UNITED REFRIGERATION, INC., D/B/A UNITED REFRIGERATION, INC., OF PENNSYLVANIA F/K/A GRAVES REFRIGERATION COMPANY, APPELLANT,
v.
EVERCOOL AIR CONDITIONING, INC., AND BRUCE R. BURRELL, JOINTLY AND SEVERALLY, APPELLEE
AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.
United Refrigeration sued Bruce Burrell, owner and president of Evercool Air Conditioning, claiming he personally guaranteed a corporate loan by signing a credit application with personal liability language. The trial court granted summary judgment for Burrell, finding he did not sign in his individual capacity despite the obligatory language. The appellate court affirmed, holding that competent evidence showed the parties understood Burrell did not intend personal liability.
The court affirmed summary judgment for Burrell, holding that although the credit application was ambiguous on its face, substantial competent evidence showed that the parties understood Burrell did not intend to assume personal liability, as evidenced by his refusal to sign above the "Individually" line and United's credit manager's testimony confirming United's awareness of this intent.
[1] A credit application is ambiguous when the language obligating the signor to personal liability is contradicted by the manner of execution.
[2] Extrinsic evidence of the parties' understanding is admissible to clarify ambiguity in a credit application regarding personal liability.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“The credit application, as executed, was ambiguous, but there was substantial competent evidence that the parties understood that Burrell did not intend to be personally liable.”
Establishes the court's holding that despite ambiguous language, parol evidence of the parties' actual understanding can defeat personal liability.
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceIn April 1990, United Refrigeration filed suit against Evercool and its owner/president Bruce Burrell on a defaulted loan. The credit application cont…
The full statement of facts, procedural history, and disposition for this case are member content.
Join FLexlaw to unlock all legal intelligence© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.
Explore caselaw by topic → Browse Guarantor Liability cases and more on FLexlaw
PER CURIAM.
In April 1990, United Refrigeration, Inc. (United) filed' a three-count complaint against Evercool Air Conditioning, Inc. (Ev- ercool) and Bruce R. Burrell.1 The complaint alleged that Burrell, the owner and president of Evercool, was a personal guarantor of a loan on which Evercool defaulted. Specifically, United contended that, because Burrell signed a credit application containing language obligating the signor to personal liability, Burrell could not limit that liability by signing only as president of the corporation. Burrell, however, claimed that he unequivocally refused to assume personal liability as evidenced by his refusal to sign in the space provided for an “individual” guarantor.2
After the hearing on Burrell's motion for summary judgment, the court determined that no ambiguity existed on the face of the credit application, and that Burrell had not signed the application in his individual capacity. Summary Judgment was entered in favor of Burrell. United appeals.
The credit application, as executed, was ambiguous, but there was substantial competent evidence that the parties understood that Burrell did not intend to be personally liable. United’s credit manager testified, by deposition, that United was aware at the time the credit application was executed that Burrell would not incur individual liability because he did not sign the application above the line marked “individually.”
Q. Why do you open with a small [credit] limit?
A. Because [the credit application] was not signed individually.
Q. You can see that he did not sign individually. Correct?
A. He did not.
(Emphasis added).
United argues here that it was unreasonable to find that the president of the corporate applicant for credit would sign a guarantee instrument expecting that he would assume no individual liability, and that the corporation would simply be guaranteeing payment of its own obligation. Nevertheless, there is competent evidence in support of the trial court’s finding that Burrell did not assume personal liability for the corporate debt.
Affirmed.
. Evercool subsequently went into bankruptcy and was dismissed as a party.
. Two separate lines were provided below the obligatory language of the agreement — one for the name of the guarantor, and another for the signature of the individual guarantor. The undersigned, jointly, severally, and personally, in consideration of your extending credit to above-named applicant, do hereby agree to pay for all goods sold to applicant, and in the event of default by applicant you shall be entitled to look to us for payment ...
Name Signature
Bruce R. Burrell, President
Individually