Beaulieu Group, LLC v. Joel Lefkowitz

PER CURIAM: We have had the benefit of oral argument in this case, have considered the arguments of the parties, and have examined the relevant portions of the record. We conclude that the judgment of the district court should be affirmed. With respect to plaintiffs contract claim, we can assume arguendo that defendant Lefkowitz was aware of the November 14, 2005, letter. However, from plaintiffs perspective, the most favorable inference therefrom (which is also reasonable) is that the parties contemplated at that time that the parent corporation, Hoboken, would become the customer of Beaulieu in the place of Superior. Nevertheless, the guaranty unambiguously guaranteed only Beaulieu’s extensions of credit to Hoboken, and when Beaulieu subsequently extended credit to Hoboken’s subsidiary, SPI LLC, the guar *812 anty unambiguously did not apply. The mere fact that SPI LLC’s purchase orders carried the legend — “SPI LLC, a division of Hoboken Floors” — did not alter the fact that the credit was extended to SPI LLC, not to Hoboken. Pursuant to Peara v. Atlanta Newspapers, Inc., 120 Ga.App. 163, 169 S.E.2d 670 (1969), the Georgia law is clear that “a contract of suretyship must be construed strictly ... [and a] surety’s liability will not be extended by implication. ... The undertaking of a surety ... cannot in law or equity, be bound further than the very terms of his contract.” Id. at 671. Thus, the guaranty of the debts of one of two related corporation cannot be extended to encompass the debts of the other corporation. Therefore, Lefkowitz’s guaranty of the debts of the parent, Hoboken, did not extend to encompass a guaranty of the debts of Hoboken’s subsidiary, SPI LLC. With respect to plaintiffs alter ego theory, we affirm on the basis of the district court’s resolution of that claim. With respect to plaintiffs fraud claim, we affirm on the basis of the district court’s holding that plaintiff failed to prove justifiable reliance. For the foregoing reasons, the judgment of the district court is AFFIRMED.