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BLOG / 06.01.17 /Jack Malley

Appellate Division Kills Commercial Lease Guaranty Claim for Failure to Submit Original Agreement at Trial

In 76-82 St. Mark’s, LLC v. Gluck (Supreme Court, Kings County) a commercial tenant sought to recover damages for breach of a guaranty agreement. At trial, the landlord’s counsel attempted to enter into evidence a faxed copy of the agreement that was missing two lines on the second page. The trial judge denied admission of the copy and granted the tenant’s motion to dismiss the case on the ground that the landlord failed to meet its burden of proof.

By a decision dated February 22, 2017, the Appellate Division, Second Department affirmed the trial court’s decision. Copies of documents are regularly admitted into evidence at trial under CPLR 4539 when a party business can demonstrate that it makes copies of the subject document in the regular course of its business by a reliable process. However, the Second Department found that the landlord did not meet the requirements of that statute.

Thus, the copy of the agreement could only be admitted into evidence if the landlord established that it was a reliable and accurate portrayal of the original. The Second Department held that the landlord failed to meet that burden because “the [landlord’s] principal was not present when the original guaranty was executed, and thus could not testify as to whether the original guaranty was similarly missing a portion of paragraph four, while [the tenant] testified that the guaranty she executed contained complete paragraphs.” See Gluck, 2017 WL 691073, at *2 (2nd Dep’t 2017).

The Gluck decision puts real estate investors and tenants on notice that original transaction documents must be maintained to avoid a trial disaster.