On August 19, 2013, defendant, LLC, entered a five-year lease agreement (the Lease) with Plaintiff for use as a restaurant and bar with liquor sales not to exceed 40% of the gross sales generated on the premises. The Lease prohibited LLC from using the premises as a nightclub, dance hall, disco, or for any other use inconsistent with the specified designated use. The Lease permitted the Plaintiff on prior written notice to conduct a complete audit of the records to assess its gross sales and percentage of gross sales from the sale of alcoholic beverages. Under the terms of the Lease, the Plaintiff could terminate it and take possession of the premises upon the occurrence of any event of default.
In consideration of the Lease with LLC, G executed a personal guaranty, under which she unconditionally guaranteed the payment of all gross rent and charges under the lease, performance of all lease obligations, and payment of actual costs and attorney fees related to enforcement of the Lease.
On July 24, 2017, plaintiffs brought action against defendants alleging that LLC defaulted under the terms of the Lease by failing to pay the LLC filed a petition for protection under Chapter 11 of the United States Bankruptcy Code and filed notice in the circuit court that an automatic stay applied in this case.
Breach of Personal Guaranty
The plaintiff moved for partial summary disposition of its claims against G for breaches of her personal guaranties because of her failure to pay plaintiff the gross rent owed by LLC. The trial court summarized the plaintiff’s damages calculation in relation to the breaches of the guaranty based upon the account Lease Ledger. The trial court found that the personal guaranty made G liable for all gross rent without setoff.
Defendants argue that the trial court erred by entering summary disposition against G under her personal guaranty without permitting them to present evidence entitling them to setoffs and adjustments to the gross rent. They contend that genuine issues of material fact existed regarding the amount of rent owed by LLC and the validity of the personal guaranty.
Guaranty contracts are to be construed like other contracts. G’s personal guaranty lack ambiguity. Her personal guaranty induced the landlord to enter into the Lease. Under the terms of her guaranty, she assented to all of the provisions of the Lease.
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