USI Capital and Leasing, a Div. of USI Credit Corp. v. Chertock

• Decision Date: 09 April 1991
• Parties: USI CAPITAL AND LEASING, A DIVISION OF USI CREDIT CORP., Plaintiff-Appellant-Respondent, v. Sidney CHERTOCK, Defendant-Respondent-Appellant, and Hazardous Waste Disposal Corp., et al., Defendants.
• Court: New York Supreme Court — Appellate Division

Page 74

568 N.Y.S.2d 74

172 A.D.2d 235

USI CAPITAL AND LEASING, A DIVISION OF USI CREDIT CORP., Plaintiff-Appellant-Respondent, v. Sidney CHERTOCK, Defendant-Respondent-Appellant, and Hazardous Waste Disposal Corp., et al., Defendants.

Supreme Court, Appellate Division,

First Department.

April 9, 1991.

Before SULLIVAN, J.P., and ROSENBERGER, WALLACH, KUPFERMAN and SMITH, JJ.

MEMORANDUM DECISION.

Judgment, Supreme Court, New York County (Walter M. Schackman, J.), entered December 6, 1989, awarding plaintiff damages of $7,598.89 for net unpaid rental installments, late charges of $144.75, plus interest at 12% per annum from July 1, 1982 to September 8, 1989 in the sum of $6,675.02, for a total of $14,418.66, and attorneys fees of $7,000 against defendant Chertock based on the guaranty agreement dated August 17, 1979 with respect to defendant Hazardous' obligations under a lease agreement of the same date but denying judgment with respect to two subsequent lease agreements dated December 5, 1980, unanimously modified, on the law, to the extent of reversing that part of the judgment which dismissed plaintiff's claims with respect to the guaranty of the second and third leases, granting plaintiff judgment with respect thereto and remanding for a hearing on any further counsel fees due plaintiff and, except as thus modified, affirmed, without costs or disbursements.

In 1978, Chertock invested $15,000 in and guaranteed various obligations of Hazardous Waste Disposal Corp. in return for 50% of the profits. Hazardous, which eventually went bankrupt in 1983, subsequently entered into three forklift-truck lease agreements with plaintiff's assignor, one on August 17, 1979 and two on December 5, 1980. Also on August 17, 1979, Chertock executed a continuing guaranty of Hazardous' obligations to plaintiff's assignor. Chertock is alleged to have executed two further personal guaranties in connection with each of the second and third leases. Chertock claimed all three guaranties were forgeries. After a trial, the IAS court found that only the first guaranty was authentic. Although finding Chertock so liable, it only granted judgment for the obligations under the first lease, finding that, despite the plain language indicating it was a continuing guaranty, the parties never so intended because plaintiff's assignor sought Chertock's personal guaranty of the subsequent December 5, 1980 lease agreements. However innovative such a ruling might appear in terms of compromising the matter, it is clearly flawed and erroneous. Accordingly, we modify to grant plaintiff judgment under the August 17, 1979 continuing guaranty for Hazardous' obligations under both the second and third lease agreements.

The August 17, 1979 guaranty was, by its express terms, "an absolute, unconditional, continuing guaranty of payment" of the "payment and performance of all indebtedness and obligations of [o]bligor to [o]bligee of every kind and description, direct or indirect, primary or secondary, absolute or contingent or due or to become due ... whether now or hereafter arising under the [a]greement or any other present or future agreement, document or instrument now or hereafter executed and delivered by [o]bligor to [o]bligee...." It is well settled that "where a question of intention is determinable...