Rena Abel v. Alexander Oil Company

Summary

The Fourteenth Court of Appeals considered whether Rena Abel was liable under a personal guaranty for debts incurred by a limited liability company that succeeded her son-in-law’s sole proprietorship. The court held that the guaranty covered only obligations of the sole proprietorship, not debts incurred by the LLC or obligations for which the son-in-law was personally liable solely as an agent of the LLC. The court reversed and rendered a take-nothing judgment in Abel’s favor while affirming the judgment in all other respects.

Holdings

1. Rena Abel's guaranty covered only the obligations of John Steele's sole proprietorship and did not extend to debts incurred by John Steele Trucking, LLC.
2. The trial court erred by denying Rena Abel's motion for JNOV because a legal principle precluded recovery against her.

Questions Presented

1. Whether the trial court erred in denying Rena Abel's motion for JNOV because the jury's finding against John Steele established only liability for debts incurred by John Steele Trucking, LLC, which Rena's guaranty did not cover.
2. Whether a guarantor who guaranteed the obligations of a sole proprietorship may be held liable for obligations incurred by a separate limited liability company operated by the same individuals.

Disposition

other