In this breach of contract action, plaintiff Yellow Book Sales Distribution Company, Inc. ("Yellow Book") alleges that the defendants, M & J Commodity Brokerage Corporation ("M & J"), James Appel and Michael Appel, failed to pay for advertising services provided as per the parties' agreements. The complaint alleges causes of action for breach of contract and account stated as against the corporate defendant and alleges a breach of contract cause of action as against the individual defendants, on a theory of guaranty. The plaintiff seeks $16,766.66 in damages, plus statutory interest and a contractual collection fee of 33%. In his answer, defendant Michael Appeldenies liability as a personal guarantor.

Prior to the trial on December 16, 2013, the parties stipulated to several facts: (1) that the corporate defendant requested that plaintiff accept and publish its advertising in several Yellow Book publications; (2) that the corporate defendant owes plaintiff the sum of $16,766.66; and (3) that the defendant James Appel filed for bankruptcy and the plaintiff was not presently proceeding against him. This left for resolution the issue of whether defendant Michael Appel is personally liable as a guarantor under any of the contracts between the plaintiff and the corporate [*2]defendant.

At the trial, plaintiff Yellowbook presented the testimony of its employee Courtney Himes and documentary evidence and defendant Michael Appel testified on his own behalf. The court credits the testimony and evidence to the extent indicated.

FINDINGS OF FACT

Courtney Himes, a "custodian of records, corporate representative and paralegal" employed by the plaintiff for the past five years, reviewed the plaintiff's records in regard to the defendant's account and found that the parties entered into several contracts during 2007 and 2008, four of which were admitted into evidence. She testified that the plaintiff performed its obligations under the contract by providing all of the advertising services requested by the defendant, and that it was not paid in full by them for those services. Himes explained that the plaintiff accepts signed copies of contracts by fax from its customers, which are then scanned into its record system for later retrieval, and that this appeared to be the procedure followed here.

Defendant Michael Appel testified that he established the corporate defendant, M & J Commodity Brokerage Corp., a container rental business, in 2002 with his son, defendant James Appel. However, he "divested" himself from the corporation in 2005 to go back to writing, leaving his son to run the business. He explained that, since 2005, he has had no involvement in the business as a partner or owner. However, in 2007 and 2008, he occasionally helped out his son by answering phones and conceded that he signed contracts on behalf of the business if there was a time constraint and the son was unavailable. Appel explained that the plaintiffs would often fax the contracts to the office at the last minute, as the publication deadline approached, and instruct him to "hurry up" and sign it and fax it back. Shown Exhibit 1A, he denied that he printed his name on it, but agreed that he had signed Exhibit 1B on the second page. He also agreed that the signature on Exhibit 1C was his own. However, he was never told by any representative from the plaintiff that he was signing as a personal guarantor and never thought he was personally obligating himself. The plaintiff declined to cross-examine this witness.

Plaintiff's Exhibit 1A, the first contract introduced into evidence by the plaintiff, is dated August 22, 2007, and requires that the defendants pay a total monthly fee of $550.00, or $6,600.00 for the contract year, for listings in various of the plaintiff's local directories. Plaintiff's Exhibit 1B appears to be a faxed version of Exhibit 1A, but with several alterations and numerous discrepancies between the two documents. Most importantly, Michael Appel's signature appears on Exhibit 1B, but does not appear on Exhibit 1A. However, Appel did not recall signing Exhibit 1B. The plaintiff's witness failed to adequately explain these variations.

The unexplained discrepancies in the documents, the illegibility of Exhibit 1B and the absence of Michael Appel's signature on Exhibit 1A precludes a finding that his signature on Exhibit 1B created a valid guaranty. The corporate defendant, however, does not dispute that it received the advertising services listed on that contract and owes the contract price.The plaintiff introduced into evidence another contract, signed the following year, on May 15, 2008, which was admitted into evidence as Plaintiff's Exhibit 1C. This contract, similar to the contract in Exhibit 1A, reflects a contract price of $40 per month for 12 months, totaling $480 for the year, for advertising in plaintiff's internet directory. Unlike Exhibits 1A, however, Exhibit 1C shows that it was signed by Michael Appel. The purported guaranty language is as follows. In [*3]the bottom right corner of the contract over the signature lines, printed in small print, is "This is an advertising contract between Yellow Book Sales and Distribution Company, Inc. or YP Tel," following by a blank line with the words "Print Customer Name." Handwritten above that blank line are the words "M & J Commodity Brokerage Corp." However, at the very end of that line is the word "and" in very small, barely legible print, followed by another blank line over the following text: "Authorized Signature Individually and for the Customer (Read paragraph 15 on the reverse hereof)." That print is so small as to be barely legible. On that signature line is what appears to be the defendant's signature, with the word "owner" handwritten after it.

Paragraph 15, referenced on the signature line, is printed on the reverse side of the contract as the final paragraph, also in very small print. It is entitled "Authority: Persons Obligated: Signer Obligated" and states as follows:

The signer agrees that he/she has the authority and is signing this agreement (1) in his/her individual capacity, (2) as a representative of the Customer, and (3) as a representative of the entity identified in the advertisement or for whose benefit the advertisement is being purchased (if the entity identified in the advertisement is not the same as the Customer or the signer). By his/her execution of this agreement the signer personally and individually undertakes and assumes, jointly and severally with the Customer, the full performance of this agreement, including payment of amounts due hereunder.

In addition, the same contract, under Paragraph 14A, provides that "[t]he individual signing this agreement on behalf of the Customer represents and warrants that he or she is authorized to sign as an owner, officer, partner or employee of Customer and that he or she is empowered to bind Customer to the terms and conditions contained therein." Subsection F of Paragraph 14, provides that "[t]his agreement may not be changed except by a writing signed by an authorized signatory of Customer and Publisher."

At the close of the evidence, the court granted a motion by the defendants to dismiss the complaint to the extent of dismissing all claims concerning Exhibits 1D and 1E, two contracts dated June 12, 2008, and October 8, 2008, respectively, as the plaintiff failed to establish any connection between those contracts and defendant Michael Appel, the alleged guarantor. This ruling left for determination only those claims related to the contracts presented as Exhibits 1A, 1B and 1C. The court finds in favor of the defendant Appel on those issues, as follows.

The plaintiff has failed to meet its met its burden of proof at the trial in that it has failed to establish, by a preponderance of the evidence, that defendant Michael Appel is liable as a guarantor on the contracts it entered with the corporate defendant.

The plaintiff is correct in arguing that "[a]n agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms." Greenfield v Philles Records, Inc., 98 NY2d 562, 569 (2002), appeal after remand 16 AD3d 228 (2005); see MHR Capital Partners LP v Presstek, Inc., 12 NY3d 640 (2009); Ashwood Capital, Inc. v OTG Management, Inc., 99 AD3d 1 (1st Dept. 2012); 150 Broadway NY Associates, LP v [*4]Bodner, 14 AD3d 1 (1st Dept. 2004). However, it is also true that extrinsic evidence of the parties' intent may be considered where "the agreement is ambiguous, which is an issue of law for the courts to decide." Greenfield v Philles Records, Inc., supra at 569; see Kasowitz, Benson, Torres & Friedman, LLP v Duane Reade, 98 AD3d 403 (1st Dept 2012), affd 20 NY3d 1082 (2013); Jet Acceptance Corp. v Quest Mexicana S. A., 87 AD3d 850 (1st Dept 2011). The same rules apply to a guaranty agreement. "Where a guaranty is clear and unambiguous on its face and, by its language, absolute and unconditional, the signer is conclusively bound by its terms absent a showing of fraud, duress or other wrongful act in its inducement." Citibank, N.A. v Uri Schwartz & Sons Diamonds Ltd., 97 AD3d 444, 446-447 (1st Dept. 2012), quoting National Westminster Bank USA v Sardi's Inc., 174 AD2d 470, 471 (1991). Conversely, where, as here, the contract "on its face is reasonably susceptible of more than one interpretation" (Chimart Assoc. v Paul, 66 NY2d 570, 573 [1986]), it is ambiguous, and warrants the consideration of extrinsic evidence.

First, in regard to the contract presented as Exhibits 1A and 1B, the plaintiff has failed to meet its burden for several reasons. As previously stated, the numerous discrepancies in the two documents, the illegibility of Exhibit 1B and the absence of Michael Appel's signature on Exhibit 1A precludes a finding that his signature on Exhibit 1B created any valid guaranty on that contract. The plaintiff simply failed to present a complete document or other competent credible and reliable proof to establish its claim against Michael Appel in regard to this contract.

Nor can plaintiff rely upon Paragraph 14 (Paragraph 14A in Exhibit 1C) to impose individual liability on Michael Appel, since it states only that the signer represents that he or she is "authorized to sign as an owner, officer, partner or employee of Customer and that he or she is empowered to bind the Customer." The court also notes that the plaintiff, by apparently altering the contract presented as Exhibits 1A and 1B after it was signed and returned, violated Paragraph 15E (Paragraph 14 in Exhibit C), which prohibits unilateral changes. The plaintiff is presumed to know the contents of the contract it drafted.

In regard to the second contract at issue (Exhibit 1C) , the evidence shows that Michael Appel signed it on the signature line under which is printed "Authorized Signature Individually and for the Customer (Read paragraph 15 on the reverse hereof)" and Paragraph 15 provides that by signing the contract, the signer is signing as a personal guarantor. As noted above, the contract is less than clear due to the size of the print and the location and fragmented nature and the wording of the purported guaranty. While the defendants did not advance the argument at trial, to the extent these contracts may be comparable to a consumer transaction, the small print and lack of clarity may have served as a basis to preclude the plaintiff from offering the contract into evidence. CPLR 4544 expressly provides that any contract involving a consumer transaction "where the print is not clear and legible or is less than eight points in depth or five and one-half points in depth for upper case type may not be received in evidence un any trial, hearing or proceeding on behalf of the party who printed or prepared such contract." Although the statute "speaks in terms of the admissibility in evidence of such a contract, the underlying purpose of this consumer legislation' is to prevent draftsmen of small, illegibly printed clauses from enforcing them." Matter of Frankel v Citicorp Ins. Servs., Inc., 80 AD3d 280, 287 (2nd Dept. 2010) quoting Matter of Filippazzo v Garden State Brickface Co., 120 AD2d 663, 665 (2nd Dept. 1986); see Sims v First Consumer Natl. Bank, 303 AD2d 288 (1st Dept. 2003).

Nonetheless, the plaintiff maintains that the language contained in the signature [*5]line and Paragraph 15 is unambiguous and constitutes an enforceable personal guaranty. In so arguing, the plaintiff relies primarily upon the Second Department's decision in Yellowbook of New York, Inc. v Shelley, 74 AD3d 1333 (2nd Dept. 2010). There, the court found an enforceable guaranty based on language on the signature line "indicating that the signatory was signing individually and for the company' and direct[ing] the signatory to read a clause on the reverse side of the particular contract" which clause "explicitly provided that the signatory of the contract agreed to accept personal liability for full performance." The court found that, by signing that contract as president of the corporation, the individual defendant had also agreed to accept personal liability, and refused to consider his testimony that he told the plaintiff he was signing only for the company and not individually. The court explained that, since the contract was unambiguous, no parol evidence could be considered. However, contrary to the plaintiff's contention, Yellowbook of New York, Inc. v Shelley is not dispositive here. Since that decision does not reveal any further detail of the particular contract the court was reviewing, it cannot be concluded that it was the same language used in the instant contract. Indeed, even the several contracts submitted by the plaintiff in this single case are not identical, and appear to change from year to year. Secondly, Michael Appel did not and does not now claim to have be the president or officer of the corporate defendant at the time of the subject contracts.

Furthermore, in addition to Yellow Book of NY, Inc. v Shelley, supra, other decisional authority relied upon by the plaintiff is from the Second Department. See also HSBC Bank USA v Goldberger, 105 AD3d 906 (2nd Dept. 2013); Florence Corp. v Penguin Constr. Corp., 227 AD2d 442 (2nd Dept. 1996); Yellowbook Co., Inc. v Mega, 190 Misc 2d 108 (App Term 2nd Dept. 2001). The plaintiff has provided no authority from the First Department that would mandate a finding of a guaranty under the facts and circumstances of this case, upon the reasoning of Yellowbook of New York, Inc. v Shelley, supra.

Rather, in Herman v Ness Apparel Co., Inc., 305 AD2d 217, 218 (1st Dept. 2003), the First Department expressly held that "[a] person who signs a writing solely as a corporate officer is not personally obligated on any contract evidenced by the writing even though the text of the writing states that the officer is to be personally obligated." In so holding, the court relied upon its decision in Rene Boas and Associates v Vernier, 22 AD2d 561 (1st Dept. 1965) which stated the same rule and noted that it had "recently been47 reaffirmed by the Court of Appeals in Savoy Record Co. v Cardinal Export Corp., 15 NY2d 1 (1964)." That is, only a "deliberately stated, unambiguous and separate expression" can personally obligate an officer or agent of a corporation. PNC Capital Recovery v Mechanical Parkings Systems, Inc., 283 AD2d 268, 270 (1st Dept. 2001), appeal dismissed 98 NY2d 763 (2002). All of these cases rely upon the rule established in Saltzman Sign Co. v Beck, 10 NY2d 63, 67 (1961), wherein the Court of Appeals explained that "[i]n modern times most commercial business is done between corporations, everyone in business knows that an individual stockholder or officer is not liable for his corporation's engagements, unless he signs individually, and where individual responsibility is demanded the nearly universal practice is that the officer signs twice - once as an officer and again as an individual." This is the controlling authority in the First Department.

Furthermore, as noted by the court in Yellowbook Sales & Distribution Co., Inc v DiGiovanni, 36 Misc 3d 1233(A) (Sup Ct, Columbia County 2012), a number of lower courts have found no valid guaranty under similar circumstances. See e.g. Yellowbook of New York [*6]LP v Kim, 2001 WL 1700320 (App Term 9th & 10th Jud Dists 2001); Yellowbook Co., Inc. v Greene, 1993 WL 603209 (Dist Ct, City of NY 1993). To the extent those decisions are critical of the form of the plaintiff's contracts, this court is in agreement. Indeed, a reasonable argument can be made that the plaintiff's standard contract, by providing only a single signature line, and including the guaranty language in small print on the back of the contract, is designed to "trap an unwary corporate officer into making an unintended assumption of personal liability." Florence Corp. v Penguin Constr. Corp., supra at 443. As observed by the court in Yellowbook Co., Inc. v Greene, supra, to do so would run afoul of the "strong presumption imposing a personal liability upon a corporate officer in the absence of clear and explicit evidence, even when the officer is a signatory to a contract purporting to bind him personally (cite omitted)."

In that regard, it is notable that in Yellowbook of New York, LP v Platt, 2003 WL 1389103 (Dist Ct, Nassau County 2003), the court stated that, when the plaintiff was asked why it did not re-draft its contracts to include two separate signature lines, one binding the principal and one personally guaranteeing the obligation, so as to avoid any confusion, plaintiff's counsel candidly explained on the record that it was a considered decision to include only one line since customers were likely to refuse to sign two lines. This remark is in keeping with Appel's testimony that it was the plaintiff's practice to demand signatures at the very last minute.These and other such deceptive and misleading practices are not and should not be countenanced. See Sims v First Consumer Natl. Bank, supra.

Finally, the application for contractual "collection fees of 33% " made by the plaintiff in the complaint is denied. No such request was made or evidence presented at trial to support it. Indeed, no such provision is found in the various contracts submitted in this case.

For these reasons, the plaintiff is awarded a money judgment against defendant M & J in the sum of $16,766,66, with statutory interest from May 15, 2008, and the complaint is dismissed as against defendant Michael Appel.

Accordingly, it is:

ORDERED that the plaintiff is awarded a money judgment against defendant M & J Commodity Brokerage Corporation, on consent, in the sum of $16,766,66, with statutory interest from May 15, 2008, and it is further,

ORDERED that the complaint is dismissed as against defendant Michael Appel, and it is further,

ORDERED that plaintiff's application for additional relief is denied, and it is further,

ORDERED that the Clerk shall enter judgment accordingly.

This constitutes the Decision and Order of the court.

Dated: March 28, 2014_____________________________NANCY M. BANNON, J.C.C.