Business Advice and Financial Planning

Defendants executed personal guaranty to protect a wholesale wine distributor, guaranteeing they would pay distributor for any indebtedness incurred by wine merchant that Defendants owned and operated.Plaintiff the purchased distributor and its assets, and later became a supplier to wine merchant. Court properly found that personal guaranty was not assignable and thus not enforceable. Defendants were not aware that guaranty had purportedly been assigned, and thus were not aware they were incurring any risk when purported assignee purchased goods from them. This was material change in terms of agreement, as Defendants' risk went from a known to unknown risk. (NEVILLE and MASON, concurring.)

Plaintiff filed declaratory judgment action to assert ownership interest in his former company, and seeking to enforce a money judgment on individual members of an LLC, based on the purported obligations of the LLC. It would be prejudicial and inequitable to impose money judgment on individual defendants as members of LLC, as a member or manager of an LLC is not personally liable for liability of company solely by being a memeber or manager. A citation to discovery individual defendants' assets will fail if underlying order is invalidated. A citation proceeding must derive its support from the main judgment. (ROCHFORD and HALL, concurring.)

Plaintiff and Defendants had been in business together, and then entered into settlement agreement that dissolved medical services company, dividing liability for loans. Upon default, lender sued all parties, and Plaintiff settled with lender; then, Plaintiff sued Defendants for breach of settlement agreement. Court found that company had violated Medical Practice Act prohibition on fee-splitting with non-physicians. Settlement agreement is enforceable, as it contains no illegal terms, and states that parties had ceased doing business together. (McBRIDE and HOWSE, concurring.)