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Caves v. Columbus Bank and Trust Co.

A guarantor's liability cannot be extended by implication or interpretation.

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Columbus Bank & Trust Company “CB&T” sued Dr. Sammy Caves and several other defendants, alleging claims for racketeering, breach of contract, breach of guaranty, and constructive trust. CB&T subsequently moved for partial summary judgment against Caves on its guaranty claim. The trial court granted the motion and ordered Caves to pay CB&T $5,756,728.90. Caves appeals, and for reasons that follow, we affirm in part and reverse in part. To prevail on summary judgment, CB&T must show that no genuine issue of material fact remains and that it is entitled to judgment as a matter of law.1 Once CB&T makes this prima facie showing, “the burden shifts to Caves to come forward with evidence establishing a defense” to the guaranty.2 On appeal, we review the trial court’s summary judgment ruling de novo, construing the evidence and all reasonable inferences in favor of Caves, the non-movant.3

Viewed in this manner, the record shows that Caves was a Director and shareholder of Preferred Alliance, Inc. “PAI”, a company that sold discount medical and travel programs through telemarketers. Because PAI’s business involved a high volume of credit card transactions, PAI needed a merchant relationship with a bank authorized to process the credit card charges. PAI established such a relationship with CB&T.

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