Summary
This Appellate Division, First Department decision affirms the Supreme Court's denial of the plaintiff's motion for summary judgment against a defendant who allegedly guaranteed a $30 million loan through a forged signature. The court found that genuine issues of material fact remain regarding whether the defendant ratified the forged guaranty or knowingly benefited from the fraud committed by a former managing principal. Consequently, the plaintiff's claims for breach of the carveout guaranty cannot be resolved as a matter of law at this stage.
Topics
Practice areas
Questions Presented
- Whether the summary‑judgment motion should have been denied because genuine issues of material fact exist as to whether Feldman ratified the forged guaranty and whether he benefited from Meir's fraud.
Holdings
- The denial of summary judgment is affirmed because genuine issues of material fact remain regarding Feldman's ratification of the forged guaranty and his receipt of proceeds that may be attributable to Meir's fraud.
Key quotations
“Supreme Court correctly denied plaintiff's motion for summary judgment as against Feldman on the claims for breach of the carveout guaranty because questions of fact remain as to whether Feldman ratified the forged guaranty, and whether he benefitted from Meir's fraud (see Matter of Cologne Life Reins. Co. v Zurich Reins. [N. Am.] , 286 AD2d 118, 127 [1st Dept 2001]).”
Factual background
Plaintiff loaned $30 million to two non‑parties, HFZ Member RP Portfolio LLC and HFZ Member RB Acquisitions, owned by defendant Zeil Feldman. The loan documents contained a carve‑out guaranty that Feldman individually guaranteed. Defendant Nir Meir forged Feldman's signature on the guaranty and misappropriated most of the loan proceeds.
Procedural history
Plaintiff sued for breach of a carve‑out guaranty after a loan to non‑parties. The Supreme Court, New York County denied summary judgment on the guaranty claims. The appellant appealed that denial.