Original WP 5.1 Version (NOTE: This decision was approved by the court for publication.)
This case can also be found at 319 N.J. Super. 435.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
NEW JERSEY ECONOMIC DEVELOPMENT
AUTHORITY and BANQUE NATIONALE
DE PARIS, HOUSTON AGENCY,
PAVONIA RESTAURANT, INC., ERNESTO A.
TOLENTINO, JAMES A. McLAUGHLIN, JR.,
PAUL S. FREEMAN, MANMOHAN PATEL,
WILLIAM H. CONSTAD, DONALD CINOTTI,
VINCAS M. VYZAS, K. JOSEPH VYZAS,
SAMUEL A. DiFEO, JOSEPH C. DiFEO,
ELEANOR HARTNETT and H. CLAY IRVING, III,
RAY VYZAS, FRANCIS E. SCHILLER,
EUGENE P. SQUEO, JOHN SEAHOLTZ
and LEONA SEAHOLTZ,
NEW JERSEY ECONOMIC DEVELOPMENT
AUTHORITY and BANQUE NATIONALE
DE PARIS, HOUSTON AGENCY,
PAVONIA RESTAURANT, INC.,
RAY VYZAS, FRANCIS E. SCHILLER,
K. JOSEPH VYZAS, EUGENE P. SQUEO,
SAMUEL A. DiFEO, JOSEPH C. DiFEO,
ELEANOR HARTNETT, JOHN SEAHOLTZ,
LEONA SEAHOLTZ and H. CLAY IRVING, III,
JAMES A. MCLAUGHLIN, JR., PAUL S.
FREEMAN, MANMOHAN PATEL, WILLIAM
H. CONSTAD, DONALD CINOTTI and
VINCAS M. VYZAS,
Submitted: September 29, 1998 - Decided
December 4, 1998
Before Judges Muir, Jr., Keefe and Eichen.
On appeal from Superior Court of New Jersey,
Law Division, Essex County.
Schiller & Sasso, attorneys for appellants Ray
Vyzas, Francis E. Schiller, Eugene P. Squeo,
John Seaholtz and Leona Seaholtz on A-4568-96T3 (Theodore E. Schiller, on the brief).
Margulies, Wind, Herrington & Knopf, attorneys
for appellant Ernesto A. Tolentino on A-5837-96T3 (no brief was submitted on behalf of this
Dilworth, Paxson, Kalish & Kaufman, attorney
for respondents (Francis P. Maneri, on the
No other parties participated in this appeal.
The opinion of the court was delivered by
In these consolidated appeals, defendants Ray Vyzas, Francis
E. Schiller, Eugene P. Squeo, John Seaholtz and Leona Seaholtz, and
Ernesto A. Tolentino (defendants), appeal from an order entered on
February 6, 1997 granting summary judgment in favor of plaintiffs
New Jersey Economic Development Authority (the EDA) and Banque
Nationale de Paris (the Bank) in the sum of $1,530,392.88, and a
subsequent order entered on March 21, 1997 denying their motion for
reconsideration. We affirm.
The litigation arose out of the non-payment of a $1,470,000
loan (the loan) by the EDA and the Bank to Pavonia Restaurant, Inc.
(Pavonia). Pavonia was established to open and operate a new
restaurant to be located in a newly-constructed eight-story office
building in downtown Jersey City. The proceeds of the loan were
used to start the restaurant which was known as "Hudson's."
Repayment of the loan was individually guaranteed by defendants,See footnote 1
who are mostly professional and local business people and, with one
exception, are also stockholders in Pavonia.
After Pavonia and defendants defaulted in their obligations to
repay the loan, plaintiffs commenced this action. Judge Thomas
Brown granted summary judgment in favor of plaintiffs on their
complaint, concluding there were no genuine issues of material fact
on the enforceability of the guarantees. The judge also denied
defendants' motion to file an amended responsive pleading.
Thereafter, the judge denied defendants' motion for
reconsideration, and this appeal ensued.
Because this is an appeal from the grant of summary judgment,
we are required to accept defendants' evidence as true and to give
them the benefit of all favorable inferences that can reasonably be
drawn therefrom. Brill v. Guardian Life Ins. Co. of Am.,
142 N.J. 520, 535-36 (1995); see alsoR. 4:46-2(c). Accordingly, we will
summarize the pertinent facts of the case in accordance with those
To acquire the funds necessary to make the loan, the EDA
issued and sold Economic Growth Bonds, Composite Issue (1992 Series
P Bonds) to investors. In order to encourage investment in the
bonds, at the request of Pavonia and defendants, the Bank issued an
irrevocable letter of credit pursuant to which it agreed to repay
the bondholders in the event Pavonia defaulted.
On June 1, 1992, Pavonia executed a loan agreement, a
promissory note, financing statements, and a security agreement
pledging its leasehold improvements and restaurant equipment as
security for repayment of the loan (the loan documents). On the
same date, defendants executed a Personal Guaranty Agreement
whereby they each agreed individually to guarantee repayment of the
loan to Plaintiffs in the event of a default by Pavonia (the
Due to a four-month delay in the opening of the restaurant,
insufficient advertising, a high-priced menu, staffing problems,
and the shareholders' failure to make the necessary capital
contributions, Pavonia ran into financial difficulty and the loan
went into default. Consequently, as of August 19, 1994, the
arrearages due from Pavonia to the EDA equalled $241,207.71, and
plaintiffs sought payment from defendants in accordance with their
Thereafter, Pavonia and defendants requested plaintiffs to
forbear enforcement of their rights under the loan agreement and
guarantees. Plaintiffs agreed and, on October 17, 1994, the
parties entered into a "Loan Forbearance Agreement." The agreement
essentially provided that plaintiffs would not accelerate the loan
balance for a period of time if defendants paid the delinquent
amounts due and advanced monthly payments through December 1, 1994
totalling $312,970.19. In the agreement, defendants acknowledged
that Pavonia had defaulted on the loan, that they had not cured the
default, and that they had no defenses to plaintiffs' claims under
the loan documents or individual guarantees.See footnote 2
On February 1, 1995, Pavonia again defaulted, and plaintiffs
accelerated the loan balance. In a letter dated June 22, 1995,
counsel for plaintiffs made a demand upon defendants for full
payment of the loan or possession of the assets Pavonia had pledged
as collateral. When defendants failed to respond, on July 2, 1995,
plaintiffs filed a complaint in replevin against Pavonia and
defendants, seeking possession of the pledged assets and judgment
in the amount of the loan balance, interest, counsel fees and
costs. Plaintiffs also sought compensatory and punitive damages
for conversion, wrongful detainer, and breach of contract.
Defendants filed an answer, defenses, and a counterclaim,
essentially asserting, among other defenses, that both plaintiffs
and defendants were suffering under a mutual mistake of fact when
the loan was granted because both parties "erroneously assumed that
the business of Pavonia ... was capable of generating sufficient
net revenue to enable defendant Pavonia" to repay the loan.
After extensive discovery, on December 18, 1996, plaintiffs
moved for summary judgment. Defendants opposed the motion and
cross-moved to amend their responsive pleadings to assert defenses
grounded in fraud, bad faith, and allegations that plaintiffs had
failed to disclose material facts at the inception of the loan that
materially increased their risk under the guarantees rendering them
unenforceable. Specifically, defendants alleged that from the
inception of the loan, plaintiffs knew and failed to disclose (1)
that Pavonia's assets were insufficient to secure the loan and (2)
that plaintiffs were relying principally, if not exclusively, upon
defendants' guarantees as the source of repayment of the loan.
Defendants supported their cross-motion with various
deposition transcripts and documents, including two "memoranda"
which they maintained demonstrated that plaintiffs had relied
solely on the creditworthiness of defendants, whose collective net
worth was in excess of $56 million dollars, to secure repayment of
the loan. One memorandum was prepared on March 12, 1992 by Steven
K. Szmutko, the senior loan officer of the EDA, and the other was
a loan review document prepared on March 26, 1992 by Michael McKee,
then vice-president of the Bank. The Szmutko memorandum dealt with
the collateral for the loan. It indicated that plaintiffs needed
more than the leasehold improvements and restaurant equipment as
collateral, mentioning that the guarantors had a substantial net
worth to secure the loan.
At his deposition, Szmutko explained the memorandum,
indicating that the EDA used three factors to evaluate the loan:
(1) the sufficiency of the anticipated cash flow from the
restaurant business; (2) the quality of the proposed management;
and (3) the sufficiency of the collateral pledged. He explained
that "where one part or one component of the loan evaluation
process [is] weak, ... [the EDA] seek[s] to mitigate that weakness
by having ... additional personal guarantees or whatever ...
additional collateral we can to strengthen it independent of the
collateral." Szmutko stated that because the leasehold
improvements and the restaurant equipment were not sufficient
collateral to repay the loan in the event the restaurant failed,
the creditworthiness of the guarantors was considered "the main
source of repayment." However, he also stated that in evaluating
the loan, he viewed the anticipated cash flow from the business as
a significant source of repayment, noting the extensive business
experience of Pavonia's president, defendant Ray Vyzas, and the
restaurant's general manager who had previously directed operations
of four different restaurants. Szmutko also testified that he had
analyzed the financial statements prepared by Pavonia's accountant
and that he relied upon the location and anticipated upscale
clientele of the restaurant to generate a steady flow of income.
I had asked for financial statements prepared
by an independent accounting group which was
provided, Sobel & Company, which were
projections of balance sheet income
statements, probably the cash flow statement
as well as the assumptions which we use to
prepare the projections and assumption ranging
from the revenue, what the average price and
rates would be, whether that's consistent with
other restaurants in Jersey City. We looked
at it in terms of the value of the cash flow,
the location of the restaurant which was near
Journal Square which was in a building that
was almost completely occupied and also in
close proximity to other offices that would
attract the type of clientele to this style of
restaurant that they were proposing. We
relied on the Sobel projections during the
course of the evaluation process. I consulted
with our director of finance, [Eugene
Bukowski], and ultimately the project was
presented to our board where we determined
that the projections that were submitted by
the applicant were reasonable.
The loan review document that McKee prepared contains his
evaluation and analysis of the loan. The document indicates that
the primary source of repayment of the loan would be Pavonia's cash
flow from operation of the restaurant and that the secondary source
would be the guarantors. In an affidavit, McKee explained exactly
how he evaluated the loan. He stated that he had used projections
prepared by Pavonia's accountant and that based on these
projections, which he noted seemed reasonable, he believed that the
restaurant could generate sufficient cash flow to repay its debts.
In the affidavit, McKee clarified a comment he had made in the loan
review document that "no value" was assigned to the cash flow
generating ability of Pavonia or its collateral, explaining that
"it was a start-up restaurant with no operational history, and
therefore a value simply could not be placed on the [restaurant's]
ability to generate cash flow."
Lloyd G. Cox, vice-president of the Bank, also testified at
depositions and explained the criteria the Bank used in evaluating
We looked at this loan and I made the final
decision to include it into the composite
[bond issue]. We looked at this loan from the
standpoint that it was a start-up restaurant,
projections were provided that showed that the
restaurant could have ample cash flow to repay
the indebtedness. You had a large number of
guarantors willing to guarantee the loan.
These were professional, successful
businessmen and women, I guess, attorneys,
doctors, who lived and worked in this area so
we placed reliance that they understood their
market, they understood their home town, if
you will, and that carried a lot of weight.
We would not have entered into a relationship
knowing that there was no chance that the
restaurant would have made it and we would
have had to collect against the guarantors.
Cox went on to state that, after analyzing the financial statements
of the individual guarantors, he was satisfied Pavonia had the
ability to repay the loan in the event of a default. With respect
to the high-risk nature of the restaurant business, Cox stated the
I wouldn't have included it if I didn't think
it had much of a chance of making it. I was
relying on the New Jersey EDA having approved
the loan and also relying on this group of
professionals, successful business people who
were willing to guarantee this loan and this
venture, that they wouldn't have done so if
they didn't think it had a likelihood of being
Eugene Bukowski, the managing director of finance for the EDA
agreed, testifying in his deposition that the financial projections
prepared by Pavonia's accountant were conservative when compared
with industry standards and, that according to the financial
projections, it appeared that Pavonia's expected cash flow would be
sufficient to repay the loan.
In granting summary judgment to plaintiffs and denying their
motion for reconsideration, Judge Brown concluded that defendants
had failed to support with sufficient evidential materials any of
the theories they had advanced as defenses to the enforceability of
the individual guarantees. In so doing, the judge observed that a
party is not required to disclose information to another unless a
fiduciary relationship exists. He also determined that plaintiffs
were "not responsible to advise [defendants] of information that
[was] readily available to them on their own." The judge found
that "entering into a new restaurant arrangement [is] a high risk
business, ... [and] that defendants knew what they were getting
into" at the inception of the loan and also when they executed the
forbearance agreement. The judge then denied defendants' cross-motion to amend their pleadings to allege fraud, breach of good
faith, and failure to disclose a material risk, concluding the
contentions were "moot based on the Court's decision on the
[summary judgment] motion." The judge further stated that:
any of the asserted modifications to the
pleadings at this late date are merely an
effort to manufacture what might be a defense
to hold up the proceeding until such time as
there can be further motions made to strike
them. I see nothing in any -- any of the
papers that were submitted to this court that
would legitimately indicate that there was any
fraud, breach of good faith, or failure to
disclose on the part of the plaintiffs.
In denying defendants' motion for reconsideration, the judge
[T]here does not appear to be anything in the
case that in any way suggests any fraud or bad
faith on the part of any person in the bank.
The fact that this was a restaurant, an
operation which success is generally known to
be questionable, also the fact, as I
indicated, that the investors ... are all
businessmen...they're not 87 year old widows
who are living on what they inherited and want
to invest the money....[T]hese are businessmen
who were fully aware of what the obligations
were, not only when they entered into the
surety agreement, but also when they entered
into the forbearance agreement.
On appeal, although defendants raise arguments under numerous
separate point headings, the arguments are essentially twofold:
(1) that the evidence presented raised genuine issues of material
fact from which inferences could be drawn of plaintiffs' bad faith,
fraud, and breach of duty to disclose; and (2) that the judge
abused his discretion in denying their motion to amend their
responsive pleadings under R. 4:9-1.
"Every fraud in its most general and fundamental conception
consists of the obtaining of an undue advantage by means of some
act or omission that is unconscientious or a violation of good
faith." Jewish Ctr. of Sussex County v. Whale,
86 N.J. 619, 624
(1981). A plaintiff must establish a claim of fraud by clear and
convincing evidence. Baldasarre v. Butler,
254 N.J. Super. 502,
521 (App. Div. 1992), rev'd in part on other grounds,
132 N.J. 278
(1993). Legal fraud consists of five elements: (1) a material
representation by the defendant of a presently existing or past
fact; (2) knowledge or belief by the defendant of that
representation's falsity; (3) an intent that the plaintiff rely
thereon; (4) reasonable reliance by the plaintiff on the
representation; and (5) resulting damage to the plaintiff. Id. at
520. Equitable fraud, unlike legal fraud, does not require
knowledge of the falsity and an intent to obtain an undue
advantage. Id. at 521.
Deliberate suppression of a material fact that should be
disclosed is equivalent to a material misrepresentation (i.e., an
affirmative false statement). Strawn v. Canuso,
140 N.J. 43, 62
(1995). In other words, "[s]ilence, in the face of a duty to
disclose, may be a fraudulent concealment." Berman v. Gurwicz,
189 N.J. Super. 89, 93 (Ch. Div. 1981) (emphasis and citation omitted),
189 N.J. Super. 49 (App. Div.), certif. denied,
94 N.J. 549
(1983). However, the concealed facts "must be facts which if known
... would have prevented [the obligor] from obligating himself, or
which materially increase his responsibility." Ramapo Bank v.
224 N.J. Super. 191, 198 (App. Div. 1988) (internal
punctuation and citation omitted). Nonetheless, a party has no
duty to disclose information to another party in a business
transaction unless a fiduciary relationship exists between them,
unless the transaction itself is fiduciary in nature, or unless one
party "expressly reposes a trust and confidence in the other."
Berman, supra, 189 N.J. Super at 93-94. Indeed, as a general
proposition, creditor-debtor relationships rarely give rise to a
fiduciary duty "inasmuch as their respective positions are
essentially adversarial." Globe Motor Car Co. v. First Fidelity
273 N.J. Super. 388, 393 (Law Div. 1993), aff'd,
Super. 428 (App. Div.), certif. denied,
147 N.J. 263 (1996).
Further, where information is equally available to both parties,
neither party has a duty to disclose that information to the other.
Id. at 395.
We have carefully reviewed the entire record, the arguments
and factual contentions presented, and prevailing legal principles
and conclude that the motion judge properly determined that the
evidence presented by defendants does not create a "genuine issue
of material fact" under R. 4:46-2 requiring submission of their
claims of fraud or bad faith to a jury. "[T]he evidence `is so
one-sided that [plaintiffs] must prevail as a matter of law.'"
Brill, supra, 142 N.J. at 540 (quoting Anderson v. Liberty Lobby,
477 U.S. 242, 250,
106 S. Ct. 2505, 2511,
91 L. Ed.2d 202,
Defendants claim that plaintiffs placed sole reliance on their
individual guarantees for repayment of the loan. As reflected in
the factual recitations previously given, the record does not
support that assertion. Rather, it reflects that both plaintiffs
and defendants anticipated that the revenues from the restaurant
would support repayment of the loan. The information concerning
the anticipated revenues was, in fact, derived from Pavonia's
accountant, Sobel & Company. Although defendants maintain that the
McKee loan review document concluded that "no reliance could be
placed on the `collateral or cash flow generating ability of the
restaurant,'" the record clearly belies this assertion. The record
discloses that McKee believed, based on the projections made by
Pavonia's accountant, that the restaurant would generate sufficient
cash flow to repay the loan. As Lloyd Cox, vice-president of the
Bank, indicated, the Bank never would have included the loan to
Pavonia in the composite bond issue if it did not believe that
Pavonia would be successful. Despite defendants' attempts to make
it appear as though plaintiffs knew Pavonia would be unable to
repay the loan and therefore insisted on the guarantees, nothing in
the record supports this proposition. Defendants have not pointed
to any evidence that even suggests plaintiffs had information about
Pavonia's ability to repay the loan which defendants did not have.
Indeed, everyone understood that opening a restaurant in a new
location was an inherently risky business. Plaintiffs hoped that
the restaurant's success would comport with the financial
projections of Pavonia's accountant just as defendants did. The
obvious fact is that external factors impeded Pavonia's success,
factors which were completely unrelated to plaintiffs' evaluation
of the loan agreements.See footnote 3
In sum, defendants have utterly failed to demonstrate what
facts plaintiffs had, but defendants lacked, that materially
increased the risk beyond that which plaintiffs knew defendants
intended to assume.
Impliedly recognizing that they could not prove their case
under these theories, defendants argue that their claims are viable
under the principles of law contained in the Restatement of
Security: Suretyship § 124 (1941) (the Restatement).See footnote 4 That
section provides in relevant part:
Where before [a] surety has undertaken his
obligation the creditor knows facts unknown to
the surety that materially increase the risk
beyond that which the creditor has reason to
believe the surety intends to assume, and the
creditor also has reason to believe that these
facts are unknown to the surety and has a
reasonable opportunity to communicate them to
the surety, failure of the creditor to notify
the surety of such facts is a defense to the
Defendants argue that plaintiffs violated these principles of
law by failing to disclose facts to them that materially increased
their risk under the guarantees, specifically, that unbeknownst to
defendants, plaintiffs were relying on their guarantees as the
primary security for repayment of the loan and failed to disclose
this fact to them. They maintain they would not have undertaken
the risk if they had known the guarantees were the principal
security for the loan.
New Jersey typically gives considerable weight to Restatement
views, and has on occasion even adopted those views as the law of
this state. Citibank, N.A. v. Estate of Simpson,
290 N.J. Super. 519, 530 (App. Div. 1996). Although we find it unnecessary to
formally adopt the Restatement here, we have employed its
principles, in part, to evaluate defendants' claims.
Section 124 prescribes three conditions precedent to imposing
a duty on a creditor to disclose facts it knows about the debtor to
the surety: (1) the creditor must have reason to believe that
those facts materially increase the risk beyond that which the
surety intends to assume; (2) the creditor must have reason to
believe that the facts are unknown to the surety; and (3) the
creditor must have a reasonable opportunity to notify the surety of
such facts. See, e.g., Sumitomo Bank of Cal. v. Iwasaki,
447 P.2d 956, 963 (Cal. 1968).
However, the comments to Section 124 of the Restatement
[this rule] does not place any burden on the
creditor to investigate for the surety's
benefit. It does not require the creditor to
take any unusual steps to assure himself that
the surety is acquainted with facts which he
may assume are known to both of them.
* * * *
Every surety by the nature of his obligation
undertakes risks which are the inevitable
concomitants of the transactions involved.
Circumstances of the transactions vary the
risks which will be regarded as normal and
contemplated by the surety.
[Restatement of Security: Suretyship § 124
cmt. b (1941)].
For the reasons previously stated in our rejection of defendants'
claims of fraud and bad faith, we are satisfied that defendants
failed to raise any factual issue applying the principles derived
from the Restatement. Suffice it so say, plaintiffs were not in
possession of any facts that defendants were not aware of; both
parties hoped the restaurant would generate sufficient cash flow to
repay the loan. Regrettably, it did not.
Defendants' reliance on out-of-state cases are equally
unavailing. All of the cases involve facts that are clearly
distinguishable from those in the instant case. SeeMorris v.
Columbia Nat'l Bank of Chicago,
79 B.R. 777, 785-86 (N.D. Ill.
1987) (observing that creditor may have acted in bad faith in
allowing debtor to engage in a transaction favorable to the
creditor but adverse to the surety, when creditor knew debtor was
having financial problems); Camp v. First Fin. Fed. Sav. & Loan
772 S.W.2d 602, 604-05 (Ark. 1989) (holding that failure to
disclose to surety that interest on loan to debtor was delinquent
and that lender was making secret side loans to debtor discharged
liability of surety); Georgia Pacific Corp. v. Levitz,
716 P.2d 1057, 1059 (Ariz. Ct. App. 1986) (holding that guarantor was
discharged from liability on a continuing guarantee where creditor
knew guarantor was unaware of debtor's insolvency but continued to
extend credit to debtor, thereby materially increasing the
guarantor's risk beyond that which guarantor intended to assume);
Sumitomo Bank of Cal. v. Iwasaki, supra, 447 P.
2d at 966-67
(holding same); McHenry State Bank v. Y & A Trucking, Inc.,
454 N.E.2d 345, 349 (Ill. App. Ct. 1983) (concluding that a creditor's
release of collateral without the consent of the guarantor will
discharge the guarantor of his obligations); Maine Nat'l Bank v.
456 A.2d 1273, 1275-76 (Me. 1983) (reversing jury verdict
on judge's erroneous refusal to charge jury that creditor had duty
to disclose to an accommodation party that it had terminated
efforts on behalf of debtor to obtain a Small Business Association
loan, and holding that jury could have determined that circumstance
materially increased risk beyond that which accommodation party had
agreed to take); Security Bank, N.A. v. Mudd,
696 P.2d 458, 460-61
(Mont. 1985) (holding that creditor's failure to disclose its
decision not to apply collateral to reduce debtor's loan discharged
guarantor); see alsoRamapo Bank v. Bechtel, supra, 224 N.J. Super.
at 199 (reversing summary judgment and remanding to trial court to
consider whether concealed pre-loan side agreement by bank not to
pursue a co-guarantor in event debtor defaulted in repaying loan
Finally, aside from the merits of the instant case, there is
an additional reason why summary judgment was properly granted.
The record clearly reflects that defendants waived their claims and
defenses relating to the loan when they entered into the
forbearance agreement. SeeCedar Ridge Trailer Sales, Inc. v.
National Community Bank,
312 N.J. Super. 51, 62-65 (App. Div.
1998). Their assertion that the waiver is unenforceable because
they lacked knowledge of plaintiff's alleged "fraud" until they
conducted discovery is unavailing in view of the absence of any
evidence of "fraud," as we previously noted.
We also reject defendants' claim that the court abused its
discretion in denying their motion to file an amended responsive
pleading. The judge did not abuse his discretion when he noted
that any "modifications to the pleadings at this late date [were]
merely an effort to manufacture what might be a defense to hold up
the proceeding until such time as there can be further motions made
to strike them." SeeStuchin v. Kasirer,
237 N.J. Super. 604, 609
(App. Div.) (holding that since the "showing of fraud was marginal
at best, and the amendment would only have protracted [the]
litigation," there was no abuse of judicial discretion in denying
the amendment), certif. denied,
121 N.J. 660 (1990). While we
recognize that such amendments should be "freely given in the
interest of justice," R. 4:9-1, we perceive no abuse of discretion
by the motion judge in determining to disallow the filing of an
amended pleading to assert these new theories where they could not
be supported on this record.
Accordingly, we affirm the summary judgment entered in favor
of plaintiffs on their complaint.
Footnote: 1 For convenience and ease of reference, we use the term
"defendants" to refer interchangeably to all of the individual
guarantors and the defendants-appellants even though not all of the
guarantors have participated in this appeal.
Although a notice of appeal was filed on behalf of K. Joseph
Vyzas, Samuel E. Difeo, Joseph C. Difeo, Eleanor Hartnett, and H.
Clay Irving, III, these guarantors did not file a brief.
Consequently, we consider the appeal dismissed as to them.
Defendant Ernesto A. Tolentino filed a separate notice of
appeal and a separate appendix, and he apparently has joined in
defendants-appellants' brief. Accordingly, his appeal is
The guarantors James A. McLaughlin, Jr., Paul S. Freeman,
Manmohan Patel, William H. Constad, Donald Cinotti, and Vincas M.
Vyzas, did not file a notice of appeal.Footnote: 2 The forbearance agreement also states:
[Defendants] have no set-offs, defenses or
counterclaims against [plaintiffs] with
respect to the Indebtedness, and ... are
indebted to the Secured Parties for the
amounts recited in this Agreement.
Footnote: 3 We note that although Pavonia was unsuccessful in
establishing a viable restaurant business, its successor, Laico's
of Journal Square, has not been.Footnote: 4 Section 124 of the Restatement was revised in 1996. SeeRestatement (Third) of Suretyship and Guaranty § 12 (1996).
However, there were no substantive changes to the section that
affect this decision.