Union Bank NA V. Blanchard & Frontier Bank V. Bingo Investments

10.24.16

RIDDELL WILLIAMS REPRESENTED THE PREVAILING LENDER IN TWO IMPORTANT PUBLISHED CASES ABOUT THE ENFORCEABILITY OF GUARANTEES.

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The cases are Union Bank NA v. Blanchard, 194 Wn. App. 340 (2016), and Frontier Bank v. Bingo Investments, 191 Wn. App. 42 (2015).  In each case, the guarantors guaranteed tens of millions of dollars in commercial real estate loans. The guarantees were absolute and unconditional.  They contained extensive authorizations and waivers of defenses, setoffs, and counterclaims.  The guarantors raised a catalog of defenses to avoid liability, including accusing the lender of fraud and breaching the duty of good faith.  The holdings in these two cases could not be clearer on the law of guarantees in Washington State:  “There can be no serious dispute” that the guarantees must be enforced unconditionally and their waiver provisions upheld.  These published cases make clear that well-drafted commercial guarantees will be enforced by the courts of Washington State.