On April 28, 2025, Justice Cohen of the New York County Commercial Division issued a decision in PFNGT LLC v. Liquid Capital LLC, 2025 NY Slip Op. 31518(U), holding that ancillary clauses do not make a guaranty not an ‘instrument for the payment of money only, explaining:
An instrument for the payment of money only is one that requires the defendant to make a certain payment or payments and nothing else. It is well settled that a promissory note, as an instrument for the payment of money only, is entitled to the expedited procedure detailed in CPLR 3213.
On a motion for summary judgment to enforce an unconditional guaranty, the creditor
must prove the existence of the guaranty, the underlying debt and the guarantor’s failure to
perform under the guaranty. Once the plaintiff submits evidence establishing its prima facie case, the burden then shifts to the defendant to submit evidence establishing the existence of a triable issue of fact with respect to a bona fide defense. Here, Plaintiff has established a prima facie case for summary judgment against the Borrower and Guarantor pursuant to CPLR 3213 by demonstrating that (i) Borrower executed the Loan Agreement and accompanying Promissory Note each in an amount of $3,895,083.38 in favor of Plaintiff, (ii) the Note contains unconditional promises to repay Plaintiff in accordance with the Loan Agreement, (iii) Guarantor executed a guaranty in favor of Plaintiff, which unconditionally and irrevocably guaranteed the payment and performance of the Note; and (iv) the Borrower defaulted on the Note and Defendant has failed to repay the full amounts due under the Note and guaranty.Defendants argue that the Note and guaranty are not instruments for the payment of money only because they contain provisions requiring Borrower and Guarantor to provide certain financial disclosures and comply with all laws, among other things. These ancillary clauses do not affect or limit Guarantor’s or Borrower’s unconditional obligation to make payment. As such, they are not grounds to deny Plaintiff’s motion.
(Internal quotations and citations omitted).