Najjar v. Dahleh et al

Filing 149

The defendants motion in limine no. 9 is denied. WRITTEN Opinion entered by the Honorable Blanche M. Manning on 11/29/2011: Mailed notice(rth, )

Order Form (01/2005)

United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge

Blanche M. Manning

CASE NUMBER

Sitting Judge if Other
than Assigned Judge

09 C 3554

DATE

November 29, 2011

Najjar v. Daleh

CASE
TITLE
DOCKET ENTRY TEXT:

The defendants’ motion in limine no. 9 is denied.

# [ For further details see text below.]

STATEMENT
On December 17, 2007, Pierre Najjar loaned $675,000 to Gus Dahleh, an officer of Mortgage Direct
Company, for use in Mortgage Direct’s business. In connection with that loan, Gus Dahleh signed a
promissory note for $750,000 payable to Mr. Najjar and gave Mr. Najjar a check in the amount of $750,000
dated January 17, 2008, the date the promissory note was due. After January 17, 2008, Mr. Najjar presented
the check to the bank and discovered that Gus Dahleh’s account was closed.
Sam Dahleh (Gus’ brother) subsequently signed a personal guaranty dated August 10, 2009, relating
to the loan to Mortgage Direct. In the guaranty, Sam Daleh acknowledged that his “brother, Gus Daleh, and
the company Mortgage Direct Company, owe Najjar $750,000 based on a December 17, 2007, Promissory
Note that has matured.” Sam Daleh also promised to unconditionally guarantee payment of that debt, plus
interest and attorneys’ fees, in one year. At the end of the document, Sam Daleh signed on two lines, one
labeled “Sam Daleh, Individually” and the other labeled “Sam Daleh, as CEO and President of Mortgage
Direct Company.” Underneath the signature block, Sam Daleh wrote in:
*Note*
This is not final agreement. We (Sam, Gus + Pierre + attorney’s [sic] will work out changes
by 08/11/09. I (Sam Daleh) signing as guarantor for the money owed to Pierre Najjar.
(continued)
Courtroom Deputy
Initials:

RTH/c

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STATEMENT
Sam Daleh then printed and signed his name under the handwritten addition and added the date of
August 8, 2009. The parties agree that Sam Daleh made some payments by and through Mortgage Direct to
Mr. Najjar.
In the defendants’ motion in limine no. 9 (the court previously ruled on motions 1-8), the defendants
seek to exclude the personal guaranty that was conditionally signed by Gus Daleh pursuant to Fed. R. Evid.
408. That rule is entitled “Compromise and Offers to Compromise” and distinguishes between the prohibited
and permissible use of evidence relating to settlement negotiations as follows:
(a)

Prohibited uses—Evidence of the following is not admissible on behalf of any party,
when offered to prove liability for, invalidity of, or amount of a claim that was disputed
as to validity or mount, or to impeach through a prior inconsistent statement or
contradiction:
(1)

furnishing or offering or promising to furnish—or accepting or offering or
promising to accept—a valuable consideration in compromising or attempting to
compromise the claim; and

(2)
conduct or statements made in compromise negotiations regarding the claim,
except when offered in a criminal case and the negotiations related to a claim by a public office or agency in the
exercise of regulatory, investigative, or enforcement authority.
(b)

Permitted uses—This rule does not require exclusion if the evidence is offered for
purposes not prohibited by subdivision (a).
Examples of permissible purposes include proving a witness’s bias or prejudice; negating
a contention of undue delay; and proving an effort to obstruct a criminal investigation or
prosecution.

Fed. R. Evid. 408.
The court’s inquiry begins and ends with the purpose for which Mr. Najjar seeks to admit the
conditional guaranty. Mr. Najjar states that he is not seeking to admit the conditional guaranty to prove that
Sam Daleh or Mortgage Direct owe him money on the underlying promissory note. Instead, he is arguing that
Gus Daleh’s conditional guaranty is a separate, binding contract whereby Gus Daleh agreed to pay Mr. Najjar
money. In ruling on Mr. Najjar’s motion for summary judgment, the court reserved this issue for trial, noting:
The parties agree that despite the conditional language added by Sam Daleh, he made
some payments on behalf of Mortgage Direct to Mr. Najjar. Mr. Najjar appears to be arguing
that even if the guaranty was not final at the time Sam Daleh signed it due to the addition of the
words “[t]his is not final agreement,” the subsequent payments constitute partial performance
that ratified the guaranty and made it final and binding.
(continued)

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STATEMENT
The court finds that the guaranty itself is ambiguous. It says both that it is a final binding
obligation and that it is not final and binding. To determine the parties’ intentions, the court
may consider parol evidence, including other documents and evidence of the parties’ subsequent
conduct. See Pearson Bros. Co., Inc. v. Pearson, 113 B.R. 469, 796 (C.D. Ill. 1990).
Accordingly, neither side is entitled to summary judgment as to Count III.
Dkt. 129.
Evidence of the partial payments and the actual conditional guaranty itself are admissible to the extent
that Mr. Najjar introduces them in an effort to convince the fact finder that the conditional guaranty was a
binding contract. They are inadmissible to show that the parties attempted to settle a dispute regarding the
underlying promissory note. Because the defendants’ motion in limine only challenges the second
impermissible use and Mr. Najjar is seeking to introduce the disputed evidence for a different purpose, the
defendants’ ninth motion in limine is unavailing. It is, therefore, denied.

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