SecurAmerica Business Credit v. Karl Schledwitz, et al.

This is the second appeal involving liability on personal guaranties securing the debt of a transportation company. On remand after our first opinion, the trial court found that the transportation company and the lender, through the actions of its president, entered into a conspiracy to violate the Tennessee Consumer Protection Act and violated the duty of good faith and fair dealing, relieving the guarantors of their liability under the continuing guaranties. The trial court, however, declined to hold that the lender and transportation company committed fraud or that the sale of the transportation company from the guarantors to its current owner was a sham. We affirm the trial court’s rulings with regard to (1) the actions of the lender’s president being imputed to the lender; (2) that the sale of the transportation company was not a sham; (3) that no fraud was committed; and (4) that the guaranties at issue are continuing. We further hold that the trial court was entitled to consider both the underlying credit agreement and the guaranties in determining whether the duty of good faith was breached. However, we vacate the trial court’s judgment with regard to its findings of conspiracy, a violation of the Tennessee Consumer Protection Act, and breach of the duty of good faith. We further vacate the trial court’s judgment that the guarantors may avoid the obligations under the guaranties. We remand to the trial court for further findings of fact and conclusions of law on these issues. Affirmed in part, vacated in part, and remanded.