complaint by a landlord against the guarantor of a commercial lease the st cause of action is the issue is whether a settlement with the tenant released the guarantor from  settlement agreement settled with arbitration and some modifications of to specific provisions that we're suing under regarding the initial construction obligations of the tenant which were breached prior to the settlement so what we have here is the well established law that on a motion to dismiss the district court may only dismiss a breach of contract claim if the contract terms are unambiguous we've pointed to at least six provisions in the guarantee which at least raised the issue of an ambiguity as to whether the defendant guarantor can remain liable under its guarantee notwithstanding the fact that the land within the tenant settled their claims guarantee is ambiguous it must be construed in favor of the going to a and that somehow that entitles them despite all these ambiguities to dismiss the case but this rule of construction is in applicable in the  place on a motion to dismiss the case was decided not on a motion to dismiss but after factual findings on the declaratory judgment and the court highlighted the fact that this strictest jurist the pause button right there and let me in choir as to whether the judges have any questions so judge here's why don't we just start with you all right i do have a question i have a question about  the citizenship of the individual partners is there anything in the record to disclose what their citizenship  as the at the defendant is but we don't know from the record whether there's actually diversity we don't know that there's actual diversity and there's been no you i mean i could put that in the record that i know firsthand there's only a handful of limited partners in this if it's a limited partnership the very family owns a small company the guarantor claims to have been released only whether the lease was modified to change the obligations of the parties and therefore the guarantor is still on the h modified by the settlement agreement and the tenant was released from those obligations and the issue is whether the german tourist can still remain liable for that original breach of the lot of those obligations so it's whether he was released or whether he waived the fact under the agreement under the guarantee that he waived any settlement release it said or as he did as it did under the guarantee well are i think that's where all of this confusion has come in and it was a confusion from the district court there is no holding at all by the arbitrator that has anything with regard to the issue of whether whether tenet was in breach of its obligations under the settlement agreement and there definitely was not any decision by the arbitrator about the tenant was in a originally in breach prior to that any lawsuits for its obligations under this paragraph seventy eight regarding to this gets into a whole this is what was the issue that's been going on here that just goes down a bit rabbit hole because of the use of the language in the settlement agreement there was one time landlord work and there's one time actually the arbitrator concluded that landlord work was completed done it was not completed the provision for the nine months payment of the one dollar to five million dollars paragraph nine states only with regard to landlord work it does not refer to the done it's a separate provision in the settlement agreement because with the st of the done it but i think what we're highlighting here is all of these issues that are getting decided on a motion to dismiss and they can be  explained and flushed out and the district court just for the nd cause of action meaning alternatively that if the settlement even applies to the guarantor that  those issues were not decided to plea fully race judicata to apply by the arbitrator but the st cause of action is what i was initially referring to with regard to obligations is in a written signed release by the landlord but it was that it isn't isn't that that goes back to my initial question i was thinking that d perhaps and i'm asking for your views on this all of that language is to is in there to defeat the common law rule that if there is any change in the contract whatsoever the guarantor is released and so typically guaranteed contracts today language of the sort that you reference that says that's not so the guaranteed doesn't disappear just because there's been some change that doesn't but the big errant four is still on the hook only if there is a breach by the person being guaranteed right but the way i see it your honor is we had a breach in a moment in time opposite that the settlement release delay any excusing of performance everything that happened in the settlement agreement is irrelevant to any claims against a guarantor and those are the provisions that were ignored that made this at the very least on a motion to dismiss to continue the case ok thank you i think i understand your position and that for all of my questions or not here on a thank you michel a plaque i don't have any questions for you right now and i know you've reserved two minutes for  go through the material provisions of the guarantee to see on one hand being on the other and sure that they do fit together they're not ambiguous they do require an underlying the court by the th for the guarantor to be held liable as is held by the trial court starting with really even before that an underlying principle of new york law that's been observed by the court in this for will the case which is on page twenty two of our briefs direct quote a concrete guarantee is a contract of secondary liability on the dollars a child the th in payment or in performance that exact words and there it also provides lower down in that same paragraph that there are can be additional dowager such as attorneys here's the direct quote which may arise as a consequence under the common law if there's any modification there is a destroyed of the guarantor that opening language of paragraphs seen the gates that then reprise us to being past the sentence near the end quote the liability liability of the guarantor here under shall be based upon the obligations obligations of the tenant set forth in the lease as the same may be altered renewed extended modified amended or signed but that tells us that  quiet that still have to have an underlying the fault that you measure the liability of the guarantor by the obligations of the senate in whatever form they may have been altered now let me finish my try to finish my two minutes on paragraph  there are no members who are aliens who are from switzerland and we think there is any issue there could be cured by a simple submission of an affidavit sorry to interrupt but that was important for our city being destroyed if they were citizens argue is that there was a breach by the tenant which would render your client liable and that they can prove that and that the settlement does not resolve that issue or  somehow make it settled or something that they can't prove anymore that that you did breach and i'm missing something there i don't think you i think you're actually and i do think that there is some question there kind of question in that sense that but they certainly are arguing what you just said you can actually take a drink of water that there is an underlying default and that's been established that there's not  that you should have done them anyway and therefore you're in breech we want to work with the settlement that is the result of all of those claims including the counter claims and i don't have the record page in front of me right near as i spread things out on in my in my home office but i do know that it's on page two of the settlement where the it's clear that all the claims were were given up and what was half but half of the not settlement that the the the landlord accepted the plans that were those that were the linchpin for us to be able to perform and do the work the constituted the internet the initial alterations so that's where the obligations were changed so you can have an underlying the fall in the in the undercount one because there was never a trigger for us to be able to perform and that was that and that trigger was then changed by the settlement so that the settlement in giving up those claims of addiction in dropping the claim that we failed to perform and in setting the new schedule established that we we needed to be able to do our work so we can and that's why we can in the fall under count two either so you've got to look at the settlement to the language of the settlement and what was there to establish that there was no wonder why the this is that the allegations against our independent they can exceed that of the tenant and you don't have to go st or even at all against the tenet that's consistent with the concept of secondary liability paragraph tells us that you can waive or release least to go against the guarantor we don't dispute that either you still have to have an underlying the fault just established i believe on count one and count two you don't have an underlying the ball and that's why the decision of the district court should be a much thank you counsel mr laplante you have two minutes reserved for rebuttal and let me just say out loud that any of the members of the panel have any questions during the rebuttal time of action for the breach prior to the settlement because the terms were changed by the settlement and that's exactly what provision b of the guarantee says doesn't apply it says that the guarantee applies regardless of any compromise settlement release or terminations of any of the obligations of the tenant under the lease so when the service tenant settled by itself with the landlord under anybody's obligations  any prior breach doesn't affect the fact that we could sue the guarantor for that prior breach if they wanted to get into or out they could have released the guarantor they could have put it in the settlement agreement they didn't do anything like that whatsoever ken it was resolved was was case that was the exact issue in that case when you have a waiver of defenses by a guarantor does that does that prevent them from about unconditional or irrevocable guarantee which we have here that doesn't have to be an action which we have here it talks about waiving any recovery of any judgment against  or any circumstances which might otherwise constitute legal or equitable discharge or defense of the given tour and that was to be upheld in that case decided by this court and that there still exist a claim against a guarantor even though the underlying borrower was released and we have many more provisions waiving delays waiving equitable the legal discharge as i said waiving compromise release or settlement that they remain fully binding despite any default extended time of performance by senate or release of its performance of a double geisha and these are not something that are just trying to cover the common law rule this is a four page complicated galatea grievance by sophisticated parties understanding exactly what they were getting into when the guarantor signs and committed to all of these provisions and it can't just simply say well you settled with the tenant and now you can make any claims against me as to the nd cause of action i'll try to be brief i have a minute the nd cause of action is ok settlement agreement applies are they still in default failing to comply with the settlement agreement and it was not a decision by the arbitrator holes that the tenant was or was not in default that is language in a number of of decisions talking about landlords delay but those issues a fact that would be decided in this case and were never conclusively and fully decided in the other case the judge just mentioned that there were delays by the landlord but whether or not that the lady would excuse the tenants performance or whether or tenant then got an extension of the nine months to complete construction was never decided at all but in the underlying arbitration so that's why that nd cause of action needs to be decided in the district court where those issues  be fully fleshed out and we have the full opportunity to do that which never happened in the arbitration with the tenant thank you for your time your honest thank you very much to both counsel that was very helpful argument we appreciate it and the court will reserve decision