Extech Building Materials, Inc. v. E&N Construction Inc. ( 2024 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0191-23
EXTECH BUILDING
MATERIALS, INC.,
Plaintiff-Appellant,
v.
E&N CONSTRUCTION INC.,
SHAWN RONEY, ARC NJ,
LLC, TRAVELERS CASUALTY
AND SURETY COMPANY
OF AMERICA, and LIBERTY
MUTUAL INSURANCE
COMPANY,
Defendants,
and
JOAQUIM G. FERREIRA,
Defendant-Respondent,
and
ARC NJ, LLC,
Third-Party Plaintiff,
v.
ELIO FERREIRA,
Third-Party Defendant.
________________________
Argued June 5, 2024 – Decided July 5, 2024
Before Judges Vernoia and Walcott-Henderson.
On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket No. L-1643-21.
Lisa J. Jurick argued the cause for appellant (Starr,
Gern, Davison & Rubin, PC, attorneys; Jonathan J.
Lerner and Lisa J. Jurick, on the briefs).
Zachary D. Wellbrock argued the cause for respondent
(Anselmi & Carvelli, LLP, attorneys; Zachary D.
Wellbrock and Marissa N. Kindberg, on the brief).
PER CURIAM
In this collection case, plaintiff Extech Building Materials, Inc. (Extech)
sought sums allegedly due from defendants Joaquim G. Ferreira and Shawn
Roney under their purported personal guarantees of payment for approximately
$1,016,627.65 in building materials Extech had delivered to defendant E&N
Construction, Inc. (E&N). Extech appeals from November 4, 2022 orders:
granting Ferreira summary judgment on Extech's claims and Roney dismissal of
Extech's complaint based on the court's determination the purported personal
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guarantees did not bind either Ferreira or Roney because they were included in
a document – a credit application and agreement – they had executed on behalf
of E&N and they did not otherwise separately execute personal guarantees
binding themselves personally; and denying Extech's motion for summary
judgment against E&N and Ferreira. 1 We affirm in part, reverse in part, and
remand for further proceedings in accordance with this opinion.
I.
We summarize the undisputed facts, viewed most favorably to Extech as
the party against which the court entered summary judgment. See Crisitello v.
St. Theresa Sch., 255 N.J. 200, 218 (2023). Extech is a supplier of building
materials. E&N is a construction company. In March 2012, Extech executed a
two-page form titled "CREDIT APPLICATION AND AGREEMENT" (the
credit application), identifying E&N as the "firm" on whose behalf the form had
been completed. The completed form included hand-written information about
E&N, including its address, and the names of its bank, attorney, accountant, and
accounts payable manager. The document also included boxes checked to show
E&N's preferred mode of "receiv[ing] invoices and statements."
1
Extech does not appeal from the portion of the November 4, 2022 order
denying its motion for summary judgment against Roney. We therefore affirm
the court's order denying Extech's motion for summary judgment against Roney .
A-0191-23
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At its end, just above a series of signature lines, the credit application
included the following numbered paragraphs:
1. I/We authorize you to contact Consumer Credit
reporting agencies, all bank, credit and trade references
herein to verify our credit standing with them and
authorize them to release said information to you.
2. Past due invoices are subject to a two percent Service
Charge per month. Buyer agrees that should the late
payment charge be deemed by a court of competent
jurisdiction to violate any law[,] Buyer's sole remedy
against Extech for such violation shall be the
application of any late payment charge paid in excess
of the maximum rate allowable by law toward the
unpaid account balance that remains unpaid.
3. If it becomes necessary to effect collection, I/We agree
to pay all costs of collection including actual court costs
and attorney fees of twenty five percent.
4. The credit limit may be increased or decreased at the
discretion of Extech without written notice and without
affecting personal guarantees.
5. Buyer agrees to provide prompt written notice of any
change in Buyer's name, address, ownership or form of
business entity.
6. IN CONSIDERATION OF EXTECH BUILDING
MATERIALS, ITS SUBSIDIARIES OR AFFILIATES
EXTENDING CREDIT, WE JOINTLY AND
SEVERALLY DO PERSONALLY GUARANTEE
UNCONDITIONALLY, AT ALL TIMES, TO
EXTECH, ITS SUBSIDIARIES OR AFFILIATES,
THE PAYMENT OF INDEBTEDNESS OR
BALANCE OF INDEBTEDNESS OF THE WITHIN
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NAMES [sic] FIRM. THIS GUARANTEE SHALL
CONTINUE UNTIL [TEN] FULL BUSINESS DAYS
AFTER GUARANTOR SENDS A WRITTEN
REVOCATION OF THE GUARANTEE TO EXTECH.
Immediately following the foregoing, the credit application included a
series of three identical lines, each of which included the following printed
language:
PrintName_____ Signature_______ Witness______
(No Title)
In the document completed in March 2012, Roney's name is printed and his
signature is entered on the first line, and Ferreira's name is printed and his
signature is entered on the second line. Both lines include what appear to be the
signature of the same witness. The third line on the form is not completed; it
does not include a printed name or any signatures.
Following execution of the credit application, Extech delivered building
materials to E&N and, as alleged by Extech, E&N failed to pay $1,016,627.65
and additional service charges for those materials. Extech filed a complaint
seeking a judgment for the amounts allegedly due from E&N.2 In the complaint,
Extech also sought judgment against Ferreira and Roney, alleging they had
2
We refer to Extech's amended complaint, which is dated June 1, 2022.
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unconditionally guaranteed E&N's obligations "concurrently with the
application for revolving credit."
E&N filed an answer dated June 27, 2022, to the complaint. The answer
included cross-claims for indemnification and contribution. Ferreira and Roney
filed separate August 19, 2022 answers, each of which included cross-claims for
indemnification and requests for allocation of liability. Roney's answer also
included a demand for the production of documents to Extech.
Shortly following the filing of defendants' answers to the complaint, and
while discovery demands served by the parties remained outstanding and the
discovery end date was months away, Extech filed a motion on September 16,
2022, seeking summary judgment against E&N, Ferreira, and Roney. Ferreira
filed opposition to the motion and a cross-motion for summary judgment on
Extech's claims. Roney filed opposition to Extech's summary judgment motion
but did not file a cross-motion for summary judgment or for dismissal of the
complaint.
On November 4, 2022, the court heard argument on Extech's motion for
summary judgment and Ferreira's cross-motion for summary judgment. In
pertinent part, Extech's counsel argued Ferreira and Roney were jointly liable
for the sums due from E&N because they had signed the credit application,
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which counsel argued plainly set forth their personal guarantees of any sums due
to Extech for building materials it supplied to E&N.
Counsel for Ferreira argued the putative personal guarantee in the credit
application could not be enforced against Ferreira without "fact-finding," but
counsel also asserted the personal guarantee could not be enforced as a matter
of law because Ferreira had executed the credit application solely on E&N's
behalf and Ferreira had not signed a separate agreement binding him to the
personal guarantee referenced in the credit application.
Roney's counsel similarly claimed Roney had executed the credit
application on E&N's behalf and Roney had not otherwise separately executed
the application such that he had assumed the obligation to personally guarantee
the sums due from E&N to Extech. Although Roney had not filed a cross-motion
for summary judgment on Extech's claims against him, his counsel advised the
court at oral argument that Roney joined in Ferreira's summary judgment
motion.
In a decision delivered from the bench, the court denied Extech's motion
for summary judgment on its claims against E&N. The court found there were
"a lot of issues of fact" concerning E&N's liability for the sums claimed due,
and that resolution of those issues must await the completion of discovery.
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The court granted Ferreira's cross-motion for summary judgment, finding
that E&N had been the firm identified in the credit application and therefore
Ferreira and Roney had only signed and executed the credit application on
E&N's behalf. The court determined Ferreira and Roney had not separately
signed the application in their personal capacities such that they had agreed to,
or were bound by, the personal guarantee otherwise set forth in the application.
The court reasoned that "[i]f they wanted to make a personal guarantee, that
need[ed] to be separate and distinct[,]" and "a separate and distinct contract"
setting forth the guarantee was required to impose liability on Ferreira and
Roney as personal guarantors.
The court entered November 4, 2022 orders: denying Extech's motion for
summary judgment against E&N, Ferreira, and Roney; granting Ferreira's cross-
motion for summary judgment and denying Extech's motion for summary
judgment against Ferreira; and dismissing Extech's complaint against Roney and
denying Extech's motion for summary judgment against Roney. On a
subsequent date, the court entered a default judgment against E&N in the amount
of $1,488,208.05. Extech appealed from the court's November 4, 2022 orders.
A-0191-23
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II.
We review a grant or denial of summary judgment de novo, applying the
same legal standard as the trial court. Crisitello, 255 N.J. at 218. That standard
requires that a court "determine whether 'the pleadings, depositions, answers to
interrogatories and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact challenged and that the
moving party is entitled to a judgment or order as a matter of law.'" Branch v.
Cream-O-Land Dairy, 244 N.J. 567, 582 (2021) (quoting R. 4:46-2(c)).
"Summary judgment should be granted . . . 'against a party who fails to make a
showing sufficient to establish the existence of an element essential to that
party's case, and on which that party will bear the burden of proof at trial.'"
Friedman v. Martinez, 242 N.J. 449, 472 (2020) (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986)). "We owe no deference to conclusions of
law that flow from established facts." Crisitello, 255 N.J. at 218.
"A dispute of material fact is 'genuine only if, considering the burden of
persuasion at trial, the evidence submitted by the parties on the motion, together
with all legitimate inferences therefrom favoring the non-moving party, would
require submission of the issue to the trier of fact.'" Gayles by Gayles v. Sky
Zone Trampoline Park, 468 N.J. Super. 17, 22 (App. Div. 2021) (quoting Grande
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v. Saint Clare's Health Sys., 230 N.J. 1, 24 (2017)). "Rule 4:46-2(c)'s 'genuine
issue [of] material fact' standard mandates that the opposing party do more than
'point[] to any fact in dispute' in order to defeat summary judgment." Globe
Motor Co. v. Igdalev, 225 N.J. 469, 479 (2016) (alterations in original) (quoting
Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 529 (1995)). Insubstantial
arguments based on assumptions or speculation are not enough to overcome
summary judgment. Brill, 142 N.J. at 529. "'[C]onclusory and self-serving
assertions by one of the parties are insufficient to overcome' a motion for
summary judgment." Dickson v. Cmty. Bus Lines, Inc., 458 N.J. Super. 522,
533 (App. Div. 2019) (quoting Puder v. Buechel, 183 N.J. 428, 440-41 (2005)).
Extech argues the court erred by granting Ferreira's motion for summary
judgment and dismissing the complaint as to Roney, and by denying its motion
for summary judgment against Ferreira. Extech claims the court erred as a
matter of law by finding Ferreira and Roney were not bound by the personal
guarantee included in the credit application that they signed in March 2012.
Extech argues the court erred by finding Ferreira and Roney were not bound by
the personal guarantee because there was not an agreement separate and distinct
from the credit application setting forth the personal guarantees that were
otherwise clearly set forth in the credit application. Extech also argues the court
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erred by dismissing the complaint as to Roney because he had not filed a cross -
motion for summary judgment or dismissal of Extech's complaint.
It is undisputed that Ferreira and Roney signed the credit application and
that they were associated in some manner with E&N at the time. 3 The liability
of Ferreira and Roney turned, and turns, on the interpretation of the credit
application and whether their execution of the application bound them to the
personal guarantee of E&N's obligations included in the application. Ferreira
argues the court correctly determined that he and Roney executed the application
solely as representatives of E&N. He argues that absent a separate and distinct
document executed by them that sets forth the personal guarantee, or their
separate execution of the application on a signature line expressly stating it is
for the purpose of memorializing their agreement to personally guarantee E&N's
obligations, they cannot as a matter of law be held liable as personal guarantors.
A personal guarantee is a "'promise to pay an antecedent debt of
another[,]'" Walder, Sondak, Berkeley, & Brogan v. Lipari, 300 N.J. Super. 67,
3
The summary judgment record reflects that Ferreira was the president of E&N
and Roney was the manager of E&N when they signed the application. At oral
argument on the summary judgment motions, counsel for Extech argued Ferreira
and Roney were "employees" of E&N when they signed the credit application.
We need not resolve the issue or its impact, if any, on the merits of the parties'
positions on the underlying dispute for purposes of our disposition of the issues
presented on appeal.
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79 (App. Div. 1997) (quoting Great Falls Bank v. Pardo, 263 N.J. Super. 388,
400-01 (Ch. Div. 1993)), accompanied by "a slight benefit to the promisor or a
trifling inconvenience to the promise[,]" Great Falls Bank, 263 N.J. Super. at
401. Under the Statute of Frauds, N.J.S.A. 25:1-1 to -16, personal guarantees
must be in writing:
A promise to be liable for the obligation of another
person, in order to be enforceable, shall be in a writing
signed by the person assuming the liability or by that
person's agent. The consideration for the promise need
not be stated in the writing.
[N.J.S.A. 25:1-15.]
"Generally, a guarantor is a different person from the maker or, if the same
person, signs in different capacities when signing as maker and guarantor (e.g.,
an individual may sign as an officer of a corporate maker and also sign
individually as a guarantor of the corporate obligation)." Ligran, Inc. v.
Medlawtel, 86 N.J. 583, 589 (1981). Essentially, "[u]nder a guaranty contract,
the guarantor, in a separate contract with the obligee, promises to answer for the
primary obligor's debt on the default of the primary obligor." Feigenbaum v.
Guaracini, 402 N.J. Super. 7, 18 (App. Div. 2008); see also Great Falls Bank,
263 N.J. Super. at 398 n.5 ("A guaranty is a separate and independent contract.
The guarantor is not a party to the contract between the principal obligor and the
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guarantee, and the principal obligor is not a necessary party to the contract of
guaranty.") And, where a guarantee exists, and a demand upon the debt covered
by the guarantee is not paid, the party to whom the guaranty was made may sue
to collect on it. U.S. Rubber Co. v. Champs Tires, Inc., 73 N.J. Super. 364, 373
(App. Div. 1962).
The interpretation of a contract is an issue of law that we review de novo ,
Accounteks.Net, Inc. v. CKR L., LLP, 475 N.J. Super. 493, 504 (App. Div.
2023), and an agreement to provide a guarantee is governed by the same rules
of construction as any other contract, Ctr. 48 Ltd. P'ship v. May Dep't Stores
Co., 355 N.J. Super. 390, 405 (App. Div. 2002). "Courts are generally obligated
to enforce contracts based on the intent of the parties, the express terms of the
contract, surrounding circumstances and the underlying purpose of the contract."
Caruso v. Ravenswood Devs., Inc., 337 N.J. Super. 499, 506 (App. Div. 2001).
The benchmark for a court's interpretation of a contract "is the parties'
shared intent in reaching the agreement." Accounteks.Net, Inc., 475 N.J. Super.
at 504. The court must "consider the agreement's terms 'in the context of the
circumstances under which it was written,' 'accord to the language a rational
meaning in keeping with the expressed general purpose[,]' and apply the
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agreement accordingly." Ibid. (alteration in original) (quoting Conway v. 287
Corp. Ctr. Assocs., 187 N.J. 259, 269 (2006)).
"[W]here the terms of a contract are clear and unambiguous[,] there is no
room for interpretation or construction and the courts must enforce those terms
as written." Karl's Sales & Serv., Inc. v. Gimbel Bros., Inc., 249 N.J. Super.
487, 493 (App. Div. 1991). However,
when in the context of the document itself and the
transaction to which it pertains the terminology
employed . . . actually is not free from doubt as to its
meaning, the party is permitted to introduce proof of
extrinsic circumstances bearing on the alleged proper
interpretation of the language used.
[Schor v. FMS Financial Corp., 357 N.J. Super. 185,
192 (App. Div. 2002).]
"The construction of a written contract is usually a legal question for the court,
but where there is uncertainty, ambiguity or the need for parol evidence in aid
of interpretation, then the doubtful provision should be left to the jury." Id. at
193 (quoting Great Atl. & Pac. Tea Co., Inc. v. Checchio, 335 N.J. Super. 495,
502 (App. Div. 2000)); see also Bosshard v. Hackensack Univ. Med. Ctr., 345
N.J. Super. 78, 92 (App. Div. 2001) ("The interpretation of the terms of a
contract are decided by the court as a matter of law unless the meaning is both
unclear and dependent on conflicting testimony.").
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Based on our review of the summary judgment record, we are persuaded
the credit application is ambiguous in that it does not clearly define the capacity
in which Ferreira and Roney executed the document. Extech's form credit
application expresses contractual obligations for what it refers to as the "Buyer"
in the first five numbered paragraphs of the document and also sets forth
separate contractual obligations of putative personal guarantors in the sixth
numbered paragraph, but the form signature lines do not require that a person
executing the application indicate whether they are signing as representatives of
the "Buyer"—here, presumptively E&N—or as the personal guarantors. And
the signature lines on Extech's form credit application curiously direct that a
person signing the application not provide his or her "title" that might otherwise
be included by someone intent on making clear—by stating they are signing in
the capacity as a titled representative of the Buyer—that they have executed the
application on the Buyer's behalf.
The court granted Ferreira summary judgment and dismissed the
complaint against Roney based on a finding they had signed the application
solely in their capacities as E&N representatives and therefore on behalf of E&N
and not as personal guarantors. We find no support in the summary judgment
record for that conclusion, and the ambiguity in the signature lines and format
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of Extech's form application does not permit that determination as a matter of
fact or law. The signature lines follow a set of contractual obligations for both
the Buyer and putative guarantors, so there was no definitive basis on which the
court could correctly conclude Ferreira and Roney executed the application as
either their acceptance of the terms on behalf of E&N or as personal guarantors.
The ambiguity in the signature lines of the application and determining whether
Ferreira or Roney executed the application as personal guarantors or strictly on
behalf of E&N, requires the resolution of factual issues that are dependent on
further discovery and, if necessary, disposition by a jury. The court erred by
concluding otherwise.
We are not persuaded by Ferreira's claims, which are primarily supported
by citations to unpublished cases, that Ferreira's single signature on the credit
application precludes a finding he agreed to personally guarantee E&N's
obligations as set forth in the application's numbered paragraph six. 4 There is
4
Unpublished opinions do not "constitute precedent" and are "not binding upon
any court." R. 1:36-3; see also Guido v. Duane Morris LLP, 202 N.J. 79, 91 n.4
(2010) ("reject[ing] the use of unpublished decisions as precedent"). We
therefore decline to address Ferreira's arguments that are based on unpublished
opinions, see Sciarrotta v. Global Spectrum, 194 N.J. 345, 353 n.5 (2008)
(declining to address an "argument based on [an] unpublished opinion "), and
rely instead on our well-established principles governing the interpretation of
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no such brightline requirement and, in our view, whether Ferreira or Roney are
deemed to be personal guarantors based on their execution of the credit
application shall be based on the facts and evidence presented and the
application of general contract principles to give effect to the parties' intentions.
See, e.g., Caruso, 337 N.J. Super. at 506.
In sum, we affirm the court's order denying Extech's motion for summary
judgment against E&N, Ferreira, and Roney, and we reverse the court's orders
granting Ferreira summary judgment and dismissing Extech's complaint against
Roney. Our disposition of the issues on appeal shall not be interpreted as
constituting binding findings of fact or expressions of any opinion on the merits
of the parties' claims and defenses. We decide only that the summary judgment
record did not permit a disposition of those claims and defenses as a matter of
law at this juncture of the trial court proceedings.
Because we have determined the court erred by dismissing Extech's
complaint as to Roney on the merits, it is unnecessary to consider Extech's
argument the court erred by dismissing the claims against Roney because he did
not cross-move for summary judgment or otherwise move for dismissal of the
contracts to determine and give effect to the intention of the parties to a putative
contract for a personal guarantee.
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complaint. To the extent we have not expressly addressed any arguments
presented by the parties, we note that we have considered the arguments and
determined they are not of sufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E).
Affirmed in part, reversed in part, and remanded for further proceedings
consistent with this opinion. We do not retain jurisdiction.
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