The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.
In this action for moneys due and owing under a guaranty,
plaintiff moves for summary judgment pursuant to Rule 56 of the
Federal Rules of Civil Procedure. Plaintiff also moves to amend
its complaint to correct an inadvertent error in the ad damnum
On March 26, 1981, defendant David Wulkan ("Wulkan"), a
resident and citizen of Israel, executed a guaranty (the
"Guaranty") whereby in consideration of certain financial
considerations given to Amerintex, Ltd., he agreed to guarantee
payment to plaintiff, Bank Leumi Trust Company of New York
("Bank Leumi"). The Guaranty provided that Wulkan
"unconditionally guarantee[d]" any and all liabilities of
Amerintex, Ltd. The Guaranty also contained a choice of law
provision stating that "the rights and obligations of the Bank
and of the undersigned hereunder shall be governed and
construed in accordance with the laws of the State of New
York." The Guaranty further provided for payment by Wulkan of
attorneys fees should the Bank be required to refer a claim
thereunder for collection.
On March 27, 1981, Bank Leumi and Amerintex entered into a
security agreement. On February 5, 1985, those same parties
entered into an Accounts Receivable Loan and Security Agreement
(the "Agreement") which provided that Bank Leumi would advance
to Amerintex such amounts as it would request from time to
time, and that interest would be payable on the daily net loan
balance at the rate of 3% per annum above the Bank Leumi's
On September 1985, the security agreement and the Agreement
were amended and restated by the parties to reflect, inter
alia, Amerintex's name change to Dumax USA. Also on September
19, 1985, the Guaranty was amended and restated by Wulkan and
Bank Leumi ("Restated Guaranty") to reflect that Wulkan would
guarantee payment for the maximum aggregate principal amount of
$1,000,000 for accommodations given by Bank Leumi to Dumax USA.
On October 7, 1988, a letter agreement ("Letter Agreement")
was executed by Bank Leumi and Wulkan as president of an
Israeli company called Dumax Ltd.*fn1 In the
Letter Agreement, the parties agreed that the "Dumax
Obligation" to Bank Leumi (which at the time was an obligation
of Dumax USA to pay Bank Leumi $701,990.78 plus accrued
interest as of September 30, 1988 of $202,925.14) would be
reduced by 38.57%, provided that Bank Leumi received a cash
payment of $125,000 on or before October 17, 1988 and received
the remaining portion of the reduced balance in ten monthly
installments of $43,100 plus accrued interest beginning on
November 20, 1988. The Letter Agreement further provided that
failure to make any of the payments within ten days of their
due date would constitute a default and result in a loss of the
entire 38.57% forgiveness, with full payment then required.
Other than an initial payment of $99,990 from Wulkan in
November 1988 pursuant to the Letter Agreement, no other
payments of Dumax USA's obligations were ever made. On December
20, 1988, Bank Leumi accelerated the remaining payments under
the Restated Agreement and demanded payment of the outstanding
balance in full, without the 38.57% forgiveness. Plaintiff then
brought this action against Wulkan for payment of the full
amount pursuant to the Guaranty. Plaintiff has moved for
summary judgment pursuant to Rule 56 of the Federal Rules of
Summary judgment under Fed.R.Civ.P. 56 will be granted only
if the movant shows that (1) there is no genuine issue as to
any material fact, and (2) movant is entitled to judgment as a
matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 106
S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In
deciding a motion for summary judgment, the "fundamental maxim"
is that the court "`cannot try issues of fact; it can only
determine whether there are issues to be tried.'" Donahue v.
Windsor Locks Bd. of Fire Comm'rs, 834 F.2d 54, 58 (2d Cir.
1987) (quoting Heyman v. Commerce & Industry Ins. Co.,
524 F.2d 1317, 1319-20 (2d Cir. 1975)). "Moreover, in determining
whether a genuine issue has been raised, a court must resolve
all ambiguities and draw all reasonable inferences against the
moving party." Id. at 57.
Summary judgment should be granted where the party opposing
the motion presents no unresolved factual disputes as to the
issues material to the outcome of the litigation, King Service,
Inc. v. Gulf Oil Corporation, 834 F.2d 290 (2d Cir. 1987), and
is appropriate where a party is asserting unconditional rights
under the terms of written instruments such as loan documents.
J & B Schoenfeld Fur Merchants, Inc. v. Kilbourne & Donahue
Inc., 704 F. Supp. 466 (S.D.N.Y. 1989); A.I. Credit Corp. v.
Government of Jamaica, 666 F. Supp. 629 (S.D.N.Y. 1987); Hanam
B.V. v. Kittay, 589 F. Supp. 1042 (S.D.N.Y. 1984) (citing
Defendant makes three arguments in opposition to plaintiff's
motion: (1) under an Israeli law Wulkan's guaranty is "illegal"
and therefore unenforceable; (2) an issue of fact exists as to
whether the Bank and he orally agreed that the effectiveness
and enforceability of the Guaranty was conditional upon its
approval by Israeli authorities; and (3) plaintiff is only
entitled to the amount specified in the Letter Agreement
purportedly settling the matter.
1. The Legality of the Guaranty