My co-blogger, Avrohom Gefen, recently won an interesting case, Felix Storch Inc. vs. Martinucci Desserts USA Inc., that was published yesterday in the New York Law Journal.  The case was decided on January 31, 2011.

The reported facts are as follows.  Plaintiff, Felix Storch, sold commercial refrigerator units to Martinucci Desserts on credit.  Martinucci went out of business without having paid for the units.  The issue at trial was whether there was a personal guarantee by Mario Sclafani, Martinucci’s owner, to pay for the units in the event that Martinucci was unable to pay.

The signed credit application contained the following phrase: “The undersigned further agrees to personally guarantee any sum or sums of money which purchaser now owes or shall owe at any time.”  However, Sclafani claimed that although he knew the units were purchased on credit, he had never seen the application and that the signature on the application was not his.

In rejecting defendant’s argument, the Court wrote:

Sclafani’s defense was that the signature was not his. He stated that he did not handle any credit matters. Instead, he referred all credit matters to “the girls in the office.” Yet, he knew he received the Plaintiff’s units on credit. Defendant cannot escape his obligations by such a self-serving scheme whereby he denies his obligations while admitting he left it to “his girls” to do what was necessary. And, in this case, there is no question his staff signed the credit application, including the guarantee, on his behalf and returned it to the Plaintiff. Business owners who relinquish such unfettered authority to manage and complete their credit applications must assume the liability for what is completed on their behalf. Plaintiff had every expectation to rely upon the application received by telefax from Defendant’s office. Although the signatures are not an exact match (the Court does not profess to be a handwriting expert), it is clear that the affixed signature so closely resembled that of the Defendant that it was, at a minimum, signed on his behalf by, according to his testimony, the “girls in the office.” Defendant’s self-serving denial was insufficient to persuade this Court otherwise. (Emphasis added.)

The full text of the decision can be read here.