Beaulieu Group, LLC v. Joel Lefkowitz

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT
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No. 11-11881 FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
D. C. Docket No. 1:08-cv-03203-TCB FEB 8, 2012
JOHN LEY
CLERK
BEAULIEU GROUP, LLC,

Plaintiff - Appellant,

versus

JOEL LEFKOWITZ,

Defendant - Appellee.

________________________

Appeal from the United States District Court
for the Northern District of Georgia
_________________________

(February 8, 2012)

Before MARTIN and ANDERSON, Circuit Judges, and SCHLESINGER,* District
Judge.

PER CURIAM:

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*Honorable Harvey E. Schlesinger, United States District Judge for the Middle District of
Florida, sitting by designation.
We have had the benefit of oral argument in this case, have considered the

arguments of the parties, and have examined the relevant portions of the record.

We conclude that the judgment of the district court should be affirmed. With

respect to plaintiff’s contract claim, we can assume arguendo that defendant

Lefkowitz was aware of the November 14, 2005, letter. However, from plaintiff’s

perspective, the most favorable inference therefrom (which is also reasonable) is

that the parties contemplated at that time that the parent corporation, Hoboken,

would become the customer of Beaulieu in the place of Superior. Nevertheless, the

guaranty unambiguously guaranteed only Beaulieu’s extensions of credit to

Hoboken, and when Beaulieu subsequently extended credit to Hoboken’s

subsidiary, SPI LLC, the guaranty unambiguously did not apply. The mere fact

that SPI LLC’s purchase orders carried the legend – “SPI LLC, a division of

Hoboken Floors” – did not alter the fact that the credit was extended to SPI LLC,

not to Hoboken. Pursuant to Peara v. Atlanta Newspapers, Inc., 169 S.E.2d 670

(1969), the Georgia law is clear that “a contract of suretyship must be construed

strictly . . . [and a] surety’s liability will not be extended by implication . . . . The

undertaking of a surety . . . cannot in law or equity, be bound further than the very

terms of his contract.” Id. at 671. Thus, the guaranty of the debts of one of two

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related corporation cannot be extended to encompass the debts of the other

corporation. Therefore, Lefkowitz’s guaranty of the debts of the parent, Hoboken,

did not extend to encompass a guaranty of the debts of Hoboken’s subsidiary, SPI

LLC.

With respect to plaintiff’s alter ego theory, we affirm on the basis of the

district court’s resolution of that claim. With respect to plaintiff’s fraud claim, we

affirm on the basis of the district court’s holding that plaintiff failed to prove

justifiable reliance.

For the foregoing reasons, the judgment of the district court is

AFFIRMED.