Thanks for visiting! Welcome to a new way to research case law. You are viewing a free summary from Descrybe.ai. For citation checking, legal issue analysis, and other advanced tools, explore our Legal Research Toolkit — not free, but close.
Americorp Financial, Inc. v. Zelch
Citation: 61 F. App'x 925Docket: No. 01-1533
Court: Court of Appeals for the Sixth Circuit; February 2, 2003; Federal Appellate Court
Dr. James Zelch appeals a district court's summary judgment favoring Americorp Financial, which sought to enforce three personal guaranties signed by Zelch. Americorp, a Michigan corporation, offers finance leases for medical equipment. Zelch's guaranties were intended to secure leases for two start-up medical imaging companies in which he was involved. In May 1996, Zelch signed a Master Lease Guaranty to guarantee Tri-Imaging, Inc.'s debt, allowing promoter Randy Montrose to negotiate leases. Zelch instructed Montrose not to deliver the guaranty until all business details were finalized, but Montrose disregarded this and secured financing. In August 1996, Zelch executed a second guaranty, stipulating his signature was based on his belief that he owned twenty-five percent of Tri-Imaging, without informing Americorp of any conditions. A third guaranty was signed for Medical Imaging Systems of Binghamton, which never formally existed, following negotiations by another promoter, Anthony Defoe. Zelch has no clear memory of this guaranty but acknowledges he may have signed one at his partners' request. Both companies defaulted on their obligations, leading Americorp to file for enforcement a year and a half later, with the debt amounting to approximately two million dollars. The court will review the summary judgment under Michigan law, which interprets guaranty contracts based on standard contractual rules, assessing whether there was a genuine issue of material fact and if the moving party is entitled to judgment as a matter of law. The Master Lease Guaranties examined are unambiguous, clear, and complete, with no evidence that Americorp was involved in any fraudulent activity related to the leases. Zelch's signature on all three guaranties constitutes his assent, and Americorp provided consideration, making the contracts enforceable. Established case law indicates that a properly executed guaranty holds the guarantor liable. Zelch's claims of oral conditions imposed on the agreements are unsupported, as these conditions were not documented and Americorp was unaware of them, which negates any modification of the contract. The principle of mutual assent is critical in contract modification, and no such meeting of the minds occurred regarding Zelch's alleged conditions. Zelch's argument concerning agency is inapplicable, as Americorp's enforcement of the guaranties does not depend on Montrose's authority. Furthermore, Zelch's assertion that Americorp's lack of due diligence releases him from the guaranties is unfounded, as Michigan law does not support this claim, and records show Americorp conducted reasonable evaluations prior to executing the leases. The language of the guaranty explicitly waives the requirement for post-default notifications. Zelch also contends that the district court lacked subject matter jurisdiction due to insufficient diversity, as Defoe is a Michigan resident. However, this issue is moot since Americorp dismissed Defoe after his bankruptcy filing, resolving the diversity concern. Under Federal Rule of Civil Procedure Rule 19, Defoe is considered a dispensable party, and the dismissal is proper. The court affirms the judgment in favor of Americorp.