62 Wooster, LLC v. TML N.Y. Inc.

62 Wooster, LLC v TML N.Y. Inc. 2026 NY Slip Op 05591 October 1, 2026 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This decision is uncorrected and subject to revision before publication in the Official Reports. 62 Wooster, LLC, Plaintiff-Appellant, v TML New York Inc., et al., Defendants-Respondents. Decided and Entered: October 01, 2026 Index No. 159314/21|Appeal No. 7110|Case No. 2024-06717| Before: Moulton, J.P., Kennedy, Friedman, Michael, Hagler, JJ. Law Office of Allison M. Furman, P.C., New York (Allison M. Furman of counsel), for appellant. Norris McLaughlin, P.A., New York (Kimbrilee M. Weber of counsel), for Hiroyuki Sasaki, respondent. [*1] Order, Supreme Court, New York County (Alexander M. Tisch, J.), entered on or about October 15, 2024, which, to the extent appealed from as limited by the briefs, granted the motion by the individual defendants-guarantors to dismiss the second, fourth, and sixth causes of action against them for unpaid rent, liquidated damages, and costs and expenses in enforcing the guaranty, unanimously affirmed, without costs. This action concerns a retail store lease for part of the premises located at 476 Broome Street in Manhattan. The individual defendants, Mark Wiltzer and Hiroyuki Sasaki, each executed substantively identical personal guaranties in connection with the lease. The lease term ran through June 2025. However, the tenant had to close the business on March 22, 2020, due to the COVID-19 pandemic. By letter dated September 15, 2020, the tenant notified the landlord of its intent to vacate the premises on or before September 30, 2020. The tenant surrendered possession of the premises on September 30, 2020, by tendering the keys to the landlord's agent and delivering the premises broom clean and free of all occupants. The landlord sued the tenant and the guarantors. The complaint alleges that the guarantors are responsible for unpaid rents from July 2021 through October 2021, in the amount of $307,577.08, and for liquidated damages based on the difference between the rent and rent collected under reletting through the expiration date of the lease. The guaranties both contain mutually inconsistent provisions concerning the guarantors' liability. The second paragraph of the guaranties contain a surrender clause, under which the guarantors' liability is unequivocally terminated for any period commencing after the tenant has "voluntarily or pursuant to court order or judgment, physically vacated and surrendered legal possession" of the premises. The guaranties do not define the phrase "surrendered legal possession." The guaranties also contain a "good guy" clause in the third paragraph, under which the guarantors remain obligated to the landlord through the "Surrender Date." The Surrender Date is defined as 1) the delivery of possession of the premises broom clean and free of damages, occupants, and personal property, 2) the payment of all rent through the last day of the month of the Surrender Date, and 3) an effective instrument of surrender in a form satisfactory to the landlord on 90 days prior written notice. It is undisputed that the tenant did not satisfy the latter two conditions. [*2] The guarantors' motion to dismiss was properly granted. A guaranty is to be interpreted in the strictest manner (White Rose Food v Saleh, 99 NY2d 589, 591 [2003]). In the absence of any ambiguity, courts look solely at the language used by the parties to discern the contract's meaning (Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475 [2004]). Here, contrary to the landlord's contentions, the guaranties are not clear and unambiguous. Rather, the surrender clause and the good guy clause create ambiguity and irreconcilable conflict. The surrender clause states that "it is expressly understood and agreed by Landlord" that the guarantors shall not be liable for any period under the guaranty commencing after the tenant has, "either voluntarily or pursuant to court order or judgment, physically vacated and surrendered legal possession" of the premises. Considering that the tenant notified the landlord of its intent to vacate the premises on or before September 30, 2026, and on September 30, 2020, delivered the keys to the landlord's agent and physically vacated the premises, the guarantors' liability terminated on that date (see 1995 CAM LLC v West Side Advisors, LLC, 45 NY3d 150, 154-155 [2025] [the guarantor's liability terminated on or about November 30, 2020 where the guaranty required the tenant to "completely vacate[] and surrender[] the premises, considering that the tenant provided the landlord with a 30-day notice to vacate the premises, and on November 30, 2020, delivered the keys to the landlord's agent and physically vacated the premises]). By contrast, the good guy clause does not release the guarantors from liability considering that the tenant failed to satisfy two of the three conditions. In a futile attempt to resolve the internal inconsistency in the two guaranties, the landlord argues that the good guy clause "overrides" the surrender clause and "prevails" as the more specific clause and considering the language set forth in the fourth paragraph. The fourth paragraph provides that "[n]othing contained herein or in any such instrument shall relieve Tenant of liability to Landlord at any time (whether before or after the Surrender Date), and any liability of the Guarantor for any claims of Landlord against Tenant arising under the Lease on or before the Surrender Date shall survive the Surrender Date." [*3] The landlord's interpretation lacks merit. Courts have "long and consistently ruled against any construction which would render a contractual provision meaningless or without force or effect" (id at 156 [internal citation omitted]). An interpretation that renders language in a guaranty superfluous is unsupportable (id. at 154). The "nothing contained herein" language relied upon by the landlord to nullify the surrender clause refers only to the tenant. In that regard, the language makes sense because it does not conflict with the surrender clause and it is consistent with a good guy guaranty.FN1 The fourth paragraph indeed ties the liability of the guarantors to a "Surrender Date," but it provides no basis for excising separate and distinct language from the surrender clause. Had the guaranties contained clear language, we would not need to resort to "rules of construction regarding superfluity or canons that aid in determining the parties' intent" (id. at 157). Because the guaranties are ambiguous and internally inconsistent we must apply, as a "last resort," the maxim "contra proferentem" which favors an interpretation against the party who chose the words (1 Corbin on New York Contracts § 24.14; see also 151 W. Assoc. v Printsiples Fabric Corp., 61 NY2d 732, 734 [1984] [ambiguity in a lease resolved contra proferentem, against the landlord who prepared it and in favor of the tenant]; 67 Wall St. Co. v Franklin Natl. Bank, 37 NY2d 245, 249 [1975] [ambiguity in a lease prepared by an experienced real estate lawyer resolved against the landlord in favor of the tenant pursuant to "the rule that in cases of doubt or ambiguity, a contract must be construed most strongly against the party who prepared it and favorably to a party that had no voice in the selection of its language"]; Commercial Tenant Servs., Inc. v Northern Leasing Sys., Inc., 131 AD3d 895, 897 [1st Dept 2015] [ambiguity in a contract drafted by the plaintiff was construed in the defendant's favor because it was "internally inconsistent"]). It is undisputed that the landlord's counsel drafted the lease and guaranties. Construing the ambiguity in the guarantors' favor, the guarantors' liability terminated on September 30, 2020, and we therefore affirm. THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT. ENTERED: October 1, 2026 Footnotes Footnote 1 A good guy guaranty is "a limited guaranty in which the guarantor's obligation extends only up to the point that the tenant surrenders the premises to the landlord, leaving the tenant solely responsible for rent due from that point forward" (1995 CAM LLC, 45 NY3d at 152). Under a standard good guy guaranty, the guarantor typically guarantees the lease payments until the tenant vacates and surrenders possession (id. at 152 n 1).