SL Service, Inc. v. Clou Containers, S.P.A.

MEMORANDUM *

SL Service, Inc. (“SL Service”) appeals the district court’s decision granting summary judgment in favor of CLOU (“CLOU”) Containers on the grounds that the guaranty executed by CLOU was unenforceable under New York’s statute of frauds. SL Service also appeals the district court’s denial of SL Service’s motion for summary adjudication of CLOU’s failure-of-consideration defense. CLOU cross-appeals the district court’s grant of SL Service’s motion for summary adjudication of CLOU’s fraud-in-the-inducement defense. We reverse and remand to the district court for further proceedings consistent with this decision.

I

We find that the guaranty was enforceable under New York law. Under New York law, contracts made to guarantee the debts of another are covered by the statute of frauds. The New York statute of frauds provides:

N.Y. Gen. Oblig. Law § 5-701 .

New York courts have interpreted this statute and its predecessors to require that the written agreement or memorandum thereof contain all of the “substantial and material” terms of the contract. Standard Oil v. Koch, 260 N.Y. 150, 154 , 183 N.E. 278 (1932) (citing Drake v. Seamen, 97 N.Y. 230 (1884)). The consideration…