In a recent Wisconsin Court of Appeals case the WBA 151 Continuing Guaranty (WBA 151) was found enforceable against the guarantor despite his divorce from the borrower after making the guaranty. The facts involve a guarantor who signed a WBA 151 to guarantee a loan to a separate borrower who was also his wife. The two later divorced. After the divorce, the borrower executed additional promissory notes to the Bank. After the borrower defaulted on a note the bank enforced the guaranty against the guarantor, who disputed its enforceability due to the divorce.
The guarantor’s primary argument was that the divorce rendered the guaranty unenforceable and he had never intended to guarantee the loans following the divorce. The court did not find merit in his arguments. Specifically, the court relied upon language within the WBA 151 which it found to be unambiguous in its agreement that the guaranty shall continue despite any change in status of the debtor, who guarantees past, present, and future obligations of the debtor.
Read the full decision here.
The case: Bank Mutual, Plaintiff-Respondent, v. Daniel Bohringer and Sammy’s Taste of Chicago, Inc., Defendants-Appellants (Court of Appeals No. 2015AP2357, decided May 17, 2017).