BEACH COMMUNITY BANK v. EDWARD A. LABRY, III, ET AL. (Tenn. Ct. App. June 15, 2012)
This case involves personal guaranties on a loan to purchase real estate. The Appellants entered into a partnership for the purpose of buying and selling real estate. The partnership obtained a loan in the amount of $2,611,000.00 to purchase real property located in Florida. The Appellants each signed a personal guaranty on the loan in favor of the Appellee bank. By the express terms of the guaranties, the Appellants guaranteed “up to a principle amount of $795,600.00.”
The partnership defaulted on the loan and the bank sued to enforce the guaranties. The Appellants answered that the guaranties were joint and several and that, because they were only 30% owners of the partnership, they could only be liable for 30% of the amount of the defaulted loan. In addition, the Appellants argued that the bank breached the covenant of good faith in failing to foreclose on the subject property.
The trial court found that, under Florida law, the guaranties were not ambiguous, but were separate guaranties holding each Appellant separately liable for $795,600.00. The trial court also awarded interest on the entire debt.
We affirm the trial court’s determination that the guaranties unambiguously require each Appellant to be separately liable for $795,600.00, but hold that the term regarding interest is ambiguous. Accordingly, we reverse the grant of summary judgment on this issue and remand to the trial court for the consideration of parole evidence regarding the amount of interest and fees chargeable to the Appellants. Affirmed in part, reversed in part and remanded.
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