The opinion of the court was delivered by: Hon. John E. Jones III
On September 18, 2012, a bench trial was held in this matter. At the conclusion of the trial, the Court issued a post-trial briefing schedule. The parties have now submitted proposed findings of fact, conclusions of law and argument. (Docs. 63 and 64). Accordingly, this matter is ripe for our review and disposition. For the reason that follow, the Court finds for the Defendant, Robert M. Mumma, II ("Defendant" or "Mumma"), and shall enter judgment in his favor.
Plaintiff York Building Products Co., Inc. ("Plaintiff" or "York"), is a Pennsylvania corporation engaged in the business of providing materials such as sand, gravel, stone products and bituminous asphalt to various consumer companies. Defendant Mumma is an individual, residing in Florida, who owns both McDermitt Concrete, Inc. ("McDermitt") and Kimbob, Inc. ("Kimbob").*fn1
Both McDermitt and Kimbob are general contracting companies and have historically purchased supplies from York since the early to mid-1960s. McDermitt and Kimbob share offices and sometimes share employees as well. Thus, McDermitt employees would perform work for Kimbob and vice versa. However, York provided products to McDermitt and Kimbob under separate accounts and each company was invoiced separately by York.
In 2009, York frequently placed the McDermitt account on hold, meaning that York would hold shipments of product until McDermitt made payments on outstanding invoices. In July of 2009, York requested that McDermitt execute a credit application with a personal guarantee by Mumma. York requested the execution of this credit application and personal guarantee because McDermitt had begun requesting that York ship more product to it that York typically had in the past, thus triggering a request for a higher credit limit.
In July of 2009, York's credit manager, Bonnie Patterson ("Patterson") faxed the proposed credit application and personal guarantee to Danielle Geary ("Geary"), a bookkeeper in McDermitt's office.As noted, the most salient portion of the credit application was the requirement of a personal guarantee of Defendant Mumma, the sole principal of McDermitt. Upon receipt of the credit application and personal guarantee in McDermitt's office, it was then directed to Jonathan McClymont ("McClymont"), who was then employed as the controller or accountant for Kimbob.*fn2
Thereafter, in September of 2009, York again put the McDermitt account on hold as a result of nonpayment and a failure to provide the executed credit application and personal guarantee. McClymont spoke with Patterson about the hold status and the credit application and suggested that he could execute the credit application and personal guarantee as the controller for McDermitt. Patterson advised McClymont that Mumma needed to sign the credit application and personal guarantee himself.
On September 25, 2009, McClymont and Mumma engaged in a telephone call during which McClymont testified that he told Mumma that York would not release the hold unless Mumma signed the credit application, including the personal guarantee. During this call, McClymont suggested to Mumma that McClymont could sign Mumma's name to the credit application and personal guarantee. Mumma responded to McClymont, in what the McClymont intimated was an incredulous or questioning tone, "You would sign my name?" to which McClymont replied, "Yeah, I can sign your name." McClymont thereafter signed Mumma's name to the credit application and personal guarantee and faxed a copy of the same to York. The original document was kept by McClymont and stored in Kimbob files and was never requested by York.
At trial, Mumma testified that he did not recall ever discussing with Patterson or anyone at York about a new credit application or personal guarantee with McDermitt, although he did recall discussing McDermitt accounts payable with her. Mumma also testified that he did not authorize McClymont to sign the McDermitt credit application and personal guarantee during the September 25, 2009 phone call. It was Mumma's impression that the business relationship between the companies continued to operate under a credit application that had been in force when Mumma took control of McDermitt in 1987.*fn3
Following receipt of the faxed copy of the executed credit agreement and personal guarantee, York provided product to McDermitt totaling a principal sum of $58,000.McDermitt failed to submit payment to the Plaintiff for the product and Mumma refused to pay York for the same. This action for breach of contract followed.
It is well-established under Pennsylvania law that a personal guarantee must be in writing and "signed by the party to be charged therewith, or some other person by him authorized." 33 P.S. § 3; Donaldson v. Bernstein, 104 F. 3d 547, 557 (3d Cir. 1997). It is undisputed by the parties that McClymont, not Mumma, signed Mumma's name to the credit application. Thus, Mumma can only be bound by McClymont's signing of Mumma's signature to the ...