Lender’s Dismissal Of Claims Against Guarantor Requires Dismissal Of Guarantor’s Related Third-Party Fraudulent Inducement Claim

Posted: October 22, 2025 / Written by: Jeffrey M. Eilender, Joshua Wurtzel, Samuel L. Butt, Channing J. Turner, Thomas A. Kissane / Categories Guaranty , Fraudulent Inducement, Motion to Dismiss, Attorney Fees

Lender’s Dismissal Of Claims Against Guarantor Requires Dismissal Of Guarantor’s Related Third-Party Fraudulent Inducement Claim

On September 16, 2025, Justice Joel M. Cohen held that the voluntary dismissal of a note holder’s claim against Harvey Weinstein as guarantor warranted dismissal of a third-party complaint by Weinstein alleging fraudulent inducement. The case is AI International Holdings v. Weinstein, Index No. 656864/2017.

Plaintiff AI International Holdings sued TWC Borrower 2016 on a $45 million dollar note and named Weinstein as co-defendant/guarantor. Plaintiff and Weinstein’s counsel informed the court that they had entered into a stipulation dismissing the action as against Weinstein and, before that stipulation was filed, Weinstein filed a third-party complaint alleging that Irwin Reiter had fraudulently induced Weinstein to execute the guaranty. Reiter had spoken to the press and cooperated with prosecutors on various sex charges against Weinstein.

Noting that the delay in filing the stipulation of dismissal of the action against Weinstein may have been calculated as a means to enable Weinstein’s claim against Reiter to proceed “perhaps for Weinstein to exact revenge against Reiter”, slip op. 10-11 fn. 2, Justice Cohen dismissed the third-party complaint:

“CPLR 1007 permits a defendant to implead, by means of a third-party action, ‘a person not a party who is or may be liable to that defendant for all or part of the plaintiff's claim against that defendant’” (Sunbelt Rentals, Inc. v Tempest Windows, Inc., 94 AD3d 1088, 1089 [2d Dept 2012]; CPLR 1007). “[T]he liability sought to be imposed upon a third-party defendant must arise from or be conditioned upon the liability asserted against the third-party plaintiff in the main action” (id.). Accordingly, where the claims against the putative third-party plaintiff have been resolved or dismissed, that party can no longer pursue a third-party action under CPLR 1007 . . .

Here, Plaintiff’s claim against Weinstein was resolved by a jointly executed stipulation of dismissal. The fact that Plaintiff and Weinstein agreed temporarily not to file the stipulation (for transparently tactical reasons) is of no moment. . . . Plaintiff’s unequivocal communication to the Court that there was a signed stipulation of dismissal, along with its representation that it had determined not to pursue its claim against Weinstein, eliminated any genuine live controversy between Plaintiff and Weinstein. That controversy cannot be resuscitated through the guise of a third-party claim filed well after the stipulation of dismissal had been executed.

Slip op. 10-11 (emphasis in original, footnote omitted.)

Justice Cohen also found the third-party complaint subject to dismissal as time barred (id. 12-13) and for failure to state a claim (id. 13-15), and awarded Reiter attorneys’ fees against Weinstein under the New York anti-strategic litigation against public participation, or SLAPP, statute. Id. 15-17.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning loan agreements, guaranties, motions to dismiss or attorneys’ fees.