| JP Morgan Chase Bank, N.A. v Cellpoint Inc. |
| 2008 NY Slip Op 06595 [54 AD3d 366] |
| August 12, 2008 |
| Appellate Division, Second Department |
| JP Morgan Chase Bank, N.A., Appellant, v Cellpoint Inc.,Doing Business as Cellpoint, Inc., Respondent. |
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In an action to enforce a guaranty, the plaintiff appeals from an order of the Supreme Court,Queens County (Elliot, J.), dated September 10, 2007, which granted the defendant's motionpursuant to CPLR 3211 (a) (5) to dismiss the complaint as barred by the statute of frauds.
Ordered that the order is reversed, on the law, with costs, and the motion pursuant to CPLR3211 (a) (5) to dismiss the complaint is denied.
The plaintiff JP Morgan Chase Bank, N.A. (hereinafter Chase) commenced this action toenforce an alleged guaranty by the defendant, Cellpoint Inc., doing business as Cellpoint, Inc.(hereinafter Cellpoint). The guaranty was set forth in a stipulation of settlement executed in anunrelated action brought by Chase against nonparty Midtown Distributors Corp. (hereinafterMidtown) and its president, nonparty Eduardo Schechter, to collect on a promissory note.Schechter is also the president and owner of Cellpoint. Cellpoint moved pursuant to CPLR 3211(a) (5) to dismiss the complaint as barred by the statute of frauds on the ground that thestipulation was not signed by anyone purporting to act on behalf of Cellpoint. In opposition,Chase argued, inter alia, that Schechter signed the stipulation on behalf of Cellpoint. Indeed,Chase noted, Cellpoint made 13 payments due under the stipulation for a total of $77,500. TheSupreme Court granted Cellpoint's motion. We reverse.
A stipulation of settlement is a contract subject to principles of contract interpretation(see McCoy v Feinman, 99 NY2d 295, 302 [2002]; Ramon v Ramon, 49 AD3d 843 [2008]). Where the stipulation isclear and unambiguous on its face, the intent of the parties must be gleaned from within the four[*2]corners of the instrument, and not from extrinsic evidence (see Ramon v Ramon, 49 AD3d843 [2008]). Extrinsic evidence may be used to clarify ambiguities, but not to create them(see W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162-163 [1990]). Whether or not awriting is ambiguous is a question of law to be resolved by the courts (see W.W.W. Assoc. vGiancontieri, 77 NY2d at 162). Specific to the stipulation at issue, General Obligations Law§ 5-701 (a) (2) requires that an agreement answering for the debt or default of another mustbe in writing and "subscribed by the party to be charged therewith, or by his lawful agent" (see Eurofactors Intl., Inc. v Jacobowitz,21 AD3d 443 [2005]). Here, the stipulation at issue satisfies the writing requirement ofGeneral Obligations Law § 5-701 (a) (2). Paragraph 5 of the stipulation expressly providesthat "Cellpoint, Inc. [f]ully guarantees the payments set forth herein." Thus, the issue presented iswhether the stipulation was subscribed on behalf of Cellpoint. We find the stipulation ambiguousas to that issue.
On its face, the stipulation provides for a guaranty by an entity (Cellpoint) that is not a partyto the underlying litigation and whose relation, if any, to the underlying litigation and/or theparties thereto is not explained. Further, the name "Cellpoint" is not on the signature page of thestipulation. Cellpoint argues that because Schechter was a party to the litigation giving rise to thestipulation, it must be presumed that Schechter signed it in that capacity only. However,Schechter's signature line on the stipulation does not disclose the capacity in which he signed it.For example, he is not designated as a "defendant." Nor does the stipulation indicate that hesigned it in his individual capacity. Rather, as noted by Chase, Schechter's signature appears nextto the introduction "By:", which may be construed to indicate that he was acting in arepresentative capacity. Indeed, Schechter's signature on the stipulation as a mere party to theunderlying litigation was not strictly necessary. The stipulation was signed by his attorney, whichwas sufficient to bind him personally (see CPLR 2104; Eastman v Steinhoff, 48 AD3d738 [2008]). Finally, Schechter's signature appears after the signature for Chase's counselbut before the signature for counsel for the "Defendants," which may be read to indicate that hewas not providing his signature as a mere defendant in the underlying litigation. In sum, thestipulation is ambiguous as to the capacity in which Schechter signed it. Thus, extrinsic evidenceas to that issue properly may be considered (see e.g. Stuyvesant Plaza v Emizack, LLC,307 AD2d 640 [2003]; cf. Sopasis Constr. v Solomon, 233 AD2d 385 [1996]).However, the extrinsic evidence in the record on appeal does not resolve this issue as a matter oflaw. Thus, Cellpoint's motion should have been denied (see Town of Poughkeepsie v Espie, 41 AD3d 701 [2007]; Panish v Panish, 24 AD3d 642[2005]). Skelos, J.P., Miller, Carni and Chambers, JJ., concur.