Wife guarantor not obligated on husband’s business loan under parties’ agreement, Ky Court of Appeals Published Opinion

Growing money pots

CALLIHAN V. CALLIHAN

During the marriage Husband obtained a loan from PNC Bank for his business which wife signed as a guarantor. The parties subsequently entered into a Marital Settlement Agreement which provided each party would be responsible for debt solely in their name and Husband would hold harmless and indemnify Wife for business any debts. Husband defaulted on the business loan and PNC sued Wife in her individual capacity. Wife asked the family court of compel Husband to “indemnify her ‘for any monies paid to PNC and for all costs and attorney fees associated with defending said action and also all costs and attorney fees associated with filing this Motion in family court.’” After a hearing, the family court granted Wife’s motion.

Husband appealed arguing that because Wife personally guaranteed the note she should be obligated to pay the PNC debt. The Court of Appeals affirmed the family court holding that the family court’s finding were not clearly erroneous and based on substantial evidence, notably the MSA clearly stated Husband was responsible for the business debt “absent any exceptions.”

Digested by Elizabeth M. Howell

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