Opinion
NO. 5-19-0104
05-13-2020
PEOPLES NATIONAL BANK, N.A., Plaintiff-Appellee, v. JOEL A. THORSON, THORSON APPLIANCE SALES, LLC, BOBBY G. DARNELL JR., UNKNOWN OWNERS, and NON-RECORD CLAIMANTS, Defendants (Bobby G. Darnell Jr., Defendant-Appellant).
NOTICE
Decision filed 05/13/20. The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.
NOTICE
This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1). Appeal from the Circuit Court of Marion County. No. 16-CH-77 Honorable Allan F. Lolie Jr., Judge, presiding. JUSTICE CATES delivered the judgment of the court.
Justices Moore and Boie concurred in the judgment.
ORDER
¶ 1 Held: The trial court's finding that the unconditional guarantee was valid and enforceable was not against the manifest weight of the evidence, and the court did not err in entering the deficiency judgment against the guarantor where the Bank presented adequate evidence to establish the value of the mortgaged property. ¶ 2 Defendant, Bobby G. Darnell Jr., appeals from the judgment of the circuit court of Marion County, enforcing an unconditional guarantee on a commercial loan. Darnell claims that the circuit court erred in finding that the unconditional guarantee was valid and enforceable, and in entering a deficiency judgment based on an unfair and unreasonable valuation of the mortgaged property. For the reasons that follow, we affirm.
¶ 3 I. BACKGROUND
¶ 4 In early 2012, defendant Joel Thorson contacted plaintiff, Peoples National Bank, N.A. (Bank), to inquire about obtaining a commercial loan to purchase an existing appliance business. Bo Baer, the Bank's vice president and loan officer, reviewed Thorson's finances and advised Thorson that he would need a guarantor for the loan. Thorson asked his longtime friend, Bobby Darnell, to act as a guarantor on the loan. Darnell, a resident of Tennessee, met with Thorson and Baer at the Bank's branch office in Centralia, Illinois. A short time later, Darnell's application to act as guarantor was approved, and the Bank mailed a five-page, "Small Business Administration Unconditional Guarantee" (Guarantee) to Darnell for his signature. On May 17, 2012, Darnell signed the signature page of the Guarantee. Darnell's wife, Sara, faxed the signature page to the Bank. Darnell had agreed to mail the original signed document back to the Bank, but for reasons that are not clear, the Bank did not receive the original document by mail. The Bank subsequently mailed an identical copy of the Guarantee to Darnell. Darnell signed and dated the document on June 20, 2012, and he returned it to the Bank by mail. ¶ 5 Meanwhile, on May 18, 2012, Thorson executed a promissory note, secured by a mortgage, and closed on his loan. He purchased the appliance business, including the building, inventory, and good will for $306,000. Thorson made monthly payments during the first two years of the loan, but he could not pay the real estate taxes because the business was underperforming. Thorson was unable to make his monthly payments after June 2016, and the Bank exercised its option to declare the entire loan balance of $275,966.17 immediately due and payable. Thorson was unable to pay the balance, and the Bank commenced proceedings to foreclose on the mortgage and enforce the Guarantee.
¶ 6 A. Proceedings on Foreclosure and Enforcement of the Guarantee
¶ 7 On November 4, 2016, the Bank filed a verified complaint in the circuit court of Marion County against Thorson, Darnell, and unknown owners and non-record claimants. In count I, the Bank sought a judgment of foreclosure and sale of the mortgaged property. In count II, the Bank sought to enforce the Guarantee executed by Darnell. Copies of the mortgage contract (exhibit A), the promissory note (exhibit B), and the Guarantee (exhibit D) were attached to the verified complaint. ¶ 8 The attached promissory note, executed by Thorson on May 18, 2012, showed that the amount of the loan was $306,000, with a variable rate of interest. Based on the terms of the note, Thorson was required to make monthly payments covering principal and interest, to pay the real taxes, and to maintain insurance. Failure to make a payment when due, or a failure to pay the taxes when due, were among the events constituting a default. In the event of a default, the Bank, at its option, could require the borrower to make immediate payment of all amounts owed under the note. The Bank could also collect all amounts owing from any borrower or guarantor, obtain a judgment and take possession of any collateral, and sell, lease, or otherwise dispose of the collateral. ¶ 9 The note was secured by a mortgage contract which Thorson executed on May 18, 2012. The mortgage contract contained similar provisions addressing default. In the event of a borrower's default, the Bank's remedies included exercising its option to declare the entire debt immediately due and payable, seeking a judicial foreclosure and sale of the property, and seeking a deficiency judgment. ¶ 10 The Guarantee, attached as exhibit D, is a five-page, preprinted form, titled "SBA Unconditional Guarantee." The parties and loan information are displayed in a table in the top section on the front page of the form as follows:
| SBA Loan # | 50-07 |
| SBA Loan Name | Thorson Appliance Sales LLC |
| Guarantor | Bobby G. Darnell, Jr. |
| Borrower | Thorson Appliance Sales LLC and Joel Thorson |
| Lender | Peoples National Bank, N.A.520 S. 42nd Street, Mt. Vernon, IL 62864 |
| Date | May 18, 2012 |
| Note Amount | $ 306,000.00 |
"1. GUARANTEE¶ 11 The Guarantee contained 12 sections. Section 2 described the Note as "the promissory note dated May 18, 2012 in the principal amount of Three Hundred-six thousand ($306,000.00) Dollars, from Borrower to Lender." Section 4 set out the general powers that the Lender could exercise without notice, and without the consent of the Guarantor. These general powers included foreclosing on collateral, bidding or buying the collateral, and exercising any rights it had under the promissory note and loan documents. ¶ 12 Section 6 set forth the rights, notices, and defenses that the Guarantor agreed to waive. Under section 6 C, the Guarantor agreed to waive defenses based on any claim that: (3) the Lender or others improperly valued or inspected collateral; (4) the collateral changed in value; (7) the Lender did not conduct a commercially reasonable sale; (8) the Lender did not obtain fair market value of the collateral; and (11) the Lender made errors or omissions in loan documents or the administration of the loan. ¶ 13 The final page of the Guarantee contained two sections of acknowledgements. In section 11, the Guarantor acknowledged that Guarantor "has read and understood the significance of all terms of the Note and the Guarantee, including all waivers." In section 12, the Guarantor acknowledged that in signing the document, the Guarantor "becomes obligated under this Guarantee." Beneath the acknowledgements was a signature line. Darnell's signature appeared on the signature line on the last page of the attached Guarantee (exhibit D). The signature was dated May 17, 2012. ¶ 14 On December 27, 2016, Darnell appeared pro se and filed a verified answer and affirmative defense in response to the Bank's complaint. In his answer to count II, enforcement of the Guarantee, Darnell admitted "that he signed the Unconditional Guarantee attached as Exhibit D of the Complaint," but denied all other averments. In his affirmative defense, Darnell alleged that he was fraudulently induced into signing the Guarantee, based upon Baer's representation that Darnell would be released from his obligations under the Guarantee after two years. Darnell further alleged that after two years had passed, he inquired about the release, and the Bank refused to release him from the Guarantee. ¶ 15 Subsequently, Darnell retained an Illinois attorney to represent him in the case. On March 7, 2017, Darnell's counsel, with leave of court, filed an amended verified answer, with affirmative defenses. In the amended answer to count II of the complaint, Darnell denied that he executed the Guarantee on May 18, 2012, noting that the Guarantee was executed on May 17, 2012. He further denied that he guaranteed payment of the loan "per the terms of the Guarantee attached to the complaint." In the first affirmative defense, Darnell asserted that the Guarantee was invalid and unenforceable because the Guarantee did not contain the essential terms of the promissory note and was executed one day before the promissory note was executed. In the second affirmative defense, Darnell asserted that he was fraudulently induced to execute the Guarantee based upon the Bank's express representations and assurances that the Guarantee would be in force and effect for a period not to exceed two years, and that the Bank would release Darnell from the Guarantee if Thorson performed his payment obligations under the note for a period of two years following execution of said note. ¶ 16 Darnell also filed a verified counterclaim against Thorson on March 7, 2017. Therein, Darnell asserted that on or about May 17, 2012, he "executed an Unconditional Guarantee," and that a "true and correct copy of said Unconditional Guarantee was attached to Plaintiff's Complaint as Exhibit D and incorporated herein by reference." Darnell further asserted that if he was found liable under the Guarantee, then he was entitled to be indemnified by Thorson. ¶ 17 On April 10, 2017, the Bank filed a motion to strike Darnell's affirmative defenses. In response to the first affirmative defense, the Bank argued that the Guarantee was clear and unambiguous, and that under the express provisions in the Guarantee, Darnell waived any defenses based on the Bank's alleged errors or omissions in the loan documents, or in the administration of the loan. In response to the second affirmative defense, the Bank asserted that its loan officer, Bo Baer, informed Darnell that any potential release of the Guarantee would be dependent upon Thorson's performance of his loan obligations and an adequate showing that the cash flow of the business could support the amount of the debt for a period of two years. The Bank further noted that Darnell did not request a release from the Guarantee prior to Thorson's default. Finally, the Bank pointed to provisions in the Guarantee declaring that a Guarantor may not employ an oral statement to raise a defense to the Guarantee or to contradict or change the written terms of the Note or the Guarantee. The Bank attached and incorporated the Note, the Guarantee, and the affidavit of Bo Baer in support of its motion to strike the affirmative defenses. ¶ 18 In his affidavit, Baer stated that he informed Darnell "that any potential release would be dependent on the borrower's performance and the cash flow of the business, and that if there was adequate cash flow to support the debt for two years, then the Bank would consider a release." Baer noted that the Guarantee was mailed to Darnell's home address in Tennessee, at Darnell's request; that Darnell signed the Guarantee on May 17, 2012, one day before Thorson executed the promissory note and closed on the loan; and that Darnell did not ask any questions about this process. ¶ 19 On June 13, 2017, the trial court heard arguments on the Bank's motion to strike Darnell's affirmative defenses and took the matter under submission. In an order entered June 15, 2017, the court granted the Bank's motion to strike. The court found that there was no doubt that Darnell executed the Guarantee, and that in signing the Guarantee, Darnell acknowledged that he had read and understood its terms. The court further found that the Guarantee contained clear and unambiguous terms of the Note, including the loan number, and the date and the amount of the loan, as well as clear and unambiguous provisions regarding the rights and defenses Darnell waived when he signed the Guarantee. The court noted that the Guarantee clearly provided that oral statements were not binding. The court rejected Darnell's arguments that the Guarantee was unenforceable because it lacked specificity, and that Darnell had been fraudulently induced to sign it. ¶ 20 On August 31, 2017, the trial court found Thorson in default and entered a judgment of foreclosure. On September 8, 2017, Thorson was given notice that the judgment of foreclosure had been entered, and that he could redeem the subject property by tendering $298,994.81 plus fees and costs by November 29, 2017. Thorson did not redeem the property and a sheriff's sale was scheduled for January 16, 2018. An appraisal performed at the Bank's request, prior to the sale, valued the subject real property at $90,000. Darnell and the Bank attended the sheriff's sale. Both bid on the property. The Bank was the highest bidder, offering to purchase the property for $90,000. On January 30, 2018, the trial court entered an order confirming the sale of the property to the Bank for the sum of $90,000. The court found that the terms of the sale were fair and not unconscionable, that the sale was conducted fairly and without fraud, and that justice was done by the sale. A deficiency judgment was entered against Thorson in the amount of $230,021.20. ¶ 21 On February 2, 2018, the Bank filed a motion for summary judgment on count II of the complaint. The Bank argued that under the provisions of the Guarantee executed on May 17, 2012, Darnell owed the amount of the deficiency, plus accrued interest, costs, and attorney fees. ¶ 22 Darnell filed a response in opposition to the Bank's motion for summary judgment. Darnell argued that he had been fraudulently induced to execute the Guarantee based upon express representations by Bo Baer, the Bank's loan officer, that the Guarantee would be released after two years if Thorson was current on his loan payments. Darnell further argued that there was a triable issue of fact as to whether the Bank's bid to purchase the property for $90,000 was fair and reasonable, where the property had an appraised value of $171,000 in 2012, and the Bank offered no evidence to explain the nearly 50% decline in the appraised value by 2017. Copies of the 2012 appraisal and the Commercial Sales Contract were attached in support of Darnell's response in opposition. These documents indicated that in 2012, the subject property had been valued at $160,000, and the good will, equipment, and inventory had been valued at $142,000. ¶ 23 An affidavit by Thorson was also attached in support of Darnell's position. Therein, Thorson averred that Bo Baer had assured Darnell the Guarantee would be released after two years if Thorson kept his loan payments current, and that Darnell relied upon Baer's representations. According to Thorson's affidavit, Baer told Darnell that the loan amount was $306,000, that the real estate alone had a value of $171,000, and that in the event of a default, Darnell was assuming little risk. Thorson asserted that he was current on his payments for more than two years. Thorson also asserted that he had made some improvements to the real property, and that when he tendered possession of the property to the Bank on November 1, 2016, the property was in as good, or better, condition than when the loan was made. ¶ 24 In a reply memorandum, the Bank noted that Darnell's affirmative defenses, including the claim of fraudulent inducement, had been stricken. The Bank also noted that the court had confirmed the sheriff's sale, after finding that it was conducted fairly and without fraud. The Bank attached the appraisal dated November 2, 2017, which indicated that the real property had an appraised value of $90,000. ¶ 25 On April 17, 2018, the trial court denied the Bank's motion for summary judgment. The court found there was "a triable issue of fact as to whether the valuation of the real estate at $90,000 was fair and reasonable for purposes of this guarantee."
Guarantor unconditionally guarantees payment to Lender of all amounts owing under the Note. This Guarantee remains in effect until the Note is paid in full. Guarantor must pay all amounts due under the Note when Lender makes written demand upon Guarantor. Lender is not required to seek payment from any other source before demanding payment from Guarantor."
A cover letter accompanied Darnell's pro se answer. The cover letter, written by an attorney in Tennessee, requested the Marion County circuit clerk to file the pro se answer and affirmative defense.
Subsequently, the Bank was granted leave, without objection, to amend its complaint by interlineation to allege that the Guarantee was executed by Darnell on May 17, 2012.
¶ 26 B. The Bench Trial
¶ 27 A bench trial was held on September 13, 2018. During the trial, the court permitted Darnell to make an offer of proof as to the affirmative defenses regarding the invalidity of the Guarantee and fraudulent inducement. ¶ 28 Bo Baer was the Bank's first witness. Baer testified that Thorson came to the Bank in early 2012, to inquire about obtaining a loan to purchase a local appliance business. At that time, Baer was the Bank's vice president and loan officer. Baer reviewed Thorson's finances and determined that Thorson could apply for a loan through an SBA Guarantee program. Thorson was informed that he would need a guarantor who could help service the loan, should the business struggle. Baer recalled that Thorson sought help from a friend, Bobby Darnell, who was a tobacco farmer in Tennessee. Baer testified that in February 2012, the Bank conducted a check on Darnell's financial strength. Baer, Darnell, and Thorson met at the Bank's office in Centralia sometime between February 16, 2012, and March 5, 2012. Baer recalled that Sara Darnell may have also attended the meeting. ¶ 29 Baer testified that Darnell completed the SBA Guarantee application on March 26, 2012. Baer further testified that the terms of the underlying promissory note, including the principal amount of the loan and interest rate, would have been clarified with Darnell at that time. Baer recalled that Darnell had requested that the Guarantee be mailed to his Tennessee address, so he would not have to make another trip to Illinois to sign it. Darnell agreed to sign the document, transmit the signed copy to the Bank by fax, and mail the original signed document to the Bank. Pursuant to that arrangement, the Bank mailed the Guarantee to Darnell's home address. Baer stated that in accordance with the Bank's standard operating procedures, the entire five-page Guarantee would have been mailed to Darnell. Baer recalled that the signature page of the Guarantee was faxed to the Bank prior to the closing of Thorson's loan. Baer identified the Guarantee, including the faxed signature page that contained Darnell's signature, dated May 17, 2012. Baer recalled that the Bank did not receive the original, signed Guarantee by return mail. Baer testified the Bank preferred to have an original, signed document, so an exact copy of the Guarantee was mailed to Darnell. Darnell signed and returned the document by mail. The signature was dated June 20, 2012. Baer stated that the document signed on June 20, 2012, was identical to the Guarantee signed on May 17, 2012. ¶ 30 Baer recalled that at some point prior to signing the Guarantee, Darnell asked whether he could ever be released from his obligations under the Guarantee. Baer noted that this was a frequently asked question. Baer informed Darnell that if, after two years in business, Thorson was meeting his loan obligations, and if the tax returns showed that the business had an adequate cash flow, then Darnell could request to be released from the guarantee obligations. Baer did not remember Darnell conditioning his willingness to act as a guarantor on assurances that he would be released from his obligations in two years. Baer noted that Thorson was not able to pay the real estate taxes during the first two years of business operations, and that while Thorson made his monthly payments during the first two years of operation, the tax returns showed that the business was underperforming during that time. Baer could not recall whether Darnell requested a release from the Guarantee before Thorson defaulted on the loan. ¶ 31 Jason Russell, an assistant vice president and retail collection portfolio manager, was the Bank's next witness. Russell testified that the Bank ordered an appraisal of the mortgaged property in preparation for the sheriff's sale. The property was appraised in November 2017, and the appraised value was $90,000. Russell acknowledged that in March 2012, the property had been appraised at $171,000. Russell stated that he accepted the $90,000 appraisal, without making an inquiry into the reasons for the decline in the appraised value. Russell recalled that the Bank and Darnell were the only bidders at the sheriff's sale. He testified the Bank initially bid $76,500, or 85% of the appraised value, and that when Darnell raised the bid, the Bank then bid $90,000. Darnell did not bid again. The Bank was the top bidder and purchased the property for $90,000. Russell stated that the Bank listed the property with a realtor in Centralia. Russell noted that other collateral, including equipment and inventory, was liquidated, and credited against the loan balance. ¶ 32 The Bank then offered the evidence deposition of William Kleeman. Kleeman had been employed as a certified real estate appraiser since 1992, and he had performed numerous commercial appraisals during his career. Kleeman testified that the Bank hired his company to appraise the subject property in 2012, and again in 2017. Kleeman noted that one of his employees performed the 2012 appraisal. Kleeman supervised the work and approved the final appraisal. Kleeman stated that the estimated market value of the subject property was $171,000 in 2012. This valuation was based upon available sales' comparisons for properties sold in 2011, 2010, and 2007, respectively. Kleeman testified that he personally inspected the subject property in 2017, and that he prepared the most recent appraisal using comparable sales of three other commercial properties. He noted that all three commercial properties were on the same street as the subject property, and that all three properties had been sold within 1½ months prior to this latest appraisal. Kleeman testified that the estimated market value of the property in 2017 was $90,000. Kleeman stated that the 2012 appraisal was conducted appropriately. He noted that there were fewer commercial sales available for comparison in 2012, and that there were more recent and nearby comparable sales available in 2017. ¶ 33 The Bank also offered into evidence the affidavit of Stacie Wampler, a licensed real estate broker. Wampler had inspected the subject property. Thereafter, the property was listed for sale at $98,900. Wampler further stated that she received two offers to purchase the property. The first offer of $65,000 was made in May 2018. The second offer of $50,000 was made in August 2018. ¶ 34 Thorson was called as Darnell's first witness. Thorson testified that he and Darnell were longtime friends. Thorson asked Darnell to act as a guarantor on a loan for the purchase of an appliance business. Thorson recalled meeting with Darnell, Sara Darnell, and Bo Baer at the Bank's offices in Centralia, Illinois, a few days prior to the closing. During the meeting, Baer told Darnell that the appliance store had been a good business. Thorson testified that at some point during the meeting, Darnell made it clear that he would have to be off the loan in three years, and two years, if possible, because the Guarantee would interfere with his farm operating loan. Baer stated there should be no problem getting off the Guarantee in that time frame, if everything was current. Thorson did not recall Baer mentioning that the Bank would also require documentation that the business was financially strong. Thorson testified that Baer may have mentioned that requirement later. Thorson stated that he made his monthly payments for the first two years of the loan. He acknowledged that he was unable to pay the taxes due on the property in 2012, 2013, and 2014, and that the Bank paid the delinquent taxes in 2015 or 2016. ¶ 35 Sara Darnell testified that she was present for the meeting in May 2012. Sara noted that her husband was indecisive about signing the Guarantee because the loan for their farming operations was scheduled for renewal in three years' time. Sara stated that her husband agreed to act as a guarantor after receiving assurances he could be released from his obligations in two years. She could not recall whether a release from the Guarantee was conditioned on the loan being in good standing. When asked whether the Bank had provided a written document stating that her husband would be released from the Guarantee in two years if Thorson was current on his loan obligations, Sara testified that she was not aware of any document. ¶ 36 Darnell testified that Thorson had asked Darnell to act as a guarantor in March or April of 2012. Darnell indicated that he and his wife, Sara, met with Thorson and Bo Baer at the Bank's office in Centralia to discuss the matter. During that meeting, Darnell explained that he had an operating loan which came up for renewal every three years, and that he did not want to be on the Guarantee after two years because the operating loan would be up for renewal. Baer indicated to Darnell that this should not be a problem. Darnell testified that he made it clear that his willingness to sign the Guarantee was contingent upon being released after two years, so long as Thorson was making his payments. Darnell testified that he "probably" would not have signed a guarantee without Baer's representation about being released in two years. Darnell also testified that he apparently did not comprehend what he was being asked to guarantee. He thought he had only offered to guarantee the $160,000 portion of the loan that covered the building. Baer had indicated that the building was worth over $225,000, and that if Thorson lost the business, Darnell would likely make money. Darnell testified that he trusted Baer on these matters. ¶ 37 Darnell acknowledged that he signed an SBA application to act as a guarantor, and he identified his signature on that document. Darnell also identified his signature on the Guarantee. Darnell stated he had no recollection of signing a copy of the Guarantee in June 2012, but he acknowledged that he might have signed it. Darnell testified that he called Baer in May 2014 to ask about getting off the Guarantee. Baer stated that the Bank could not release Darnell from his obligations at that time because Thorson did not have adequate funds in the business account. Darnell testified that he was told to wait a little while, and that if there were adequate funds in the Thorson's business account, the Bank would try to release the Guarantee. During cross-examination, Darnell acknowledged that he guaranteed a loan for Thorson. He noted that he intended to guarantee only that portion of the loan covering the building. Darnell stated that he had not seen the first four pages of the Guarantee prior to signing the signature page of that document on May 17, 2012. Darnell also acknowledged that he did not lose his farm operating loan. ¶ 38 At the close of the evidence, the trial court took the matter under advisement. On November 2, 2018, the court entered a judgment in favor of the Bank. The court concluded that the Bank had proven its cause of action for breach of the Guarantee, and that under the terms of the Guarantee, the Bank was entitled to a deficiency judgment of $243,993.88 against Darnell. Darnell's motion to reconsider was denied, and this appeal followed.
The SBA Unconditional Guarantee document signed by Darnell on May 17, 2012, was marked as exhibit D and attached to the complaint. During the trial, this same Guarantee document was marked as exhibit 1, and the copy of the Guarantee which Darnell signed on June 20, 2012, was marked as exhibit 2.
¶ 39 II. ANALYSIS
¶ 40 A. The Validity and Enforceability of the Guarantee
¶ 41 On appeal, Darnell contends that the trial court erred in entering a deficiency judgment against him, where the Bank failed to prove by a preponderance of the evidence that the Guarantee was valid and enforceable. Darnell also argues that the Guarantee is invalid and unenforceable because he was fraudulently induced into signing it. ¶ 42 In a bench trial, it is the function of the trial judge to weigh the evidence and make findings of fact. Eychaner v. Gross, 202 Ill. 2d 228, 251 (2002). On appeal, the trial court's factual findings will not be overturned unless they are against the manifest weight of the evidence. Eychaner, 202 Ill. 2d at 251. A factual finding is against the manifest weight of the evidence where the opposite conclusion is clearly apparent or the finding is unreasonable, arbitrary, or not based upon the evidence presented. Eychaner, 202 Ill. 2d at 252. Under the manifest weight standard of review, deference is given to the trial court, as finder of fact, because the trial court is in a better position than the reviewing court to observe the conduct and demeanor of the parties and the witnesses. Eychaner, 202 Ill. 2d at 270-71. A reviewing court will not substitute its judgment for that of the trial court as to the credibility of the witnesses, the weight to be given to the evidence, and the inferences to be drawn from the evidence. Eychaner, 202 Ill. 2d at 270-71. ¶ 43 A guarantee is a third party's promise to answer for the payment of an obligation if the person primarily liable fails to make the payment or perform the obligation. McCracken v. Olson Cos., 149 Ill. App. 3d 104, 112 (1986). A guarantee is interpreted under the general rules of construction applicable to contracts. Bank of Benton v. LaBuwi, 194 Ill. App. 3d 489, 495 (1990); Du Quoin State Bank v. Daulby, 115 Ill. App. 3d 183, 185-86 (1983). A guarantee that is unambiguous must be enforced as written even when it contains broad statements of guarantor liability. Daulby, 115 Ill. App. 3d at 185. ¶ 44 When a guarantee is executed contemporaneously with the note it guarantees, the consideration for the note is sufficient consideration for the guarantee and no new consideration for the guarantee is required. L.D.S., LLC v. Southern Cross Food, Ltd., 2011 IL App (1st) 102379, ¶ 44. When a guarantee is executed after the underlying obligation is entered, new consideration is generally required for the guarantee. L.D.S., LLC, 2011 IL App (1st) 102379, ¶ 44. ¶ 45 With these principles in mind, we consider Darnell's challenges to the validity and enforceability of the Guarantee. Initially, Darnell claims that the Guarantee is invalid and unenforceable because, according to Bo Baer's testimony, the Bank had a policy requiring an original, signed document in order to close on an underlying loan, and the Bank had in hand only the faxed signature page of the Guarantee when Thorson closed on the loan. ¶ 46 At trial, Bo Baer, the Bank's loan officer, was the only witness to give testimony on the Bank's policies and procedures with respect to the Guarantee. Baer testified that the Bank mailed the complete five-page Guarantee to Darnell's home. According to Baer's testimony, Darnell had agreed to sign the Guarantee, fax the signed document to the Bank, and then return the original signed document to the Bank by mail. Baer testified that the signature page, containing Darnell's signature, with a date of May 17, 2012, had been faxed to the Bank prior to the closing, but the original, signed document had never been received by return mail. Baer further testified that under the Bank's policies, a faxed signature was acceptable and could be relied upon to close the loan. He stated that a copy of the Guarantee was subsequently mailed to Darnell, for Darnell's signature, because the Bank preferred to have an executed document for its records, as a matter of "housekeeping." Baer testified that the Guarantee document signed June 20, 2012, was the "exact same" as the Guarantee signed on May 17, 2012. During the trial, Darnell acknowledged that his signature, and the handwritten date of May 17, 2012, appeared on the faxed signature page. Darnell also acknowledged that his signature appeared on the Guarantee document signed June 20, 2012, although he testified that he had no recollection of signing that document. Darnell's counsel also stipulated to the admissions made in Darnell's answer and amended answer. In those pleadings, Darnell admitted he signed the "Unconditional Guarantee attached as Exhibit D of the complaint." ¶ 47 After reviewing the record, we find there was ample evidence to establish that Darnell executed the Guarantee on May 17, 2012, one day prior to the loan closing, and that the faxed signature page satisfied the Bank's requirement for a signed document. In addition, there was ample evidence to show that the Guarantee signed by Darnell on June 20, 2012, was part of a single transaction. The copy of the Guarantee, signed June 20, 2012, contained the same terms, obligations, and risks as the original Guarantee signed May 17, 2012. The copy signed June 20, 2012, did not modify any provisions of the original Guarantee or the underlying note, and the guarantor was not subjected to any additional risk. Therefore, additional consideration was not required for the Guarantee. See L.D.S., LLC, 2011 IL App (1st) 102379, ¶ 44. ¶ 48 Darnell next claims that even if the faxed signature page satisfied the Bank's requirement for a signed document, the Guarantee is unenforceable because it was signed before the execution of the underlying promissory note, and failed to include essential terms of that note. Darnell asserts that a guarantee must disclose the type and rate of interest as essential terms of the note, so that the guarantor knows precisely what he is contracting to guarantee. ¶ 49 To be enforceable, the essential terms of a contract must be definite and certain. Academy Chicago Publishers v. Cheever, 144 Ill. 2d 24, 29 (1991). A contract is sufficiently definite and certain " 'if the court is enabled from the terms and provisions thereof, under proper rules of construction and applicable principles of equity, to ascertain what the parties have agreed to do.' " Academy Chicago Publishers, 144 Ill. 2d at 29 (quoting Morey v. Hoffman, 12 Ill. 2d 125, 131 (1957)). A contract may be enforced even though some contract terms are missing or left to be agreed upon; but where essential terms are so uncertain that there is no basis for deciding whether the agreement has been kept or breached, there is no valid and enforceable contract. Academy Chicago Publishers, 144 Ill. 2d at 30. ¶ 50 Darnell relies on United States v. Fitzgerald, 938 F.2d 792 (7th Cir. 1991), in support of his contention that the type and rate of interest were essential terms of the underlying note that were not disclosed to him when he executed the Guarantee. In Fitzgerald, the guarantors signed an SBA personal guaranty in which they promised to repay the principal and interest on a promissory note that was to be signed by the borrower, on a date certain, but several days after the guaranty was executed. Fitzgerald, 938 F.2d at 793. The guaranty form indicated that the note would involve a principal sum of $63,000 and an interest rate of 7 3/8 % per annum. Fitzgerald, 938 F.2d at 793. The borrower, a real estate developer, used the loan funds to remodel property which he was leasing to the guarantors with an option to purchase. Four years later, the developer and the guarantors agreed to terminate the lease and purchase option. When the developer was subsequently unable to lease the property, he deeded it to the SBA. Several years later, the SBA obtained a deficiency judgment against the guarantors. Fitzgerald, 938 F.2d at 794. ¶ 51 On appeal, the guarantors in Fitzgerald claimed, in part, that they should not have been held liable for the unpaid balance of the loan because the guaranty lacked "certainty of terms." Fitzgerald, 938 F.2d at 794. The guarantors argued that except for the principal amount of the loan and the interest rate, the terms of the underlying note were unknown to them when they signed the guaranty. Fitzgerald, 938 F.2d at 794. The United States District Court for the Southern District of Indiana found that the guaranty was sufficiently certain to be binding. Fitzgerald, 938 F.2d at 794. On appeal, the United States Court of Appeals for the Seventh Circuit held that state law generally applied to disputes arising from loans guaranteed by the SBA and affirmed the district court's finding that the guaranty was sufficiently certain to be binding under the state law of Indiana. Fitzgerald, 938 F.2d at 794. The Seventh Circuit determined that although the guaranty did not contain all of the terms of the subsequent note, it did include the essential terms of principal and interest. The court found that the note was executed on the date indicated in the guaranty, and the guarantors had not alleged that the note contained terms other than those envisioned in the guaranty agreement. Fitzgerald, 938 F.2d at 795. ¶ 52 In this case, like Fitzgerald, Darnell acknowledged that he agreed to act as guarantor on the underlying loan. Darnell admitted that he signed the signature page of the Guarantee on May 17, 2012. Darnell knew that Thorson was borrowing money to purchase an ongoing appliance business. He also knew that the principal amount of the loan was $306,000. In this case, like Fitzgerald, the underlying promissory note was executed on the date indicated in the Guarantee, and there is no allegation that the note contained terms other than those envisioned in the Guarantee agreement. ¶ 53 We also observe that the present case is distinguishable from the Fitzgerald case. In Fitzgerald, the validity of the SBA personal guaranty was decided under the state law of Indiana, whereas Illinois law applies here. In addition, the SBA personal guaranty form at issue in the Fitzgerald case was executed in 1979. The Fitzgerald opinion indicates that the SBA personal guaranty form in effect in 1979 set forth the principal and the interest rate of the underlying note. In the case before us, the SBA Unconditional Guarantee form indicates it was printed in October 1998, and further provides that previous editions are "obsolete." Unlike the form in Fitzgerald, the SBA Unconditional Guarantee form at issue here does not include a section to identify the type and rate of interest in the underlying note, and there is no provision in the form requiring that information. As noted, the Guarantee at issue contains a table, with sections to identify the borrower, the lender, the date of the transaction, the name and number of the loan, and the principal amount of the indebtedness. All of that information was included in the Guarantee that Darnell signed on May 17, 2012. Thus, Darnell's reliance upon the Fitzgerald case to support his contention that the Guarantee failed for lack of certainty because it did not include the interest rate is misplaced. ¶ 54 Additionally, Bo Baer testified that all of the terms of the underlying loan had been established and clarified with Darnell in March 2012, at the time Darnell submitted his application to act as a guarantor. Thus, there was adequate evidence from which the trial court could find that Darnell had been informed of the essential terms and conditions of the underlying note before he executed the Guarantee on May 17, 2012.
¶ 55 B. The Affirmative Defense of Fraudulent Inducement
¶ 56 Darnell next contends that the Guarantee was unenforceable because he was fraudulently induced to sign it, based on the Bank's representation that he would be released from his obligations as a guarantor in two years. Although this affirmative defense had been stricken by the court pursuant to the Bank's pretrial motion, the trial court permitted Darnell to make an offer of proof as to this defense during the trial. ¶ 57 Fraud in the inducement exists where a party has a full understanding of the document he is signing, and is aware of the nature and character of the instrument executed by him, but that party is deceived by fraudulent representations as to facts outside the instrument. Belleville National Bank v. Rose, 119 Ill. App. 3d 56, 59 (1983). Fraud in the inducement is a defect that renders a contract voidable at the election of the injured party. Tower Investors, LLC v. 111 East Chestnut Consultants, Inc., 371 Ill. App. 3d 1019, 1030 (2007). To establish the affirmative defense of fraud in the inducement, Darnell was required to show by clear and convincing evidence that the Bank's representative, Bo Baer, made a false representation of a material fact, with knowledge or a belief that the representation was false; that the false representation was made for the purpose of inducing Darnell to act; and that Darnell acted in reasonable reliance on the truth of the representation to his damage. Steinberg v. Chicago Medical School, 69 Ill. 2d 320, 332-33 (1977); Tower Investors, 371 Ill. App. 3d at 1028. It is well settled that each element of fraud must be proven by clear and convincing evidence. Colonial Bank & Trust Co. Kozlowski, 106 Ill. App. 3d 639, 643 (1982). ¶ 58 As part of his offer of proof, Darnell was permitted to elicit testimony from witnesses about representations made by Baer during a meeting at the Bank's office in Centralia, Illinois. Baer, Thorson, Darnell, and Darnell's wife, Sara, were all in attendance. Baer testified that Darnell asked whether the Guarantee could be released after two years. Baer noted that this question was a common one. Baer stated that he informed Darnell that the Bank could consider a request to release the Guarantee after two years, if Thorson was meeting his obligations under the loan, and if there was an adequate cash flow into Thorson's business account. Thorson testified that Baer indicated that if everything was current on the loan, there should be no problem in getting Darnell released from the Guarantee. Thorson did not recall that Baer mentioned, during that meeting, that the Bank would require documentation of an adequate cash flow into the business. Darnell testified that he clearly indicated that his willingness to sign the Guarantee was contingent upon being released after two years, so long as Thorson was making his payments. Darnell testified that Baer stated there would be "no problem." Sara Darnell testified that her husband was concerned about the Guarantee because of their farm loans, and that Baer reassured her husband that he could be taken off the loan in two years. She could not recall whether a release from the Guarantee was conditioned on the loan being in good standing. ¶ 59 Based on this testimony, the trial court could have reasonably found that Baer's recollection of the events was clear, and that his testimony was more reliable than the testimony of the other witnesses. The trial court could have reasonably found that Baer accurately represented the Bank's policy regarding a release from a guarantee contract, that Darnell simply misunderstood Baer's statements, and that any misunderstanding on Darnell's part was not attributable to a knowing misstatement of fact by Baer. None of Darnell's witnesses testified that Baer unconditionally stated that Darnell would be released from the Guarantee in two years. Thorson and Darnell indicated that the release was conditioned on the loan being current. After considering Darnell's offer of proof, the trial court determined that Darnell failed to present clear and convincing evidence to establish fraud in the inducement. The trial court's findings and conclusion are not against the manifest weight of the evidence. Accordingly, the trial court did not err in finding that the Guarantee was valid and enforceable.
¶ 60 C. The Deficiency Judgment
¶ 61 In his final point, Darnell claims that the trial court erred in entering a deficiency judgment of $243,993.88 against him. Darnell argues that the judgment was based, in large measure, on the purported decrease in the appraised value of the mortgaged property from $171,000 in March 2012 to $90,000, in November 2017. ¶ 62 During trial, the Bank presented testimony from its appraiser, William Kleeman. Kleeman supervised and approved the appraisal done in 2012, and he personally performed the subsequent appraisal in 2017. Kleeman testified that the 2012 appraisal was based on older comparable sales because there were few commercial sales available for comparison at that time. Kleeman noted that in 2017 there had been very recent comparable sales of properties on the same street as the subject property. The Bank also presented evidence indicating that only two offers had been made after the Bank listed the property for sale, and that neither offer exceeded the sales price of $90,000. According to the evidence, both offers were substantially lower. ¶ 63 At trial, Darnell did not offer an independent appraisal of the property. He offered no evidence to establish that the 2017 appraisal was based on an improper method, or other irregularity. Darnell offered only Thorson's opinion that the property was in as good condition, or better condition, than when it was appraised in 2012. Darnell did not provide any evidence to show there was fraud, or irregularity, in the conduct of the sale. ¶ 64 The record indicates that the circuit court issued an order on January 30, 2018, confirming the sale of the real property to the Bank for the sum of $90,000. In its order, the court found that the terms of the sale were fair and not unconscionable, that the sale was conducted fairly and without fraud, and that justice was done by the sale. In the absence of any fraud or irregularity in the foreclosure proceeding, the price at which the property is sold is deemed to be the conclusive measure of its value for purposes of determining a deficiency judgment. Nationwide Advantage Mortgage Co. v. Ortiz, 2012 IL App (1st) 112755, ¶ 35 (mere inadequacy of the price is not sufficient cause for setting aside a judicial sale); Illini Federal Savings & Loan Ass'n v. Doering, 162 Ill. App. 3d 768, 771 (1987). Further, according to the terms of the Guarantee, Darnell expressly waived defenses based on any errors in the Bank's evaluation of the collateral or the Bank's failure to obtain fair market value for the collateral. After considering the evidence presented, the trial court found that the $90,000 valuation of the subject real property was fair and reasonable. The trial court's finding is not against the manifest weight of the evidence.
¶ 65 III. CONCLUSION
¶ 66 In summary, Darnell failed to establish that the Guarantee was invalid and unenforceable, or that he was fraudulently induced into signing it. The trial court did not err in entering a deficiency judgment against Darnell in the amount of $243,993.88. Accordingly, the judgment of the circuit court of Marion County is affirmed. ¶ 67 Affirmed.