Law clear only guarantor's signature needed

Back to TopE-mailPrintBookmark and Share

The Indiana Court of Appeals ruled on a guaranty issue today that is "so well-settled" in state law that the judges had difficulty finding recent cases restating it.

Debra Sullivan argued in Grabill Cabinet Co. Inc. v. Debra C. Sullivan, No. 02A03-0908-CV-399, that because Grabill Cabinet Co. didn't also sign a personal guaranty Sullivan had with the company, the guaranty was invalid. Sullivan signed the personal guaranty while she was an employee with Kitchens, Baths, & More, which guaranteed any repayment of debt KBM may have with the cabinet company. When KBM didn't pay on a balance, Grabill tried to collect from Sullivan. Sullivan had since left the company but didn't send Grabill any notice of termination of her personal guaranty.

The trial court granted summary judgment for Sullivan on the issue of enforceability of the guaranty.

The appellate judges disagreed with Sullivan's argument because the Indiana Statute of Frauds requires only that the party against whom the action is brought has to sign the written guaranty.

"Indeed, this seems to be one of those propositions so well-settled in Indiana law that it is difficult to find recent cases restating it," wrote Judge Cale Bradford. "Our Statute of Frauds has existed in substantially the same form, at least as it pertains to guaranties, for well over a century."

There is somewhat of a conflict between Indiana caselaw and the Statute of Frauds, and Sullivan relied on a ruling that required three parties to "execute" a guaranty for it to be valid. But signing a written guaranty isn't necessary for it to be executed and the Statute of Frauds has made it clear only the guarantor's signature is required.

The three Court of Appeals opinions that arguably define a signing requirement onto guaranties conflict with the plain language of the Statute of Frauds and Indiana Supreme Court precedent, the judge continued.

"If the Indiana Supreme Court wishes to graft new signing requirements onto guaranties beyond those mentioned in the Statute of Frauds, it may do so. As yet, however, the Court has not, and we are absolutely bound by its decisions in this regard," Judge Bradford wrote.

The appellate court reversed summary judgment for Sullivan and remanded for entry of summary judgment for Grabill on the issue and for calculation of the company's award.


Sponsored by
Subscribe to Indiana Lawyer
  1. This is ridiculous. Most JDs not practicing law don't know squat to justify calling themselves a lawyer. Maybe they should try visiting the inside of a courtroom before they go around calling themselves lawyers. This kind of promotional BS just increases the volume of people with JDs that are underqualified thereby dragging all the rest of us down likewise.

  2. I think it is safe to say that those Hoosier's with the most confidence in the Indiana judicial system are those Hoosier's who have never had the displeasure of dealing with the Hoosier court system.

  3. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  4. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

  5. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.