Anderson held that because the guarantors entered an absolute guarantee rather than a conditional guarantee, the guarantors must be liable. Anderson described a similar circumstance to the facts in Gulfstream, i.e., when guarantors availed themselves of affirmative defenses which were not related to the validity or enforceability of the guarantee. 4th DCA 1970), which distinguished between the defenses available to a guarantor of an absolute guarantee as opposed to a conditional guarantee. Gulfstream based its decision on the legal precedent of Anderson v. The guarantor could not, however, assert its own affirmative defenses as to liability for the debt.
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“Once the trial court determined the guarantor was liable for the tenant, it was subject only to the jury’s finding on the tenant’s liability.” The guarantor could still effectively enjoy the benefit of the tenant’s affirmative defenses, because if the tenant prevailed, there would be no liability for the guarantor. Once summary judgment had been entered, the guarantor became liable for the tenant’s debt. The jury determined that the guarantor was not liable because he proved an affirmative defense, but the jury’s verdict did not specify which affirmative defense the guarantor proved.įollowing the jury’s verdict, the appellate court in Gulfstream found that the jury’s verdict was legally inconsistent. The jury came to different conclusions concerning the guarantor and the tenant’s liability. At trial, both the tenant and the guarantor were permitted to assert their affirmative defenses to the jury concerning their liability to pay the damages under the lease. The trial court granted summary judgment against the guarantor concerning his liability on the guarantee. The tenant and the guarantor claimed they were not required to pay rent because the landlord’s self-help violated § 83.05, Florida Statutes. The Gulfstream landlord sued the tenant and the guarantor for the tenant’s liability for a breach of the lease.
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The landlord’s action was an apparent violation of § 83.05, Florida Statutes, which prohibits commercial landlords from undertaking “self-help” that inhibits tenant use over the leased property unless either the landlord won a judgment of eviction, the tenant surrendered the property, or the tenant abandoned the property. The landlord claimed that the tenant had not paid required monthly rent, and therefore locked the entrance to the tenant’s nightclub. In Gulfstream, the appellate court reviewed the propriety of a jury verdict holding the tenant liable but not, however, the guarantor of the tenant’s debt.
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4th DCA 2019), guarantors are limited in the defenses they may bring in a breach of contract action concerning a guaranteed debt. Peter Mavrick is a Fort Lauderdale business litigation attorney with extensive experience in defending and prosecuting the interests of businesses in court proceedings and arbitration.Īs discussed in the recent decision by Florida’s Fourth District Court of Appeal in Gulfstream Park Racing Ass’n, Inc. In other words, a guarantor may not escape liability if the absolute guarantee is lawful and the party owing the underlying debt is liable under that debt.
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Under Florida law, the guarantor can be held liable only when a court determines the guaranty is lawful and the alleged debt is actually owed. When a guarantor is sued based on an absolute guarantee of a debt, the guarantor may either challenge the validity of the guarantee or show that the guaranteed debt is not owed.