On August 6, 2025, the Second Department issued a decision in ZFA Mgt., LLC v. Heng Chen, 2025 NY Slip Op. 04599, holding that defenses to enforceability of a note were no basis for delaying enforcement of an unconditional guaranty, explaining:
The plaintiff commenced this action, inter alia, to recover on a personal guaranty. The plaintiff alleged that it entered into a license agreement with nonparty Red Sun City Corp. (hereinafter Red Sun) for Red Sun’s use of certain commercial property, and the defendants executed a personal guaranty on Red Sun’s obligation under the license agreement. The plaintiff further alleged that Red Sun failed to perform its obligations under the license agreement and that the defendants failed to satisfy their obligations under the guaranty. The defendants interposed an answer with, among other things, twelve affirmative defenses.
The plaintiff moved, inter alia, for summary judgment on the first cause of action which was to recover on the guaranty, and, in effect, dismissing the defendants’ affirmative defenses. In an order entered December 7, 2023, the Supreme Court, among other things, granted those branches of the plaintiff’s motion. The defendants appeal.
A guaranty is a promise to fulfill the obligations of another party, and is subject to the ordinary principles of contract construction. 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 on the first cause of action by demonstrating that the defendants unconditionally guaranteed the payment of Red Sun’s obligations under the license agreement, Red Sun defaulted on its obligations under the license agreement, and the defendants defaulted on their obligations under the guaranty. In opposition, the defendants failed to raise a triable issue of fact.
(Internal quotations and citations omitted).