Moen v. Meidinger, 950315
| Decision Date | 14 May 1996 |
| Docket Number | No. 950315,950315 |
| Parties | Kenneth O. MOEN, Plaintiff and Appellee, v. Bruce W. MEIDINGER and Sherry L. Meidinger, Defendants and Appellants. Civil |
| Court | North Dakota Supreme Court |
Janet Holter Zander, Zander Law Office, P.C., Williston, for plaintiff and appellee.
Sean O. Smith, Tschider & Smith, Bismarck, for defendants and appellants.
Bruce W. Meidinger and Sherry L. Meidinger appealed from a corrected summary judgment awarding Kenneth O. Moen $15,000, plus interest, costs, and disbursements, in Moen's lawsuit to enforce the Meidingers' alleged guaranty of a debt owed by their corporation, Dakota Farm & Home, Inc. (Dakota). We reverse and remand.
On March 28, 1984, with a $240,000 loan from First National Bank of Bowman, underwritten by the United States Small Business Administration (SBA), to Dakota, Meidingers purchased the assets of Econo Farm & Home Centers, Inc., in Bowman, North Dakota, and transferred them to Dakota. Meidingers individually guarantied the SBA loan. Bruce Meidinger, as President, and Sherry Meidinger, as Secretary of Dakota, executed a promissory note by Dakota to Moen, a shareholder of Econo Farm & Home Centers, Inc., for $15,000. Dakota and Moen executed a standby agreement on an SBA form whereby Moen agreed not to collect or enforce the $15,000 note without the prior written consent of First National Bank of Bowman.
In April 1986, Dakota also received a disaster loan from the SBA for $84,500. Meidingers executed an additional guaranty on an SBA form whereby each guarantied payment of this debt to the SBA. Dakota and Moen again executed a standby agreement on an SBA form whereby Moen agreed not to enforce or collect on the 1984 note for $15,000 without the prior written consent of the SBA. Paragraph 1 of the 1986 standby agreement said:
1. There is owing by Borrower to Standby Creditor the amount of Fifteen thousand and no/100 Dollars ($15,000.00) with interest at the rate of 10 per cent per annum from March 28, 1984 * (which amount and all interest, if any, now and hereafter owing thereon, are in this Agreement collectively called "Claim"). The Claim is not evidenced by any promissory note, bond or other written obligation of any kind whatever except, Promissory Note. A true and correct copy of each such note, bond or other written obligation (if any), is annexed hereto and made a part hereof.
As shown, the words "without interest" and the entire last sentence in the printed form were lined out. Meidingers signed at the end of the standby agreement as President and Secretary of Dakota, and additionally signed below the signatures of the parties to the agreement in this manner:
Guarantors, Endorsers, Sureties
/s/ Bruce W. Meidinger
Bruce W. Meidinger, Indi vidually
/s/ Sherry L. Meidinger
Sherry L. Meidinger, Indi vidually
The dispute in this case centers on the effect of the latter signatures.
The business operated by Dakota failed, and Dakota became a defunct corporation. In 1994, Moen sued Meidingers for payment of his 1984 promissory note for $15,000, asserting Meidingers had individually guarantied this debt owed by Dakota. Both sides moved for summary judgment. In his affidavit for summary judgment, Moen stated: "Bruce W. Meidinger and Sherry L. Meidinger, individually, guaranteed the debt owed to the Plaintiff by [Dakota] (Exhibits 1 and 2 herein) pursuant to the terms of the standby agreement." In their affidavits for summary judgment, Meidingers each stated: "That the only personal guarantee given by your affiant was to the U.S. Small Business Administration, in consideration for two loans in the amount of $240,000, and $84,500."
The trial court granted Moen's motion for summary judgment and denied Meidingers' motion, ruling that Meidingers individually guarantied the debt of Dakota to Moen by signing the standby agreement as "Guarantors." After a corrected summary judgment was entered for the right amount with interest, Meidingers appealed.
The rules of civil procedure permit summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." NDRCivP 56(c). From our review, we conclude that the standby agreement is ambiguous on whether Meidingers individually guarantied the debt of Dakota to Moen, and that a genuine issue of material fact about the parties' intent precludes summary judgment in this case.
The trial court concluded, without explanation, that "Meidingers did sign a personal guarantee in return for Moen's agreement to delay seeking payments due," and that "Meidingers, individually, guaranteed the debt under the terms of the standby agreement." We encourage trial courts to fully explain the rationales for their decisions to aid public understanding and to facilitate appellate review. Muller v. Custom Distributors, Inc., 487 N.W.2d 1, 2 (N.D.1992). While a better explanation of the trial court's reasons here might have made our review easier, we conclude that the court believed Meidingers' signatures under the words "Guarantors, Endorsers, Sureties" was, as a matter of law, their guaranty of Dakota's debt to Moen.
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