tenet controlled ity by thirty-six percent of reduced filing guarantors causes of action respect made “principal payments with No TCC and the deed trust sale. and/or Liabilities, to the extent that but guaranty required Tenet provision payments such amount of guarantors give sue all and TCC notice subsequently reborrowed [we]re not simultaneously, the deed as it of trust sale pay- This focuses on Debtor.” entirely why chose to do. It is not clear made, out- not on reduction of the ments proceed against Tenet was the' unable And, standing principal based balance. bankruptcy was under while TCC language, the court have reason- could sequence protection. But of events ably language contem- determined receiving payments resulted relationship plated ongoing, prebreach benefit, inured to Tenet created “principal at the time the the debtor problem suffer conse- the and must Presumably, payments” made. the were subsequent quences. Although these events reborrowing sums would not borrower application affect the the breaching agreement. There is no after the it from a do not transform guaranty in case. language in the such guaranty of collection. See into a presents stronger case thus a Schulson 153, Taylor, 175 Ariz. at 854 P.2d at prede- interpreting agreement require to (courts the parties’ intent at strive to effectuate execution).3 voluntary payment. fault time of contract’s similarly language the Additionally, position the trial under the the Silvers’ in original guaran- change that not obtain the Tenet could nature of cannot might eventually recover because it ty- them simply erroneous its debt from the collateral guaranty MacCulley 30 The in up specific simply v. Fideli a liable sum. The court Ocala, Savings applied proceeds Federal the collateral & Loan Ass’n under- debt, 327, lying determined that an amount less (Fla.Dist.Ct.App.1976), 335 So.2d re $775,000 remained, than and ordered quired reduction debt to a certain level in Harley that amount. Id. at 411. guarantor, in order to release the rather than guaranty. has no to the Silvers’ amount, a reduction of a certain as here. Nevertheless, But, is similar. In33 Crown Insurance v. La- Life here, unlike the in Bonte, 111 Wis.2d 330 N.W.2d MacCulley guarantor stated that the was a (1983), provided the limitation that it would “party” underlying obligation, to the $45,000 which remain until effective the first support finding continuing principal fully performed liabili had “been and ob- added.) ty. Furthermore, majority (Emphasis Id. in that served the Debtor.” specifically phrase, The court relied on the explain case did not the basis for its conclu Debtor,” “by construing in the limitation. guaranty required sion that the the debtor to Id. at 205. The limitation here contains no reduce the debt specified below the level Likewise, language. such trigger pro default could the release Ridge Preston Corp. Financial Services deficiency vision. See id. at 330. This Tyler, (Tex.Ct.App. 796 S.W.2d majority’s reasoning in MacCulley was the 1990), specific language contained from which subject of a dissent in that case. Id. at 331-32 the court concluded that the debtor C.J., (Boyer, dissenting). To the extent that guaranteed could “reduce the indebtedness.” MacCulley position, bolsters Tenet’s I dis Again, we have no similar here. majority with it as I do with the here. majority 34 The states that if the Silvers’ guaranty in 31 The TMG Insurance Life liability triggered principal was not when the Ashner, 21 Kan.App.2d defaulted, recourse would have (1995), provided guaran- sale, apply to wait until the trustee’s liability tor’s equal was “limited to an amount debt, proceeds and then to one-third of the amount of the [l]oan from sue the Silvers. outstanding.” time to time The court held fact, require does suggests not that the entire amount of the collateral opposite. As the Silvers conceded at oral ceeds did extinguish argument, they breached the contract fail- liability. tor’s Id. at 1155. But it also stated pay on demand. That does not neces- guarantor’s was not fixed at sarily mean that the amount of their the time of guarantor default and that the was forever fixed at that time. See Ashner. only remained liable for one-third of the debt The best course of action under the Silvers’ receipt after proceeds. Id. interpretation would have been for Tenet to at 1155-56. supports This fact the Silvers’ obtain the Silvers first for guaranty. finally, And guaranty, thereby fixing the breach of the court Ashner also noted that each case the amount of the Silvers’ “ is fact-intensive and that other cases ‘are then could conduct the trustee’s sale. At ” generally not controlling’ interpreting point, of the trustee’s sale quoting Id. at 38 Am.Jur.2d applied could not have been to the million Guaranty p. supports 1071. Ashner requirement. reduction position far more than Tenet’s. majority also mentions that ¶32 In Southern Bank & Trust Co. pay Silvers failed to on demand when re- Harley, 292 S.C. 356 S.E.2d 410 quired, thereby depriving Tenet of due and (App.1987), contained the fol- prompt payment contemplated. The Sil- lowing language “provided, of limitation: vers did breach the however, undersigned demand. But that does not fix the amount of hereunder shall not exceed at one time a If, example, for the collateral $775,000.00____” total of ... The limitation proceeds paid the entire debt after the de- princi- made no reference to reduction of the fault, dispute no one would would balance, does; pal as the Silvers’ limitation then have been released from their rather, provided Thus, that the were promise their breach 226 393, Partners, Ariz. P.2d issue 184 909

promptly does not on the bear of contract is parties (App.1995) (interpretation whether the intended 395 fact). De- provision. question of law and proceeds to to the release matter not ciding solely ¶ here is reason- 36 Because construing the difficulty have no would ably susceptible interpretations, both uphold- guaranty in favor of the Silvers and question parties’ true intent a material is ing the trial court. See Consolidated Roof- parol may using evi- fact resolved 452, Grimm, 140 Ariz. Supply & 159, P.2d Taylor, 175 Ariz. at 854 dence. 457, 455, (guaranties (App.1984) P.2d 682 460 Summary only appropri- judgment is 1145. guarantor). to limit construed genu- is “no ate after a conclusion that there belatedly the words “volun- Tenet cannot add and ... ine issue as to material fact “pay- tary pre-default” the word judgment as moving is entitled to a a But, in the because ment” limitation. 56(c)(1), matter of law.” Ariz.R.Civ.P. 16 ruling appeal arises from the trial court’s A.R.S., And, considering granting Pt. 2. summary judgment, it is for cross-motions Tenet,, judgment summary we should con- necessary not to reach that conclusion. favorably the facts most Silvers. strue Accordingly, Ice See Nestle Cream Co. agreement reasonably sus- is 38 When “[ejven though summary for cross motions parties’ interpretations, a ceptible to both filed, grant judgment a court not a [are] granting into trial court should not be forced summary judgment remains unless there summary judgment without a for either side genuine issue as to material fact knowledge facts. This is complete parties judgment as is entitled to many years is agreement a case which law.” Mut. Ins. matter of Grain Dealers originally entered who old and James, 118, 315, 116, v. Ariz. unavailable. Sil- into are (1978). Likewise, that the do not pre- representatives are vers’ and summary facts make dispute the does not stan- sumably still Because our available. appropriate of such judgment in the absence novo, Hahn v. Pima of review de dard a conclusion. See Nelson v. Phoenix Resort 167, 4, 24 County, 200 Ariz. P.3d Corp., Ariz. P.2d reverse the (App.2001), this court should inappro- (App.1994) (“Summary judgment is further judgment, remand case for facts, undisputed, priate where the if even deny court to ceedings, and instruct the trial differ.”); allow minds to reasonable summary judgment. parties’ both motions for Revenue Dep’t ex rel. Arizona State Airlines, 437-38, Ariz. Cochise (if stipulation 601-02 for P.2d omits cross-motions deniable); fact, important see cross-motions 52 P.3d 795 States, F.2d also Stewart v. United D.C., BLANKENBAKER, dba E. Thomas Cir.1984) (“When (9th a material issue of Centers, an Arizona sole Medical Vax-D stipu- fact is not addressed a statement Plaintiff, proprietorship, Counterdefen facts, improper summary judgment lated dant-Appellant, Wright party.”); Alan et for either Charles al., Procedure Federal Practice and individual, Tommy JONOVICH, an (1998) (“[E]ven stipu- facts are at 400 some - Defendant, Counterclaimant lated, summary judgment be denied if must Appellee. genuine stipulation equivocal or if a dispute of material fact remains de- issue 1No. CA-CV-01-0379. Consequently, stipulation.”). spite Arizona, of Appeals Court summary judg- granting erred trial court 1, Department Division C. 56(c)(1). ment. See Ariz.R.Civ.P. Sept. pres- Based on failure evidence, any parol it is understandable ent trial court ruled on the motions Blackhawk

matter of law. See Scholten v.

Case Details

Case Name: Tenet Healthsystem TGH, Inc. v. Silver

Court Name: Court of Appeals of Arizona

Date Published: Aug 27, 2002

Citation: 52 P.3d 786

Docket Number: 2 CA-CV 2001-0172

Court Abbreviation: Ariz. Ct. App.