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Valley National Bank v. Marcano

Superior Court of Connecticut, Judicial District of New Britain, New Britain

September 17, 2015

Valley National Bank as Successor in Interest to Park Avenue Bank
Steven Marcano


Cynthia K. Swienton, J.

This is a collection action brought by the plaintiff, Valley National Bank (VNB), against the defendant, Steven Marcano. VNB in its complaint alleges that the defendant guaranteed payment of obligations made by My Little Star Baby Products, Inc., to Park Avenue Bank, (PAB), of which VNB is a successor in interest.

The one-count complaint sounds in breach of contract against the defendant. A court trial was held on July 24, 2015. The court heard from two witnesses: the defendant, Steven Marcano, and Michael Robinson, vice-president in special assets for VNB. The parties filed simultaneous post-trial briefs. The court has reviewed the evidence admitted, considered the testimony provided, and the arguments set forth by both parties, and renders this decision after careful consideration of all of these items and the applicable law.[1]


" In a bench . . . the court sits as the trier of fact . . ." (Internal quotation marks omitted.) Knock v. Knock, 224 Conn. 776, 793, 621 A.2d 267 (1993). The court makes the following findings of fact based upon the more credible evidence.

The defendant was one of the founders of the entity known as My Little Star Baby Products, Inc., and was the president of the company when it applied for a business line of credit with Park Avenue Bank in New York. The loan application was approved, and Marcano executed the business loan agreement, commercial security agreement, corporate resolution authorizing the borrowing, as well as the promissory note and commercial guaranty. The documents which were admitted into evidence as Exhibits 1-8 indicate a loan number of 401696.[2] The promissory note which secured the line of credit had a maturity date of May 27, 2009, when all sums drawn upon the line of credit along with interest were to be paid in full without demand.

The personal guarantee signed by the defendant secured My Little Star's obligation to PAB. After approval, My Little Star made drawdowns on the line of credit through drawdown requests made by the defendant.[3] The total amount of the drawdowns was $248, 723.06.

At some point, PAB was seized by the FDIC, and VNB purchased the assets of PAB from the FDIC as receiver. Exhibit 9, which is a Purchase and Assumption Agreement, indicates that the FDIC transferred the defendant's obligation to PAB to VNB. (Plaintiff's Exh. 9, Article 3.1.)

The defendant has made no payments on the obligation of My Little Star as a personal guarantor. The current amount due as of July 22, 2015, is $328, 009.28, of which $248, 723.06 is principal, and $79, 286.22 is interest, with a per diem of $36.27.


The loan formation documents, including the promissory note and commercial guaranty, provide choice of law provisions which dictate that New York state law governs their interpretation and enforcement. Parties are allowed to choose the laws which govern their contracts unless the chosen state has " no substantial relationship to the parties or the transaction" or application of the laws of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest [in the determination of the matter." ] Elgar v. Elgar, 238 Conn. 839, 850, 679 A.2d 937 (1996). The documents executed indicate that they were signed by My Little Star and PAB in New York, while doing business in New York. Furthermore, although the defendant is a resident of Connecticut, there was no objection raised as to the court applying the laws of New York to the interpretation and enforcement of the note and guaranty. Therefore, the court will apply New York law.

" The elements of a cause of action for breach of contract are the formation of a contract between plaintiff and defendant, performance by plaintiff, defendant's failure to perform, and resulting damages." (Citations omitted. Internal quotation marks omitted.) Beheer B.V. (Amsterdam) v. South Caribbean Trading Ltd., 7 Misc.3d 1010(A), 801 N.Y.S.2d 243 (Sup.Ct., N.Y. County 2004). The formation of a contract under New York law is a factual inquiry which asks, " [i]s there a sufficiently definite offer such that its unequivocal acceptance will give rise to an enforceable contract . . . Impenetrable vagueness and uncertainty will not do." Matter of Express Indus. & Term. v. DOT, 93 N.Y.2d 584, 589-90, 715 N.E.2d 1050, 693 N.Y.S.2d 857 (1999).

Personal guarantees of future obligations are enforceable and continue until terminated in writing. See, Chemical Bank v. Sepler, 60 N.Y.2d 289, 291, 469 N.Y.S.2d 609, 457 N.E.2d 714 (1983).

The loan documents are clear and precise regarding the nature and extent of the agreement between the parties. The defendant's signature is found on each of these documents, as either president of My Little Star or as the personal guarantor, and the loan number of 401696 is also found on each of these exhibits. In addition to the promissory note, which sets forth the debt and its terms of payment and consequences of default, the commercial guaranty obligates the defendant for the debts of My Little Star to PAB. VNB is the current holder of the debts in this matter, and therefore is entitled to judgment based upon the ...

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