On June 11, 2024, Justice Cohen of the New York County Commercial Division issued a decision in Manhattan Real Estate Fund, LP v. Paz, 2024 NY Slip Op. 32017(U), denying a motion for summary judgment in lieu of complaint on a guaranty because the guaranty covered both payment and performance, explaining:
Here, the expedited procedure of CPLR 3213 is not available. It is true that generally, an unconditional guaranty qualifies as an instrument amenable to CPLR 3213 treatment. However here, as in PDL Biopharma, the documents guarantee not only payment but also performance of the borrower’s obligations.
The Guaranty provides that “Lender is not willing to make the Loan, or otherwise extend credit, to Borrower unless Guarantor unconditionally guarantees payment to Lender of the Guaranteed Debt (as herein defined) and timely performance of the Guaranteed Obligations (as also herein defined).” The Guaranty goes on to provide:
Guaranty of Payment. Guarantor hereby irrevocably and unconditionally guarantees to Lender and its successors and assigns the payment and performance of the Guaranteed Debt ( as herein defined) 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 liable for the Guaranteed Debt as a primary obligor.
Guaranty of Performance. Guarantor hereby unconditionally and irrevocably guarantee to Lender the full, complete and timely performance of all of the Guaranteed Obligations, including, without limitation, that Borrower will duly and punctually perform, observe and comply with all of the terms, covenants and conditions of the note, the Loan Agreement, and the other Loan Documents . . . .
The “Guaranteed Obligations” are defined as “the Guaranteed Debt and all other obligations, duties and liabilities of Borrower under the Loan Documents, including, by means of example only and without limitation, the maintenance of all insurance (and timely payment of all premiums thereon), all in strict accordance with the terms of the Loan Agreement and the other Loan Documents.”
While Plaintiff may ultimately establish that such provision does not require additional performance by plaintiff as a condition precedent to payment, or otherwise make defendant’s promise to pay something other than unconditional, at this stage is not clear from the face of the Guaranty that it is an instrument for the payment of money.
(Internal quotations and citations omitted).