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S.C.A.C.D.11/6/2002
1. Introduction
Defendant Frank T. Harrison (Harrison) appeals from a money judgment entered in favor of plaintiff S.C.A.C.D., Inc. (plaintiff) in the total sum of $540,056.42. The judgment is based on continuing guaranties that Harrison, as surety, signed on behalf of Inland Heating, Inc. (Inland), as principal, in favor of Inland's suppliers, namely, Fab Steel Supply, Inc. (Fab Steel), Bell Industries, Inc. (Bell), and Carrier Southern California (Carrier) (the old guaranties). Plaintiff succeeded to the interests of Fab Steel, Bell, and Carrier under the old guaranties, and continued supplying goods to Inland. Inland later declared bankruptcy , and plaintiff sued Harrison on the old guaranties.
Harrison first contends that the old guaranties are not enforceable on credit that plaintiff gave Inland after plaintiff succeeded to the old guaranties. Second, he contends that plaintiff breached its duty of full faith and disclosure to him, by failing to advise him that it considered the old guaranties to be valid before it extended new credit to Inland. Third, he contends that the trial court abused its discretion by denying his motion in limine to allow an expert witness, Harvey Flood, to testify concerning credit practices in the air conditioning supply industry, and whether plaintiff reasonably relied on the old guaranties before it extended new credit to Inland.
We affirm. We conclude that the old guaranties were valid and enforceable on credit that plaintiff gave Inland after it succeeded to the old guaranties, because the old guaranties were continuing, assignable, and were never terminated. We further conclude that plaintiff did not breach its duty of full faith and disclosure to Harrison by failing to advise him that it considered the old guaranties to be valid, because substantial evidence showed that Harrison himself acknowledged that the old guaranties were valid. Lastly, we conclude that the trial court did not abuse its discretion in refusing to allow Mr. Flood to testify, because his proffered testimony was not relevant to any of the issues in the action.
2. Facts and Procedural History
From about 1983 to 1997, Inland was in the business of installing air conditioning and heating systems in new homes throughout Southern California. Inland filed for bankruptcy protection in 1997. Harrison was one of Inland's shareholders.
In 1983, Harrison executed a continuing guaranty in favor of Fab Steel, on behalf of Inland (the Fab Steel guaranty). In 1990, Bell acquired Fab Steel's assets, including its rights under the Fab Steel guaranty. In the same year, Harrison executed a new continuing guaranty in favor of Bell (the Bell guaranty). In 1993, plaintiff acquired Bell's assets, including its rights under the Fab Steel and Bell guaranties.
Meanwhile, in 1989, Harrison signed a continuing guaranty in favor of Carrier, on behalf of Inland (the Carrier guaranty). In 1990, plaintiff acquired Carrier's assets, including Carrier's rights under the Carrier guaranty.
In 1993, shortly after plaintiff acquired Bell's assets, plaintiff's representative, Lewis Earhart (Earhart), met with Harrison and asked him to sign a new guaranty on behalf of Inland and in favor of plaintiff, but Harrison refused. Earhart testified that Harrison told him that plaintiff did not need a new guaranty because plaintiff already had the old guaranties.
Harrison disputed Earhart's testimony. Harrison testified that he refused to sign a new guaranty because "I shouldn't have to. I paid all my bills in the past. I don't need a personal [guaranty]. There is no reason for it. And [plaintiff] took [its proposed guaranties]
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