DIG SSOF EVANSTON LENDER LLC v. YEN (2024)

Order, Supreme Court, New York County (Melissa A. Crane, J.), entered on or about September 29, 2023, which granted defendants' motion under CPLR 5021(a)(2) for an order directing entry of the full satisfaction of a judgment in favor of plaintiff and against defendant, unanimously affirmed, with costs.

The nonparty borrower has satisfied the loan at issue, which was secured by defendant guarantors, including all default interest that had accrued for late payment of the debt.  Because a guarantor's liability is merely a secondary obligation on the underlying debt, guarantor liability cannot exceed the amount owed by the debtor (see Weissman v. Sinorm Deli, Inc., 88 N.Y.2d 437, 446, 646 N.Y.S.2d 308, 669 N.E.2d 242 [1996]).  Thus, plaintiff lender cannot obtain prejudgment interest from the guarantors in addition to the default interest already obtained from the borrower, as such would constitute an impermissible double recovery (see PAF–PAR LLC v. Silberberg, 118 A.D.3d 446, 446, 987 N.Y.S.2d 361 [1st Dept. 2014], affd 27 N.Y.3d 930, 28 N.Y.S.3d 679, 48 N.E.3d 960 [2016]).

In view of the foregoing, we need not reach the remaining arguments.