DECISION AND AMENDED ORDER
Plaintiff Valley National Bank (“Valley”) filed a complaint (the “Complaint”) in this action against Defendants Greenwich Insurance Company and XL Reinsurance America, Inc. (together, “Defendants”), alleging that Defendants failed to pay Valley money owed pursuant to a bond that Defendants had issued to National Investment Services, Inc. (“National”) to guarantee the payment of obligations owed by National to Valley. Promptly after filing the Complaint, Valley brought a motion for summary judgment pursuant to Fed. R.Civ.P. 56 (the “Motion”). Defendants opposed the Motion, and included a series of certifications asking for further discovery pursuant to Fed.R.Civ.P. 56(f). By Order dated March 81, 2003, the Court granted the Motion, and indicated that its findings, reasoning and conclusions would be set forth in a separate Decision and Order to be made available to the parties. Accordingly, for the reasons discussed below, the Motion is GRANTED.
I. FACTS
As narrated by Valley, the Complaint describes a simple matter regarding two sureties who refused to honor their contractual commitments to guarantee obligations set forth in a Premium Finance Agreement, dated October 1, 2001 (the “PFA”), entered into between Valley and National. Under the PFA, Valley agreed to advance $7,500,000 (the “Funds”) to National, which undertook to use the Funds to finance premiums on National’s insurance policy with Twin Oaks Insurance Company, Ltd. (“Twin Oaks”). 1 Pursuant to a Loan and Security Agreement and a Term Note between Valley and National, dated October 26, 2001 (the “Loan Agreement” and the “Term Note,” respectively, and together with the PFA, the “Transaction Documents”), National was scheduled to repay the Funds in eight equal installments of principal every three months, plus accrued interest (the “Installments”). To insure against the risk that Nationаl might default on the Installments, Valley received contractual guarantees from National and required National to obtain a premium finance bond (the “Bond”) from the Defendants, which guaranteed payment of the obligations owed by National to Valley in the event of any default by National.
The Installments commenced on February 1, 2002. While National paid the first Installment, it failed to make the required payment for the second Installment three months later on May 1, 2002. Two weeks following the missed payment, Valley notified National that it was in default and demanded payment of the remaining amount (the “Remaining Amount”) due under the Loan Agreement and Term Note, as well as reasonable costs, expenses and late charges. Simultaneously, Valley notified the Defendants that it was asserting a claim under the Bond for payment of the Remaining Amount together with per diem interеst from May 16, 2002. Valley alleges
In response to the Complaint, the Defendants paint a far different portrait of what occurred in this transaction. Defendants allege that, unbeknownst to them at the time they issued the Bond, Valley was either involved in, or aware of, a fraudulent scheme by which Valley and other parties disguised simple loans as premium finance arrangements, then negotiated bonds to guarantee these arrangements. According to the Defendants’ chronology, Robert Nicosia (“Nicosia”), then executive vice president of Universal Bonding Insurance Company (“UBIC”) and an honorary advisory board member of Valley, originally approached Valley at the beginning of 2001 seeking a $7,500,000 loan on behalf of National, but was rebuffed becausе National did not meet Valley’s credit standards for such a loan. As a result, Defendants allege, Nicosia restructured the transaction as a premium finance arrangement, whereby Twin Oaks would issue an insurance policy to National and in return would receive the Funds in the form of premium payments. However, Defendants assert, Nicosia was in fact the sole shareholder of Twin Oaks, and the Funds never reached Twin Oaks nor were they used to pay insurance premiums. 2
According to Defendants, because they were unaware that Nicosia had disguised a simple loan as a premium finance arrangement, they agreed to issue the Bond, negotiated by Nicosia, to guarantee National’s obligations to Valley under the PFA. 3 Defendants contend that if they had known that the Bond was backing what was essentially a fine of credit loan, they would never have issued the Bond because they are not in the business of financial guaranty insurance, a higher risk form of insurance that protects lenders against default by borrowers on financial obligations. 4
Defendants claim that once informed that National had defaulted on the second Installment, Defendants attempted to investigate the transaction, but Valley was uncooperative. Using the information they were able to gather, Defendants allege that Valley fraudulently induced them to issue the Bond, and ask for the opportunity to conduct further discovery in order to mount a defense based on this allegation.
II. DISCUSSION
A. STANDARD OF REVIEW
1. Valley’s Rule 56 Motion
In considering a motion for summary judgment, the Court must grant such a
In cases involving notes and guaranties, this Court has held that “a plaintiff establishes its prima facie entitlement to summary judgment by establishing the execution of the agreements at issue and nonpayment thereunder.”
Orix Credit Alliance, Inc. v. Bell Realty, Inc.,
No. 93 Civ. 4949,
The main distinction between a contract of guaranty and a contract of suretyship is that “[a] ‘surety’ is typically jointly and severally liable with the principal obligor on an obligation to which they are both bound, while a ‘guarantor’ typically contracts to fulfill an obligation upon the default of the principal obligor.” Restatement (Third) of Suretyship and Guaranty § 1, cmt. c. (1996);
see also Anderson v. Rizza Chevrolet, Inc.,
This distinction is relevant in deciding when the obligor’s responsibilities begin, but once a determination is made that an obligor has such a responsibility, the difference between the two types of obligatory instruments is not significant, for both involve a promise to answer for a third person’s debt. Thus, the prima facie test developed by this Court for plaintiffs moving for summary judgment against a guarantor, which requires proof that the principal debtor has not fulfilled its obligation, should be equally applicable to plaintiffs moving for summary judgment against sureties, especially given that the liability for a surety is stricter because the
The Court is persuaded that Valley has met its initial burden. Valley has demonstrated, and Defendants do not contest, that the Bond was entered into freely by National and Defendants. Moreover, Defendants admit that they have not yet fulfilled their payment obligations under the Bond. Thus, Valley is entitled to summary judgment requiring Defendants to pay Valley under the terms of the Bond unless Defendants can assert defenses that raise any genuine issue of material fаct.
2. Defendants’ Rule 56(f) Response
While Rule 56 does not require that any discovery take place before a motion for summary judgment can be granted,
see Demery v. Extebank Deferred Comp. Plan (B),
Thus, Rule 56(f) is a safeguard against premature grants of summary judgment and this Court has found that it “should be applied with a spirit of liberality.”
Bonnie & Co. Fashions, Inc.,
To determine whether an opponent of a summary judgment motion has proven sufficiently that Rule 56(f) should be invoked, the Second Circuit has established a four-part test to examine the affidavit or certification submitted arguing for continued discovery:
The affidavit must include the nature of the uncompleted discovery; how the facts sought are reasonably expected to create a genuine issue of material fact; what efforts the affiant has made to obtain those facts; and why those efforts were unsuccessful.
Id.
The Court shall address the question of whether Defendants have met their burden under Rule 56(f) below.
3. Choice of Law
The Bond, which was drafted by Defendants, contains a choice of law and forum selection clause that reads:
The laws of the State of New York shall 'be applicable in determining the rights and obligations of any party under thisbond and the courts of the State of New York, including the United States District Court for the Southern District of New York shall have exclusive jurisdiction over any dispute arising under this bond.
(Bond, attached as Exhibit 4 to Aff. of Robert J. Chase In Support of Motion for Summary Judgment, dated October 8, 2002 (“Chase Aff.”), at ¶ 10.)
While both parties agree that this clause gives exclusive jurisdiction to this Court to hear the Complaint, Valley contends that the choice of law portion of the clause is permissive, and argues that the Court, after employing New York’s “interest analysis” test, should use New Jersey law under New York’s conflict of laws rules. Defendants disagree with this contention, arguing that the choice of law clause mandates that New York law be applied in adjudicating this dispute.
Neither the parties nor the Court have been able to identify precedent thаt deals with similarly worded clauses in the context of choice of law. However, other courts in the Second Circuit have ruled on similar disputes involving the mandatory or permissive nature of the verb “shall” when used in forum selection clauses.
See, e.g., John Boutari and Son, Wines and Spirits, S.A. v. Attiki Imp. and Distrib. Inc.,
These cases offer some guidance but are not perfectly analogous because of the inherent distinction between forum selection and choice of law. It is possible, as the foregoing cases demonstrate, for more than one court to have jurisdiction over a matter if the choice of forum is not explicitly stated in the contract. Such ambiguity allows the parties to prosecute the action in a forum of their preference, assuming that the forum has sufficient ties to the matter. Indeed, the Federal Rules of Civil Procedure explicitly discuss the possibility of transfer, either between state and federal courts or between different states or different countries, due to matters of convenience and justice.
See
Fed.R.Civ.P. 1404(a) (“For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.”). It is not practical, however, for more than one dis-positive law to be applicable to a matter,
5
nor does the choice of law depend entirely on the preference of the parties. Instead, which law applies is a question that has only one answer, ascertainable first through an explicit choice of law clause and then, if no such clause exists, by a conflict of laws analysis.
See
Restatement (Second) of Conflict of Laws § 186 (1971) (stating that choice of law is determined by
The implication of this distinction is that finding a forum selection clause permissive is consistent with the flexibility of forum selection in general, while finding a choice of law provision permissive contradicts the reality that only one body of substantive rules can actually serve as the applicable law to govern final adjudication of the merits of a dispute. Moreover, while it is theoretically possible for a trained lawyer to read the Bond’s choice of law provision as being less explicit than other conceivable grammatical variations, 6 a permissive interpretation would directly violate both the preference for honoring the parties’ choice of law selection and one of the “prime objectives of contract law,” which is “to protect the justified expectations of the parties and allow them to foretell with accuracy what will be their rights and liabilities under the contract.” Restatement (Second) of Conflict of Laws § 187, cmt. e (1971 & Supp.1989). This policy of certainty, convenience and predictability of result is crucial, and demands that “the parties should have power to choose the applicable law.” Id.
Thus, when confronted with a choice of law clause like the one in the Bond, the Court finds the phrase “[t]he laws of the State of New York shall be applicable in determining the rights and obligations of any party under this bond” to be a mandatory assertion ■ that New York State’s laws are the ones that govern the Bond, and are to be used in settling any disputes arising under that instrument. This interpretation is bolstered when considered in conjunction with the equally exclusive mandate of the forum selection clause, which definitively places any litigation about the Bond only in this Court or in New York State courts. The Court is persuaded that the parties — both of them sophisticated entities which had entered into these types of agreements frequently and negotiated the Bond at an arms’ length basis — intended to employ New York law in New York courts, including the federal court in the Southern District of New York. Cf Restatement (Second) of Conflict of Laws § 187, cmt. b (1971 & Supp.1989) (noting that choice of law provisions of adhesion contracts, “drafted unilaterally by the dominant party and then presented on a £take-it-or-leave-it’ basis to the weaker party who has no real opportunity to bargain about its terms,” should be scrutinized and not enforced if doing so “would result in substantial injustice to the adherent.”).
B. DEFENDANTS’ AFFIRMATIVE DEFENSES AND RULE 56(F) MOTION
Proceeding under applicable New York State law, the Court turns to Defendants’ opposition to the Motion. In accordance with the Court’s ruling above, Defendants must assert defenses that raise genuine issues of material fact in order to avoid summary judgment in favor of Valley. In tandem with raising these defenses, Defendants have also submitted to the Court
Before the Court can consider Defendants’ defenses, however, it must examine Valley’s contention that Defendants waived all defenses when they agreed to the transactions by virtue of a clause (the “Disclaimer Clause”) in the Bond which states:
The Surety’s liability under this bond shall not be released, discharged or affected in any way (except as expressly provided in this bond) by any circumstances or condition (whether or not [Defendants] shall have knowledge thereof), including, without limitation: (a) the attempt or the absence of any attempt by [Valley] to obtain payment or performance by [National] or any other surety or guarantor of the [insurance premium payments]; ... and (c) any other circumstance which might otherwise constitute a legal or equitable discharge or defense of [Defendants], except as provided under this bond. [Defendants] hereby expressly waives and surrenders any defense to its liability under this bond based upon any of the foregoing acts, omissions, agreements, waivers or matters. It is the purpose and intent of this bond that the obligations of [Defendants] hereunder shall be absolute and unconditional under any and all circumstances, except to the extent provided in this bond.
(Chase Aff. Exh. 4, at ¶ 6.)
Under New York law,
7
the seminal case regarding the enforceability of waivers in guaranties is
Citibank, N.A. v. Plapinger,
The Second Circuit,
in Manufacturers Hanover Trust v. Yanakas,
elaborated on
Plapinger
by noting thаt “in order to be considered sufficiently specific to bar a defense of fraudulent inducement ... a guarantee must contain explicit disclaimers of the particular representations that form the basis of the fraud-in-the-inducement claim.”
In the instant case, the Court is persuaded by the exchanges between the parties and the fact that the Bond is not a preprinted form, in which certain blanks are filled in by hand, that the guarantee here in contention is “the product of negotiations among sophisticated businessmen that produced custom-crafted instruments.”
Frankel v. ICD Holdings
S.A.,
Indeed, not only was the Bond the product of negotiations, but Defendants themselves, in addition to being experienced sureties who presumably issue such bonds frequently, drafted the terms of the Bond. In fact, Defendants’ underwriting manager rejected a draft of the Bond submitted by Nicosia and in response attached a bond form, which it claimed was “the only one we are now using for these transactions.” (Memorandum from Scott Adams to Bob Nicosia, dated October 3, 2001, attached as Exh. B to Certification of Scott Adams In Opposition To Plaintiffs Motion for Summary Judgment, dated November 11, 2002 (“Adams Cert.”).) Thus, considering that Defendants drafted and proposed the language to be used in their surety transactions, it is difficult to imagine that they did not thoroughly examine the implications of contractual language that made their obligations under the Bond “absolute and unconditional.”
Furthermore, the issue of specificity of the disclaimer, viewed as so crucial to the court in
Yanakas,
is less applicable in this situation where the drafter and more sophisticated party in the transaction now claims that the disclaimer is too broad and not specific enough. All of the cases that the
Yanakas
court relied on to build its rule of specificity involved situations where the non-drafting and typically less sophisticated party accepted a contract containing a disclaimer defendant later asserted did not waive its defense of fraud in the inducement.
See, e.g., Manufacturers Hanover Trust Co. v. Restivo,
In sum, the Yanakas court apparently was striving to protect the party who had not originally drafted the disclaimer and who might have less sophistication in such matters from being tied to a broad disclaimer that prevented an affirmative defense in situations which that weaker party had never contemplated. The equitable underpinning of Yanakas is not applicable to rescue Defendants here, as these sophisticated insurance entities, which are in the business of providing bond guarantees of the type in question and earning corresponding fees from their commitments, not only drafted the disclaimer and used it routinely in their business, but negotiated at length the specific terms of the financing with another sophisticated lending institution.
Even if this Court were to require more specificity in the Disclaimer Clause, the Court remains persuaded that subsection (e) of the Disclaimer Clause sufficiently covers a situation like the one at bar, preventing a release from liability under “any other circumstance which might otherwise constitute a legal or equitable discharge or defense of [Defendants], except to the extent provided in this bond.” (Chase Aff. Exh. 4, at ¶ 6.) The exception clause at the end demonstrates that both parties had an opportunity to further clarify and carve out any additional exceptions for liability they wanted to make, but ended up settling for the inclusive language of the disclaimer waiver.
Along with the issue of boilerplate language and specificity, the court in Yanakas found significance in the absence of a blanket disclaimer, and the lack of a waiver of defenses to the validity of the guarantee itself. The Bond at issue here contains two blanket disclaimers of the type found in Plapinger, the first one as described in the preceding paragraph and the second one which states that Defendants “еxpressly waive[] and surrender[] any defense to [their] liability under this bond based upon any of the foregoing acts, omissions, agreements, waivers or matters” listed earlier in the Disclaimer Clause. (Chase Aff. Exh. 4, at ¶ 6.) Moreover, the defense that Defendants have mounted does not depend on the validity of the Bond itself, but rather on the validity of the transaction contained in the Transaction Documents. Thus, whether or not the Bond waives any defenses to its own validity is irrelevant.
Other cases in the aftermath of
Plapinger
and
Yanakas
similarly support Valley’s position.
See Nat’l Westminster Bank PLC,
Defendants rely heavily on
JPMorgan Chase Bank v. Liberty Mutual Ins. Co.,
As part of its findings, the court held that the broad disclaimers in the bonds- — ■ which seemingly made the bonds enforceable regardless of the validity of the Enron contracts — did not preclude a defense of frаudulent inducement because the alleged fraudulent arrangements were negotiated separately from the bonds at issue without the defendants present, making it virtually impossible that the defendants could have had knowledge of the purported fraud. See id. at 27. The court also noted that the Enron contracts themselves contained potentially material misrepresentations because they referred to the sale and delivery of commodities, which never happened. See id. at 28.
However, JPMorgan involved an unusual case of fraud at the extreme, embodied in the deceptive business practices of the now - defunct Enron Corporation. In JPMorgan, the sureties believed that they were insuring a sale of assets, and, more specifically, the delivery by Enron of gas and oil. Instead, Enron had created a scheme whereby it sold gas and oil to Mahonia for a lump sum paid all at оnce (and lent to Mahonia by JPMorgan), then repurchased the gas and oil from another company, which had the same director and shareholders as Mahonia, for a larger sum that was paid over time. This scheme created a simple loan from JPMorgan to Enron, but by disguising it as a sale of assets, Enron could book it as revenue and induce the sureties to issue bonds that guaranteed the loans would be repaid, which the sureties would not have been able to do under New York law.
By contrast, the instant case involved a loan of money from Valley to National to finance insurance premiums. While it is questionable whether the money was ever used to actually purchase the insurance premiums, this transfer of the Funds did occur exactly as described in the Transaction Documents, with money being transferred from Valley to National Program Services, Inc. (“NPS”), which served as National’s insurance broker.
{See
Wiring Instructions, attached as Exh. 5 to Chase Aff.) The issue of how the Funds were actually used was not important to Valley’s due diligence efforts because Valley is not forbidden from lending to a business for general capital expenditures. Rather, its only concern would have been that the loan be paid back. For these same reasons, the structure of the loan was also not important to Valley, and Valley even admits that the arrangement was initially structured as a working capital line of credit to enable National to finance its insurance premiums, but in the process of negotiations was reworked as a premium finance agreement.
{See
Reply Affidavit of Robert J. Chase In Support of Motion for Summary Judgment, dated December 5, 2002
Moreover, as compared with the defendants in JPMorgan, Defendants here have offered little to no evidence to implicate Valley in the alleged fraud or to demonstrate that Valley had any knowledge that the Funds were not to be used for purchasing insurance premiums. Indeed, the JPMorgan defendants, by virtue of demonstrating that Mahonia was involved in Enron’s scheme, were able to clearly link JPMorgan to Mahonia and Enron because JPMorgan was actually suing on behalf of Mahonia. In the instant case, Valley has never represented itself as being affiliated with National in any respect other than to hаve entered into the Transaction Documents with National.
Defendants offer the Loan Agreement, which was issued the day after Defendants issued the Bond, as an example of how Valley was aware of and involved in the purported fraud, alleging that the Loan Agreement changed the structure of the transaction as Defendants understood it by providing that Valley advance the Funds to National as opposed to Twin Oaks directly. In fact, the Loan Agreement actually provided that Valley would advance the Funds to NPS, not National. Regardless, the Court is not persuaded either way that the destination of the Funds raises a material issue because Defendants themselves claim that Twin Oaks was merely a sham company controlled by Nicosia. Thus, whether the Funds went to NPS or to Twin Oaks, the question remains the same: were the proceeds going to be used to purchase insurance premiums or not? Once again, the Court is persuaded that this is an issue about which Defendants should have been concerned, not Valley.
Defendants also attempt to establish Valley’s role in the alleged fraud with a certification filled with hearsay, which offers the representations of an attorney working with UBIC to- investigate the transactions at issue here. (See Certification of Gerald H. Gline (“Gline”), dated November 8, 2002 (“Gline Cert.”).) 8 Gline alleges that Vito Gruppuso (“Gruppuso”), the president and owner of National and NPS
indicated that everyone at Valley, including Robert Chase (Valley’s Loan Officer), knew that the loan proceeds were not going to be used for insurance premium financing and that the loan transaction was really a line of credit loan. Mr. Gruppuso also indicated that Mr. Chase knew that an insurance policy was not being issued.
(Gline Cert., at ¶ 5.)
The Court notes that if it were to consider this evidence as submitted under Rule 56(f), such evidence “need not be presented in a form suitable for admission as evidence at trial, so long as it rises sufficiently above mere speculation” and therefore “reliance on hearsay is not, per se, a dispositive defect under Rule 56(f).”
Simas v. First Citizens’ Federal Credit Union,
Defendants’ Rule 56(f) motion would also likely pursue their speculations regarding Nicosia’s involvement in the alleged scheme. Defendants argue that Nicosia originally asked for a $7,500,000 loan from Valley, but was turned down. Yet, this allegation is derived from the hearsay statements of Scott Adams (“Adams”), President of Avalon Risk Associates, Inc., which served as underwriting manager to the Defendants. In his affidavit to the Court, Adams explains that at the time he talked to Nicosia about issuing the Bond, Adams
did not know [National] had previously applied for a loan from [Valley] in the amount of $7,500,000, and Valley had rejected the application because [National] did not meet [Valley’s] credit standards for such a loan. [Adams] was not aware of [National’s] failed attempt to secure that loan from [Valley] until after the [Bond] had been issued on October 25, 2001.
(See Adams Cert., at ¶ 2-3.)
Adams’ statement is presented with no indication of how he discovered this information, and is even couched in such a way as to avoid a direct statement that Nicosia had applied for the loan on National’s behalf and been rejected because of poor credit. 10 Instead, Adams tells the Court he “did not know” and “was not aware” of National’s (and presumably Nicosia’s) actions, leaving open the possibility that his lack of knowledge and awareness was due to the fact that the loan request never happened. In fact, Chase explicitly denies that Nicosia ever “approached [him], or to the best of [his] knowledge, anyone at Valley seeking a loan on behalf of National.” (See Chase Reply Aff., at ¶ 5.) As with Gline’s affidavit, these factors lend little credibility to Adams’ assertions.
Defendants also attempt to imply that there was an illicit connection between Nicosia and Valley by asserting that Nicosia had been an adviser to Valley’s Board of Directors during the time of the alleged fraudulent transaction.
(See
Adams Cert.,
Under Defendants’ Rule 56(f) motion, Defendants apparently hope to pursue, among other things, the issue of Nicosia’s alleged loan attempt and his possible influence at Valley. However, the Court is not inclined to indulge Defendants’ desire to engage in a lengthy inquiry based on mere speculation that Nicosia was initially rejected when he applied for National to receive a loan or that Nicosia’s position on Valley’s honorary advisory board may have enabled Valley to participate in an alleged fraud.
See Seils v. Rochester School Dist.,
Thus, the Court is persuaded that Valley has met its burden for summary judgment, that Defendants waived all defenses in the Disclaimer Clause оf the Bond they drafted, and that Defendants’ Rule 56(f) motion has failed to demonstrate how the facts sought are reasonably expected to raise a genuine issue of material fact.
III. ORDER
For the reasons described above, it is hereby
ORDERED that the Court’s Order dated March 31, 2003 in this action is amended to incorporate the discussion set forth herein; and it is further
ORDERED that Plaintiff Valley National Bank’s motion for summary judgment is granted.
The Clerk of Court is directed to close this case.
SO ORDERED.
Notes
. Such arrangements, referred to as "insurance premium financing agreements,” allow commercial enterprises to pay their insurance premiums in full at the inception of coverage without having to expend large amounts of cash immediately. As part of the arrangements, the insured enters into a premium finance agreement whereby the insured promises to repay the premium finance company the monies advanced, plus finance charges, in amortized monthly installments.
See In re Schwinn Bicycle Co.,
. Neither party indicates how the Funds were actually spent.
. Defendants allege that they were encouraged to issue the Bond in part because of a second bond, also negotiated by Nicosia and issued by UBIC and Lumbermens Mutual Casualty Company (“Lumbermens”), that Defendants believed backed the Bond they had issued. UBIC and Lumbermens are involved in two cases before this Court that involve similar parties and raise nearly identical issues. See Lumbermens Mutual Casualty Co., et al. v. WestRM — West Markets Ltd., No. 02 Civ. 7253 (S.D.N.Y.) and WestRM — West Markets Ltd. v. Lumbermens Mutual Casualty Co., et al., No. 02 Civ. 7344 (S.D.N.Y.).
. Financial guaranty insurance is considered higher risk because of the potentially large losses involved. See 4 Wolcott B. Dunham, Jr., New York Insurance Law § 54.01 (2002). As a result of these larger risks, the New'York Insurance Law requires financial guaranty insurers to confine their business to financial guaranty insurance and a few related lines of insurance, imposes certain licensing and financial reserve requirements, and excludes such insurance from coverage under the New York Property/Casualty Insurance Security Fund, which protects parties with valid insurance policies from losses due to insurer insolvencies. See N.Y. Ins. Law § 6901-6909 (McKinney 2000).
. The Court notes that it is possible for parties to "choose to have different issues involving their contract governed by the local law of different states.” See Restatement (Second) of Conflict of Laws § 187, cmt. i (1971 & Supp.1989). Thus, in such a situation, more than one state's laws could apply to different aspects of the contract. However, the instant case does not present this type of situation.
. For example, the Bond’s choice of law provision would arguably be less likely to raise an issue for litigation if it had been drafted to read: "The interpretation and application of the terms and conditions of this Bond shall be governed exclusively by the laws of the State of New York.”
. Consistent with its discussion above, the Court proceeds under the assumption that сase law discussing guaranties is equally applicable to bonds issued by sureties.
. The Court notes that the certification does not actually have a title.
. The Court notes that this impression transforms in Defendants’ memorandum of law into a declaration that Gruppuso “has stated" that Robert Chase ("Chase”), a loan officer and the Vice President of Valley, "knew that, the loan proceeds from the Premium Finance Agreement were not going to be used for insurance premium financing and that the loan was actually a line of credit loan.” (See Opposition of Defendants Greenwich Insurance Company and XL Reinsurance America, Inc. to Plaintiff Valley National Bank’s Pre-Discovery Motion for Summary Judgment, dated November 11, 2002 (“Def.Opp.”), at 3.) (emphasis added)
. The Court notes that while Adams’ certification lists National as the loan applicant (see Adams Cert., at 113), Defendants’ memorandum of law states that Nicosia sought the loan. (See Def. Opp., at 4.)