Surrender in a Good-Guy Guaranty Means Unilateral Vacatur—Landlord Acceptance Not Required to Cut Off Guarantor Liability

Case: 1995 CAM LLC v. West Side Advisors, LLC, 2025 NY Slip Op 05782 (N.Y. Court of Appeals, Oct. 21, 2025)

Author: Wilson, Chief Judge (majority); Singas, J., dissenting (joined by Garcia, J.)

Introduction

This decision from New York’s highest court resolves a recurring commercial leasing dispute: when does a personal “good guy” guarantor’s obligation end? The court holds that, under the particular language of the guaranty at issue, the guarantor’s liability terminated on the date the tenant unilaterally surrendered possession—after giving the contractually required notice and leaving the premises completely vacant—without requiring the landlord’s written acceptance of surrender under the lease’s “No Waiver” clause. The ruling reverses the Appellate Division and clarifies how New York courts should read surrender-triggered guaranty terminations in light of the anti-superfluity canon and the commercial function of “good guy” guaranties.

The parties are landlord 1995 CAM LLC (plaintiff-respondent) and tenant West Side Advisors, LLC (WSA), with WSA’s principal, Gary Lieberman, as limited guarantor (defendants-appellants). The dispute centers on whether Lieberman remained liable for post-vacatur rent and charges after WSA vacated the premises on November 30, 2020, provided 30 days’ prior notice, and delivered keys, notwithstanding the landlord’s lack of a written acceptance of surrender.

Summary of the Opinion

The Court of Appeals holds that the guaranty—negotiated and included in the 2016 Second Amendment—was a limited “good guy” guaranty that ended when the tenant surrendered possession by:

Providing at least 30 days’ prior notice of the intended vacatur date;
Completely vacating the premises, free and clear of subtenants and other occupants; and
Relinquishing control of the premises (including delivery of keys).

Critically, the court concludes that the guaranty did not condition the end of the guarantor’s liability on the landlord’s written acceptance of surrender under paragraph 25 of the REBNY standard form lease. Reading “surrender” in the guaranty to require landlord acceptance, the court explains, would render the guaranty’s negotiated conditions—particularly the 30-day notice and the “completely vacated” requirement—superfluous or nonsensical. The court therefore reverses the Appellate Division and denies the landlord’s motions for judgment and summary judgment on its post-vacatur guaranty claims. Pre-vacatur obligations remain unaffected by this holding.

Detailed Analysis

The Contract Language at Issue

The guaranty (Second Amendment, ¶ 9) required the guarantor to pay tenant’s monetary obligations “that have accrued under the terms of the Lease” up to the latest date that the tenant and its affiliates “shall have completely vacated and surrendered the Demised Premises to Owner… pursuant to the terms of the Lease,” coupled with a tenant obligation to give at least 30 days’ prior notice of the vacatur-and-surrender date. The REBNY lease also contains:

Paragraph 22 (End of Term): tenant must “quit and surrender… broom clean” at lease expiration/termination.
Paragraph 25 (No Waiver): no acceptance of surrender absent landlord’s written agreement; delivery of keys to unauthorized personnel does not effect surrender or termination.

The guaranty also includes a conflicts clause: if the guaranty terms are inconsistent with the REBNY lease, the guaranty controls. The majority treats the guaranty and lease as integrated but recognizes that, where a reading would nullify bargained-for guaranty conditions, the guaranty’s text and function govern.

Precedents and Authorities Cited

Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A. v Navarro, 25 NY3d 485 (2015): Guaranties are subject to ordinary contract principles.
Matter of Wallace v 600 Partners Co., 86 NY2d 543 (1995); Breed v Insurance Co. of N. Am., 46 NY2d 351 (1978): Courts enforce the parties’ intent as expressed in clear text.
Vermont Teddy Bear Co., Inc. v 538 Madison Realty Co., 1 NY3d 470 (2004): Unambiguous contracts are enforced according to their terms.
Riverside S. Planning Corp. v CRP/Extell Riverside, L.P., 13 NY3d 398 (2009): Special force to plain language in real estate transactions; seek a sensible meaning and avoid absurdity.
White Rose Food v Saleh, 99 NY2d 589 (2003): Guaranties are interpreted in the strictest manner.
Lawyers’ Fund for Client Protection v Bank Leumi Trust Co., 94 NY2d 398 (2000): Contract interpretations that render language superfluous are disfavored.
William C. Atwater & Co. v Panama R. Co., 246 NY 519 (1927): Read words in context of the whole and seek a sensible meaning; substance over form.
Ronnen v Ajax Elec. Motor Corp., 88 NY2d 582 (1996): Avoid constructions that make provisions meaningless.
Mastrovincenzo v City of New York, 435 F3d 78 (2d Cir 2006): Words should carry ordinary meanings; avoid absurd results.

The dissent relies on a line of First Department and Southern District decisions enforcing REBNY paragraph 25’s “written acceptance” requirement, even where a guaranty references surrender, and views this case as controlled by that settled reading. The majority neither adopts nor refutes those decisions expressly, instead resting on the unique guaranty text and the anti-superfluity canon.

Legal Reasoning

The majority’s analysis proceeds in four steps:

Ordinary contract principles with special force in real estate. The court applies plain-meaning interpretation and emphasizes commercial certainty, especially in transactions negotiated by sophisticated parties at arm’s length.
Strict construction of guaranties, coupled with anti-superfluity. While guaranties are interpreted strictly, they must also be read so that no contractual terms are rendered meaningless. Reading “surrender” to import landlord acceptance would:
- Make the guaranty’s 30-day notice requirement unworkable or nonsensical, because it would require the tenant to predict the date of landlord acceptance—an event outside the tenant’s control; and
- Nullify the guaranty’s distinct “completely vacated” requirement, which only has work to do if the guarantor can be released before lease-end (when REBNY paragraph 22’s broom-clean surrender would already apply).
Distinguishing lease termination from guaranty termination. REBNY paragraph 25 prevents implied lease terminations; it does not itself define when a separate guaranty obligation ends. Here, the guaranty added conditions (notice, complete vacancy, relinquishment of control) whose evident purpose is to allow a pre–lease-end, self-executing cut-off of the guarantor’s risk upon unilateral surrender of possession. The guaranty also contains a conflicts clause specifying that its terms control over the lease if inconsistent.
Commercial function of a “good guy” guaranty. The court recognizes the guaranty’s purpose: to incentivize tenants to exit promptly, sparing landlords eviction costs. Conditioning the guarantor’s release on landlord acceptance would let the landlord perpetually extend the guarantor’s exposure by withholding consent—undermining that commercial purpose and the bargained-for notice and vacancy conditions.

Applying those principles, the court holds that Lieberman’s guaranty terminated on or about November 30, 2020, when WSA gave timely notice, vacated completely, and relinquished control (including a walkthrough and key delivery). The landlord’s written acceptance was not a condition to that cut-off.

The Dissent’s Approach—and the Fork in the Road

Justice Singas would affirm, anchoring the analysis in the guaranty’s phrase “pursuant to the terms of the Lease.” In her view:

Because the guaranty incorporates the lease by reference, a “valid surrender” requires landlord’s written acceptance under paragraph 25; and
Even the key handover failed because it was made to an unauthorized superintendent, which paragraph 25 says cannot effect surrender.

For the dissent, the majority overcorrects by using anti-superfluity to eclipse clear, incorporated lease conditions and a consistent body of lower-court law that enforces paragraph 25 in guaranty disputes. The dissent also cautions that “strictissimi juris” applies to a guarantor’s liabilities after the court interprets the contract; the interpretive step, she argues, still points to landlord-acceptance as the trigger.

The majority counters implicitly: paragraph 25 governs lease termination, not guaranty termination; the guaranty added independent, self-executing conditions that would be rendered idle if landlord acceptance were required. And the guaranty’s conflicts clause, plus the commercial sense of a good-guy guaranty, supports the majority’s reading.

Relationship to Existing First Department and Federal Decisions

The dissent cites multiple First Department and SDNY cases that enforced paragraph 25’s written-acceptance requirement in analogous settings. This Court of Appeals decision does not declare those cases wrong; rather, it signals that outcomes depend on the specific guaranty language. Where a guaranty:

Explicitly conditions the guarantor’s release on landlord’s written acceptance; or
Lacks independent, self-executing conditions (like 30-days’ notice and a “completely vacated” requirement) that would otherwise be nullified; or
Contains no conflicts clause prioritizing guaranty terms over the lease,

courts may still require landlord acceptance. But where, as here, reading “surrender” to require acceptance would make negotiated guaranty terms impossible or meaningless, the guarantor’s liability ends upon unilateral surrender of possession.

Practical Impact and Guidance

Key Takeaways for Landlords

Do not assume paragraph 25’s written-acceptance requirement keeps a guarantor on the hook after a tenant vacates. If the guaranty’s text mirrors this case (notice plus complete vacatur), the guarantor’s liability may self-terminate at surrender of possession.
Draft with precision. If continued guarantor exposure is desired:
- Expressly state that the guaranty terminates only upon landlord’s written acceptance of surrender, or upon a written surrender agreement executed by landlord and tenant;
- Cross-reference paragraph 25 and make landlord acceptance a condition precedent to guaranty termination; and
- Eliminate conflicts by stating that no guaranty term shall be construed to permit termination without written acceptance if that is the intended bargain.
Preserve claims against the tenant entity. This decision does not equate a unilateral tenant vacatur with lease termination. Post-vacatur rent and damages may still be recoverable from the tenant (subject to contractual mitigation duties, if any).

Key Takeaways for Tenants and Guarantors

When the guaranty includes a 30-day notice and a “completely vacated” condition, strict compliance can end guarantor liability even without landlord acceptance.
Execute a clean surrender protocol: give timely written notice, remove all property and occupants, document the condition of the space, return keys, and demonstrate relinquishment of control.
Negotiate explicit “good-guy” language to avoid ambiguity; if the parties intend landlord acceptance to be unnecessary, say so.

Litigation and Settlement Dynamics

Landlords may need to recalibrate settlement valuations in guaranty suits where tenants unilaterally vacated with notice during the pandemic era and after; guarantor exposure may cut off earlier than previously assumed.
Expect more granular textual analysis of guaranties; motions will turn on whether acceptance is required by the guaranty’s own terms and whether an anti-superfluity reading compels a unilateral cut-off.

Drafting Checklist Post-1995 CAM

Trigger: State whether guaranty termination occurs upon (a) tenant’s unilateral surrender of possession meeting specified conditions, or (b) landlord’s written acceptance of surrender.
Conditions: Specify the exact conditions (notice period; complete vacancy; broom-clean; payment of arrears; return of keys to a named designee; surrender agreement).
Hierarchy: Add an express conflicts clause and say which instrument controls in a conflict (lease vs. guaranty).
Mitigation: Clarify landlord’s post-vacatur obligations (if any) and the effect, if any, on the guarantor.
Evidence: Require deliverables (e.g., photos, walk-through certificates, key receipts) and designate who may accept keys.

Complex Concepts Simplified

Good-Guy Guaranty: A limited guaranty where the guarantor backs the tenant’s obligations only until the tenant vacates and surrenders possession. It incentivizes tenants to leave promptly when they can’t pay.
Surrender of Possession vs. Lease Termination: Surrender of possession is the tenant’s act (vacating, returning keys, relinquishing control). Lease termination typically requires landlord acceptance (often in writing) or a termination event. This case treats those as distinct for guaranty purposes.
REBNY Paragraph 25 (No Waiver): Prevents implied lease terminations; requires landlord’s written acceptance for a surrender of the lease. It does not automatically define when a separate guaranty obligation ends.
Anti-Superfluity Canon: Courts prefer interpretations that give meaning and effect to every contract term rather than rendering words redundant or impossible to perform.
Conflicts Clause: A provision specifying that if the guaranty conflicts with the lease, the guaranty governs. This supports reading guaranty-specific surrender conditions as controlling.
Strictissimi Juris: Guaranty obligations are strictly construed; a guarantor cannot be held to obligations beyond the guaranty’s terms as properly interpreted.

Conclusion

1995 CAM LLC v. West Side Advisors, LLC establishes an important interpretive rule for New York “good guy” guaranties: when a guaranty ties the guarantor’s release to the tenant’s “surrender” and also contains independent, self-executing conditions (30 days’ notice; complete vacancy; relinquishment of control), courts will not graft the lease’s landlord-acceptance requirement onto the guaranty if doing so would make those negotiated conditions superfluous or impossible. The guarantor’s liability ends upon unilateral surrender of possession, unless the guaranty clearly requires landlord acceptance.

While the dissent underscores a robust line of lower-court cases enforcing REBNY paragraph 25’s written-acceptance mandate in guaranty disputes, the Court of Appeals focuses on the guaranty’s particular text and purpose, and on interpretive canons that preserve every clause’s function. The decision invites more careful drafting: landlords who want acceptance as a condition must say so expressly; tenants and guarantors who seek a self-executing cut-off should negotiate for it in clear terms. In the meantime, this opinion will reshape litigation and settlement expectations in New York’s commercial leasing market wherever guaranty language mirrors the operative provisions here.