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Lafarge Bldg. Materials, Inc. v. Thompson

Supreme Court of Georgia

September 22, 2014

LAFARGE BUILDING MATERIALS, INC.
v.
THOMPSON

Certiorari to the Court of Appeals of Georgia -- 323 Ga.App. 276.

Cohen, Cooper, Estep & Allen, Scott A. Schweber, Evans, Scholz, Williams & Warncke, John A. Williams, Garland, Samuel & Loeb, Robin N. Loeb, for appellant.

Dupree & Kimbrough, Hylton B. Dupree, Jr., Blake R. Carl, for appellee.

OPINION

Nahmias, Justice.

On October 23, 2007, Larry B. Thompson executed a continuing guaranty in favor of Lafarge Building Materials, Inc., as part of an application for credit submitted by his company, Elite Dwellings, LLC. During 2008, Elite Dwellings ordered building materials under the account established based on the application but then failed to pay Lafarge for the materials. In May 2009, Lafarge sued Elite Dwellings and Thompson, alleging that they were jointly and severally liable for the debt.[1] Lafarge and Thompson eventually

Page 445

filed cross-motions for summary judgment, and in October 2012, the trial court ruled that the guaranty satisfied the Statute of Frauds and entered summary judgment against Elite Dwellings and Thompson jointly and severally for $105,147.

Elite Dwellings did not appeal the judgment, but Thompson did. A divided Court of Appeals reversed, holding that the guaranty was unenforceable because it did not sufficiently identify the name of the principal debtor and thus failed to satisfy the Statute of Frauds.[2] See Thompson v. LaFarge Building Materials, Inc., 323 Ga.App. 276, 280-281 [295 Ga. 638] (746 S.E.2d 908) (2013). We granted Lafarge's petition for certiorari and posed the following question:

Did the Court of Appeals err in holding that the guaranty agreement at issue here did not identify the principal debtor with sufficient specificity to satisfy the Statute of Frauds? Compare Capital Color Printing, Inc. v. Ahern, 291 Ga.App. 101 (1) (661 S.E.2d 578) (2008), with LaFarge Building Materials, Inc. v. Pratt, 307 Ga.App. 767 (1) (706 S.E.2d 131) (2011).

We conclude that the Court of Appeals did err, and we therefore reverse its judgment.

1. The application for credit and continuing guaranty at issue comprise two pages, with the guaranty set off in a box at the bottom of the second page. In the first section on the first page of the application, Elite Dwellings, LLC is listed as the " Name of Company/Individual," with Larry B. Thompson listed as the owner. Three trade references are then listed, as is the Bank of America on the line for bank references. The application is signed on the second page by Elite Dwellings's office manager " on behalf of the Applicant." The " General Provisions" section on that page provides for Lafarge to investigate the credit history of the " Applicant," saying:

This application and the information contained herein is a request for the extension of credit. The Applicant authorizes Lafarge to obtain a written or oral credit report from any credit reporting agency. The Applicant further authorizes any bank or commercial business with whom the Applicant is doing or has done any type of business to give any and all necessary information to Lafarge which will assist in the credit investigation. The Applicant further authorizes Lafarge to reinvestigate the Applicant's credit status from time to time as Lafarge deems necessary. Lafarge reserves the right to limit or terminate any extension of credit to Applicant.

In the continuing guaranty box, Thompson signed the line for " Signature of Individual Guarantor." The guaranty incorporates the application and describes the party whose debt is guaranteed as the " Applicant," saying:

In consideration of the credit extended to the Applicant identified on page 1 of this Application for Credit, the entirety of said applications [sic] being incorporated herein [295 Ga. 639] by reference thereto, ... the undersigned guarantor (jointly and severally if more than one), unconditionally guaranty [sic] the payment when ...

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