McDonald v. Ferguson Enterprises, Inc.

• Decision Date: 29 June 2005
• Docket Number: No. A05A0563.,A05A0563.
• Citation: 274 Ga. App. 526,618 S.E.2d 45
• Parties: McDONALD et al. v. FERGUSON ENTERPRISES, INC.
• Court: Georgia Court of Appeals

274 Ga. App. 526

618 S.E.2d 45

McDONALD et al. v. FERGUSON ENTERPRISES, INC.

No. A05A0563.

Court of Appeals of Georgia.

June 29, 2005.

Reconsideration Denied July 20, 2005.

Richard Phillips, Joseph C. Kitchings, Phillips & Kitchings, Ludowici, for appellants.

Mathew M. McCoy, David H. Johnson, McCorkle, Pedigo and Johnson, Savannah, for appellee.

BERNES, Judge.

Ferguson Enterprises, Inc. ("FEI") filed a complaint against Arthur McDonald and Debra Dunn alleging that they were liable under a personal guaranty agreement for "all sums owed by Dunn Plumbing" on an open account for construction materials. The alleged guaranty agreement was attached to and incorporated into the complaint as part of a multi-page credit application. McDonald and Dunn answered, asserted counterclaims, and moved to dismiss, alleging that FEI's complaint was barred by the Statute of Frauds because the guaranty failed to identify the principal debtor. See OCGA § 13-5-30(2) (A promise to answer for the debt of another must be in writing and signed by the party charged therewith.).

McDonald and Dunn appeal the trial court's denial of their motion to dismiss and the trial court's grant of summary judgment to FEI on the claims alleged in its complaint. McDonald also appeals the trial court's grant of summary judgment to FEI on his counterclaim.¹ Because we find the guaranty failed to sufficiently identify the principal debtor, we reverse the trial court's denial of McDonald and Dunn's motion to dismiss and the trial court's grant of summary judgment to FEI on its claims. However, we affirm the trial court's grant of summary judgment to FEI on McDonald's counterclaim.

1. FEI concedes that the personal guaranty does not identify the principal debtor by name, but nevertheless argues that the identity of the principal debtor is obvious in that the guaranty states that FEI is extending credit on behalf of the "entity applying for credit above (`Applicant')." However, the record reveals no entity is identified elsewhere in the application as the "Applicant" or the "entity."²

[W]here a guaranty omits the name of the principal debtor, it is unenforceable as a matter of law. Builder's Supply Corp. v. Taylor, 164 Ga.App. 127, 128, 296 S.E.2d 417 (1982) (failure of a document to state the identity of the entity whom [the] guarantor agreed to indemnify is fatal). See Ellis v. Curtis-Toledo, Inc., 204 Ga.App. 704, 705(2) 420 S.E.2d 756 (1992)[;] Northside Bldg. Supply Co. v. Foures, 201 Ga.App. 259, 260, 411 S.E.2d 87 (1991). . . . [T]he agreement is not enforceable because it fails to satisfy the statute of frauds.

Sysco Food Svcs. v. Coleman, 227 Ga.App. 460, 461, 489 S.E.2d 568 (1997); Fontaine v. Gordon Contractors Supply Co., 255 Ga.App. 839, 839-840, 567 S.E.2d 324 (2002). This is true "[e]ven where the intent of the parties is manifestly obvious. . . ." Sysco Food Svcs. v. Coleman, supra. "[T]his Court is not authorized to determine the identity of the principal debtor by inference as this would entail consideration of parol evidence. Neither may we construe the defect sub judice as in the nature of contractual ambiguity." (Citation omitted.) Roden Electrical Supply v. Faulkner, 240 Ga.App. 556, 557(1), 524 S.E.2d 247 (1999). Parol evidence is inadmissible to describe what is totally omitted. Builder's Supply Corp. v. Taylor, supra at 128, 296 S.E.2d 417.³

Accordingly, we conclude that the trial court erred in denying McDonald and Dunn's motion to dismiss and in granting FEI summary judgment on its claims. Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991). See also Desai v. Silver Dollar City, 229 Ga.App. 160, 163(1), 493 S.E.2d 540 (1997).

2. McDonald claims the trial court erred in granting summary judgment on his counterclaim because the "Plaintiff failed to segregate the accounts by the job" and because the "Plaintiff gathered information from . . . McDonald . . . "to collect the alleged debt without the required notices. . . ." However, McDonald fails to cite any authority imposing a duty on the plaintiff to "segregate the accounts" or to any authority imposing a duty on the plaintiff to give notice prior to gathering information from McDonald.⁴ In light of McDonald's failure to state a cognizable claim, the trial court did not err in granting FEIs motion for summary judgment on McDonald's counterclaim.

Judgment affirmed in part and reversed in part.

BLACKBURN, P.J., and MILLER, J., concur.

1. The trial court granted only partial summary judgment as to McDonald. It found a genuine issue of material fact existed as to whether McDonald executed the...