Tag Archives: guaranty

Treating Simultaneity as Effecting Incorporation by Reference–Midland Property Partners

Here we have another not-very-thoughtful analysis of multiple documents executed at the same time. Midland Property Partners, LLC v. Watkins, 2013 WL 5904617 (Mo.App. W.D. 2013).

For reasons the opinion does not clarify, a maker of notes also issued a separate guaranty.  The guaranty contains a waiver of a right to a jury trial.  The notes do not.

As to claims brought on the notes themselves, and not on the guaranties, the court, relying on the principle that simultaneous agreements are to be construed together, reads-into the notes a jury waiver included in the guaranties:

“Accordingly, the Notes and Guaranties should be construed together in order to ascertain the intention of the parties with respect to the jury-waiver provisions.”

This kind of express incorporation as a result of having provided multiple writings is a common mistake made by courts.  The parties have expressly chosen to provide separate documents.  If they wanted each to be read into the other, why would there not be a single instrument?  Or, then, why would the notes not expressly incorporate the guaranties?

The intelligent approach to these issues is not to simply, and tediously, treat what the parties consciously memorialized in separate writings as if they were in a single writing.  Rather, the other simultaneous agreements may be referenced for interpretative purposes, as a Missouri court noted three decades ago:

We agree with the trial court that the deed of trust/note and the lease are separate documents and each must be interpreted and enforced according to its own terms. The provisions of one are not to be impliedly incorporated into the other. However, these documents, along with others, constituted one complicated interdependent transaction. The documents contain references to each other, and obviously are closely related. The intent of the parties and the meaning of those documents must be determined from the entire transaction and not simply from isolated portions of a particular document.

Norcomo Corp. v. Franchi Construction Co., 587 S.W.2d 311, 317 (Mo. App. 1979) (emphasis added).

This author has previously examined these issues at some length.  See Royce de R. Barondes, Side Letters, Incorporation by Reference and Construction of Contractual Relationships Memorialized in Multiple Writings, 64 Baylor Law Review 651-720 (2012).  Link to SSRN version.