On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-7080-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Rodríguez and Yannotti.
This matter comes before us for the second time. Abdul and Mazeena Jaleel (Guarantors) appeal from the June 4, 2009 final judgment, following a bench trial, in favor of plaintiff JP Morgan Chase Bank, N.A. (Bank) for $28,926.99.*fn1 This judgment is based on the Guarantors' personal guarantee of the obligations of University Donuts, Inc. (UDI), a New York Corporation. We affirm.
These facts are not contested. The Guarantors purchase UDI in 1997 for $37,000 for the purpose of operating a donut shop. One year later, the Bank extended a $25,000 line of credit to UDI. The Guarantors agreed to repay this obligation if the loan went into default.
The loan documents entitle the Bank to recover all outstanding principal, interest, attorney fees and costs. The Guarantors individually agreed to the terms of the guaranty evidenced by their signatures. In particular, the credit application provided:
[t]his guaranty shall continue in effect unless and until I give written notice to the bank terminating my future liability under this guaranty in which event I recognized that this guaranty shall continue in effect with respect to any and all obligations incurred prior to the time the bank receives such notice.
The application also provided that all notices must be received by certified mail, return receipt requested and addressed to the Bank. Abdul Jaleel signed this credit application as "President."
The Credit Line Agreement (Agreement), which was provided to the Guarantors after the credit line was approved, specified that UDI could not transfer or assign any of its rights or obligations without first obtaining written consent of the Bank. The Agreement also provided that it was governed by, construed and interpreted in accordance with New York law.*fn2
In May 2006, the Guarantors agreed to sell their shares in UDI for $24,000 to Liaqat Ali Khan, and Ahmad W. Niazi (collectively the "Buyers"). The Bill of Sale held the Buyers responsible for all taxes, violations or any dues of the business accruing after May 5, 2006. The Bill of Sale was prepared by a New York notary. The closing took place without lawyers representing either side.
The Guarantors owed $2,792.14 to the Bank at the time of the sale. On May 4, 2006, after the closing, the Guarantors and the Buyers visited the Bank's branch located next to their business and informed an employee of the sale of the business. The Guarantors told the employee that they wished to terminate the line of credit. The Guarantors provided a letter on UDI letterhead to the Bank employee requesting the Bank to continue conducting business with UDI and to maintain the credit line account. The letter in its entirety states:
[w]e, Abdul Cader Mohamed Jaleel, and Mazeena U. Jaleel certify as the out going board members in the capacity of president and the director of the above corporation that from May 2nd 2006 we were replaced by the incoming Board members Mr. Liaqat A. Khan, as the president and Ahamad W. Niazi, as the director of the above named corporation. They will be responsible for maintaining the accounts i.e. depositing and withdrawal of the money and all other related activities related to the bank.
Therefore, please do the needful enabling them to continue to do business with you as you ...