Court Opinion

ID: 4087433
Source: CourtListenerOpinion
Date Created: 2016-10-08 00:14:07.410302+00
Date Added: 2024-06-11T14:33:27.162760
License: Public Domain

SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

801
CA 11-00155
PRESENT: SCUDDER, P.J., SMITH, CARNI, SCONIERS, AND GREEN, JJ.

CONTINENTAL INDUSTRIAL CAPITAL, LLC,
PLAINTIFF-APPELLANT,

                    V                              MEMORANDUM AND ORDER

LIGHTWAVE ENTERPRISES, INC., ET AL., DEFENDANTS,
AND STEPHEN C. ARNOLD, DEFENDANT-RESPONDENT.

CULLEY, MARKS, TANENBAUM & PEZZULO, LLP, ROCHESTER (GARY J. GIANFORTI
OF COUNSEL), FOR PLAINTIFF-APPELLANT.

ELLIOTT STERN CALABRESE LLP, ROCHESTER (IRVING PHETERSON OF COUNSEL),
FOR DEFENDANT-RESPONDENT.

     Appeal from an order of the Supreme Court, Monroe County (David
Michael Barry, J.), entered July 28, 2010. The order, among other
things, limited defendant Stephen C. Arnold’s liability to the amount
specified in the guaranty agreement.

     It is hereby ORDERED that the order so appealed from is
unanimously affirmed without costs.

      Memorandum: In an action seeking, inter alia, to enforce a
limited guaranty, plaintiff contends that Supreme Court erred in
determining that defendant Stephen C. Arnold is not liable to
plaintiff for attorneys’ fees in excess of the limitation contained in
his personal guaranty. We reject that contention. It is undisputed
that an officer of defendant Lightwave Enterprises, Inc. (Lightwave)
entered into a lease with plaintiff, and that Arnold and other
officers of Lightwave contemporaneously signed a limited guaranty
providing that they would be liable for all payments due under the
lease. The guaranty also provided in consecutive sentences that the
unsuccessful party in an action brought by plaintiff against Arnold
and the other guarantors would be liable for reasonable attorneys’
fees to be fixed by the court and that the guaranty “is limited to
$50,000 individually and $150,000 in the aggregate.” After Lightwave
defaulted on its obligations, plaintiff commenced proceedings seeking,
inter alia, to enforce the lease against Lightwave and the guaranty
against Arnold and the other guarantors. In a bench decision, the
court concluded that plaintiff was entitled to a judgment against
Lightwave and the guarantors in the amount of $510,510.24. In the
order on appeal, the court further concluded that Arnold’s liability
under the guaranty was limited to $50,000, inclusive of attorneys’
fees.
                                 -2-                           801
                                                         CA 11-00155

     Contrary to plaintiff’s contention, the guaranty unequivocally
limits Arnold’s liability to $50,000, and we thus conclude that
plaintiff may not seek attorneys’ fees that would increase Arnold’s
exposure under the guaranty. We reject plaintiff’s contention that
the guaranty is ambiguous on the issue of whether the limit includes
attorneys’ fees. “Whether an agreement is ambiguous is a question of
law for the courts . . . Ambiguity is determined by looking within the
four corners of the document, not to outside sources . . . And in
deciding whether an agreement is ambiguous courts ‘should examine the
entire contract and consider the relation of the parties and the
circumstances under which it was executed. Particular words should be
considered, not as if isolated from the context, but in the light of
the obligation as a whole and the intention of the parties as
manifested thereby. Form should not prevail over substance and a
sensible meaning of words should be sought’ ” (Kass v Kass, 91 NY2d
554, 566, quoting William C. Atwater & Co. v Panama R.R. Co., 246 NY
519, 524). In addition, a guaranty is to be strictly construed (see
generally White Rose Food v Saleh, 99 NY2d 589, 591).

     Here, the guaranty does not state that plaintiff is entitled to
attorneys’ fees in excess of the amount guaranteed. If the parties
had wished to provide otherwise, it is elementary that they could have
done so (see e.g. Anglo Irish Bank Corp. Ltd. v Ashkenazy, 28 Misc 3d
1222[A], 2010 NY Slip Op 51428[U], *4-5; County Glen, LLC v
Himmelfarb, 4 Misc 3d 1015[A], 2004 NY Slip Op 50886[U], *4).
Inasmuch as the guaranty at issue here unequivocally and without
reservation limits Arnold’s liability to $50,000, plaintiff is not
entitled to recover attorneys’ fees that would expand his liability in
excess of that amount.

Entered:   June 10, 2011                        Patricia L. Morgan
                                                Clerk of the Court