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Reliance Construction Ltd. v. Kennelly

NEW YORK SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT


February 4, 2010

RELIANCE CONSTRUCTION LTD., ETC., PLAINTIFF-APPELLANT,
v.
JIM KENNELLY, ETC., ET AL., DEFENDANTS-RESPONDENTS.

Order, Supreme Court, New York County (Karen S. Smith, J.), entered December 22, 2008, which denied plaintiff's motion for summary judgment seeking to recover on two personal guaranties, unanimously reversed, on the law, with costs, the motion granted, plaintiff's claim for attorneys' fees and expenses severed, and the issue of the amount of attorneys' fees and expenses incurred in enforcing the guaranties remanded for a hearing unless the parties stipulate to the amount of such fees and expenses. The Clerk is directed to enter judgment against defendant Kennelly in the amount of $11,440,782.91 plus interest and against defendant Shaoul in the amount of $5,813,514.91 plus interest.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Gonzalez, P.J., Saxe, McGuire, Manzanet-Daniels, RomÁn, JJ.

601373/08

Plaintiff made a prima facie showing for summary judgment by proving the absolute and unconditional guaranties and the guarantors' failure to perform (see Kensington House Co. v Oram, 293 AD2d 304 [2002]). The court erred in failing to give effect to the clear preclusion of the debtor's defenses, setoffs and counterclaims (see Sterling Natl. Bank v Biaggi, 47 AD3d 436 [2008]). While a guaranty is subject to the fulfillment of any condition precedent to the liability imposed therein (see Madison Ave. Leasehold, LLC v Madison Bentley Assoc. LLC, 30 AD3d 1, 10 [2006], affd 8 NY3d 59 [2006]), the instant guaranties predicated the guarantors' liability on the owner's default in making payment, not on its default on the legal obligation to do so; any other interpretation would render the greater portion of the guaranties meaningless (see Bradley v Earl B. Feiden, Inc., 8 NY3d 265, 274-275 [2007]). There was no issue of fact with respect to the amount of damages. Finally, the guarantors' claimed need for discovery relating to the debtor's separate liability cannot forestall summary judgment against them (see Marine Midland Bank v Hakim, 247 AD2d 345 [1998]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

20100204

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