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Banks Beware: Retain Clear Copies

We all do our best to keep thorough records, especially those in the banking industry.  But there are times, through no fault of our own, that records are misplaced or poor copies of the records are all we have.  On Friday Feb. 28, 2014, the Georgia Court of Appeals sent us all a warning:  keep poor copies at your own risk.  

The case is Swanstrom v. Wells Fargo Bank, A13A1836, and it involves a bank, Wells Fargo, that sought to recover a debt under a personal guaranty.  In support of its motion for summary judgment, Wells Fargo submitted a copy of the guaranty, and the trial court granted the bank’s summary-judgment motion.  

The guarantor appealed, claiming that the “record does not contain the terms of his personal guaranty.”  The Court of Appeals agreed, and held that the copy of the guaranty that Wells Fargo submitted was illegible and thus “not entitled to evidentiary consideration.”  The Court of Appeals decided that Wells Fargo, “as the party alleging that a contract exists, has the burden of proving its existence and its terms,” had not met its burden and reversed the trial court’s grant of summary judgment.    

The Swanstrom decision should not come as a surprise.  But we should all use it as a lesson—especially those in the banking industry—retain clear copies of all notes and guaranties.  Otherwise, summary judgment may be difficult, and a trial may be necessary.