The owner of a now-defunct architectural firm is not personally obligated to repay a Venezuelan insurer $12 million in construction bonds, says a federal appeals court, in affirming a lower court ruling.

Newark, New Jersey-based Grad Associates P.A., an architectural firm that has since terminated operations, which was owned and controlled by B. Allen Trousdale, formed a joint venture and contracted with the Republic of Venezuela to design and build a prison in Bolivar City, Venezuela, according to court papers in Seguros Nuevo Mundo SA v. B. Allen Trousdale.

Venezuela required the issuance of certain payment and performance bonds, which Carabobo, Venezuela-based Seguros issued, according to Tuesday’s ruling by the 2nd U.S. Circuit Court of Appeals in New York.

Following the joint venture’s alleged breach of its construction contract, Venezuela sued Seguros, which paid Venezuela $12 million to settle the lawsuit.

Seguros then filed suit seeking to recover that amount plus, costs, fees and other damages from Mr. Trousdale personally. Mr. Trousdale argued the guaranty was not a personal guaranty, which he had signed only as a Grad representative.

The U.S. District Court in Brooklyn dismissed the lawsuit in March 2016, and a three-judge appellate court panel unanimously upheld the ruling.

“The complaint does not plausibly allege that Trousdale agreed to be personally liable on the guaranty,” said the appellate panel. “The plain language of the guaranty … states that Trousdale was ‘acting in (his) capacity of president’ and ‘on behalf of Grad Associates, P.A.,’” it said.

“Furthermore, the complaint is silent as to the structure of the transactions between the parties, the regulations, or any other circumstances under which Trousdale executed the guaranty.

“Without more, the complaint fails to identify or point to ‘clear and explicit evidence’ of Trousdale’s Intent to substitute or add his personal liability for or to that of Grad,” said the ruling, in quoting an earlier case, and upholding the lower court’s ruling.