Blair Rubber Co. v. Altra Coatings Technology, Inc.
575 So. 2d 504, 1991 WL 24816, 1991 La. App. LEXIS 281 (1991)
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Rule of Law:
A written statement expressing a clear intent to personally guarantee another party's debt, such as stating 'I am willing to personally guarantee,' constitutes an express and binding suretyship contract upon its receipt by the creditor, without requiring formal notice of acceptance.
Facts:
- Altra Coatings Technology, Inc. intended to purchase rubber from Blair Rubber Company, Inc.
- On October 6, 1988, Whitney J. Poirrier sent a letter to Blair Rubber regarding Altra's account.
- The letter stated, 'I am willing to personally guarantee the account of Altra Coatings Technology, Inc. up to the amount of $50,000.00.'
- Poirrier enclosed his personal financial statement and a check for an old balance with the letter.
Procedural Posture:
- Blair Rubber Company, Inc. filed suit against Whitney J. Poirrier in the 24th Judicial District Court (trial court) to enforce the personal guarantee.
- The trial court found in favor of Blair Rubber, holding that Poirrier was personally responsible for the specified amount.
- Poirrier, as appellant, appealed the trial court's judgment to the Louisiana Court of Appeal, Fifth Circuit (an intermediate appellate court).
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Issue:
Does a letter stating 'I am willing to personally guarantee the account of [a company] up to the amount of $50,000.00' create an express and legally binding suretyship agreement under Louisiana law?
Opinions:
Majority - Gaudin, Judge
Yes. A letter stating a willingness to personally guarantee an account creates a clear, unequivocal, and binding suretyship contract. The court reasoned that the language used by Poirrier was a precise and explicit promise, not merely an invitation to negotiate. Under Louisiana Civil Code Art. 3038, a suretyship must be 'express and in writing.' Furthermore, Art. 3039 states that a suretyship is established upon the creditor's receipt of the writing, and the creditor's acceptance is presumed without any notice being required. The court, citing its precedent in Guaranty Bank & Trust Co. v. Jones, affirmed that while a guaranty agreement need not observe technical formalities, it must embody an 'absolute expression of an intent to be bound,' which Poirrier's letter clearly did.
Analysis:
This decision solidifies the principle in Louisiana suretyship law that formal acceptance by a creditor is not necessary to form a binding guarantee. It emphasizes that the court will look to the plain language of a document to determine the guarantor's intent, and phrases like 'I am willing to' will be interpreted as an expression of present commitment rather than a preliminary offer. This ruling places the burden on potential guarantors to use unambiguously conditional or non-binding language if they only wish to open negotiations. The case serves as a strong precedent that informs commercial parties that informal written communications can create significant financial obligations.
