Appeals court hears arguments over scope of Anthony Paul's personal guarantee

An appellate panel heard oral argument in Day Road LLC v. JBM Enterprises over whether a personal guarantee signed by Anthony Paul imposed liability only for obligations of Hush Labs or instead created an unconditional, continuing obligation tied to the landlord's lease.

James Ware, counsel for appellant Paul, told the court the guarantee is a "stand alone agreement" with internal definitions that identify Hush Labs as the tenant and therefore limit Paul's liability. He argued the guarantee's preamble and paragraph 16 supply the operative definitions and that looking to extrinsic documents to expand obligations would improperly create ambiguity and make summary judgment inappropriate.

Julia Fleming, counsel for Day Road LLC, urged the court to construe the lease amendment and the attached guarantee together as part of the same 2021 transaction, noting Paul signed both documents contemporaneously. Fleming pointed to explicit language in the amendment and guarantee stating that the principals "hereby agree to personally and unconditionally guarantee the lease," and told the panel that reading the instruments in harmony supports affirming the trial court's judgment holding Paul liable.

The judges pressed both sides on whether the interpretive dispute is purely legal or requires additional factual development about why the anticipated assignment to Hush Labs did not occur. The panel thanked counsel and took the matter under advisement before adjourning.