Summary
This Appellate Division, First Department decision affirms the lower court's denial of a landlord's motion for summary judgment against a tenant's guarantor under a "good-guy guaranty." The court held that because the guaranty did not expressly incorporate the lease's surrender terms or require landlord consent, the guarantor was not obligated to obtain such consent before vacating. Additionally, genuine issues of fact regarding whether the premises were returned in "broom-clean" condition and the timing of alleged damages precluded summary judgment. The opinion also notes prior sanctions imposed on the landlord for spoliation of evidence.
Topics
Practice areas
Questions Presented
- Whether a good‑guy guaranty that does not incorporate the lease’s surrender provision or contain an express consent requirement obligates the guarantor to obtain the landlord’s written consent to surrender.
- Whether the landlord’s motion for summary judgment against the guarantor should be denied.
- Whether damages that accrued before the guarantor’s liability terminated are within the guarantor’s liability and must be decided by a factfinder.
Holdings
- The motion court correctly denied summary judgment; the guaranty does not require the guarantor to obtain the landlord’s written consent to surrender.
- The motion court properly denied the motion; questions of fact preclude a finding that the premises were in broom‑clean condition at surrender.
- The determination of damages accrued before termination of liability is a factual issue for the finder of fact.
Key quotations
“The motion court properly determined that nothing in the good‑guy guaranty required the guarantor to obtain the landlord's consent to surrender.” (*1)
“Where a guaranty does not incorporate the surrender terms of the lease by reference or include an express term ... the tenant's obligation to obtain the landlord's consent ... cannot be imputed to the guarantor.” (*1)
Factual background
The landlord and tenant entered a lease that included a "good‑guy" guaranty executed by Crunch Holdings LLC. The lease required the tenant to obtain the landlord's written consent before surrendering the premises. The guaranty did not incorporate the lease's surrender provision nor contain an express term requiring landlord consent. The landlord moved for summary judgment against the guarantor, asserting that the guaranty required such consent. The motion court also considered alleged damage to the premises and the destruction of emails by the landlord.
Procedural history
The Supreme Court, New York County entered an order on April 2, 2024 denying 213 West 23rd St. LLC's motion for summary judgment on the guaranty. The appellant appealed that order to the Appellate Division, First Department.