ORIX FINANCIAL SERVICES INC v. McMULLEN (2009)

Order, Supreme Court, New York County (Michael D. Stallman, J.), entered October 30, 2007, which granted the motion of plaintiff Orix Financial Services, Inc. (Orix) for summary judgment as to individual defendant Terry McMullen, severed the complaint and otherwise denied Orix's motion for summary judgment, and denied defendants' cross motion for summary judgment, unanimously affirmed, with costs.

Defendant Terry McMullen (the borrower) executed a Conditional Sale Contract Note (the note) in conjunction with his purchase of a tractor-trailer from a dealer, who assigned all of its rights under the note to Orix.   Orix had engaged in two prior financing transactions with the borrower.   In the latter transaction, entered seven months prior to the note at issue, Orix also obtained a signed and notarized personal guaranty from Connie Smith a/k/a Connie McMullen (the guarantor) for obligations due Orix from the borrower.   The guaranty expressly states that it is a “continuing guaranty” which remains in effect until terminated.   When the borrower defaulted on the note, Orix repossessed the tractor-trailer and sold it at auction.   Orix then commenced this action against the borrower for the balance due on the note and joined a claim against the guarantor.

 Here, as in Orix Fin. Servs., Inc. v. Precision Charters, Inc., 2007 WL 2042499, *2 [S.D.N.Y.2007] and James Talcott, Inc. v. Bloom, 29 A.D.2d 390, 391, 288 N.Y.S.2d 398 [1968], the language of the guaranty unambiguously contemplated future agreements between Orix and the borrower.   This language cannot be read to limit the guarantor's liability to amounts owed under the March 1999 note (see Chemical Bank v. Sepler, 60 N.Y.2d 289, 294, 469 N.Y.S.2d 609, 457 N.E.2d 714 [1983] ).   As the guarantor has never denied that she signed the guaranty, her challenges to the validity of the notarization are irrelevant.

 We also reject defendants' argument that the purported “falsification” of the verification tainted the entire transaction and precluded Orix from recovering from the borrower, as the borrower's agreement with Orix would remain valid even if the guaranty were void (see Midland Steel Warehouse Corp. v. Godinger Silver Art Ltd., 276 A.D.2d 341, 343, 714 N.Y.S.2d 466 [2000];  National Union Fire Ins. Co. of Pittsburgh v. Clairmont, 231 A.D.2d 239, 241-242, 662 N.Y.S.2d 110 [1997], lv. dismissed 92 N.Y.2d 868, 677 N.Y.S.2d 773, 700 N.E.2d 312 [1998] ).