 Pursuant to Ind.Appellate Rule 65(D), this
 Memorandum Decision shall not be
 regarded as precedent or cited before any
                                                          FILED
                                                        Jun 04 2012, 8:31 am
 court except for the purpose of establishing
 the defense of res judicata, collateral
                                                               CLERK
 estoppel, or the law of the case.                           of the supreme court,
                                                             court of appeals and
                                                                    tax court




ATTORNEY FOR APPELLANTS:                        ATTORNEYS FOR APPELLEE:

MICHAEL W. MCCLAIN                              STEVEN M. BADGER
Ballinger McClain, PLLC                         JAMES P. MOLOY
Louisville, Kentucky                            NATHAN T. DANIELSON
                                                Bose McKinney & Evans LLP
STEVEN P. LANGDON                               Indianapolis, Indiana
McNeely Stephenson Thopy & Harrold
New Albany, Indiana


                               IN THE
                     COURT OF APPEALS OF INDIANA

KMC REAL ESTATE INVESTORS, LLC,                 )
GEORGE L. ALCORN, DAVID BERRY,                  )
DAVID BRITT, ABDUL G. BURIDI,                   )
JEFFREY CAMPBELL, KEITH CARTER,                 )
ALEXANDER DIGENIS, THOMAS ECKERT,               )
SATYA GARIMELLA, EUGENE GILES,                  )
SHAWN GLISSON, ELI HALLAL,                      )
JOHN HATEGAN, AMY HALLAL                        )
HENDERSON, SAMER HUSSEIN, ROBERT                )
KARMAN, LESLIE STROUSE MATTINGLY,               )
JOHN MCCONNELL, JULIO MELO, CHARLES             )
OATES, BRIAN PARADOWSKI,                        )
RUKHSANA RAHMAN, SYED RAZA,                     )
LAWRENCE ROUBEN, JOHN RUMISEK,                  )
ANIL SHARMA, CHRISTODULOUS S.                   )
STAVENS, MIO STIKOVAC, and BRIAN                )
THORNTON,                                       )
                                                )
       Appellants-Respondents,                  )
                                                )
               vs.                              )   No. 10A05-1109-MF-501
                                                )
RL BB FINANCIAL, LLC,                           )
                                                )
       Appellee-Petitioner.                     )
                                                )
\

                    APPEAL FROM THE CLARK SUPERIOR COURT
                      The Honorable Roger L. Duvall, Special Judge
                            Cause No. 10D02-1102-MF-79


                                      June 4, 2012

               MEMORANDUM DECISION - NOT FOR PUBLICATION

VAIDIK, Judge


                                    Case Summary

      A group of twenty-two physicians (collectively “Physicians”) appeal the trial

court’s ruling granting summary judgment in favor of RL BB Financial, LLC (“Assignee

Lender”). The Physicians argue that the personal guaranties they signed for a loan used

to build a hospital are unenforceable on multiple grounds and that there is insufficient

evidence to prove Assignee Lender’s damages. We hold that the Physicians are bound by

the enforceable guaranties that they signed and that there is sufficient evidence proving

Assignee Lender’s damages. The trial court did not err in granting summary judgment.

                            Facts and Procedural History

      Kentuckiana Investors, LLC (“KI”) is a group of practicing physicians, including

the twenty-two involved in this appeal.     One of its purposes was to invest in the

construction of a new hospital in Clark County, Indiana, that would be operated by

Kentuckiana Medical Center, LLC (“Medical Center”).

      In the first half of 2007, the Physicians invested in KI, paying approximately

$34,000 per unit of ownership. The KI Operating Agreement signed by each Physician



                                           2
indicated that each investor’s individual guaranty liability on mortgage debt incurred by

Medical Center would be capped at four times each investor’s capital contribution.

      On June 21, 2007, Medical Center executed and delivered to Branch Banking &

Trust Company (“Original Lender”) a note in the principal amount of $21.5 million. The

note was secured by a mortgage in Medical Center’s real property and the proposed

hospital building, which was to be constructed with the loan proceeds on the property.

The mortgage was recorded the next day.

      The Physicians signed personal guarantees of Medical Center’s indebtedness to

Original Lender, which explicitly state that they are to be governed by Kentucky

substantive law. The guaranties were negotiated by Medical Center representatives and

provided three tiers of liability, such that liability would be reduced over time as the

hospital met certain cash flow targets. The actual amount of liability varied greatly from

physician to physician, and oftentimes was much greater than the liability cap imposed

under the KI Operating Agreement. See Appellee’s App. p. 97, 103, 109, 115, 121, 127,

133, 139, 145, 151, 158, 164, 170, 176, 182, 188, 194, 200, 207, 213, 220, 226, 232, 238,

244, 250, 256, 262, 268. Notably, the Physicians were not represented by attorneys when

reviewing and signing the guaranties. Br. of Appellants Buridi, et al. p. 7. Also, many of

the physicians admitted that they did not read the guaranties before signing them. Id. at

621, 660, 674, 682, 686, 692. The guaranties were all dated June 21, 2007, and were

made “to induce [Original Lender] to make the Loan to Borrower.” Id. at 103. Three of

the guaranties, however, were not signed until approximately three weeks later – those

signed by Abdul G. Buridi, Amy Hallal Henderson, and Lawrence Rouben. Id. at 120,

181, 243.
                                            3
       On April 6, 2009, one of the Physicians, Alexander Digenis, sold three of his five

membership units in KI to Chris Stavens, Eli Hallal, and Brian Thornton in accordance

with the KI Operating Agreement. Id. at 660-61. Digenis attempted to contact Original

Lender to inform them of the transaction, but he received no response. Id. at 661.

Similarly, on May 1, 2010, Rukhsana Rahman sold all of her membership units in KI to

Chris Stavens and Eli Hallal. Id. at 686. Shawn Glisson invested in five units of KI, but

this investment was a joint investment with his equal business partner, so he contends he

only owned two-and-one-half units of KI.

       In 2010, RL BB Financial, LLC, (“Assignee Lender”) purchased the loan from

Original Lender. Medical Center then defaulted on its obligations under the note and

mortgage by failing to make loan payments and failing to pay real-estate taxes. Id. at

414. Medical Center also filed a voluntary bankruptcy petition in the United States

Bankruptcy Court for the Southern District of Indiana on April 1, 2011, another event of

default. Id. at 699. Medical Center admitted that it owes Assignee Lender the principal

sum of $20,606,597.77, plus interest and other charges.

       Assignee Lender filed a Complaint against Medical Center on February 23, 2011,

seeking a judgment on the note in the amount of $20,606,598.00 and for foreclosure of a

related mortgage and the appointment of a receiver. Id. at 46-51. Assignee Lender

moved for summary judgment against the Physicians on May 17, 2011, seeking to

enforce their individual guaranties. The trial court granted the motion.

       The Physicians now appeal.1


       1
          We note that the Physicians request oral argument in their Appellant’s Brief. However, this is
not the proper procedure for requesting oral argument because no motion was filed. Indiana Appellate
                                                   4
                                      Discussion and Decision

        The Physicians contend that the trial court erred in granting summary judgment to

Assignee Lender. Three of the arguments apply to the group of physicians as a whole:

(1) the guaranties were entered into by agents who were acting outside the scope of their

authority, rendering the guaranties void; (2) there is insufficient evidence to prove

liability and damages; and (3) Assignee Lender failed to first exhaust its rights against

Medical Center and execute on its collateral before enforcing the personal guaranties.

The other three arguments apply only to individual Physicians: (1) the Buridi, Henderson,

and Rouben guaranties were signed almost three weeks after the contract was executed

and are therefore void for lack of consideration; (2) the Glisson guaranty is void in whole

or in part for a unilateral mistake of fact; and (3) Digenis’ and Rahman’s transfer of

ownership interest in their shares of KI reduces or eliminates their liability under their

personal guaranties. We will address each argument in turn.

        When reviewing the entry or denial of summary judgment, our standard of review

is the same as that of the trial court: summary judgment is appropriate only where there

is no genuine issue of material fact and the moving party is entitled to a judgment as a

matter of law. Ind. Trial Rule 56(C); Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904

N.E.2d 1267, 1269 (Ind. 2009).2 All facts established by the designated evidence, and all




Rule 52(B) states “A party’s motion for oral argument shall be filed no later than seven days after: (1) any
reply brief would be due under rule 45(B) . . . .” In any event, we find that oral argument is not warranted
in this case.
        2
          The guaranties specifically state that they are to be governed by Kentucky law. However, while
the guaranties are governed by Kentucky law, “procedural and remedial matters are governed by the law
of the forum state.” Ashley v. State, 757 N.E.2d 1037, 1040 (Ind. Ct. App. 2001).
                                                     5
reasonable inferences from them, are to be construed in favor of the nonmoving party.

Naugle v. Beech Grove City Sch., 864 N.E.2d 1058, 1062 (Ind. 2007).

                                 I. Physician Arguments

                           A. Validity of the Personal Guaranties

         The Physicians contend that the guaranties were entered into by Medical Center’s

management representatives acting as agents of the Physicians. They argue that the

agents had no authority to negotiate and deliver the guaranties, and exceeded the scope of

their authority, so therefore the guaranties should be nullified. We disagree.

         Specifically, the Physicians contend that the terms of the guaranties were not

authorized because the amount of their personal liability exceeded the cap outlined in the

KI Operating Agreement. They argue that representatives from the Medical Center

negotiated the terms of the guaranties on behalf of the Physicians, and were aware of the

personal liability caps contained in the KI Operating Agreements. By negotiating a

guaranty that exceeded that cap, the Physicians contend that the Medical Center agents

were acting outside the scope of their authority. We find this argument to be without

merit.

         While Medical Center representatives negotiated the terms of the guaranties and

delivered the guaranties to the Physicians, the guaranties were signed by the Physicians

themselves, not Medical Center representatives. “Absent an ambiguity in the contract,

the parties’ intentions must be discerned from the four corners of the instrument without

resort to extrinsic evidence.” Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d

381, 385 (Ky. Ct. App. 2002). The signatures contained within the four corners of the


                                             6
guaranties were those of the Physicians, so they were the ones who entered into the

contract, not agents from the Medical Center on behalf of the Physicians.

       Each guaranty also clearly stated the amount of individual liability each Physician

was taking on. If the Physicians had read the guaranties, they would have been acutely

aware of the personal liability that they were accepting by signing the guaranties. “The

fact that one party may have intended different results, however, is insufficient to

construe a contract at variance with its plain and unambiguous terms.” Id. Just because

the Physicians did not intend to contract to a higher amount of personal financial liability

in the guaranties they signed with Original Lender does not change the fact that they did

do so, and it does not allow us to construe the contract in a way that is at odds with its

plain language. Failure to read the terms of the contract, as long as there was the

opportunity to read it, is not grounds for nullification. See Cline v. Allis-Chalmers Corp.,

690 S.W.2d 764, 766 (Ky. Ct. App. 1985).

       Regardless, there are some instances where a guarantor is not liable because of the

actions of his agents who negotiated the agreement. The Physicians argue that this is one

of those cases because Medical Center’s agents negotiated the contract with the Original

Lender in a manner they did not have the authority to do. They liken this situation to that

in the Ohio case of Becker v. Bank One, Steubenville, N.A., 1991 WL 16543 (Ohio Ct.

App. Feb. 8, 1991). In Becker, only the signature page of a personal guaranty was sent to

Becker’s office and he was told it was “another partnership document [he] need[ed] to

sign.” Id. at *1. The signature page was later attached to a personal guaranty without

Becker’s knowledge or authority. Id. The trial court’s verdict in favor of Becker was


                                             7
upheld because “the guaranty transaction was entered into without [Becker]’s knowledge,

authority or permission.” Id. at *4.

       However, the present case is clearly factually distinguishable from Becker because

these guaranties were entered into with the Physicians knowledge, authority, and

permission. The Physicians were not merely given a page to sign that was then attached

to a personal guaranty; they were each given their own guaranty in whole to read and

sign. See, e.g., Appellee’s App. p. 108 (each guaranty was notarized, authorizing that the

Physician who signed the guaranty “acknowledged that he (or she) executed and

delivered the foregoing instrument as his (or her) free and voluntary act and deed.”). The

terms were clearly spelled out, and any failure to read the terms of the guaranty by the

Physicians was through no fault of the Original Lender. When the Physicians signed the

guaranties, they did so with full knowledge and authority of their terms; they were not the

victims of fraud, differentiating this case from Becker.

       Finally, the Physicians argue that they need to conduct discovery to determine if

there was the type of fraud that would place this case in the same category as Becker and

relieve the Physicians of personal liability. But the record shows that each Physician had

the entire guaranty in front of him when it was signed, id., the Physicians themselves

were the ones who signed the guaranties, and the Physicians do not contest these facts.

Br. of Appellants Buridi, et al. p. 7. Further discovery is unwarranted.

       We therefore take the terms of the guaranties as they are written, and we find that

the trial court did not err in finding there is no issue of material fact that the Physicians

should be held personally liable for the full amounts indicated in their guaranties.

                       B. Sufficient Proof of Liability and Damages
                                              8
      The Physicians also contend that there is insufficient evidence to prove the amount

of damages that Assignee Lender has incurred. They argue that a single affidavit is not

enough to verify that Medical Center is liable to Assignee Lender and that the amount of

principal due is $20,606,597.77. We disagree.

      Assignee Lender made a prima facie case showing liability and also the amount

owed by Medical Center through the affidavit of Thomas Skoko. Appellee’s App. p.

411-15. Skoko is an asset manager for Rialto Capital Advisors, LLC, a company to

which Assignee Lender granted power of attorney to take all necessary actions with

respect to the loan and loan documents at issue in this case. Id. at 411-12. As an asset

manager for Rialto, Skoko is familiar with the loan, has the responsibility for collecting

the loan, and has access to the accounts and records dealing with the loan. Id. at 412.

Skoko therefore has personal knowledge as to the loan, and swore in his affidavit that as

of February 8, 2011, Medical Center defaulted for failure to make payments according to

the terms of the loan documents and failure to pay real estate taxes, and owed Assignee

Lender a principal sum of $20,606,597.77 plus interest, late charges, and other amounts

due pursuant to the loan documents. Id. at 414. After Assignee Lender made that prima

facie case through Skoko’s affidavit, the burden then shifted to the Physicians to show

that there was a genuine issue of material fact concerning this issue. See Dreaded, Inc.,

904 N.E.2d at 1270.

      In their brief, the Physicians cite no evidence and make no argument that the

amount of principal due on the loan is incorrect. The Physicians merely question the

sufficiency of the Skoko affidavit to substantiate the liability and amount of damages.

However, affidavits are appropriate evidence to use at the summary-judgment stage as
                                          9
long as they are based on personal knowledge and set forth facts that would be admissible

in evidence.    T.R. 56(E).      Additionally, affidavits have previously been held to

“establish[] a prima facie case to recover the debt” from guarantors. Am. Mgmt., Inc. v.

MIF Realty, L.P., 666 N.E.2d 424, 430 (Ind. Ct. App. 1996). Because affidavits are

appropriate evidence at the summary-judgment stage, the Skoko affidavit is sufficient

proof of damages in this case.

       Additionally, although the Skoko affidavit is sufficient proof of liability and

damages, Assignee Lender also provided the sworn admission of the principal obligor,

Medical Center, from its bankruptcy proceedings as proof of damages. Appellee’s App.

p. 774. In the sworn admission, Medical Center admits to owing $20,606,597.77 on its

note and first mortgage. Id. Taking this admission together with the Skoko affidavit, the

Physicians have failed to show that there is a genuine issue of material fact surrounding

liability and the amount of damages; the trial court did not err in making this finding.

                                 C. Impairment of Collateral

       The Physicians finally contend that the trial court erred in granting summary

judgment in favor of Assignee Lender because Assignee Lender must first exhaust its

rights against Medical Center and execute on its collateral before enforcing the personal

guaranties. The Physicians also argue that they should be allowed to conduct discovery

to determine if Assignee Lender unreasonably impaired the value of the Medical Center’s

collateral, the collateral that they claim should have been executed on first. We disagree.

       Kentucky classifies a guaranty as either one for payment – an absolute guaranty –

or one for collection – a conditional guaranty. See Liberty Nat’l Bank & Trust Co. v.

Russ, 668 S.W.2d 567, 568 (Ky. Ct. App. 1984). A guaranty is an absolute guaranty
                                       10
when it is subject to no conditions and contains an absolute promise to pay the

outstanding indebtedness guaranteed. See id. The type of guaranty is determined under

Kentucky law by looking at its language. McGowan v. Wells’ Trustee, 213 S.W. 573,

577 (Ky. 1919).     The guaranty involved in this case is an absolute guaranty, as it

expressly states that “[t]his is a guaranty of payment, not of collection . . . .” Appellee’s

App. p. 417. The guaranty goes on to say that “Guarantor therefore agrees that Lender

shall not be obligated prior to seeking recourse against or receiving payment from

Guarantor, to do any of the following . . . , all of which are hereby unconditionally

waived by Guarantor: (1) take any steps whatsoever to collect from Borrower . . . .” Id.

       When a guaranty is absolute, “the guaranty may proceed against the guarantor at

once on default of the principal. The guarantor’s liability is dependant upon the same

rule of law by which the liability of one who has broken his contract is determined.”

Yager v. Ky. Title Co., 66 S.W. 1027, 1028 (Ky. 1902). Therefore, Assignee Lender had

the right to immediately enforce the guaranties against the Physicians and did not need to

first exhaust its remedies against Medical Center or execute on its collateral. As a result,

the Physicians’ argument of impairment of collateral also must fail, because the collateral

in question was not at issue. The trial court did not err in granting summary judgment in

favor of Assignee Lender.

                                II. Individual Arguments

       In addition to the arguments applying to all of the Physicians’ guaranties as a

whole, the Physicians also make arguments that concern only specific individual

Physicians.

                                 A. Lack of Consideration
                                            11
      The Physicians argue that there are issues of material fact that certain guaranties

should be invalid for lack of consideration, which is an absolute requirement for a

contract under Kentucky law. See, e.g., Huff Contracting v. Sark, 12 S.W.3d 704, 707

(Ky. Ct. App. 2000). Specifically, the Buridi, Henderson, and Rouben guaranties were

signed almost three weeks after the contract was executed. Therefore, the Physicians

argue, there was no benefit to them because the contract had already been signed, and

Original Lender gave up nothing because it was already contractually obligated to

provide the loan proceeds by the time these three guaranties were signed.

      Assignee Lender, however, argues that Smith v. Bethlehem Sand & Gravel Co.,

LLC, 342 S.W.3d 288 (Ky. 2011), is instructive on this issue. In Bethlehem Sand, Smith,

the guarantor, executed a guaranty of a loan made to his company, Brooks Sand &

Gravel. However, Smith argued that the guaranty was invalid for lack of consideration

because it was executed one day after the promissory note was executed. The Kentucky

Court of Appeals found adequate consideration because the guaranty was part of the

inducement for making the loan, and the Note and guaranty were both signed for exactly

the same purpose. Id. at 294-95.

      The Physicians contend that Bethlehem Sand is distinguishable because of the

difference in the amount of delay, the number of guarantors, and the sophistication of the

party signing the guaranty. Br. of Appellants Buridi, et al. p. 13. However, we agree

with Assignee Lender that the court was focusing on the financial interest of the

individual guarantor, Smith, in the borrower, Brooks Sand & Gravel, and the substance of

the transaction itself when it found that there was adequate consideration present in


                                           12
Bethlehem Sand. We therefore reject the Physicians’ attempt to distinguish Bethlehem

Sand from the present case, and we apply its holding and reasoning.

       In this case, the Physicians had a clear financial interest in the borrower, KI, as

they all invested varying amounts of money in the corporation. Also, the substance of the

transaction itself shows that the guaranties were signed in order to induce the loan,

meaning that the guaranties and note were signed for the exact same purpose.        Despite

any delay in signing these three specific guaranties, the guaranties as a whole and the

note were signed with the specific purpose of procuring the loan for the construction of

the hospital.   We therefore find any argument contending that there was a lack of

consideration as a result of the delay in signing to be without merit under the reasoning in

Bethlehem Sand.

                                    B. Mistake of Fact

       The Physicians also argue that there are material issues of fact concerning whether

Glisson’s guaranty is void in whole or in part for a unilateral mistake of fact. They

contend that his personal liability under the guaranty is disproportionate to the two-and-a-

half shares of KI that he owns – half of the jointly owned five shares he owns with his

business partner – and that Original Lender must have made a mistake in drafting the

terms of his guaranty. We find this argument to be without merit.

       Under Kentucky law, in order to rescind a contract for a unilateral mistake, “the

consequences of the mistake must be so grave that the enforcement of the contract would

be unconscionable, the mistake must relate to a material feature of the contract, the

mistaken party must have exercised ordinary diligence, and the rescission must be


                                            13
possible without serious prejudice to either party.” Jones v. White Sulphur Springs Farm,

Inc., 605 S.W.2d 38, 43 (Ky. Ct. App. 1980). This is simply not the case here.

       Glisson was given the opportunity to read the guaranty before he signed it, and if

he thought that the amount of liability was incorrect based on the number of shares of KI

that he owned, he should not have signed it. A party’s own negligence in failing to read

the terms of a contract prevents him from claiming that it does not say what he believes it

should. See Prewitt v. Estate Bldg. & Loan Ass’n, 156 S.W.2d 173, 174 (Ky. 1941).

Glisson did not exercise ordinary diligence in the signing of the guaranty, so he cannot

now claim that the guaranty contained a mistake, the enforcing of which would cause

consequences so grave as to be considered unconscionable. The trial court did not err in

finding this guaranty to be enforceable.

                          C. Transfer of Ownership of KI Shares

       Finally, the Physicians argue that there are material issues of fact concerning

whether the transfer of Digenis’ and Rahman’s ownership interest in their shares of KI

reduces or eliminates their liability under their personal guaranties. They contend that

Digenis and Rahman informed Original Lender of these transfers, so they should have

been allowed to conduct discovery to determine if the bank was in fact on notice of the

transfers. We disagree.

       When Digenis and Rahman notified Original Lender of their transfers, they did so

orally and not in writing. Under Kentucky law, “oral agreements or representations

cannot be proved or relied upon if they contradict a positive provision of the written

contract.”   Fifth Third Bank v. Waxman, 726 F. Supp. 2d 742, 751 (E.D. Ky. 2010). The

guaranties signed by the Physicians, including Digenis and Rahman, specifically stated
                                          14
that “[n]o amendment, modification or waiver shall be deemed to be made by Lender

unless in writing signed by an officer of Lender.” Appellee’s App. p. 420 (emphasis

added). Therefore, the oral representations made by Digenis and Rahman cannot be

relied upon because they directly contradict a provision of the written guaranty.

       Additionally, guaranties fall within Kentucky’s statute of frauds, Ky. Rev. Stat.

Ann. § 371.010 (West 1990), and “the Supreme Court of Kentucky [has] recognized that

subsequent agreements that materially alter the terms of agreements within the statute of

frauds must also meet the statute of frauds’ writing requirement.” Waxman, 726 F. Supp.

2d at 752. If Digenis and Rahman wanted to reduce or eliminate their personal liability

under their guaranties, they must have done so in writing. The trial court therefore did

not err in finding that there was no issue of material fact that Digenis’ and Rahman’s

liability should not be reduced or eliminated as a result of their transfer of KI shares.

       Affirmed.

CRONE, J., and BRADFORD, J., concur.




                                              15
