CENTURY CITY MALL LLC v. WAXMAN (2021)

Judgment, Supreme Court, New York County (Alan C. Marin, J.), entered March 5, 2020, awarding plaintiff the total amount of $451,941.30, pursuant to an order, same court and Justice, entered on or about February 14, 2020, which granted plaintiff's CPLR 3213 motion for summary judgment in lieu of complaint, unanimously reversed, on the law, without costs, the judgment vacated, the motion denied, and the papers converted to pleadings.  Appeal from the order unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Plaintiff's motion for summary judgment in lieu of complaint should have been denied.  The guaranty was not “absolute and unconditional” and contained no waiver of defenses, as distinguished from the guaranties at issue in Royal Equities Operating, LLC v. Rubin, 154 A.D.3d 516, 62 N.Y.S.3d 337 (1st Dept. 2017), relied upon by the motion court.  Defendant adequately raised a failure of consideration defense of the underlying obligation, that is, plaintiff's failure to deliver possession of the leased premises to the named tenant, a defense which may be raised even on an unconditional guaranty (Moon 170 Mercer, Inc. v. Vella, 169 A.D.3d 537, 537, 95 N.Y.S.3d 27 [1st Dept. 2019]).  Further, liability under the guaranty could not be resolved on a motion pursuant to CPLR 3213 because “[w]here proof outside the instrument is necessary to establish the underlying obligation, the CPLR 3213 procedure does not apply” (Maglich v. Saxe, Bacon & Bolan, P.C., 97 A.D.2d 19, 21, 468 N.Y.S.2d 618 [1st Dept. 1983]).  Here, because defendant did not waive any defenses in the guaranty, proof outside the guaranty — competent evidence showing that plaintiff delivered possession to the named tenant and not another entity — was necessary to establish defendant's liability (id.).