Waiver of Defenses in Guaranty Prevented Guarantor From Asserting Affirmative Defenses to Guaranty's Enforcement

In the past week, Schlam Stone & Dolan LLP's Commercial Division Blog has posted on a number of issues, including the March 31, 2021, decision by the Second Department in Capital One Taxi Medallion Fin. v. JEB Mgt. Corp., 2021 NY Slip Op. 01960, holding that the waiver of defenses in a guaranty prevented the guarantor from asserting affirmative defenses to the guaranty's enforcement, explaining:

On a motion for summary judgment to enforce a written guaranty, all that the creditor need prove is an absolute and unconditional guaranty, the underlying debt, and the guarantor's failure to perform under the guaranty. Here, the plaintiff established its prima facie entitlement to judgment as a matter of law through its submission of the loan agreements, the guaranties, and evidence that the defendant failed to make payment in accordance with the terms of those instruments. Once the plaintiff establishes, prima facie, its entitlement to judgment as a matter of law, the burden shifts to the defendant to establish, by admissible evidence, the existence of a triable issue with respect to a bona fide defense.

The Supreme Court properly determined that the defendant waived the defenses to the enforcement of the guaranties. The guaranties contained an absolute, continuing and unconditioned guaranty of payment in which the defendant agreed to remain liable even where he would otherwise be entitled to an equitable or legal discharge of his obligations. Moreover, the guaranties provided that the defendant would remain liable for Obligations of Borrower created or arising before termination and all renewals extensions, refinancings and other Liablities arising out of same. By their terms, the guaranties were absolute and unconditional and foreclosed the defendant from raising the defenses of collusion and fraudulent inducement. In any event, the defendant failed to demonstrate the existence of a triable issue with respect to these defenses.

(Internal quotations and citations omitted).

Other posts included:

On April 1, 2021, the First Department issued a decision in Boesky v. Levine, 2021 NY Slip Op. 02059, holding that the continuous representation doctrine saved a legal malpractice claim from being time-barred.

On April 1, 2021, the First Department issued a decision in Kim v. Francis, 2021 NY Slip Op. 02072, dismissing an appeal for failure to provide proof of service of the record and appeal brief.

On April 1, 2021, the First Department issued a decision in Levin v. Salvini, 2021 NY Slip Op. 02074, holding that incidental beneficiaries to a contract cannot bring third-party beneficiary claims.

On April 13, 2021, the First Department issued a decision in Atsco Footwear Holdings, LLC v. KBG, LLC, 2021 NY Slip Op. 02235, holding that an account stated defense defeated a claim based on the alleged miscalculation of payments.