Can a guarantor be sued in Texas?

July 10, 2022

An out-of-state guarantor was subject to suit in Texas when

Whited personally guaranteed the performance and payment of “any and all financial, credit or business obligations” that one Texas company owed to another Texas company. [1] These obligations were those of a managing general agent as defined by the Texas Administrative Code and the Texas Insurance Code. [2] He agreed that his guaranty would be “interpreted by, construed in accordance with, and governed by the laws of the State of Texas.” Moreover, the agreement he guaranteed included another such Texas choice-of-law clause as well as a Texas forum-selection clause. Both his guaranty and the MGA obligations he guaranteed were performable in Dallas County, Texas. [3] Old American agreed to appoint Windhaven as its managing general agent after Whited agreed to execute this guaranty. According to the guaranty agreement, Whited agreed to it because he “desire[d] to continue the appointment of [Windhaven] a [sic] Texas Managing General Agency to act as [Old American’s] Managing General Agent”; he “wish[ed] to facilitate such continuing appointment”; and he wished to increase Old American’s financial security. 

Whited v. Old American County Mut, Fire Ins. Co., 05-21-00536-CV (June 16, 2022) (mem. op.) (references added).