PANISH v. RUDOLPH (2002)

Order, Supreme Court, New York County (Herman Cahn, J.), entered March 6, 2002, which, in an action by the assignee of a guarantor against a co-guarantor seeking, inter alia, contribution for the assigning guarantor's payment of the co-guarantor's proportionate share of the loan, inter alia, denied plaintiff's motion for summary judgment, and granted defendant's cross motion for summary judgment to the extent of dismissing the cause of action for attorneys' fees, unanimously affirmed, without costs.

Plaintiff's motion for summary judgment was properly denied on the ground that issues of fact exist as to whether the borrower was in default, and thus whether the guarantors' liability had been triggered (see Weissman v. Sinorm Deli, 88 N.Y.2d 437, 446, 646 N.Y.S.2d 308, 669 N.E.2d 242;  State of New York v. Peerless Ins. Co., 117 A.D.2d 370, 373, 503 N.Y.S.2d 448).   If plaintiff's assignor paid the guaranteed loan not as a guarantor but as a volunteer, then the loan was extinguished by payment, such that no right of contribution arose against the co-guarantor and thus no such right existed to be assigned to plaintiff, who stands in the shoes of her assignor (see Trans-Resources, Inc. v. Nausch Hogan & Murray, 298 A.D.2d 27, 746 N.Y.S.2d 701, 703-04).   Based upon the foregoing, and the parties' differing explanations for the payment to defendant of a portion of the loan proceeds, issues of fact also exist as to whether defendant has been unjustly enriched.   The motion court properly dismissed plaintiff's claim for attorneys' fees, correctly interpreting the guaranty provision authorizing such fees as applying to actions brought by the lender against the guarantors, and not to actions by one guarantor against another.   We have considered plaintiff's other contentions and find them unavailing.