Justice Alice Schlesinger
The Ustayev defendants argued lenders lacked standing to collect on a guaranty until a deficiency judgment was obtained after foreclosure in this foreclosure action regarding two commercial mortgages relating to real property. They claimed plaintiffs could not maintain the action against the guarantors as they elected to foreclose on the premises. Their counsel argued a lender could not simultaneously maintain a foreclosure action, and an action to recover on the mortgage debt without leave of court under Real Property Actions and Proceedings Law §1301(3). Counsel alleged as plaintiffs sought a judgment of foreclosure on the two loans, the claim to collect on the debt pursuant to the guaranty was barred. Plaintiffs claim while §1301(3) barred two separate actions, it did not bar a single action with separate causes of action relating separately to foreclosure and the guaranty. The court agreed concluding §1301 must be read in conjunction with §1371(1), and ruled a guaranty was not distinct from the mortgage debt and was appropriately enforced in the foreclosure action when the deficiency judgment was sought following the sale. Hence, dismissal against them was denied.
