Playboy Enterprises, Inc. v. Sanchez-Campuzano, 030513 FED5, 11-41006

Docket Nº:11-41006
Opinion Judge:PER CURIAM:
Party Name:PLAYBOY ENTERPRISES, INCORPORATED, Plaintiff-Appellee, v. JAVIER SANCHEZ-CAMPUZANO, Individually and as agent of Grupo Siete S.A., Incorporated; SPORTS TIME, INCORPORATED; GROUP SEVEN COMMUNICATIONS, Defendants-Appellants.
Judge Panel:Before REAVLEY, PRADO, and OWEN, Circuit Judges.
Case Date:March 05, 2013
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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PLAYBOY ENTERPRISES, INCORPORATED, Plaintiff-Appellee,

v.

JAVIER SANCHEZ-CAMPUZANO, Individually and as agent of Grupo Siete S.A., Incorporated; SPORTS TIME, INCORPORATED; GROUP SEVEN COMMUNICATIONS, Defendants-Appellants.

No. 11-41006

United States Court of Appeals, Fifth Circuit

March 5, 2013

Appeal from the United States District Court for the Southern District of Texas USDC No. 7:01-CV-226

Before REAVLEY, PRADO, and OWEN, Circuit Judges.

PER CURIAM: [*]

This appeal involves the declaration of rights and enforcement of a guaranty agreement. Appellee, Playboy Enterprises Inc. (PEI), brought suit in district court to enforce a guaranty agreement against Appellants, Javier Sanchez-Campuzano (Sanchez), Sports Time, Inc., and Group Seven Communications. The district court granted summary judgment, holding that the agreement is enforceable and Sanchez is personally liable. We affirm.

I

PEI sought a declaration in the district court that Sanchez, Grupo Siete S.A., Grupo Siete S.A. de C.V., Grupo Siete Comunicaciones, S.A. de C.V., Paul Siegel, Sports Time, Inc, and Group Seven Communications were required to guaranty the performance of obligations under a License Agreement between PEI and Editorial Caballero, S.A. de C.V. (EC). The district court dismissed Grupo Siete S.A., Grupo Siete S.A. de C.V., Grupo Siete Comunicaciones, S.A. de C.V., and Paul Siegel. No one has appealed these dismissals. The only remaining Appellants are Sanchez, Sports Time, Inc., and Group Seven Communications.

PEI entered into a License Agreement with EC and Grupo Siete International, Inc. (GSI) to publish a Spanish language version of Playboy magazine in Mexico and to distribute it in Mexico and the United States. Sanchez is the owner and president of EC. Before entering into the License Agreement, PEI required a Guaranty Agreement from EC's parent company, Grupo Siete S.A., and GSI's parent company, Sports Time, Inc. Both parties obliged.

The Guaranty Agreement is in letter form, addressed to PEI, and states:

In order to induce you to enter into a License Agreement (a copy of which is annexed hereto) between yourselves as licensor and Editorial Caballero, S.A. ("Caballero") as licensee, for a Mexican language edition of PLAYBOY Magazine (the "Foreign Edition"), the undersigneds hereby guarantee, without any limitation of any kind, the performance of Caballero of all of the terms and conditions of said License Agreement and, therefore, undertake to be responsible to you, jointly and severally with Caballero for all liabilities of Caballero arising out of its obligations under or in connection with said License Agreement or by reason of any breach thereof; and This guarantee and agreement shall remain in full force and may be called upon by you without your being required to commence any proceedings of any nature against Caballero.

The letter was dated September 10, 1996 and was signed on November 7, 1996 by Sanchez as president of "Grupo Siete S.A., Inc." and by Siegel as chairman of "Sports Time, Inc."

In 2001, PEI sued Appellants to enforce the Guaranty Agreement and moved for partial summary judgment and declaratory relief. The district court abated the action pending resolution of an appeal in Texas state court concerning the rights and obligations of PEI, EC, and GSI under the License Agreement. After two trials, the state court action resulted in a final judgment in which the jury returned a verdict relieving PEI of liability and finding that EC had breached the License Agreement and had committed fraud against PEI.

After final judgment was entered in state court, the district court granted PEI's motion for partial summary judgment and declaratory relief, holding that the Guaranty Agreement is an absolute guaranty under which Sanchez, Sports Time, Inc., and/or Group Seven Communications are required to perform or ensure performance of EC and to jointly and severally indemnify PEI for all liabilities in connection with EC's breach of the License Agreement. Appellants appeal the district court's judgment on multiple grounds.

II

The district court construed the Guaranty Agreement as an absolute guaranty and held that Appellants were responsible for EC's liabilities to PEI arising under or in connection with EC's breach of the License Agreement. Appellants claim that summary judgment was improper because both the Guaranty Agreement and License Agreement are ambiguous in multiple ways. Appellants also rely on several contract defenses to claim that the underlying License Agreement is unenforceable, thus rendering the Guaranty Agreement a nullity.

A

The Guaranty Agreement references a license agreement and states that a copy of that agreement is attached to the Guaranty Agreement. However, nothing is attached to the original or to any authentic copy of the Guaranty Agreement. Appellants claim that this, along with conflicting dates within the Guaranty Agreement and the License Agreement relied upon by PEI, creates an ambiguity as to what document or iteration of the License Agreement was actually guaranteed.

Although the type-written dates are different on the agreements-the Guaranty Agreement is dated September 10, 1996, and the License Agreement is dated November 1, 1996-as noted by the district court, the uncontroverted evidence reveals that Sanchez signed the License Agreement on November 7, 1996 and that Sanchez and Siegel signed the Guaranty Agreement in one another's presence on the same date.

"The essential terms of a guaranty agreement are (1) the parties involved, (2) a manifestation of intent to guaranty the obligation, and (3) a description of the obligation being guaranteed."1 The description of the obligation does not have to include all of the terms of the underlying agreement; as long as the underlying agreement is identifiable, the guaranty is enforceable.2 Here, the Guaranty Agreement identifies the licensor and licensee to the underlying agreement, identifies the parties acting as guarantors, manifests an intent to guaranty the License Agreement, and describes the subject of the License Agreement. Additionally, throughout the litigation, the parties relied on the same License Agreement and offered no facts to suggest that there could be a different agreement fitting the same description. Thus, notwithstanding differing dates and the failure to attach the License Agreement, no ambiguity exists as to what agreement was being guaranteed.

B

Appellants also argue that the Guaranty Agreement is ambiguous because the License Agreement includes GSI, but the Guaranty Agreement only seeks to enforce the License Agreement against EC, leaving EC susceptible to liability for GSI's actions. Similarly, Appellants claim that because PEI argued in the state court trial that GSI breached the License Agreement, there is a fact issue as to whether the Guaranty Agreement has even been triggered by EC.

The district court correctly rejected both of these arguments. At no time has PEI attempted to enforce the Guaranty Agreement for anything other than EC's obligations and liabilities to PEI. Consequently, the district court's order was only directed at enforcement of the License Agreement against EC, and the district court held it need not address any alleged ambiguity concerning GSI. PEI has not mentioned the liabilities of GSI nor does the Guaranty Agreement require that GSI breach anything.

We also agree with the district court that the argument that the Guaranty Agreement has not been triggered is without merit. The agreement guarantees "the performance of Caballero [EC] of all of the terms and conditions of said License Agreement." Appellants admitted before the district court that EC breached the License Agreement. Thus, by Appellants' own admission, there is no question that...

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