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Parol Evidence Is Not Admissible to Contradict the Clear Terms of Loan Contract

Ubom v. SunTrust
No. 2862 (Md. Ct. Spec. App. 2011)

by Colleen K. O’Brien, Law Clerk
Semmes, Bowen & Semmes (

In this case, SunTrust Bank (“SunTrust”) filed a Complaint against Ubom Law Group (“ULG”) and Mr. Ubom, after ULG defaulted on a commercial loan. The trial court granted summary judgment in favor of SunTrust, and found that ULG and Mr. Ubom were jointly and severally liable for the judgment. Mr. Ubom appealed on grounds that the judgment against him personally was erroneous.

The case arose when ULG applied for a commercial line of credit, and Mr. Ubom personally guaranteed it. Mr. Ubom disputed the validity of his personal guarantee, and wanted to introduce evidence of an oral conversation that he had with a SunTrust representative. According to Mr. Ubom, he was told by the SunTrust representative that he could avoid personal liability on the loan by: 1) not filling his name in as the legal name of the personal guarantor; and 2) by writing managing partner after his name in another signature line.

The issue before the Court of Special Appeals was whether Mr. Ubom signed his name in his capacity as a corporate officer or whether it constituted a personal guarantee. The Court began by ruling whether the evidence of the conversation Mr. Ubom had with the SunTrust representative was admissible as parol evidence. The parol evidence rule in Maryland holds that if the contract is unambiguous, parol evidence may not be admitted to vary, alter, or contradict it. To be ambiguous, the language must be susceptible to more than one meaning to a reasonable person. To the Court, the contract was clear, and therefore, parol evidence regarding the conversation that Mr. Ubom had with the SunTrust representative was inadmissible. The language of the agreement as a whole showed an “intent to fix personal liability on Mr. Ubom as guarantor” and it specifically identified the guarantor as jointly liable for the applicant’s obligations. Therefore, the parol evidence that Mr. Ubom sought to introduce to contradict the clear terms of the contract was inadmissible. Moreover, the fact that Mr. Ubom listed his corporate title next to his signature did not relieve him of personal liability. Consequently, the Court of Special Appeals affirmed the trial court’s grant of summary judgment for SunTrust.