                                                                                                                           Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


12-17-2008

Mitsubishi Corp v. Goldmark Plastic
Precedential or Non-Precedential: Non-Precedential

Docket No. 06-4846




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Recommended Citation
"Mitsubishi Corp v. Goldmark Plastic" (2008). 2008 Decisions. Paper 98.
http://digitalcommons.law.villanova.edu/thirdcircuit_2008/98


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                                                  NOT PRECEDENTIAL
                     UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT
                               _____________

                                    No. 06-4846
                                   _____________

                           MITSUBISHI CORPORATION

                                           v.

                  GOLDMARK PLASTIC COMPOUNDS, INC.;
                GOLDMARK PLASTICS INTERNATIONAL, INC.;
                   G.P.C. PLASTIC SALES CORPORATION;
                 STANLEY R. GOLDMARK; KENNETH GROSS,
                                                Appellants
                                     v.

                     ARISTECH CHEMICAL CORPORATION;
                               SUNOCO, INC.,
                                               Third Party Defendants
                                 __________

                  On Appeal from the United States District Court
                       for the Western District of Pennsylvania
                               (D.C. Civil 02-cv-01975)
                  District Judge: Honorable David Stewart Cercone
                                     __________

                     Submitted Under Third Circuit LAR 34.1(a)
                                on October 23, 2008

                   Before: RENDELL and SMITH, Circuit Judges
                            POLLAK,* District Judge

                             (Filed: December 17, 2008)

__________________

   * Honorable Louis H. Pollak, Senior Judge of the United States District Court for the
     Eastern District of Pennsylvania, sitting by designation.
                                       __________

                               OPINION OF THE COURT
                                     __________

RENDELL, Circuit Judge.

       We are asked on this appeal to overturn the District Court’s conclusion that the

language of the Guarantee Agreement dated January 19, 2001 (“Guarantee Agreement”),

encompassed all obligations, rather than just future obligations, of Goldmark Plastic

Compounds Inc. to Aristech Chemical Corporation and/or Sunoco, Inc. The salient facts

are undisputed. Because we disagree with the District Court’s interpretation of the

language of the Guarantee Agreement, we will reverse and remand.

       The District Court granted summary judgment against individual defendants

Kenneth Gross and Stanley Goldmark, concluding that they were personally responsible

for all obligations of related corporations by virtue of the Guarantee Agreement. The

Guarantee Agreement was given to Aristech Chemical Corporation and/or Sunoco, Inc.,

“in order to induce [them] to extend credit to Goldmark Plastic Compounds, Inc.” The

relevant language of the Guarantee Agreement reads as follows:

              In order to induce you to extend credit to GOLDMARK
              PLASTIC COMPOUNDS INC. (Herein “Debtor”),
              concerning the purchase of products and services from you,
              the undersigned hereby guarantee, jointly and severally, the
              full and prompt payment to you of any indebtedness and any
              other monetary liabilities and obligations of Debtor to you in
              connection therewith, together with all expenses of obtaining
              payment thereof or enforcing any collateral security or this

                                             2
              Guarantee, including court costs and reasonable attorneys’
              fees (said indebtedness, liabilities, obligations and expenses
              being referred to herein as “Such Obligations”).

       The District Court believed that the guarantee of “any indebtedness” “necessarily

encompassed any existing debt at the time the instrument was executed, which included

the $2.4 million promissory note that was executed on the same date.” (Apx. 33A) The

District Court also reasoned that the “continuing, absolute and unconditional Guarantee”

language reflected the intent to extend to future indebtedness as well. Thus, the District

Court concluded, “[t]hus, the language used in the instrument objectively reflects a clear

intent to guarantee both the existing and future indebtedness of Goldmark Plastics to

Aristech and/or Sunoco, which is only reinforced by the circumstances and context in

which the personal guarantee was executed.” (Apx. 34a)

       Returning to the language of the Guarantee Agreement itself, we conclude that the

express terms of the Guarantee Agreement reveal an intent to include only future

obligations within the terms of the guarantee. We begin by examining the critical “hereby

guarantee” language, which states that the guarantee is given in order to induce Aristech

to “extend credit . . . concerning the purchase of products and services from you.”

       The guarantee language then states that what is guaranteed is “the full and prompt

payment to you of any indebtedness and any other monetary liabilities and obligations of

debtor to you in connection therewith . . .” (Emphasis added)




                                             3
       These liabilities, together with expenses, etc., are identified and referred to as

“Such Obligations.” Thereafter, throughout the guarantee, it is clear that what is

guaranteed is “Such Obligations.”

       Because the parties themselves agreed to the guarantee of liabilities in connection

with the extension of credit concerning purchase of products prospectively, we cannot

agree with the District Court that pre-existing obligations were included under the term of

“Such Obligations.”

       Accordingly, we will REVERSE and REMAND for further proceedings.1

___________




  1
   We need not address the issue as to choice of law because we believe that, under any
applicable law, the contract terms are limited to future extensions of credit for future
purposes.

                                              4
