UNITED LEGWEAR COMPANY LLC v. Allison Yedid Missry, Defendant-Respondent. (2025)

Order, Supreme Court, New York County (Louis L. Nock, J.), entered September 9, 2024, which granted defendant Allison Yedid Missry's (defendant) motion to dismiss the complaint against her and denied plaintiff's motion for summary judgment against defendant on the breach of guarantee claim, unanimously affirmed, with costs.

The motion court properly granted defendant's motion to dismiss and denied plaintiff's motion for summary judgment based on plaintiff's execution of a general release of the borrower, the corporate guarantor, and those releasees' officers and shareholders, which includes defendant, without a reservation of rights (see Global Mins. & Metals Corp. v. Holme, 35 A.D.3d 93, 98, 824 N.Y.S.2d 210 [1st Dept. 2006], lv denied 8 N.Y.3d 804, 831 N.Y.S.2d 106, 863 N.E.2d 111 [2007];  General Obligations Law §§ 15–104, 15–105[1]).  Additionally, because defendant's guarantee does not contain a provision under which she agreed to be bound after the release of the borrower, the unqualified release of the borrower also discharged defendant's obligations under her guarantee (see Becker v. Faber, 280 N.Y. 146, 148–149, 19 N.E.2d 997 [1939]).

The motion court properly rejected plaintiff's argument that the release was amended while in escrow to include a reservation of rights against defendant, superseding the original release.  “The purpose of an escrow is to assure the carrying out of an obligation already contracted for” (National Union Fire Ins. Co. Pittsburgh, Pa. v. Proskauer Rose Goetz & Mendelsohn, 165 Misc.2d 539, 544, 634 N.Y.S.2d 609 [Sup. Ct., N.Y. County 1994], affd 227 A.D.2d 106, 642 N.Y.S.2d 505 [1st Dept. 1996]).  If an escrow is established, the instrument in escrow becomes irrevocable (see id. at 545, 634 N.Y.S.2d 609;  see also Farago v. Burke, 262 N.Y. 229, 233, 186 N.E. 683 [1933]).  Here, the original release recites the consideration as paid and does not contain any conditions precedent to its effectiveness, rendering it effective upon execution and irrevocable, irrespective of whether it was actually placed in escrow.  Therefore, the amended release was properly deemed a nullity.

Plaintiff's contention that defendant failed to lay a foundation for the submission of the original release in her motion papers is unavailing.  The original release was previously identified and authenticated by codefendant Alex Missry in his reply affidavit submitted in further support of plaintiff's prior motion for summary judgment in lieu of complaint.

We have considered plaintiff's remaining contentions and find them unavailing.