Casner & Edwards’ Terrance J. Hamilton Prevails on Behalf of Client in Guarantor Defense Case
Terrance J. Hamilton, a partner in Casner & Edwards’ Litigation Group, successfully defended a guarantor in a case arising out of a commercial lease.
In August 2019, Hamilton received a decision from the Massachusetts Appeals Court in which the court affirmed and upheld the grant of summary judgment entered in the Superior Court dismissing an amended complaint against his client who had guaranteed a commercial lease. In the case, Hamilton successfully argued that because the tenant’s lease had been terminated by a settlement agreement following a summary process action to evict the tenant, the lease guaranty was no longer in force and effect.
In the case, Hamilton represented the guarantor, who was being sued on a personal guaranty after the tenant fell behind in rent on a lease for a furniture store. The landlord brought a summary process action and the parties entered into a settlement agreement under which the landlord allowed the tenant to continue to occupy the premises on a month to month basis. The tenant once again fell behind on occupancy payments and a lawsuit ensued in which the tenant not only lost a $437,500 security deposit, but the landlord was awarded another $437,500 in back rent. The tenant had no assets, so the landlord sued the guarantor personally on his guaranty. The guarantor sought legal counsel after the landlord, seeking damages of approximately $2 million including interest, attorney’s fees and future rent under the lease that originally was to continue through 2018, obtained an attachment of $5 million on properties he personally owned. Hamilton entered an appearance and filed an answer, taking the position that the guaranty obligations were predicated on the fully satisfied terms of the lease that subsequently was terminated by the settlement agreement and therefore his obligations as a guarantor no longer existed. Eventually, the parties filed cross-motions for summary judgment, with the landlord arguing that the language of the guaranty providing that the guaranty was, inter alia, “absolute,” “unconditional” and “waiv[ing] his right to assert any defenses” was the controlling document.
After the hearing, the judge awarded the guarantor summary judgment dismissing the amended complaint, agreeing with the firm’s position that because the lease had been terminated by the settlement agreement following the summary process action, the judgment entered against the tenant in Superior Court arose out of the settlement agreement, a contract which the guarantor had not guaranteed and was not covered by the lease guaranty. The landlord appealed and oral argument was held in December. After eight months, the Appeals Court issued a decision affirming the judgment of the Superior Court. The landlord thereafter filed an application for further appellate view with the Massachusetts Supreme Judicial Court. Hamilton filed an opposition, and on November 14, 2019, the SJC denied the landlord’s application. Hamilton specializes in professional and legal malpractice litigation, personal injury matters and commercial litigation. He has substantial trial court experience in the state and federal courts and extensive appellate experience (over 40 reported decisions) before the Massachusetts Supreme Judicial Court, the Massachusetts Appeals Court, and the United States Court of Appeals for the First Circuit.
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