On March 27, 2023, Justice Chan of the New York County Commercial Division issued a decision in HCC Ins. Holdings, Inc. v. Athenium Analytics LLC, 2023 NY Slip Op. 30943(U), awarding summary judgment in lieu of complaint based on a guaranty, explaining:
CPLR 3213 is intended to provide a speedy and effective means of securing a judgment on claims presumptively meritorious. The accelerated procedure applies to an instrument for the payment of money only. To qualify for CPLR 3213 treatment, a plaintiff must prove a prima facie case by the instrument and a failure to make the payments called for by its terms. In addition, a plaintiff must show that the accounts stated, on which the action is based, are instruments for the payment of money only. An instrument sued upon is for the payment of money only when it contains the defendant’s explicit acknowledgement of a debt and suffices to prove the debt by itself. Proof of nonpayment or a similar de minimis deviation from a guaranty may be offered to establish a prima facie case under CPLR 3212.
Here, plaintiff establishes its prima facie case for entitlement to summary judgment under CPLR 3213 by supplying proof of a note that that has matured and defendant’s failure to make payment under the Guaranty Agreement. Defendant does not dispute that it failed to pay the amount owed under the Guaranty. The burden now shifts to the party opposing the motion to produce evidentiary proof in admissible form which requires a trial of the action. Mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient to defeat summary judgment.
Defendant claims that CPLR 3213 is not applicable to this Guaranty Agreement because it has a performance component to it in that the word “performance” appears in the Obligations part of the preamble and because of the indemnification provision in the Credit Agreement. Further, defendant argues that the Guaranty should be read by including what is being guaranteed and points to the Obligations section: “Obligations mean every liability, now or hereafter, owing to Lender by Borrower, arising out of that certain Credit Agreement and Term Loan Note dated of even date herewith between Lender and Borrower”. To defendant, this language shows that the guaranty is not just a guaranty of the Note as it guarantees future unliquidated obligations under the Credit Agreement. An unconditional guaranty is an instrument for the payment of money only within the meaning of CPLR 3213. and the mere presence of the indemnification provision in the Obligations provision does not make the Guaranty an instrument for payment and performance, thus barring CPLR 3213 relief. This is especially true when no additional performance is required before defendant may begin to repay the loan or otherwise alter defendant’s promise of repayment. And defendant does not assert that the indemnification provision of the Credit Agreement requires additional performance before defendant is obligated to repay the loan.
Defendant’s reliance on JFURTI, LLC v First Cap. Real Est. Advisors, L.P (165 AD3d 419 [1st Dept 2018]) is unavailing. JFURTI involved a settlement agreement and guaranty agreement where the defendant guarantor in that case agreed to be joint and severally liable for a $1.3 million judgment entered against JFURTI in a separate action, indemnify and repay JFURTI for any amount collected, paid, or seized related to the $1.3 million judgment, and assume responsibility for all reasonable costs incurred in connection with the action. JFRUTI posted a cash bond in the amount of the $1.3 million action to stay a pending appeal, which First Capital refused to pay. JFRUTI’s relief pursuant to CPLR.3213 was denied because of the numerous other obligations under the settlement agreement and the difficulty in identifying the required payment amounts.
Here, in contrast to JFRUTI, defendant points only to the indemnification provision as evidence of performance under the Guaranty. In addition, the amount owed in JFRUTI was unknown until the expenses occurred, but in this case the principal and interest were calculable at the execution of the Note. Here, defendant does not allege that there are additional obligations beyond the indemnification provision or repayment obligation and does not contend that the amount owed under the Guaranty was unknown.
(Internal quotations and citations omitted).