Jacobs P.C. Successfully Defeats a Landlord's Initial Attempt to Enforce a Personal Guaranty


This insights piece discusses the rare occasion where a landlord misconstrues the language of a guaranty, and quickly backtracks when faced with its own admissions in litigation.In an action pending in New York Supreme Court, captioned 1325 Fifth Avenue LLC v. Jacob Leviev, Index No.: 152269/2022, the landlord rushed to file a motion for summary judgment before any discovery had been commenced, thinking that it had a smooth, quick past to victory in seeking to enforce an unconditional personal guaranty.However, as explained below, under the express terms of the guaranty, it was far from clear that the tenant owed the landlord anything.In fact, as was explained in the opposition brief filed by Jacobs P.C., if any sums were owed, it was the landlord who owed money to the tenant.

To begin, while the terms of the lease at ossie differed, on its face, the “good guy” guaranty sought to be enforced by the landlord cuts off liability upon the tenant vacating the premises. In connection with its motion for summary judgment, the landlord submitted an affidavit submitted that admitted that the tenant vacated on a certain date. Ironically, based on the landlord’s own admissions, on the date that the landlord admitted that the tenant vacated and delivered possession to the landlord, it was undisputed that the landlord was holding more in its security deposit than the sums allegedly owed to the landlord by the tenant. Given these startling admissions, Jacobs P.C. persuasively argued that there was no event of default triggering any guarantor liability. For this reason alone, we argued that denial of summary judgment is warranted.

Faced with this argument, rather than file a reply brief and try to win the case, the landlord did what was prudent under the circumstances, which was stipulating to withdraw its motion for summary judgment.Now, given the even playing field, the attorneys at Jacobs P.C. are now working together to resolve the matter, which will include asserting counterclaims for affirmative relief.

This victory adds to Jacobs P.C.’s successful defenses against landlord’s seeking to enforce commercial guaranties against guarantors.