Groth v. Ace Cash Express, Inc.
This text of 623 S.E.2d 208 (Groth v. Ace Cash Express, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
Paul Groth and Christopher Welton appeal the trial court’s grant of summary judgment to Ace Cash Express, Inc. (“Ace”) on Ace’s claim that they were personally liable to Ace as guarantors of the debts of Empire Financial, LLP (“Empire”). Groth and Welton argue that the *351 trial court instead should have granted their motion for summary judgment because the guaranty Ace seeks to enforce does not satisfy the Statute of Frauds. We agree and reverse.
Summary judgment is proper when there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. 1 We review de novo a trial court’s decision on summary judgment. 2 Here, the material facts are not in dispute. In 1996, Ace and William Willis entered into a franchise agreement (the “franchise agreement”) whereby Willis would operate an Ace check cashing franchise in Georgia. Willis signed a separate personal guaranty of all obligations under the franchise agreement (“Willis guaranty”), which was attached as Exhibit F to the agreement. Willis subsequently assigned the Ace franchise to Southern Financial Express, Inc. (“Southern”), which he and Deborah Moffett owned as equal partners. This was done with Ace’s consent, through a document entitled “Assignment/Assumption Agreement and Consent” (“Southern assignment”).
On November 15,1999, Ace, Southern, and Empire entered into an “Assignment/Assumption Agreement and Consent” in which Southern transferred the Ace franchise agreement to Empire with Ace’s consent (“Empire assignment”). Southern is identified as the “Assignor” and Empire as the “Assignee.” The Empire assignment provides, in pertinent part:
2. Assumption. Assignee hereby assumes the obligations and liabilities of Assignor in and under the Franchise Agreement, including to personally guarantee the obligations of the Assignee as set forth in the Franchise Agreement under Exhibit F — Guaranty which is attached hereto as Exhibit A. 3
Elsewhere in the Empire assignment, Groth and Welton are identified as the owners of Empire. The signature lines read:
ASSIGNEE:
Empire Financial, L.L.P.
A Georgia limited liability company
By: [signature]
Name: Paul Groth
Its: Partner
By: [signature]
*352 Name: Christopher C. Welton
Its: Partner
Ace later sued Groth and Welton, seeking to enforce the personal guaranty which Ace contends they assumed through the Empire assignment. Groth and Welton argue, however, that the Empire assignment does not bind them as guarantors. The parties filed cross motions for summary judgment and, after a hearing, the trial court granted summary judgment to Ace on the issue of liability and denied Groth and Welton’s motion.
On appeal, Groth and Welton argue that the Empire assignment cannot bind them as a personal guaranty because it does not satisfy the Statute of Frauds, which requires that a promise to pay the debt of another be in writing and signed by the party making the guaranty. 4 Groth and Welton contend that the guaranty language in the Empire assignment cannot bind them as a personal guaranty because they signed the contract on behalf of Empire, not in their individual capacities.
It is undisputed that the Empire assignment is a contract among Southern, Empire, and Ace, and that Groth and Welton signed it on behalf of Empire as its partners. 5 This case is, therefore, distinguishable from those in which the parties dispute whether a guaranty was signed in a person’s individual or corporate capacity, 6 or those where a single contract was signed twice, once in an individual and once in a corporate capacity. 7 The relevant question here is whether Groth’s and Welton’s signatures on behalf of Empire could also bind them individually to the purported personal guaranty referenced in the Empire assignment.
The trial court relied on Gigandet v. Lighting Galleries 8 in finding that Groth’s and Welton’s signatures bound them personally as well as binding the company. In Gigandet, the president of a corporation signed an account agreement in his capacity as president. The agreement specifically stated that “ £[i]f the ... account debtor is a corporation, the undersigned agree to personally guarantee . . . *353 payment of any charges.’ ” 9 The Gigandet court found that, in light of the specific contractual provision subjecting the corporate officer to personal liability, his single signature bound both the officer individually and the corporation. 10
Initially, we note that Gigandet is physical precedent only and thus not binding. 11 Moreover, a single signature generally denotes that the person is signing in either an individual or representative capacity, but not both. 12 And, unlike in Gigandet, the assignment contract in this case does not unequivocally state that Groth and Welton are guaranteeing Empire’s debt. 13 Under these circumstances, we cannot find that Groth’s and Welton’s signatures on behalf of Empire also served to bind them individually. 14 Accordingly, the alleged personal guaranty was not signed by the parties making it, as required by the Statute of Frauds. 15 It follows that the trial court erred in granting summary judgment to Ace and in denying Groth and Welton’s motion for summary judgment.
Judgment reversed.
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Cite This Page — Counsel Stack
623 S.E.2d 208, 276 Ga. App. 350, 2005 Fulton County D. Rep. 3555, 2005 Ga. App. LEXIS 1247, Counsel Stack Legal Research, https://law.counselstack.com/opinion/groth-v-ace-cash-express-inc-gactapp-2005.