On August 2, 2024, Justice Patel of the New York County Commercial Division issued a decision in Acquiom Agency Servs. LLC v. Fox Capital LLC, 2024 NY Slip Op. 51000(U), holding that a guaranty’s reference to performance of obligations did not bar summary judgment in lieu of complaint, explaining:
Defendants argue that the Guaranty Agreement is not an instrument for the payment of money only as required by CPLR § 3213 because of the reference to “the payment and performance . . . of all Obligations” in the Guaranty Agreement. This argument does not withstand even minimal scrutiny when viewing the unaltered provision from the Guaranty Agreement:
Guaranty. In consideration of the benefit derived or to be derived by it from the Credit Agreement from and after the Closing Date, each Guarantor hereby jointly and severally unconditionally and irrevocably guarantees to Administrative Agent for the benefit of the Secured Parties, as a primary obligor and not merely as a surety, the faithful, prompt and complete payment and performance in full in cash of all Obligations, including (x) amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code (as defined below) or similar laws, and (y) any default interest provided for under the Credit Agreement or any other Loan Document (including default or other interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, whether or not a claim for such interest is allowed or allowable in such proceeding).
Further, when consulting the Credit Agreement for a definition of “Obligations”, it remains clear that the “Obligations” are entirely monetary in nature. Defendants point to the terms “performance” and “Obligations,” but do not identify specific non-monetary performance obligations that are condition precedent to repayment under the Guaranty Agreement. The mere addition of the words and performance does not necessarily remove the guaranty from the category of instruments for the payment of money only. Where Defendants do identify specific elements of performance, they are mischaracterized and create requirements for Defendants’ performance where no such obligation exists. The “performance of numerous affirmative obligations, duties, and covenants of sweeping scope” are drawn from the Credit Agreement and are covenants between Borrower and the Administrative Agent and Lenders—not the Guarantors.
Next, Defendants argue that CPLR § 3213 is unavailable because the extent of obligations and definition of the event of default cannot be determined through the Guaranty Agreement alone. This argument is also unavailing. CPLR § 3213 is available where a right to payment can be ascertained from the face of a document. Here, the Guaranty Agreement establishes Plaintiff’s prima facie case of a right to payment. Reference to the Credit Agreement and an affidavit to assert non-payment does not take the Guaranty Agreement out of the purview of CPLR § 3213. Recourse to CPLR 3213 was appropriate since the guaranty was an instrument for the payment of money only. The fact that the obligations guaranteed were evidenced in a series of underlying documents did not alter this fact.
(Internal quotations and citations omitted).