Reference To “Other Obligations” In Payment Guarantees Does Not Prevent The Use Of CPLR 3213’s Accelerated Judgment Procedure

Posted: May 14, 2025 / Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner / Categories Attorney-Client Privilege, In Camera Review

Reference To “Other Obligations” In Payment Guarantees Does Not Prevent The Use Of CPLR 3213’s Accelerated Judgment Procedure

On March 25, 2025, Justice Melissa A. Crane granted a bank plaintiff’s motion for summary judgment in lieu of complaint under CPLR 3213 over the objection of defendants that the guarantee agreements referenced “other obligations” and therefore were not “instrument[s] for the payment of money only” under the rule. In Flagstar Bank, N.A. v. Olive Tree Asset Management LLC, et al., Index No. 653863/2024, three guaranteeing defendants pointed to language in their guarantee agreements referencing other obligations in an effort to show that the agreement concerned more than just a simple guarantee of payment that would allow accelerated judgment. The Court disagreed, explaining:

Defendants Gelfman, Simba B Holdings LLC, and Simba B AM Holdings LLC ("Gelfman Defendants") argue that the August 2022 Guaranties are not instruments for the payment of money only, because the guarantee refers to "other obligations." This claim is unavailing. The "obligations" are all financial in nature that is, there is no obligation to perform anything other than tendering payment for borrowers’ debts.

The attorneys at Schlam Stone & Dolan frequently advise clients concerning the accelerated judgment procedure under CPLR 3213. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.