SOLIS, Judge
Now before the Court are:
1. Plaintiff's Motion for Summary Judgment, with separate statement of facts, filed May 25, 2001;
2. Defendant's Response to Plaintiff's Motion for Summary Judgment, with separate statement of facts, filed July 19, 2001; and
3. Plaintiff's Response to Defendant's Reply to Plaintiff's Motion for Summary Judgment, filed September 19, 2001.
After a thorough review of the summary judgment evidence, the pleadings, the briefs, and the applicable law, for the reasons set forth below, the Court is of the opinion that Plaintiff's Motion for Summary Judgment should be GRANTED.
BACKGROUND
This case arises out of an action to collect under a guaranty executed and delivered by Defendant William C. Nelson in connection with a commercial line of credit and term loan financing extended by Plaintiff FINOVA Capital Corporation. FINOVA, a commercial finance company headquartered in Scottsdale, Arizona, and All State Auto Rent, Inc. ("All State"), on or about September 2, 1997, entered into a Loan and Security Agreement (which, as amended on November 9, 1998, shall be referred herein as the "Loan Agreement"). Pl.'s Compl. at 2. Pursuant to the Loan Agreement, FINOVA, subject to certain covenants, conditions and limitations, agreed to provide All State a revolving line of credit not to exceed $1,250,000 (the "Revolving Line of Credit") and a term loan not to exceed $2,000,000 (the "Term Loan"). Id. All State also executed and delivered to FINOVA a Promissory Note dated September 2, 1997 (amended November 9, 1998) (collectively, the "Note"), to evidence the advances made by FINOVA. Id.
Under the Loan Agreement and the Note, interest was to accrue (a) on the principal balance of the Revolving Line of Credit at a rate of 2.5% per annum in excess of the "Governing Rate" (as defined in the Loan Agreement) and (b) on the principal balance of the Term Loan at a fixed rate of 11% per annum. Id. Upon the occurrence of an "Event of Default" (pursuant to and as defined by the Loan Agreement): (a) the applicable rates of interest for each of the Revolving Line of Credit and the Term Loan were to increase in the amount of 4% per annum; and (b) FINOVA had the right to exercise one or more remedies, including, declaring the entire principal balances of the Revolving Line of Credit and the Term Loan as immediately due and payable. Id. at 2-3.
Contemporaneously with the execution and delivery of the Loan Agreement, Nelson (the president and owner of All State) executed and delivered to FINOVA a Guaranty (Continuing/Unlimited) dated September 2, 1997 (the "Guaranty"). See Pl.'s Compl., Exh. C. Under the Guaranty, Nelson absolutely and unconditionally guaranteed, without limitation, the punctual payment in full at maturity, whether due pursuant to acceleration or otherwise, of the principal, interest and other sums due from All State to FINOVA regarding all indebtedness and liability existing between them. Id. See Id. at 1. Additionally, the Guaranty provided that Nelson agreed to pay FINOVA any and all costs, expenses and reasonable attorney's fees paid or incurred by FINOVA in collecting or endeavoring to collect the debt of All State or in enforcing this said Guaranty. Id. at 1-2.
According to Plaintiff, All State is now in default of its obligations to FINOVA under the Loan Agreement, thus creating one or more of the Events of Default. See Pl.'s Mot. Summ. J. at 4. More specifically, FINOVA charges that All State (a) violated Section 2.5 of the Loan Agreement by exceeding its borrowing availability pursuant to the Revolving Line of Credit; and (b) violated Section 2.12 of the Loan Agreement by failing to make principal payments owing on the Term Loan. Id. Thus, by virtue of such Events of Default, FINOVA accelerated all amounts owing under the Loan Agreement, making such amounts immediately due and payable. Id.
FINOVA further asserts that both All State and Nelson, on numerous occasions, have acknowledged that Events of Default have occurred under the Loan Agreement, and that FINOVA has accelerated all amounts owing as a result. Id. Specifically, in a Forbearance Agreement (the "Forbearance Agreement") entered into by All State, Nelson and FINOVA on April 25, 2000, the parties thereto agreed, in relevant part, that:
(a) Pursuant to Section 2.5 of the Loan Agreement, the outstanding balance of Indebtedness is in excess of the availability, pursuant to Section 2.1 of the Loan Agreement, and pursuant to Section 2.12 of the Agreement, principal payments under the Term Loan have not been paid by [All State] . . . who is in default under the terms of the Loan Agreement.
(b) [All State] is in default under the terms of the Loan Documents and [FINOVA] has this date accelerated the Indebtedness and demanded repayment of the Indebtedness in full.
See Cook Aff., Exh. 1 at 1. Consequently, FINOVA agreed in the Forbearance Agreement to "refrain from exercising its rights and remedies under the Loan Documents until after May 31, 2000, with respect to all Defaults or Events of Default," in exchange for All State's agreement to (i) pay all accrued but unpaid interest due, and (ii) to liquidate and sell off its remaining inventory of pledged vehicles. Id. at 2.
FINOVA ultimately filed its Complaint against Nelson on October 6, 2000, alleging liability under the Guaranty for all amounts still owing under the Loan Agreement and the Note.
Subsequently, in a letter agreement dated June 14, 2000 among FINOVA, All State and Nelson, FINOVA agreed to extend the forbearance period until June 30, 2000 so as to allow All State and Nelson and additional opportunity to continue liquidating the loan collateral. See Pl.'s Mot. Summ. J. at 5 n. 4 ( citing Cook Aff., Exh. 2).
Subsequent to this filing, FINOVA asserts that All State and Nelson completed the liquidation of all the loan collateral, and the proceeds were applied by Plaintiff to All State's outstanding obligations. As of April 30, 2001, after applying all the proceeds of the collateral liquidation, FINOVA claims the amounts still owing pursuant to the Loan Agreement and the Note are: (a) $299,660.22 pursuant to the Revolving Line of Credit, plus interest accruing on the balance of such amounts thereafter at the default rate of 14% per annum; and (b) $399,454.00 owing pursuant to the Term Loan, plus interest accruing on the balance of such amounts owing thereafter at the default rate of 15% per annum. See Pl.'s Mot. Summ. J. at 5 (citing Cook Aff. at 3). Thus, FINOVA asserts Defendant Nelson is now responsible for such amounts pursuant to his obligations under the Guaranty.
DISCUSSION
I. Summary Judgment Standard
Summary judgment shall be rendered when the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is appropriate in any case where the critical evidence is so weak or tenuous on an essential fact that it could not support a judgment in favor of the nonmovant. Little v. Liquid Air Corp., 37 F.3d 1069, 1076 (5th Cir. 1994). However, all evidence and the reasonable inferences to be drawn therefrom must be viewed in the light most favorable to the party opposing the motion. United States v. Diebold Inc., 369 U.S. 654, 655 (1962).
The moving party bears the burden of informing the district court of the basis for its belief that there is an absence of a genuine issue for trial, and of identifying those portions of the record that demonstrate such an absence. Celotex, 477 U.S. at 323. Once the moving party has made an initial showing, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The mere existence of some factual dispute will not defeat a motion for summary judgment. Willis v. Roche Biomedical Lab., Inc., 61 F.3d 313, 315 (5th Cir. 1995). Only disputes over facts that might affect the outcome of the suit under the governing law will preclude summary judgment. Id. Moreover, a dispute about a material fact is genuine only if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id.
The Court will not, in the absence of any proof; assume that the nonmoving party could or would prove the necessary facts. Little, 37 F.3d at 1075. Therefore, if the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case, and on which he bears the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23. Finally, the Court has no duty to search the record for triable issues. Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). "The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which the evidence supports his or her claim." Id. A party may not rely upon "unsubstantiated assertions" as competent summary judgment evidence. Id.
II. Legal Analysis
Pursuant to the Loan Agreement in this case, based on the parties stipulations, the terms therein "shall be governed by and construed in accordance with the internal laws . . . of the state of Arizona." Pl.'s Compl., Exh. A at 23. Under Arizona law, "a guaranty is a collateral promise by one person to answer for the payment of some debt or the performance of some duty in case of the default of a third party who, in the first instance, is liable for such payment or performance." Dykes v. Clem Lumber Co., 118 P.2d 454, 455 (Ariz. 1941). Where the language of a guaranty contract is clear and unambiguous, it must be given effect as it is written. Consolidated Roofing Supply Co. v. Grimm, 682 P.2d 457, 460 (Ariz.App. 1984). As such, a guarantor can be "compelled to pay" if he is under a legal obligation to do so. Mobile Discount Corp. v. LuBean, 656 P.2d 639, 641 (Ariz.App. 1982).
In this case, Defendant does not challenge his obligations under the Guaranty. Instead his Response to Plaintiff's motion raises as challenges to summary judgment that: (1) there are genuine issues as to the amount owing pursuant to the Guaranty, and (2) FINOVA has breached certain of its agreements with the borrower pursuant to the Loan Agreements, and subsequent amendments to the same. See Def.'s Resp. at 2. More specifically, Nelson asserts that the affidavit of J.T. Cook III, submitted in support of the Plaintiff's Motion, fails to establish the amount owing pursuant to the (i) Revolving Line of Credit, and (ii) the Term Loan because it only states that "after applying all proceeds of a collateral liquidation the amounts owed are X." Id. (emphasis in original). This challenge by Defendant, however, is meritless. Based on the record as presented to it by the parties, the Court finds Plaintiff's evidence satisfactorily establishes that the amounts stipulated in Paragraphs 21 and 22 of the Cook Affidavit correspond to the amounts owed by Nelson under the Guaranty for the Revolving Line of Credit ($299,660.22 plus interest) and on the Term Loan ($399,454.09 plus interest). See Pl.'s Resp. Def.'s Reply ("Pl.'s Reply") at 2. Moreover, the Court is satisfied that FINOVA has properly applied to All State's outstanding indebtedness all the payments, offsets and credits relating to All State's liquidation proceeds, including those specifically challenged by Nelson relative the auction of April 24, 2001. See Cook Aff., Exh. 3.
Defendant's second challenge centers around the violation of a Subordination and Standstill Agreement ("Subordination Agreement"), allegedly entered into by FINOVA, All State and B.D. Waters, a creditor of All State Rent, Inc. See Def.'s Resp. at 2. According to Nelson, this Subordination Agreement, of which he was a third-party beneficiary, provided that so long as All State was indebted to FINOVA, B.D. Waters would take action to collect his indebtedness against All State only after All State's indebtedness to FINOVA was satisfied. Id. However, notwithstanding this agreement, Nelson asserts that FINOVA took no steps to cause Waters to abide by the parties Subordination Agreement after Waters sued All State, and thus he was proximately damaged by All State's then ensuing inability to service its indebtedness as to FINOVA (which he had guaranteed). Id. at 2-3. Regardless of these allegations, any alleged violation of this agreement by Plaintiff still does not extinguish Nelson's obligations under the Guaranty here. Any rights that FINOVA may or may not have had against Waters in preventing it from taking any enforcement action against All State prior to Plaintiff's debt being satisfied, does not determine FINOVA's rights as against Nelson under the Guaranty. See Provident Nat'l Assurance v. Sbrocca, 885 P.2d 152, 154 (Ariz.App. 1994) ("a guaranty contract is a separately enforceable and independent [right]"). As such, the Court finds that Nelson has failed to create a genuine issue material issue of fact, and summary judgment shall be granted to FINOVA on these claims.
CONCLUSION
Accordingly, upon careful review of the parties' arguments and the relevant law, for the reasons stated previously, the Court concludes that Plaintiff's Motion for Summary Judgment shall be and are hereby GRANTED. The Court therefore awards damages to the Plaintiff as follows:
(a) $299,660.22 on the Revolving Line of Credit, plus interest accruing on the unpaid balance of such amounts at the rate of 14%
per annum from May 1, 2001 until the date of judgment;
(b) $399,454.09 on the Term Loan, plus interest accruing on the unpaid balance of such amounts at the rate of 15% per annum from May 1, 2001 until the date of judgment;
(c) costs of court; and
(d) attorneys' fees incurred or paid by FINOVA.
The Court further directs the Plaintiff to file an affidavit in support of attorneys' fees, listing billing rates and hours of work performed in the enforcement of this Guaranty. This affidavit shall be filed within 30 days from the date of this Order.
IT IS SO ORDERED.