Arnold Schwartz v Anthony Abbatine, et al.

Summary

The New York Appellate Division, Second Department, affirmed an order denying defendants’ motion to dismiss an action seeking recovery under personal guaranties. The court held that evidence of partial payments raised a factual question regarding revival of the statute of limitations and that the underlying debtor entities were not necessary parties because the creditor could sue the guarantors without first suing the debtors.

Holdings

1. Although defendants established prima facie that the limitations period had expired, the plaintiff raised a question of fact as to whether partial payments renewed the statute of limitations with respect to the note and loans as to both defendants. Dismissal under CPLR 3211(a)(5) was therefore properly denied.
2. Frozen Ropes Baseball Company, LLC, and Warwick Yard, LLC, were not necessary parties because the agreements did not require the plaintiff to sue the debtors before suing the guarantors, and a creditor may sue a guarantor upon the debtor's default without first suing the debtor.

Questions Presented

1. Whether the complaint should be dismissed under CPLR 3211(a)(5) as barred by the six-year statute of limitations.
2. Whether partial payments and related communications raised a question of fact as to revival of the statute of limitations.
3. Whether Frozen Ropes Baseball Company, LLC, and Warwick Yard, LLC, were necessary parties under CPLR 1001(a) because the action sought recovery from their guarantors.

Disposition

affirmed