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Guaranty Provision Requiring Some Additional Performance Obligations Held Insufficient to Defeat Motion for Summary Judgment In Lieu of Complaint

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  • Posted on: May 3 2023

By: Jeffrey M. Haber

In past articles, we have examined a motion for summary judgment in lieu of a complaint under CPLR § 3213 (seee.g., herehereherehere, and here). Today, we take another look at this statute by examining BBM3, LLC v. Vosotas, 2023 N.Y. Slip Op. 02279 (1st Dept.  May 2, 2023) (here), a case involving an unconditional guaranty of payment.

CPLR § 3213

Pursuant to CPLR § 3213, “[w]hen an action is based upon an instrument for the payment of money only or upon any judgment, the plaintiff may serve with the summons a notice of motion for summary judgment and the supporting papers in lieu of a complaint.” The purpose of CPLR § 3213 is “to provide quick relief on documentary claims so presumptively meritorious that a formal complaint is superfluous, and even the delay incident upon waiting for an answer and then moving for summary judgment is needless.”1 

A promissory note2 and an unconditional guaranty are prototypical instruments for the payment of “money only” within the meaning of CPLR § 3213.3

To meet the prima facie burden on a summary judgment motion under CPLR § 3213, the movant must prove “the existence of the guaranty, the underlying debt and the guarantor’s failure to perform under the guaranty.”4 Thereafter, “the burden shifts to the defendant to establish, by admissible evidence, the existence of a triable issue with respect to a bona fide defense.”5 

What is a Guaranty?

A guaranty is a promise to fulfill the obligations of another party and is subject “to the ordinary principles of contract construction.”6 Under those principles, “a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms.”7 

“Guaranties that contain language obligating the guarantor to payment without recourse to any defenses or counterclaims, i.e., guaranties that are ‘absolute and unconditional,’ have been consistently upheld by New York courts.”8 “Absolute and unconditional guaranties have … been found to preclude guarantors from asserting a broad range of defenses.”9 

The New York Court of Appeals has acknowledged the application of absolute guaranties even to claims of fraudulent inducement in the execution of a guaranty. In Citibank v. Plapinger, 66 N.Y.2d 90 (1985), the defendants were officers, directors and shareholders in a company which secured a line of credit from the plaintiff banks. After the company defaulted, it restructured its debt as a term loan, guaranteed by the defendants. When the company subsequently filed for bankruptcy, the banks declared the term loan and interest immediately due and sued the defendants on the guaranty. Among their defenses to the litigation, the defendants asserted fraud in the inducement, based on alleged false or recklessly made statements of the banks that they would provide the company with an additional line of credit as part of the debt restructuring. The defendants argued that but for verbal assurances that the banks would issue the credit, the defendants would not have signed the guaranty on the term loan.

The Court of Appeals held that under the “absolute and unconditional” language of the guaranty, the defendants were foreclosed from asserting their fraud in the inducement defense. In reaching this conclusion, the Court rejected the need for the defendants’ specific disclaimer of reliance on the banks’ oral representations. Instead, the Court determined, quoting from the guaranty, that the defendants agreed “that the ‘absolute and unconditional’ nature of their guarantee was ‘irrespective of (i) any lack of validity … of the … Loan Agreement … or any other agreement or instrument relating thereto,’ or ‘(vii) any other circumstance which might otherwise constitute a defense’ to the guarantee.”10 Given the substance of the guaranty, to permit the defendants to assert that the bank induced them to sign “would in effect condone defendants’ own fraud in ‘deliberately misrepresenting [their] true intention’ when putting their signatures to their ‘absolute and unconditional’ guarantee.”11 In other words, because the defendants had assured the banks that their guaranty to pay the loan was not subject to any defenses, they were bound to their promise.

BBM3, LLC v. Vosotas

BBM3 concerned the development, operation, and financing of a hotel in Miami Beach (the “Property”). The project was initially financed by a $36 million loan (the “Loan”) that the original lender made to two entities (the “Borrowers”). The Loan was evidenced by a promissory note and secured by, among other things, a first priority mortgage lien on the Property.

Pursuant to the loan agreement, if the original lender reasonably determined that there was a deficiency, defined as a shortfall between the estimated cost of completion and the portion of the Loan not yet advanced and the funds in the collateral account (“Deficiency”), then the original lender could deliver written notice demanding that the Borrowers deposit sufficient collateral to cover the amount of the Deficiency (the “Deficiency Collateral”) within ten days. Failure to make such a deposit of Deficiency Collateral constituted an event of default. 

Pursuant to one guaranty, the guarantors “unconditionally and absolutely” guaranteed payment and performance of the guaranteed obligations, including accrued and unpaid interest on the Loan and late payment charges. The guarantors were to make such payments “immediately upon demand” without protest or notice. 

Pursuant to another guaranty, the guarantors “unconditionally and absolutely” guaranteed payment and performance of the guaranteed obligations, including the Borrower’s obligation under the Loan to deposit Deficiency Collateral with respect to the Loan. These guarantors agreed to make such payments “immediately upon demand” without protest or notice.

A Deficiency Notice was sent pursuant to the loan agreement, stating that the original lender determined that there was a Deficiency of at least $3,281,759.74. When the Guaranty Notice was sent a year and a half later, the Deficiency increased to $8,750,522.57, with interest due in the amount of $1,180,446.16. 

The Lender claimed that, as of March 10, 2021, the amount owed under one of the guarantees was $14,804,571.89, consisting of (i) interest on the Loan, (ii) funding due to the interest reserve for an interest shortfall arising from the guaranteed obligations, and (iii) insurance premiums. With regard to the other guaranty, the Lender sought $4,181,759.74, consisting of the Deficiency demanded in the Deficiency Notice and a settlement of a change order for a delay claim on the hotel construction. 

The Lender commenced an action against the guarantor of one of the guarantees pursuant to CPLR § 3213 by summons and notice of motion dated March 26, 2021.

The motion court granted the motion, holding that the Lender “established its prima facie entitlement to summary judgment”. The motion court found that the Lender presented evidence that the guarantees were valid and in effect, that it was owed $14,804,571.89 under one of the guarantees and $4,181,759.74 under the other one, and that the guarantor failed to perform under the guarantees.

On appeal, the Appellate Division, First Department affirmed.

The Court held that “Plaintiff satisfied its prima facie burden on its CPLR 3213 motion for summary judgment in lieu of complaint by demonstrating the existence of the guaranties and underlying debts, as well as defendant guarantor’s failure to perform under the guaranties.”12

The Court also held that “CPLR 3213 relief was appropriate despite the completion guaranty’s provision requiring some additional performance obligations by the borrower.”13 In so holding, the Court reasoned that “the guaranty ‘include[d] an unconditional obligation to pay’ that ‘required no additional performance by plaintiff as a condition precedent to payment.’”14 [Eds. Note: a guarantee of both payment and performance, does not qualify as an instrument for the payment of money only under CPLR § 3213.15]


CPLR § 3213 provides for an accelerated judgment at the outset of the litigation. There are no pleadings, and there is no discovery when a movant seeks summary judgment under CPLR § 3213. 

As noted, to obtain judgement as a matter of law pursuant to CPLR § 3213, the movant must demonstrate that its “action is based upon an instrument for the payment of money only or upon any judgment.” When the former is involved, the movant must demonstrate that the other party executed an instrument that contains an unequivocal and unconditional promise to pay the party upon demand or at a definite time and the party failed to pay according to the terms of the instrument. 

In BBM3, the Court found that “the guaranty ‘include[d] an unconditional obligation to pay’ that ‘required no additional performance by plaintiff as a condition precedent to payment.’”16 As such, the guarantee at issue did not require both payment and performance, which would have made CPLR § 3213 in applicable.17 It was a “prototypical example of an instrument within the ambit of [CPLR § 3213] … [i.e.,] an unconditional promise to pay a sum certain, signed by the maker and due on demand or at a definite time.”18


  1. Weissman v. Sinorm Deli, 88 N.Y.2d 437, 443 (1996) (internal quotation marks omitted). See also Cooperatieve Centrale Raiffeseisen-Boerenleenbank, B.A., “Rabobank Intl.,” N.Y. Branch v. Navarro, 25 N.Y.3d 485, 491-492 (2015).
  2. Weissman, 88 N.Y.2d at 444.
  3. Navarro, 25 N.Y.3d at 492.
  4. Davimos v. Halle, 35 A.D.3d 270, 272 (1st Dept. 2006) (citing, City of New York v. Clarose Cinema Corp., 256 A.D.2d 69, 71 (1st Dept. 1998)).
  5. Cutter Bayview Cleaners, Inc. v. Spotless Shirts, Inc., 57 A.D.3d 708, 710 (2d Dept. 2008) (citation and internal quotation marks omitted).
  6. E.g., Compagnie Financiere de CIC et de L’Union Europeenne v Merrill Lynch, Pierce, Fenner & Smith Inc., 188 F.3d 31, 34 (2d Cir. 1999) (citing, Banco Portugues do Atlantico v. Asland, S.A., 745 F. Supp. 962, 967 (S.D.N.Y. 1990)).
  7. Greenfield v. Philles Records, 98 N.Y.2d 562, 569 (2002).
  8. Navarro, 25 N.Y.3d at 493 (citations omitted).
  9. Id. (citing cases).
  10. Plapinger, 66 N.Y.2d at 95.
  11. Id.
  12. Slip Op. at *1 (citation omitted).
  13. Id.
  14. Id. (quoting, iPayment, Inc. v. Silverman, 192 A.D.3d 586, 587 (1st Dept. 2021), lv. dismissed, 37 N.Y.3d 1020 (2021) (citations omitted)).
  15. Punch Fashion, LLC v. Merchant Factors Corp., 180 A.D.3d 520, 521 (1st Dept. 2020), lv. dismissed, 35 N.Y.3d 1124 (2020).
  16. Id. (quoting, iPayment, Inc. v. Silverman, 192 A.D.3d 586, 587 (1st Dept. 2021), lv. dismissed, 37 N.Y.3d 1020 (2021) (citations omitted)).
  17. Punch Fashion, 180 A.D.3d at 521.
  18. Weissman, 88 N.Y.2d at 444.

Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes and is not intended to be and should not be taken as legal advice.

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