Morrison Cohen Obtains Dismissal for Guarantor

On July 3, 2024, the New York State Appellate Division reversed a 2022 trial court order and dismissed guaranty claims brought against Morrison Cohen’s client, the guarantor of a promissory note. The firm’s client was named as a third-party defendant in an attempt to hold him personally liable under a guaranty of a $2.4 million note.

Morrison Cohen identified an incongruity in the description of the underlying debt and used this point to bring a motion to dismiss the claim. The lower court rejected that effort but the firm prosecuted the issue on appeal, convincing a panel of appellate justices to reverse the prior order and to dismiss the claim in its entirety.   

The appeals court found that Morrison Cohen’s arguments concerning misnomers in guaranties “utterly refuted the factual allegations of the third-party complaint.” This decision highlights the importance of technical perfection when preparing instruments to answer for the debt of another and underscores the litigation risk presented by defects in drafting those documents.

Christopher Milito and Joaquin Ezcurra represented the guarantor in the case.