Summary
holding that "a joint obligor who pays more than his proportionate share of a common liability is entitled to contribution from the other joint obligors."
Summary of this case from NY Artistic, LLC v. Archetype, LLCOpinion
July 25, 1996
Appeal from the Supreme Court, Albany County (Harris, J.).
This appeal arises out of the parties' involvement in the formation of defendant General Schuyler Company, a general partnership which was formed to acquire, renovate and sell the Philip Schuyler Building in the City of Albany. The basic facts, as alleged in plaintiff's complaint, are set forth in our decision in a prior appeal by one of the individual defendants ( 223 A.D.2d 938). At issue in this appeal is whether plaintiff is entitled to summary judgment on his claim for contribution against defendant Ronald Krolick based upon the personal guarantees executed by plaintiff and Krolick so that General Schuyler could obtain $6,000,000 in bank financing for the project. Supreme Court initially granted plaintiff's motion, but upon Krolick's motion to reargue the court denied plaintiff's motion, resulting in this appeal by plaintiff.
We reject Krolick's claim that this appeal is stayed by the bankruptcy proceedings instituted by defendant Harold Dubroff pursuant to the Federal Bankruptcy Code ( see, 11 U.S.C. § 362). This Court has jurisdiction to determine the scope and effect of the automatic stay on this appeal ( see, Matter of Baldwin — United Corp. Litig., 765 F.2d 343), at least insofar as the rights and liabilities of nondebtors are concerned ( see, e.g., Strober Bros. v. Kitano Arms Corp., 224 A.D.2d 351; Matter of State of New York v. DeFranco Ford, 202 A.D.2d 593). The cause of action at issue in this appeal is based exclusively on the written guarantee executed by plaintiff and Krolick and seeks recovery from Krolick alone. The rights and liabilities of Dubroff are not at issue. "An automatic stay of proceedings accorded by 11 U.S.C. § 362 may not be invoked by entities such as sureties, guarantors, co-obligors, or others with a similar legal or factual nexus to the debtor" ( Matter of State of New York v DeFranco Ford, supra, at 594). "Within a single case, some actions may be stayed, others not" ( Maritime Elec. Co. v. United Jersey Bank, 959 F.2d 1194, 1204). Based upon these principles, we conclude that the automatic stay resulting from Dubroff's bankruptcy petition does not affect this appeal.
On the merits, we conclude that Supreme Court correctly denied summary judgment to plaintiff on his contribution claim against Krolick. Plaintiff's claim for contribution is based upon the well-settled equitable principle that a joint obligor who pays more than his proportionate share of a common liability is entitled to contribution from the other joint obligors ( see, Falb v. Frankel, 73 A.D.2d 930). Pursuant to the guarantee, plaintiff and Krolick were each liable to pay the full amount of the debt upon General Schuyler's default. If, as plaintiff alleges, he paid the full amount, he is entitled to recover one half from his coguarantor, Krolick ( see, Morgan v. Smith, 70 N.Y. 537, 541). Plaintiff contends that even if there is a question of fact as to the amount of his payment, he is entitled to partial summary judgment on the issue of Krolick's liability, but plaintiff's right to recover from Krolick is dependent upon plaintiff's payment of an amount in excess of the money which, as between him and Krolick, it was his duty to pay ( see, Morgan v Smith, supra, at 542; Falb v. Frankel, supra, at 931).
Based upon our review of the record, which discloses a rather complex series of transactions involving a nonparty corporation, we agree with Supreme Court that questions of fact exist as to whether and to what extent plaintiff personally paid on the guarantee. Krolick's claim that he is entitled to summary judgment is also meritless. The release upon which he relies does not affect the rights and liabilities of plaintiff and Krolick as between themselves. Supreme Court's order should be affirmed.
Mercure, J.P., Crew III, Peters and Spain, JJ., concur. Ordered that the order is affirmed, without costs.