Capital Color Printing, Inc. v. Ahern

• Decision Date: 25 March 2008
• Docket Number: No. A07A1875.,A07A1875.
• Citation: 291 Ga.App. 101,661 S.E.2d 578
• Parties: CAPITAL COLOR PRINTING, INC. v. AHERN et al.
• Court: Georgia Court of Appeals

661 S.E.2d 578

291 Ga.App. 101

CAPITAL COLOR PRINTING, INC. v. AHERN et al.

No. A07A1875.

Court of Appeals of Georgia.

March 25, 2008.

Reconsideration Denied April 14, 2008.

Janis L. Rosser, Roswell, for appellant.

Pankey & Horlock, Larry A. Pankey, Deming, Parker, Hoffman, Green, Campbell & Daly, Frank F. Pape, Jr., Conaway & Strickler, Dylan E. Wilbanks, Atlanta, for appellees.

MILLER, Judge.

Capital Color Printing, Inc. ("CCP") brought this action against Quality Printing 4 Less, LLP and its successor in interest, Martin Michaels Printing, LLP (collectively "Quality Printing"), and its owners, Jason M. Ahern and Todd M. Heflin. The complaint sought payment due for printing services CCP performed for Quality Printing, and alleged that Ahern and Heflin were personally liable for this debt based upon a written guaranty. CCP now appeals the trial court's grant of summary judgment to Ahern and Heflin individually and its denial of CCP's motion for summary judgment as to Heflin. We reverse, finding that the guaranty at issue renders Heflin personally liable for the debts incurred by Quality Printing, and that a material question of fact exists as to whether Ahern clothed Heflin with apparent authority to sign his name on that guaranty.

On appeal from a grant of summary judgment, we conduct a de novo review of the evidence to determine if there exists a genuine issue of material fact and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, entitle the movant to judgment as a matter of law.

[Cit.] Wachovia Bank. v. Moody Bible Institute of Chicago, 283 Ga.App. 488, 489, 642 S.E.2d 118 (2007).

So viewed, the evidence shows that Quality Printing is a printing broker, meaning that it sells printing services to customers but subcontracts with third parties, such as CCP, to actually perform those services. In February 2004, Ahern, acting on behalf of Quality Printing, contacted CCP about performing printing work. Elaine Tennant, CCP's credit manager, explained to Ahern that he and Heflin would have to execute personal guaranties before CCP could perform work for Quality Printing.

On March 17, 2004, Quality Printing forwarded to CCP a one-page credit application, which contained the guaranty at issue (the "Guaranty"). On the front side of that application, a box captioned "CUSTOMER" appears at the top, and contains blanks labeled "Your Name" and "Company Name." The names "Todd M. Heflin and Jason Ahern" are written on the line next to "Your Name," and "Quality Printing 4 Less" is written on the line provided for "Company Name." Quality Printing's corporate address, telephone and fax numbers, and Federal Employer Identification Number are also listed in the "customer" box. Immediately below this box are several other questions relating to the "customer," and the responses indicate that Quality Printing is a partnership, owned by Ahern and Heflin. Toward the bottom of the front side of the application is the sentence, "The undersigned has read the terms and conditions of sale on the reverse side of this agreement and agrees to be bound thereby." Although immediately below that sentence is a blank line for the customer's signature, no signature appears thereon.

Just below the customer signature line is the statement: "The undersigned guarantees payment of any and all invoices for services rendered to customer including the payment of all interest and attorney's fees. Guarantor(s) has read the terms and conditions of sale on the reverse side of this agreement and agrees to be bound thereby." Immediately below that statement is a blank line for the insertion of the Guarantor's name and signature. On that line appear the printed names of Ahern and Heflin, as well as what appear to be the signatures of each.

The reverse side of the application lists the "Terms and Conditions" of the agreement, and contains 28 separate, numbered paragraphs. Paragraph 27 provides, in relevant part:

GUARANTOR(S): In consideration of and to induce [CCP] to extend credit to the Purchaser as indicated on the front of this credit application, the Guarantor(s) agrees to be ... jointly, severally, and directly liable to the Printer for the due performance of all such Obligations. The Guarantor(s) jointly and severally also agree to pay in addition thereto, all costs, expenses and reasonable attorney's fees at any time paid or incurred in endeavoring to collect said indebtedness, liabilities and obligations, or any part thereof, and in and about enforcing this instrument.

That page defines the term "Printer" as meaning CCP, but does not define the term "Purchaser."

Heflin moved for summary judgment as to CCP's claims against him individually, claiming that the Guaranty failed to specifically identify the principal debtor and was therefore unenforceable as a matter of law. Ahern filed a similar motion for summary judgment as to CCP's claims against him individually, and further asserted that the Guaranty was unenforceable against him because his purported signature thereon was a forgery. CCP filed cross-motions for summary judgment on its claims against Ahern and Heflin, arguing that the Guaranty satisfied the Statute of Frauds and was therefore enforceable. It also claimed that there existed a material question of fact on the issue of whether Ahern had authorized Heflin, either implicitly or explicitly, to sign the Guaranty on his behalf.

The trial court entered an order granting Ahern's and Heflin motions for summary judgment, and denying CCP's motions for summary judgment as to all defendants. CCP now appeals the trial court's grant of summary judgment to Ahern and Heflin and its denial of CCP's motion for summary judgment as to Heflin.

1. The Statute of Frauds requires that, to be enforceable, a promise to answer for another's debt "must be in writing and signed by the party to be charged therewith." OCGA § 13-5-30(2). "This requirement has been interpreted to mandate further that a guaranty identify the debt, the principal debtor, the promisor, and the promisee." (Citations omitted.) John Deere Co. v. Haralson, 278 Ga. 192, 193, 599 S.E.2d 164 (2004).

Here, the trial court found that the Guaranty failed to satisfy the Statute of Frauds because it "omitted the name" of the principal debtor. Ahern and Heflin assert that this finding must be affirmed because the Guaranty neither defined Quality Printing as the "principal debtor" nor contained an express statement that Ahern and Heflin were guaranteeing the debt of Quality Printing, specifically. Put another way, Ahern and Heflin claim that the Guaranty's use of the terms "customer" and "Purchaser" to identify the principal debtor fails to satisfy the Statute of Frauds, because it does not sufficiently identify Quality Printing, by name, as the customer or the Purchaser. We disagree.

The majority of cases relied on by Ahern and Heflin have found a guaranty unenforceable for failure to identify the principal debtor where the name of the principal debtor was omitted entirely from the guaranty — i.e., the principal debtor's name appeared nowhere in that document. See Industrial Mechanical v. Siemens Energy & Automation, 230 Ga.App. 1, 2-3, 495 S.E.2d 103 (1997) (alleged guaranty failed to identify any third-party whose debts the purported guarantor would be guaranteeing); Ellis v. Curtis-Toledo, Inc., 204 Ga.App. 704, 705(2), 420 S.E.2d 756 (1992) (noting that the guaranty agreement "left blank" the name of the principal debtor); Northside Bldg. Supply Co. v. Foures, 201 Ga.App. 259, 259-260, 411 S.E.2d 87 (1991) (same); Builder's Supply Corp. v. Taylor, 164 Ga.App. 127, 296 S.E.2d 417 (1982) (affirming a directed verdict in favor of defendants where "the name of the principal debtor to whom plaintiff extended credit was entirely omitted from the contract of guaranty") (punctuation omitted). None of these cases, however, require that a guaranty specifically denominate a party as the "principal debtor," and we decline to create such a requirement.

As the Supreme Court of Georgia has explained, the Statute of Frauds does not mandate "that [a written guaranty] must be of a certain type or form." John Deere Co. v. Haralson, supra, 278 Ga. at 194, 599 S.E.2d 164 (holding that a guarantor's signature is sufficient to identify him as such for the purpose of the Statute of Frauds, and that he need not be identified separately in the document as the "guarantor"). See also OCGA § 10-7-4 ("The form of the contract is immaterial, provided the fact of suretyship exists"). Rather, to satisfy the Statute of Frauds, the document must sufficiently identify the party whose debts are being guaranteed. See Roach v. C.L. Wigington Enterprises, 246 Ga.App. 36, 37, 539 S.E.2d 543 (2000). Here, that party was identified as the "customer" to whom CCP was extending credit. The question, therefore, is whether the credit application identifies that "customer" as Quality Printing.

Ahern and Heflin argue that the Guaranty is ambiguous because the term "customer" could refer to either Quality Printing or to Ahern and Heflin individually. We disagree.

As a threshold matter, we note that any ambiguity as to whom the term "customer" refers is resolved by the admissions of Ahern, Heflin, and Quality Printing, that Quality Printing was the customer to whom CCP was extending credit, and therefore the party whose debts Ahern and Heflin were guaranteeing.¹ The trial court apparently refused to consider these admissions, finding that any such parol evidence was barred by the Statute of Frauds. This view, however, fails to recognize that the Statute of Frauds prohibits only the admission of parol evidence that would "add to, take from, or vary a written contract." OCGA § 13-2-2(1); see also OCGA § 24-6-1. Thus, if the Guaranty in fact failed to identify the principal debtor, either as the "customer" or otherwise, parol evidence would be inadmissible to supply that identification. See...