Commercial Division Blog

Posted: July 31, 2019 / Categories Commercial, Contracts

Plaintiff's Delay in Bringing Suit or Exercising Other Remedies Did Not Waive Right to Sue

On July 3, 2019, Justice Schecter of the New York County Commerical Division issued a decision in Taxi Medallion Loan Trust III v. Benson Hacking Corp., 2019 NY Slip Op. 32069(U), holding that a plaintiff's delay in bringing suit or exercising other remedies did not waive its right to sue, explaining:

Defendants have also failed to raise a triable issue of fact as to waiver, which may not be inferred to frustrate the reasonable expectations of the parties embodied in a contract when they have expressly agreed otherwise. The Security Agreements and Guarantees state that no delay on the part of the Lender in exercising any of its options, powers or rights, or partial or single exercise thereof, shall constitute a waiver thereof. Thus, plaintiff's purported failure to serve a timely notice of default, to reject payments, to seize collateral or to more expeditiously file suit, did not effect a waiver. Nor did plaintiff's mere acceptance of defendants' sporadic monthly payments after the Maturity Date constitute a waiver.

Guarantors are likewise liable under the unconditional Guarantees, which waived all defenses. The Guarantees, moreover, allowed plaintiff to change or extend the time of payment without releasing Guarantors. Thus, even if plaintiff had expressly or de facto extended the time for Borrowers to repay the Notes, Guarantors agreed that any extension would not extinguish their obligations under the Guarantees. Guarantors are personally liable under the Guarantees for Borrowers' liability under the Notes.

(Internal quotations and citations omitted).

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