Wilson Court Ltd. Partnership v. Tony Maroni's, Inc.

• Decision Date: 12 March 1998
• Docket Number: No. 64766-6,64766-6
• Citation: 134 Wn.2d 692,952 P.2d 590
• Parties: . TONY MARONI'S, INC., a Washington corporation; M & R Foods, Inc., a Washington corporation; and Anthony L. Riviera and Jane Doe Riviera, husband and wife, Petitioners. Supreme Court of Washington, En Banc
• Court: Washington Supreme Court

Page 692

134 Wn.2d 692

952 P.2d 590

WILSON COURT LIMITED PARTNERSHIP, a Washington limited partnership, Respondent, v. TONY MARONI'S, INC., a Washington corporation; M & R Foods,

Inc., a Washington corporation; and Anthony L.

Riviera and Jane Doe Riviera, husband

and wife, Petitioners.

No. 64766-6.

Supreme Court of Washington,

En Banc.

Argued Sept. 18, 1997.

Decided March 12, 1998.

Montgomery, Purdue, Blankinship & Austin, Joseph C. Brown, Jr., Seattle, for Petitioners

Jameson, Babbitt, Stites & Lombard, Bradley L. Brigham, Seattle, for Respondent.

TALMADGE, Justice.

We must determine in this case if a guaranty of a commercial lease signed by the president of a corporate tenant was enforceable against the president personally, although he signed the guaranty in a representative capacity. We hold a signature on a guaranty with additional words that are descriptio personae generally binds the individual who signed the agreement unless the signature creates an ambiguity as to who is bound. The courts must then construe the guaranty. In the present case, the president's signature creates an ambiguity but we hold he was personally liable because if we were to adopt his interpretation of the guaranty, the corporate tenant would have to be the guarantor of its own lease. Such an interpretation is commercially unreasonable because, as a matter of law, a party cannot be the guarantor of its own contract. We affirm the summary judgment in favor of the landlord on the guaranty.

ISSUE

Was a corporate president who signed a guaranty of a commercial lease between the landlord and the corporation

personally liable under the guaranty although he signed the guaranty with the notation "President" after his name?

FACTS

Tony Maroni's, Inc. (Tony Maroni's) signed a written commercial lease (Lease) for Seattle retail space owned by Wilson Court Limited Partnership (Wilson). Anthony L. Riviera (Riviera), Tony Maroni's President, signed the Lease. Tony Maroni's leased 1,676 square feet of space for a 60-month term. The Lease provided for extensive tenant improvements, estimated to be worth $45,520. Initially, Tony Maroni's contributed $5,000 toward those improvements, and then was to pay an additional $7,000 over the life of the Lease, amortized at $148.73 per month. Wilson contributed the balance of $33,520 toward the improvements.

Contemporaneously with the execution of the Lease, Riviera executed a guaranty agreement (Guaranty) which was incorporated by reference in the Lease. Riviera wrote the description "President" by hand after his name on the signature line of the Guaranty. The Guaranty stated:

EXHIBIT 1 TO EXHIBIT G

GUARANTY

REFERENCE is made to lease dated the ____ day of __________, 19__, between Wilson Court Limited Partnership, as Landlord, and Tony Maroni's, Inc. as Tenant.

FOR VALUE RECEIVED and in condition for, and as an inducement to, the Landlord entering into said lease, which has been executed simultaneously herewith, the undersigned hereby guarantees to the Landlord, its successors and assigns, the full performance and observance of all covenants, conditions and agreements therein provided to be performed and observed by the Tenant, its successors and assigns, and expressly agrees that the validity of this agreement and the obligations of the Guarantor hereunder shall in no way be The undersigned further agrees that its liability under this agreement and guaranty shall be primary, and that in any right of action which shall accrue to the Landlord under the said lease, the Landlord may at its option, proceed against the undersigned without having commenced any action, or having obtained any judgment, against the Tenant and that the venue of any action against the undersigned may be in the county in which the premises are located.

terminated, affected or impaired by reason of the assertion by the Landlord against the Tenant of any of the rights or remedies reserved to the Landlord pursuant to the provisions of said lease, or by reason of the waiver by the Landlord of, or failure to [sic] the Landlord to, enforce any of the terms, covenants or conditions of said lease, or the granting of any indulgence or extension of time to the Tenant, all of which may be given or done without notice to the Guarantor. The undersigned waives notice of default in the payment of rent, additional rent or any other amounts contained or reserved in said lease, or notice of a breach or non-performance on any of the covenants, conditions or agreements contained in said lease.

WITNESS THE EXECUTION HEREOF THIS 23 day of December, 1992.

GUARANTOR:

By: /s/ Anthony L. Riviera President

Clerk's Papers at 81. The Guaranty indicated its execution was a condition for Wilson to lease the space to Tony Maroni's. However, the Guaranty did not specifically identify in its text who was bound, referring only to "the undersigned" or "Guarantor."

In contrast with the Guaranty, Riviera also signed the Lease in a representative capacity, but the Lease contained numerous indicia that only Tony Maroni's was bound by the Lease terms. Paragraph 15.25 required a warranty from Riviera that the corporate tenant was properly incorporated and qualified to do business, the corporation had authority to enter into the Lease and perform its terms, the Lease Shortly after the execution of the Lease, Tony Maroni's sought Chapter 11 bankruptcy protection. Tony Maroni's assigned the Lease to M & R Foods (M & R), another Riviera company. Thereafter, M & R defaulted on the Lease. Wilson filed suit against Tony Maroni's, M & R, and Riviera seeking a writ of restitution and damages. The trial court granted Wilson a writ of restitution. Wilson then moved for summary judgment against M & R for damages resulting from breach of the Lease and against Riviera on the Guaranty. Riviera also moved for summary judgment asserting he was not personally liable on the Guaranty because he signed only in his capacity as a corporate officer. The trial court granted summary judgment to Wilson and Division One of the Court of Appeals affirmed, holding the purpose and circumstances surrounding the Guaranty could lead only to the conclusion the parties intended to bind Riviera personally. Wilson Court Ltd. Partnership v. Tony Maroni's, Inc., 83 Wash.App. 194, 198, 920 P.2d 1213 (1996). We granted review.

                bound the corporation, and the corporate board of directors would adopt a resolution authorizing or ratifying execution of the Lease.  The signature block of the Lease indicated Tony Maroni's was the tenant and contemplated that Riviera signed as "Its:  President."   Moreover, Riviera's signature was notarized as the president of Tony Maroni's as well
                

ANALYSIS

When reviewing an order for summary judgment, we engage in the same inquiry as the trial court, and will affirm summary judgment if there is no genuine issue of any material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). All facts and reasonable inferences are considered in a light most favorable to the nonmoving party, and all questions of law are reviewed de novo. We will sustain the trial court's judgment upon any theory established in the pleadings and supported by proof. Schaaf v. Highfield, 127 Wash.2d 17, 20-21, 896 P.2d 665 (1995); While the parties agree a guaranty here was intended and executed by the parties, they disagree as to who is bound by its terms. Riviera asserts he did not intend to be personally bound by the Guaranty and his signature on the Guaranty, he argues, is an objective manifestation of that intent. By adding the title "President" to his signature when he signed the Guaranty, he contends he was signing in a representative capacity only, on behalf of Tony Maroni's, making the Guaranty unenforceable against him personally. Wilson, on the other hand, contends the terms of the Guaranty itself, and the nature of guaranties generally, indicate the Guaranty was to be enforced against Riviera personally.

Failor's Pharmacy v. Department of Soc. & Health Servs., 125 Wash.2d 488, 493, 886 P.2d 147 (1994).

At the outset, a critical issue is whether there was mutual assent by these parties to be bound by the Guaranty. Yakima County (West Valley) Fire Protection Dist. No. 12 v. City of Yakima, 122 Wash.2d 371, 388, 858 P.2d 245 (1993). Washington follows an objective manifestation test for contracts, looking to the objective acts or manifestations of the parties rather than the unexpressed subjective intent of any party. U.S. Life Credit Life Ins. Co. v. Williams, 129 Wash.2d 565, 570, 919 P.2d 594 (1996); Lynott v. National Union Fire Ins. Co., 123 Wash.2d 678, 684, 871 P.2d 146 (1994); Retail Clerks Health & Welfare Trust Funds v. Shopland Supermarket, Inc., 96 Wash.2d 939, 944, 640 P.2d 1051 (1982); City of Everett v. Sumstad's Estate, 95 Wash.2d 853, 855, 631 P.2d 366 (1981). A guaranty is a contract subject to these general rules regarding contract formation. Hall v. Custom Craft Fixtures, Inc., 87 Wash.App. 1, 937 P.2d 1143 (1997) (applying objective manifestations test to asserted guaranty agreement); Bellevue Square Managers v. Granberg, 2 Wash.App. 760, 766, 469 P.2d 969 (proper interpretation and construction of guaranty agreement is based upon same principles as those applied to contracts generally), review denied, 78 Wash.2d 994 (1970). While such mutual assent is ordinarily a question of fact, Sea-Van Invs. Assocs.

v. Hamilton, 125 Wash.2d 120, 126, 881 P.2d 1035 (1994), the parties here both moved for summary judgment on the enforcement of the Guaranty. There is no genuine issue as to any material fact with respect to the existence of a guaranty. The question is who is bound by it.

Early Washington cases regarding descriptive language following a signature on a contract indicate such language is generally considered to be descriptio personae, that is, merely descriptive of the person executing the agreement, and does not foreclose personal...