In a March 8, 2011 decision by Justice Schweitzer, the court granted the plaintiff’s motion for summary judgment in lieu of a complaint, pursuant to CPLR § 3213, which sought payment from the defendant under a guaranty. In opposing the motion, the defendant argued that the guaranty was not an instrument for the payment of money only because it contained performance obligations and payment obligations, and the court was required to consider additional documents to determine the sum owed. The court rejected those arguments, finding that precedent provided that the application of CPLR § 3213 is not affected if the instrument at issue is part of a larger transaction, so long as the instrument requires the defendant to make certain payments and nothing else. Moreover, the court found that the performance obligations contained in the guaranty did not bar CPLR 3213 relief because they did not condition the payment of money on that specific performance. The court also rejected the defendant’s argument that the guaranty was a penalty—a “bad boy” guaranty—which was unenforceable as a matter of law because the defendant, a sophisticated party, waived the right to assert that defense by an express contract provision.
UBS Commercial Mtge. Trust 2007-FL1 v Garrison Special Opportunities Fund LP, Sup Ct New York County, March 8, 2011, Schweitzer, J, Index No. 652412/10