and things and by invoking eco tenancy provision terminate the lease and therefore avoid liability and guarantee addition court's decision is at odds with the  case law supporting the enforcement of unconditional guarantees particularly in the commercial context its lease with linens and things in june of one thousand nine hundred six and at that same time on that same day it bargain for a negotiated for an unconditional guarantee a linens and things performances under the lease by noble corporation which at the well the main the main point your honor is that the unconditional nature of the guarantee prohibits c d s from reaching into the underlying conditional there's no condition you have to pay that correct and trying to invoke  well it matters in the sense that c d s take the position the appellee takes the position that because the lease was not terminated according to then by virtue of linens and things bankruptcy subsequent surrender of possession  behalf of the tenant versus on behalf of itself but those provisions are not applicable in this situation because in this particular situation you had linens and things filing for bankruptcy under title level of the us bankruptcy code and rejecting the lease under three sixty five of the bakers your junctions not terminations well your honor there are some cases that say that it is a term nation and some cases that say that it is not there and the cases that conclude and  a noted bankruptcy source concludes that the mere rejection of the lease and bankruptcy should not act as a determination per se because there may be underlying rights to third parties you make of three sixty five settlement agreement was entered into after g m s made a written demand again c d s pursuant to the guarantee to pay then outstanding read and c d s originally did not pay us any rent distinguished earth however i do believe judge chester got a lot wrong there he did say that the district of new jersey follows these rules but he wasn't looking and he doesn't cite to the cruise case which is the new jersey supreme court case in  distinctions between surety ship and a guarantee and there is a distant for a difference in a legal basis between the two on one side to guarantee it's a separate obligation with two parties between the principal and that i'm surprised that you're not i mean i think let's assume that what judgement is quoted is accurate that indeed in certain circumstances the  staff set off or counterclaim whatever but under i mean the whole place seems we could rise and fall on section eight point zero three and the characterization of what is in there another w of their back and forth and so in some cases they're using both i mean live at the same prince well i agree your honor that there is a misuse or a every last use of the terms but again we point back to the supreme court's decision s gets a right to exercise the right to terminate and the option under section eight zero three guide me when you look at the first paragraph of the guarantee the guarantee says the unconditional guarantee says that c v s is liability is to perform and fulfill the terms conditions and provisions of the lease and w claims on behalf of the insolvent debtor that is in a position to do and well yeah if it relates to the the obligation of the guarantor i mean if there was a set off or if there was a defense to the know i think it gets back to the characterization of what eight point three is how how do you construe the option to have alternative ran an option that judge whit was enough and the right to cancel and terminate the lease how do you get how do you how is it c b s can exercise affirmatively exercise those rights so i think you have to look at the obligations in the lease are informed that the obligations in the lease are informed by the rights in the lease and so the way to answer that is when you look at for example section five point zero five of the least that says that the landlord has the right to inspect cam records and six point zero four of the lease that says that the landlord says that the tenant has the right to contest real estate taxes to get to the back up on that and so what the guarant or when that when that and this is the purpose of the exception when the tenant like linens is an able to assert those type of rights the guarantor then gets to come in so that there is no windfall for says that they exercise and step in the shoes of the principle i mean i'm aware cases that they can assert the claims that often defense is counter claims that that it's a second circuit case from one nine hundred eighty nine and let me tell you what the import of that case is well if not the import tell us the building that the holding of that case was that the guarantor sought specific performance under the  sought to enforce the rights that the tenant would have had and the second circuit said that the guarantor was intitled to obtain a specific performance that the tenant would have been able to assert but had or it was a specific language in that case or why is that i think what you would see in that case is that the court found that specific performance was a means of enforcing the terms of the contract and so by in plot applying the insolvency exception that it was a means for the guarantor to be able to relies upon the restatement third of surety ship and guarantee and the restatement third of surety ship and guarantee which new jersey law does recognize does talk about how it doesn't even actually require insolvency it allows when the principal obloquy were so in this case linens and things is not able for whatever reason to assert its own rights that a guarantor would be able to assert in jersey supreme court says the you're under the crew's case cites to that with support correct the cruise he cites to the restatement third of surety ship i want to make sure i'm clear the cruise case does not stand for that proposition it cites with new jersey approval the restatement third of surety ship and guarantee and if you were to look at section thirty four of the restatement third of surety shipping guarantee will find that in an instant like this c d s but because linens and things is not in a position to be able to assert rights and and the reason why you have a general rule like that is that you don't want two different parties to be asserting rights think about why c v s agreed to this guarantee it agreed to this guarantee because of the provisions in the lease and agreed to guarantee it because it had a tenant that wanted to go into the property and the guarantee was was required to be given and presumably it wasn't c b s its predecessor did it that signed on to these wonderful things but it is absolutely that but but if you think about the provisions of eight point zero one eight point zero three  three is no longer in the shopping center for twelve consecutive months that it gives the ten's with the least says the right to be able to terminate which would have been fine if linens and things were operating and this happened to it it would have that right but you know the fact scenario we have here it's a little bit disingenuous to say that that that's the situation i mean you know linens and things was already dark itself so it's not like it was being harmed in an ongoing basis by virtue of the fact not necessarily sure as i i don't think we have anything the records indicate what the negotiations were what we had the section eight point zero one which allows linens to go dark but there's a specific provision in there that allows it to go dark and obligation i actually think the first breach occurred before the rejection of the nonpayment the record would reflect occurred before the rejection not the filed settlement agreement was after the rejects the settlement agreement was absolutely out of your saying it it undid the breach the settlement agreement so when the wednesday when jean asked me to demand on c b s c b s immediately honored its obligations and paid all d undue monies which was its obligation and the guarantee which when it was still in breach which was its obligation under the guarantee right to listen things and still breach lynas insult things had still breached and now that isn't things and if you apply the insolvency exception is refer the obligations of the guarantor are informed by the least you can look at that leave that guarantee alone without going back to the least to understand what the obligations were under the lease limit prompt performance guarantee is of the full and performance of the terms of the lease so they're obligated themselves to perform the obligations i guess that's where notice and terminating the lease and accelerating maybe we wouldn't be here isn't their primary the primary purpose the premier reason why commercially awards this week guarantee guarantors is to pay potential debts of ten of debts of tenants under the lease but isn't that your primary responsibility if the if that is the obligation absolutely is that your obligation that is the obligation of the tenant in this instance and that's what it did s for amounts that arise damages due to an insta fault so there was in fact it was the exact opposite g n a s did all the actions at after taking possession of the property changing the locks all those different things and i want to talk just for a few  one of the provisions in the co tenancy section was to provide the landlord with twelve months notice that this election was being made and the reason for that is the landlord then has the opportunity knowing that an election is being made to were there because you have to the if lennon's had the right to do that your honor which again they did not they had to elect that option and give notice to the landlord that it was so doing well the question of what what condition we're talking about this is an unconditional guarantee the reference isn't a cruise decision to the large surety ship is a decision in which the supreme court in jersey recognizes those distinctions this is the guarantee and public policy that the law enforcing