CHARLESTON — The West Virginia Intermediate Court of Appeals partially affirmed and partially reversed an appeal between an attorney and a trust.
All parties are appealing a judgment made on July 21, 2022, by Monongalia Circuit Court, which had granted partial summary judgment to PITA LLC and Milan Puskar Revocable Trust and had entered a monetary judgment of $1,291,518.83 against Segal, with post-judgment interest at a rate of 4%, according to an opinion in the West Virginia Intermediate Court of Appeals.
Judge Thomas E. Scarr authored the majority opinion.
PITA filed its appeal on July 28, 2022, which is one of the two cases combined in this appeal, while Segal filed his on Aug. 22, 2022. These appeals have been consolidated for oral argument and decision.
PITA and the trust alleged three assignments of error, while Segal also raised three assignments of error in his appeal.
This case involves guaranties provided to secure a $3 million loan obtained by Protea Biosciences Inc. from Centra Bank, which is now United Bank.
Protea, a bio-analytic technology company associated with West Virginia University, received the loan in 2009. The guarantors Milan Puskar, Leonard Harris, Stanley Hostler and Segal each signed guaranties for $1 million, stating their liability would only be discharged upon full payment of the loan.
A year later, on July 30, 2010, the trust signed an additional $3 million guaranty. Despite this, there was no formal document absolving Segal, Hostler, Harris, or Puskar as guarantors. Hostler and Harris alleged Puskar verbally stated his intention to cover Protea's obligations, but this was not documented, and Centra's loan officer denied knowledge of such an agreement.
In November 2011, the trust provided 500,000 shares of Mylan Laboratories stock as collateral, according to the court document.
In 2017, a Change in Terms Agreement was signed, confirming the guarantors' continued liability in case of Protea's default. It contained a disclaimer against oral agreements contradicting its terms. That same here, PITA was created and acquired Protea's note and related documents from United.
When Protea defaulted in later that year, PITA demanded payment from Segal, Harris and Hostler's estate. When they refused, PITA and the trust sued them.
The lower court granted partial summary judgment to plaintiffs and Segal, entering judgment against Segal. All parties appealed this decision.
"In the present case, we see no reason to depart from the general rule that coguarantors are equally liable for the balance of an underlying obligation, up to the amount of their individual guaranties," Scarr wrote in the ruling. "Thus, Segal would be responsible for one half of the unpaid balance, up to the limit of his guaranty. Although co-guarantors may agree among themselves as to their respective shares, and provide for something other than equal shares, we find no such agreement, either express or implied, in this case."
The court upheld the lower court's decision, confirming Segal and the trust's equal liability for Protea's unpaid loan balance.
The opinion emphasized that co-obligors, desiring different liability arrangements, must establish such agreements either in their guaranties or separate contracts.
Attorneys involved declined to comment on the matter, as Segal is appealing the ruling.
West Virginia Intermediate Court of Appeals case numbers: 22-ICA-4, 22-ICA-46