Dynasty Corp. v. Alpha Resins Corp.

• Decision Date: 29 March 1991
• Citation: 577 So.2d 1278
• Parties: DYNASTY CORPORATION, et al. v. ALPHA RESINS CORPORATION. 89-771.
• Court: Alabama Supreme Court

Page 1278

577 So.2d 1278

DYNASTY CORPORATION, et al. v. ALPHA RESINS CORPORATION.

89-771.

Supreme Court of Alabama.

March 29, 1991.

G. Douglas Jones of Polson, Jones, Bowron & Robbins, Birmingham, for appellants.

Deborah S. Ashe and Conrad C. Pitts of Keller & Pitts, Florence, for appellee.

ALMON, Justice.

This is an appeal from a summary judgment entered in favor of the plaintiff, Alpha Resins Corporation ("Alpha"), and against the defendants, Dynasty Corporation ("Dynasty"), Alfred Wilhite, and Peggy Wilhite, in an action to recover a debt that was secured, in part, by personal guaranties signed by the Wilhites.

The Wilhites were officers and the majority stockholders of Dynasty, a manufacturer of floor tiles. From 1984 to 1988 Alpha was the principal supplier of the resins that Dynasty used in its manufacturing process. Dynasty began to have problems paying for its resin shipments in 1985 and was soon substantially in debt to Alpha. In order to ensure a continued supply of resins, the Wilhites signed personal guaranties on August 20, 1985, and July 28, 1986.

Although those guaranties stated that they were signed by the Wilhites in consideration of a potential extension of credit by Alpha to Dynasty and the extension of time for payments toward "existing indebtedness," they expressly limited the Wilhites' personal liability under the guaranties to debts incurred as a result of resin shipments made after August 20, 1985, but prior to May 16, 1987. The first guaranty stated, in part:

"[T]he undersigned guarantors hereby ... guarantee prompt payment of any liability of [Dynasty] to you on account of merchandise and/or equipment or other personal property hereinafter sold or leased or delivered by you to [Dynasty] after [August 20, 1985], but prior to July 25, 1986....

"....

"This is an absolute guaranty, intended to cover any and all sales and/or lease transactions entered into after [August 20, 1985] and prior to July 25, 1986, regardless of form."

The second guaranty used the same language, except that the Wilhites' personal liability was limited to purchases made after July 28, 1986, but prior to May 16, 1987.

Dynasty continued to have problems servicing its debt to Alpha after the guaranties were executed. In 1989 Dynasty stopped buying resins from Alpha, switched to a new supplier, and apparently stopped making payments on its debt.

Alpha then filed a complaint against Dynasty and the Wilhites, demanding $71,291.68, the amount it contended was owed on the debt. The claim against the Wilhites was based solely on their guaranties.

Alpha filed a motion for summary judgment. The defendants then amended their answer, alleging that the guaranties had been signed without consideration and were therefore invalid. However, that amendment was stricken. The defendants then filed their first motion in opposition to summary judgment on October 10, 1989. That motion was supported by affidavits from Alfred Wilhite and Bob Droke, Dynasty's treasurer, as well as by other materials filed with the court, including materials submitted by Alpha. In his affidavit Alfred stated that Dynasty had been required to pay "collect on delivery" for the shipments it received during the period covered by the guaranties and therefore had not received any credit during that period. Droke's affidavit generally corroborated the statements contained in Alfred's affidavit.

Dynasty and the Wilhites also filed a second motion in opposition to summary judgment, along with a supplemental affidavit by Droke, on October 24, 1989. However, because it appears that the motion and affidavit were filed with the circuit court clerk's office only two minutes before that office received the trial court's order granting Alpha's motion for summary judgment and were not before the court when it ruled on Alpha's motion, they...