ROBERT C. MALT & CO., APPELLANT,
v.
CARPET WORLD DISTRIBUTORS, INC., RICHARD SUSCO AND GERALD MARTIN, APPELLEES

Fla. 4th DCA | 2000-07-19
No. 4D99-1842
WARNER, C.J., GUNTHER and STEVENSON, JJ., concur.
763 So. 2d 508 Florida District Court of Appeal, Fourth District (2000) Positive Treatment
Cited by 11 cases

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Holding

A signature by a corporate officer on a guaranty provision, even with a corporate title, can bind the individual personally if the contract language indicates personal liability.


Headnotes

[1] A signature on a corporate document, even if appearing to be in a representative capacity, may create personal liability if the document's language indicates an assumptio…

[2] The Statute of Frauds requires a writing signed by the party to be charged to enforce a promise to answer for the debt of another.

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Facts & Procedural History

Plaintiff leased to Carpet World, with an addendum where Susco allegedly personally guaranteed Carpet World's net worth. Susco signed the addendum as …

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Opinion of the Court
PER CURIAM.

PER CURIAM.

Appellant Robert C. Malt & Co. (“the Plaintiff’) filed suit against Carpet World Distributors, Richard Susco, and Gerald A. Martin. This appeal concerns the trial court’s dismissal of the Plaintiffs third-amended complaint as to Susco. Finding that the trial court erred in dismissing the Plaintiffs complaint, we reverse and remand for further proceedings.

According to the Plaintiffs third-amended complaint, the Plaintiff and Carpet World executed a commercial lease. The complaint alleged that under an addendum to the lease, Susco would serve as a personal guaranty that Carpet World’s net worth would remain above a certain amount. The lease and addendum were made exhibits to the complaint. The Plaintiffs complaint identified the following language in the addendum as the provision creating the personal guaranty:

9. In the event the net worth of [Carpet World] is reduced in excess of ten percent (10%) ... then it is agreed that Richard Susco shall guarantee the shortfall....

Susco signed the lease and addendum in the following manner:

CARPET WORLD DISTRIBUTORS, INC.

By: /s/ Richard M. Susco Pres.

Richard M. Susco — President

In moving to dismiss the third-amended complaint, Susco’s position was that the lease was a contract between the two corporations only and that he was not a party to the lease. Susco argued the statute of frauds prevented the Plaintiff from seeking damages against him individually under either the lease or the addendum be cause those documents were not signed by Susco in his personal capacity and because nothing in the documents indicated he accepted the role of guarantor. Finding Susco’s argument compelling, the trial court granted his motion and dismissed the Plaintiffs third-amended complaint with prejudice.

The Plaintiff now appeals. There is no dispute over whether the condition triggering the guaranty occurred. The only issue is whether as a matter of law the lease provides the Plaintiff with recourse against Susco individually as guarantor. The statute of frauds provides, in pertinent part, “No action shall be brought ... to discharge the defendant upon any special promise to answer for the debt, default or miscarriage of another person ... unless the agreement or promise upon which such action shall be brought, or some note or memorandum thereof shall be in writing and signed by the party to be charged therewith.... ” § 725.01, Fla. Stat. (1999). Neither party disputes that the language of paragraph nine falls within this portion of section 725.01, thus requiring Susco’s signature. The only thing Sus-co disputes is that Susco’s signature as president was insufficient and that another signature in his personal capacity was therefore necessary to enforce the obligations of paragraph nine under the Statute of Frauds. Thus, the dispositive issue in this case is whether Susco’s signature on the addendum was sufficient to allow the Plaintiff to enforce the obligations of paragraph nine against Susco in his personal capacity. See § 725.01, Fla. Stat. (1999).

Generally, a signature preceded by the word “by” and accompanied by descriptio personae, that is, language identifying the person signing the document as a corporate officer or something similar, does not create personal liability for the person signing a contract to which he or she is not a specified party. See Delta Air Lines, Inc. v. Wilson, 210 So. 2d 761 (Fla. 3d DCA 1968). Personal liability may still be imposed, however, where the contract contains language indicating personal liability or the assumption of personal obligations, despite a signature preceded by a corporate name and the word “by” and followed by descriptio personae. See Onderko v. Advanced Auto Ins., Inc., 477 So. 2d 1026 (Fla. 2d DCA 1985); Roy v. Davidson Equip., Inc., 423 So. 2d 496 (Fla. 4th DCA 1982); Manufacturers’ Leasing, Ltd. v. Florida Dev. & Attractions, Inc., 330 So. 2d 171 (Fla. 4th DCA 1976).

In Roy v. Davidson Equipment, Inc., the president of a corporation signed a guaranty agreement with his name and corporate title. See Roy, 423 So. 2d at 496. His signature was preceded by “Roy Energy Corporation, Guarantor” and the word “by.” See id. The guaranty imposed joint and several liability upon the signor of the contract in the event the corporation defaulted in its rental payments. See id. This Court observed that the “manner in which the guaranty was signed, standing alone and without more, would be the classic example of a corporate officer signing in a representative capacity only.” Id. at 496-97. This Court ruled that because the signature was affixed to a guarantee of corporate indebtedness, the guarantee language specifically negatived the signature as having been made in a representative capacity. See id. at 497. To determine otherwise, that the individual was not personally obligated on the guaranty agreement, would render the guaranty agreement meaningless, as it does not make sense for the corporation to guarantee its own debt.

Likewise, here, Susco appears to have signed a writing containing a guaranty provision. Although Susco’s signature appears to be in his representative capacity only, that single signature, when considered with the language of paragraph nine, is sufficient to enforce the guaranty provision against him in his .personal capacity. See id.; see also § 725.01. It would nullify the specific language of paragraph nine to conclude that the Plaintiff could not, as a matter of law, enforce the obligations of paragraph nine against Susco in his personal capacity. Thus, under the narrow facts of this case, the trial court erred in dismissing the Plaintiffs complaint as to Susco. See Roy, 423 So. 2d at 497. We reverse and remand for further proceedings.

REVERSED AND REMANDED.

WARNER, C.J., GUNTHER and STEVENSON, JJ., concur.


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Citator

Cited By

  • Lab. Corp. OF Am. v. McKOWN, 829 So. 2d 311 (Fla. 5th DCA 2002)
    …inserting his or her corporate title after their name on the document cannot defeat the purpose of the guarantee when, by its terms, the document contains provisions for individual liability. See Robert C. Malt & Co. v. Carpet World Distribs., Inc., 763 So. 2d 508, 510 (Fla. 4th DCA 2000) (stat [*314] ing that personal liability may be imposed “where the contract contains language indicating personal liability or the assumption of personal obligations, despite a signature preceded by a corporate name and the…
  • Pial Holdings, Ltd v. Riverfront Plaza, LLC, 379 So. 3d 547 (Fla. 6th DCA 2024)
    …and Service First’s signatures. But no magic words are required to create a guaranty; instead, we look to the substance of an agreement to determine whether it constitutes a guaranty. See e.g., Robert C. Malt & Co. v. Carpet World Distribs., Inc., 763 So. 2d 508, 510– 11 (Fla. 4th DCA 2000) (interpreting corporate officer’s conditional promise to pay corporation’s debts as personal guaranty despite that promise’s inclusion in lease addendum). Meltzer and Service First were not “borrowers” of the restructure…
  • Fairway Mortg. Solutions, Inc. v. Locust Gardens, 988 So. 2d 678 (Fla. 4th DCA 2008)
    …ty for the person signing a contract to which he or she is not a specified party,” unless “the contract contains language indicating personal liability or the assumption of personal obligations.” Robert C. Malt & Co. v. Carpet World Distribs., Inc., 763 So. 2d 508, 510-11 (Fla. 4th DCA 2000). Here, the language of the agreement itself contemplates the execution of a separate guaranty. It specifically defines a guarantor as: “any ‘Person,’ as hereinafter defined, who has executed or has agreed to execute any…

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