Plaintiff May Move for Summary Judgment in Lieu of Complaint on Guaranty Even if Interpretation of Guaranty Relies on Other Agreements

On November 20, 2020, Justice Friedman of the New York County Commercial Division issued a decision in Adrianna Papell, L.L.C. v. Silverstein, 2020 NY Slip Op. 33877(U), holding that a plaintiff may move for summary judgment in lieu of complaint on a guaranty even when interpreting the guaranty requires reliance on other agreements, explaining:

The court rejects defendant’s further argument that CPLR 3213 is inapplicable to the Unconditional Guaranty because an impermissible degree of reference to outside sources is necessary. The outside sources to which defendant refers are the Trademark License Agreement and the amendments to that Agreement. The fact that one must look at the underlying agreement between the plaintiff and the obligor to determine the amount of the guarantee does not preclude the use of CPLR 3213. PDL Biopharma, Inc. v Wohlstadter, (147 AD3d 494, 495-496 [1st Dept 2017]) on which defendant relies, is not to the contrary. There, the court was required to construe complex agreements and to resolve preliminary legal issues, including whether the guaranties sued upon were still in effect and whether they had come due. No such issues are present on this motion, which involves one Unconditional Guaranty and one underlying obligation set forth in the Trademark License Agreement, the enforceability of which are not in question.

(Internal quotations and citations omitted).

Cases in the Commercial Division of the New York courts usually involve a motion to dismiss at the outset and then a motion for summary judgment at the close of discovery, so such motions are a big part of our practice. The decision above is about a special procedure in New York for quickly resolving claims relating to unpaid notes or similar documents allowing the plaintiff to move for summary judgment at the beginning of an action. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions about seeking or opposing a motion for pre-trial dismissal or judgment of a commercial lawsuit.