Corporate President May Avoid a Personal Guaranty

Factual Background

In this case, the defendant, Theodore Mountzuris, the president and chief executive officer of RCS, a subsidiary of Aspeon, Inc., negotiated a lease on behalf of Aspeon, for office space with Cummings Properties, Inc. During the negotiations, the defendant made it clear that he was considering leaving the company, due to issues with new management. However, he continued working on the lease transaction. On March 7, 2000, a Cummings Properties employee met the defendant at his office to have the lease signed. Although the defendant was not sure why he was the person that should have signed the lease, his assistant assured him that he was authorized by Aspeon to sign the lease. The defendant asked the plaintiff's employee if the lease had been reviewed by Aspeon's legal counsel and in the final form. The plaintiff's employee assured him that the lease was being presented in its final negotiated form. The defendant relied on the plaintiff's employee's representation without reading the lease. The defendant, who was in a rush to the airport to make a flight, signed the lease in two places, once on the signature line marked 'Lessee,' next to which was typed 'Aspeon Solutions, Inc.' and once on another line that was check marked and began with the word, 'By.' At the bottom of the page was a section identified as a personal guaranty with another signature line and a check box. This line did not have the word 'By' or any other designation. The defendant also signed that line. His name was later typed in below his signature. Due to a dispute on whether the personal guaranty was enforceable, the plaintiff filed suit in the Boston Municipal Court.