In February 2005, defendant Nam Koo Kim (hereinafter the husband), as sole owner of Majestic Group Korea, Ltd., entered into a loan agreement on behalf of the company with plaintiff

[the Overseas Private Investment Corporation] to borrow $1,500,000 for the purposes of financing a

“Ruby Tuesday’s” restaurant in South Korea. The husband and his wife, defendant Hee Sun Kim (hereinafter the wife), issued personal guaranties for the loan. In October 2005, Majestic defaulted on the loan and a restructured loan and assumption agreement was executed by the parties and included a promissory note by the husband to pay plaintiff $1,517,000 in the event of a default.

Once again, the wife agreed to personally guaranty the terms of the note and signed a written commitment to that effect. When the borrowers defaulted on the restructured loan, plaintiff, as was its right under the agreement, accelerated payments of the promissory note and commenced this action seeking recovery of the amount due under the note, together with interest and counsel fees. Plaintiff moved for summary judgment, and [the trial court granted the plaintiff’s motion].

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* * * Defendants argue that a question of fact has been created as to the scope of the wife’s guaranty and the Supreme Court [trial court]

erred by granting plaintiff summary judgment. We do not agree.

A party is entitled to a judgment on a guaranty of a note if it proves that there has been a default on the payment of a promissory note and the party against whom judgment has been sought has executed a valid guaranty warranting the payment of the amount due under that note.

In her defense, the wife argues that when she signed the guaranty she was only provided with the last page of the agreement and claims to have been told that her liability under the guaranty was limited to the value of her real property interest in Virginia. However, she admits that she did not participate in the negotiations that led up to the issuance of the promissory note and that it was her husband who asked her to sign the guaranty agreement.

While the husband echoes the wife’s claim that she signed the guaranty agreement without seeing the entire document, he does not deny that, at the time, he was in possession of the entire agreement. In addition, he provides no confi rmation of his wife’s assertion that when she signed the guaranty agreement she was told that her legal obligation was limited to the value of her real estate interest in Virginia. In addition, the terms of the guaranty are clear on its face and specifi cally provide that the wife has guaranteed full payment of the promissory note. In fact, immediately above the wife’s signature is an acknowledgment to the effect that she “has received a copy of this Restructured Loan Deferral Letter, agrees to all terms and conditions hereof, and confi rms that the Personal Guaranty is, and remains, in full force and effect.” In short, the wife’s contention that it was her understanding that she was providing a limited commitment in regard to the payment of the promissory note is belied [contradicted] by what is clearly set forth in the document and, “in the absence of fraud, duress or some other wrongful act by a party to a contract, a signer of an agreement is deemed to be conclusively bound by its terms whether or not he or she read it.”

The wife—who by her own admission had no contact with plaintiff in regard to this transaction—has presented no documentary evidence to support the conclusion that plaintiff used duress or fraud to procure her signature on this document. As such, she is bound by the terms of her guaranty. [Emphasis added.]

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ORDERED that the order is affirmed, with costs.

Questions:-

1. If the guaranty agreement had not been in writing, would the agreement have been enforceable? Explain.

2. A guarantor can be required to pay a debt only after the principal debtor defaults. Which party was the principal debtor in this case?