On October 29, 2025, Justice Patel of the New York County Commercial Division issued a decision in Acore Capital Mtge., LP v. Foulger, 2025 NY Slip Op. 34184(U), holding that questions of fact regarding the amount owed barred summary judgment in lieu of complaint on an unconditional guaranty, explaining:
Under CPLR § 3213, a party may move for summary judgment in lieu of complaint whenan action is based on an instrument of payment of money only. The instrument qualifies if it contains an unconditional promise to pay a certain sum, without referenceto outside facts or outside performances. The Plaintiff must establish the instrument, the underlying debt, and the default, then the burden shifts to the guarantor to raise triable issues of fact.
The instrument at issue, the Mezzanine Guaranty of Recourse Obligations Agreement, provides in relevant part:
guarantor hereby irrevocably and unconditionally guarantees to Administrative Agent the payment and performance of the Guaranteed Obligations as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise. Guarantor hereby irrevocably and unconditionally covenants and agrees that it is fully and personally liable for the Guaranteed Obligation as a primary obligor as set forth herein.
The language does not condition Defendants’ payment obligation on a tax inquiry or other inquires, rather the language is absolute and unconditional. New York Courts consistently uphold language rendering an obligation absolute and unconditional without any recourse to any defense or counterclaim by a guarantor. A guaranty is to be interpreted in the strictest manner. Here, the relevant provision of the Guaranty expressly holds the Guarantors irrevocably and unconditionally personally liable for the guaranteed obligations.
The Plaintiff also demonstrates an outstanding debt—the transfer tax. Plaintiff provides a copy of the Controlling Interest Transfer Form, which lists the total taxes paid as, $3,270,262.16. Plaintiff provides a copy of cashed check it made to the Department of Assessment and Taxation for $3,270,262.16. In his affidavit, Mann states that neither the Borrower nor the Guarantors have paid ACORE.
However, Defendants have raised material issues of fact. Defendants argue that the transfer tax was overpaid, therefore the amount of the overpayment is not payable under the loan document, which they argue would relieve the Guarantors of their liability to pay, pursuant to Section 6.3 (e).
Under Section 6 of the Mezzanine Loan Agreement, subsection 6.3 entitled “Events of Default; Remedies; Exculpation” states in relevant part:
Guarantor shall have no liability under Recourse Carve-Outs Guaranty …to the extent that such Guarantor can prove that such Recourse arose (I) from acts or omissions caused by Administrative Agent, Lender or their respective Affiliates (A) in connection with the exercise of remedies underthe Loan Documents (including, without limitation, a foreclosure on, ortransfer in lieu of foreclosure of, the equity interest in…pursuant to the LoanDocuments.
Defendants argue the conflict arose because of Plaintiffs’ acts or omissions—the improperaccounting and lack of inquiry that led to the inflated sum. Plaintiff argues it was Defendants’ actsor omissions—their failure to pay—that caused the UCC sale and triggered Defendants’ obligationto pay, which gave rise to the recourse liability.
The contract does not enumerate specifically the acts/omission in question of which partiesargue should be considered a breach under the provision. A contract is ambiguous if theprovisions in controversy are reasonably or fairly susceptible of different interpretations or mayhave two or more different meanings, When interpreting acontract, it is well-settled the fundamental rule for interpretation is that a contract is to beconstrued in accord with the parties’ intent. The Court determines whether the contract is ambiguous by viewing thecontract as a whole, considering the relationship of the parties and the intentions of the parties asmanifested.
Here, the intent under the Guaranty Agreement, or any guarantee, is to secure personalliability for payments not made; therefore, issues of fact raised as to payment thereto properlyprecludes entitlement to summary judgment at this stage. Although Plaintiff has set forth theexistence of the instrument and the debt, Defendants have succeeded in raising triable issues offact as to the debt and its default. Whether Defendants must pay and how much Defendantsmust pay are two separate questions. The issue of how much Defendants must pay raises an issue of fact and requires the Court to reference outside facts, which is contrary to what is required under a CPLR § 3213 motion.
(Internal quotations and citations omitted).