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BANK LEUMI TRUST CO. OF NEW YORK v. WULKAN

April 2, 1990

BANK LEUMI TRUST COMPANY OF NEW YORK, PLAINTIFF,
v.
DAVID WULKAN, DEFENDANT.



The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.

  OPINION AND ORDER

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 clause.

FACTS

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 designated rate.

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.

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 Civil Procedure.

DISCUSSION

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 cases).

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

First, Wulkan asserts that his Guaranty would be illegal under the Israeli Currency Control Law, 1538-1978, which, according to an affidavit by Wulkan's Israeli counsel, prohibits certain "transactions in foreign currency" without a permit. Plaintiff submits that this provision ...


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