Opinion
2018–12429 Index No. 507480/18
01-22-2020
CHICAGO TITLE INSURANCE COMPANY, Respondent, v. BROOKWOOD TITLE AGENCY, LLC, et al., Appellants.
Zilberberg Einhorn Karpel, P.C., Brooklyn, NY (Samuel Karpel of counsel), for appellants. Fidelity National Law Group, New York, NY (Christopher Balala of counsel), for respondent.
Zilberberg Einhorn Karpel, P.C., Brooklyn, NY (Samuel Karpel of counsel), for appellants.
Fidelity National Law Group, New York, NY (Christopher Balala of counsel), for respondent.
REINALDO E. RIVERA, J.P., RUTH C. BALKIN, SHERI S. ROMAN, BETSY BARROS, JJ.
DECISION & ORDER In an action, inter alia, to recover on a personal guaranty, the defendants appeal from an order of the Supreme Court, Kings County (Leon Ruchelsman, J.), dated August 24, 2018. The order, insofar as appealed from, denied those branches of the defendants' motion which were pursuant to CPLR 3211(a) to dismiss the second and third causes of action.
ORDERED that the order is affirmed insofar as appealed from, with costs.
The defendant Brookwood Title Agency, LLC (hereinafter Brookwood), served as the policy issuing agent for the plaintiff, Chicago Title Insurance Company (hereinafter Chicago Title), pursuant to an issuing agency contract. In that contract, Brookwood agreed to indemnify and save harmless Chicago Title for all losses resulting from certain errors or omissions. The defendant Mendel Zilberberg, Brookwood's manager, executed a personal guaranty which provided: "the undersigned ... hereby guarantee the full and faithful performance of the obligations of [Brookwood] under the Issuing Agency Contract, as amended; and the undersigned do hereby agree to fully indemnify [Chicago Title] and save [Chicago Title] harmless from any and all loss resulting from delinquent remittances and any shortage in the escrow accounts of [Brockwood]."
Chicago Title alleges that, in November 2006, Brookwood improperly issued a title insurance policy to cover a mortgage, which resulted in Chicago Title paying a claim after the deed to the mortgagor was voided and the mortgage was cancelled. In April 2018, Chicago Title commenced this action seeking, in the second cause of action, to recover for that loss under the personal guaranty, and in the third cause of action, contractual and common-law indemnification. The defendants moved, inter alia, pursuant to CPLR 3211(a) to dismiss the second and third causes of action. In an order dated August 24, 2018, the Supreme Court denied those branches of the defendants' motion. The defendants appeal. We agree with the Supreme Court's determination denying that branch of the defendants' motion which was to dismiss the cause of action to recover on the guaranty. Contrary to the defendants' contention, that cause of action is not untimely. The six-year statute of limitations applicable to a guaranty begins to run when the principal is in default (see CPLR 213 ; Haber v. Nasser, 289 A.D.2d 199, 200, 733 N.Y.S.2d 720 ; Bayside Fuel Oil Depot Corp. v. Savino Oil & Heating Co., 133 A.D.2d 658, 660, 519 N.Y.S.2d 832 ). Here, the breach of guaranty cause of action did not accrue until February 19, 2015, when Brookwood failed to indemnify Chicago Title for the payment Chicago Title made on the claim. Since this action was commenced less than six years later, that cause of action was timely asserted (see Bayside Fuel Oil Depot Corp. v. Savino Oil & Heating Co., 133 A.D.2d at 660, 519 N.Y.S.2d 832 ).
The defendants also failed to establish that the guaranty, by its terms, did not encompass the obligation to indemnify Chicago Title for the subject loss. "A guaranty is a promise to fulfill the obligations of another party, and is subject to the ordinary principles of contract construction" ( Cooperatieve Centrale Raiffeisen–Boerenleenbank, B.A., "Rabobank Intl.," N.Y. Branch v. Navarro, 25 N.Y.3d 485, 492, 15 N.Y.S.3d 277, 36 N.E.3d 80 [internal quotation marks omitted] ). "Under those principles, ‘a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms’ " ( id. at 493, 15 N.Y.S.3d 277, 36 N.E.3d 80, quoting Greenfield v. Philles Records, 98 N.Y.2d 562, 569, 750 N.Y.S.2d 565, 780 N.E.2d 166 ). The terms of a guaranty are to be strictly construed, and a guarantor should not be found liable beyond the express terms of the guaranty (see White Rose Food v. Saleh, 99 N.Y.2d 589, 591, 758 N.Y.S.2d 253, 788 N.E.2d 602 ; Solco Plumbing Supply, Inc. v. Hart, 123 A.D.3d 798, 800, 999 N.Y.S.2d 126 ). Here, in the first clause of the guaranty, Zilberberg guaranteed Brookwood's performance of its obligations under the issuing agency contract. Since that contract included an obligation to indemnify, such indemnification obligation was covered under the guaranty.
Further, under the circumstances of this case, the termination of the issuing agency contract did not extinguish the indemnification obligation of the contract or of the guaranty (see Louis Dreyfus Energy Corp. v. MG Ref. & Mktg., 2 N.Y.3d 495, 501, 503, 780 N.Y.S.2d 110, 812 N.E.2d 936 ; cf. Pierson v. Empire State Land Assoc., LLC , 65 A.D.3d 1114, 1115, 886 N.Y.S.2d 411 ).
The defendants' remaining contentions are without merit.
RIVERA, J.P., BALKIN, ROMAN and BARROS, JJ., concur.