What Happened: An investment advisor tenant stopped paying utilities in March 2020; it stopped paying rent in June; and it surrendered the office in November. The landlord sued the tenant and the corporate officer who signed a good guy guaranty on its behalf. After years of ping ponging around in litigation, the court ruled that the tenant and guarantor were jointly and severally liable for rent both before and after the tenant vacated, citing language in the guaranty releasing the guarantor upon the tenant’s surrender “pursuant to the terms of the Lease.” One of those terms was that the landlord accept the tenant’s surrender in writing. And since the tenant didn’t get the landlord’s written acceptance, the guarantor was on the hook. One failed appeal later, the guarantor took its case to the state’s highest court. 

Ruling: The New York Court of Appeals reversed, finding that the guarantor wasn’t liable for post-surrender rent. 

Reasoning: The guarantor’s liability ended when the tenant surrendered the premises, even though the landlord didn’t actually accept the surrender in writing. While the guaranty covered all of the tenant’s monetary obligations until the date of surrender, it didn’t define “surrender,” leaving the door open for the Court to look at the entire context. The whole point of structuring the arrangement as a good guy guaranty was to limit the guarantor’s liability to the tenant’s actions. After all, as an officer, the guarantor had some level of control over the tenant. By contrast, it had no control over the landlord’s actions. Tethering the guarantor’s liability to the landlord’s acceptance of the surrender would defeat the purpose and render much of the guaranty language superfluous, the Court reasoned. “We have long and consistently ruled against any construction which would render a contractual provision meaningless or without force or effect.”

• 1995 CAM LLC v. West Side Advisors, LLC, 2025 N.Y. LEXIS 1771, 2025 NY Slip Op 05782, 2025 LX 436241