may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
David C. Johnson,
David A. Johnson,
Filed March 18, 1997
Hennepin County District Court
File No. 9519972
Peter A. Van Valkenburg, Rebecca L. Wilson, Wilkerson, Hegna & Walsten, P.L.L.P., 1100 Northland Plaza, 3800 West 80th Street, Bloomington, MN 55431-4426 (for respondent)
Walter J. Gates, III, Kunard, Barnett, Kakeldey & Gates, Ltd., 226 North Broad Street, Mankato, MN 56002-3008 (for appellant)
Considered and decided by Huspeni, Presiding Judge, Parker, Judge, and Schumacher, Judge.
David A. Johnson appeals from a summary judgment enforcing a guaranty agreement against him as guarantor. We affirm.
Both parties moved for summary judgment based on the language of a lease guaranty executed by appellant on behalf of one of respondent's new business tenants.
[A] guaranty is construed the same as any other contract, the intent of the parties being derived from the commonly accepted meaning of the words and clauses used, taken as a whole.
American Tobacco Company v. Chalfen, 260 Minn. 79, 108 N.W.2d 702, 704 (1961). The construction and effect of a contract are questions of law. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn. 1979).
The lease guaranty stated:
Guarantor unconditionally guarantees to landlord the full and punctual performance by Tenant of all terms, covenants, and conditions to be performed or met by Tenant under the Lease for a period up to twelve (12) months.
The tenant defaulted, and the guarantor received notice of default from the landlord. In spite of the "unconditionally guarantees" language, the guarantor argues that his performance was excused because certain conditions were not met. Specifically, the guarantor argues that the landlord was obligated first to recover from the tenant and, because the landlord failed to obtain a judgment against the tenant, his performance was excused. Next, the guarantor argues that his performance was excused because the landlord failed to enforce a working capital loan provision contained in the lease.
The landlord was unable to obtain a judgment against the tenant because his claim was discharged when the tenant filed for bankruptcy. Paragraph four of the lease guaranty explicitly states that discharge of the tenant's debt in bankruptcy does not discharge the guarantor's obligations. Further, the lease guaranty is unconditional, not conditioned on the landlord's performance of any lease terms. See Dahmes v. Industrial Credit Co., 261 Minn. 26, 33, 110 N.W.2d 484, 489 (1961) (in absence of language clearly indicating guaranty is conditional, it is treated as absolute). The financing provision was not a part of the guaranty and did not place any additional conditions on the guaranty.
The trial court also correctly rejected the guarantor's argument that his obligation was satisfied by the tenant's partial payment of rent for two years after the 12-month guaranty period terminated. The construction urged by the guarantor would lead to an anomalous result and nullify any obligation he had to provide a guaranty. See Chergosky v. Crosstown Bell, Inc., 463 N.W.2d 522, 526 (Minn. 1990) (contracts are interpreted to give their provisions meaning and effect; construction that leads to an absurd result should be avoided); see also Wessels, Arnold & Henderson v. National Medical Waste, Inc., 65 F.3d 1427, 1436 (8th Cir. 1995) (applying Minnesota law).
[ ]1 Guarantor argues on appeal that he did not receive notice of default. However, guarantor waived this argument by not raising it at the summary judgment hearing and instead admitting notice in his affidavit dated April 23, 1966, at paragraph 7. See Sarafolean v. Kauffman, 547 N.W.2d 417, 421 n.3 (Minn. App. 1996).
[ ]2 Guarantor's argument is undermined by his April 23, 1996, affidavit, in which he admits that the relevant guaranty period was limited to a single 12-month period commencing in August 1991 when he received notice of default.