David M. Grill and Joseph Poe Win Decision in Extell 601, et al. v. Vinegar Hall Baking Co., et al.December 20, 2012
David M. Grill, a partner in the firm’s Litigation & Appeals Practice Group and Joseph Poe, a partner in the firm’s Insurance Coverage & Litigation Practice Group, won summary judgment in favor of a New York City commercial landlord against a “good guy” guarantor of the commercial tenant’s obligations under its lease. The commercial tenant had been evicted from the commercial premises and owed substantial base rent, additional rent, fees and costs. Adopting the landlord’s argument that the guarantor’s liability for the tenant’s obligations was not extinguished because he had not satisfied all the conditions of the guaranty, the Court rejected the guarantor’s argument that the guaranty was satisfied when the tenant surrendered the premises (because it had been evicted) and the guarantor made partial tender of the amounts owed at the time of the surrender (because the full amount owed was not paid). The Court also rejected the guarantor’s defense that he was not liable for the expanded rental obligations in an amendment to the commercial lease because there was no evidence that the executed amendment had been delivered to the landlord, and instead adopted the landlord’s position that the guarantor was liable for the amendment because the guarantor was not a party to the commercial lease or the amendment and thus his signature to, but not the delivery of, the amendment was necessary to make the contract enforceable. The Court also dismissed the guarantor’s counterclaim for conversion of the tenant’s security deposits and trade fixtures and equipment, embracing the landlord’s argument that the guarantor did not have standing to assert the claim because he did not have a possessory interest in the security deposits, trade fixtures and equipment.
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