United States v. John N. Grayson Dorothy L. Grayson

I

The United States Department of Commerce’s Economic Development Agency (EDA) entered into an agreement to loan $2 million to Univox-Cálifornia, Inc. John L. Grayson, president and sole shareholder of Univox, and his wife Dorothy Grayson, executed an unconditional guaranty of the entire loan.

Univox failed to make any installment payments on the loan after July 1985. On February 25, 1986, EDA notified Univox that it was accelerating the note and demanding immediate repayment. A week later, EDA made a formal demand on the Graysons as guarantors for payment of all amounts due on the note.

Because the Graysons failed to honor this demand, the EDA, in August 1986, filed suit against them in district court. After protracted procedural wrangling, the district court granted the Graysons’ motion for leave to file an amended answer and counterclaim. At the same time, it granted EDA’s motion for summary judgment.

II

A. The Graysons argue that the district court erred in granting summary judgment in favor of EDA because their first amended answer and counterclaim raise genuine issues of material fact regarding EDA’s right to recover on the Graysons’ guaranty and the Graysons’ right to…