'Good Guy' Guarantor Not Liable for Accelerated Rent

A “good guy” guaranty said that the guarantor was liable only for the performance of the tenant's lease obligations accrued up to a “Limitation Date.” The Limitation Date was defined as the date that the tenant met certain conditions—such as moving out of its space, notifying the owner of its move, and surrendering its keys. The tenant notified the owner that it was abandoning its space on March 14, 2002. On March 20, 2002, the owner improperly blocked the tenant from moving out. On April 15, 2002, the owner terminated the lease, accelerated the remaining rent due under the lease, and sued the guarantor for full payment. The guarantor argued that it was liable for the rent due only up to March 20, 2002.

A New York court set the Limitation Date at March 20, 2002, and ruled that the guarantor was liable only for the rent due up to that date—not for the accelerated rent that became due on April 15, 2002. The court noted that although the tenant hadn't fully moved out by March 20, 2002, it had tried to do so. But the owner improperly blocked the tenant. So the court refused to set the Limitation Date on April 15, 2002, because that would have let the owner benefit from its improper action against the tenant [Benjamin Shapiro Realty v. 57th St., LLC].