National Bank of Kuwait, S.A.K.P., New York Branch v. Parker

Background

National Bank of Kuwait, S.A.K.P., New York Branch (NBK), described in the opinion as a banking corporation organized under Kuwaiti law acting through its New York branch, loaned Galleria 2425 Owner, LLC $51,675,000 to purchase property in Houston, Texas. Galleria signed a promissory note secured by a deed of trust on the property. On the same day, Bradley Parker signed an unconditional personal guaranty to induce NBK to make the loan.

The guaranty required Parker to guarantee repayment of Galleria’s entire debt if, among other events, Galleria voluntarily filed for bankruptcy. It also required Parker to pay NBK’s actual enforcement costs, including reasonable attorney and expert fees. Parker waived all defenses to enforcement except proof that Parker or Galleria had actually paid the guaranteed amount.

Galleria defaulted. It filed for bankruptcy shortly before a scheduled foreclosure sale in July 2023; that proceeding was later dismissed. Galleria filed for bankruptcy again on the day of a December 2023 foreclosure sale, and that bankruptcy proceeding remained pending when the opinion was issued. NBK stated that, as of October 25, 2024, the total amount owed was $38,200,623.26, consisting of unpaid principal and interest after crediting $27,000,000 from the bankruptcy court’s sale of the property.

NBK sued Parker in New York state court. Parker removed the case to federal court, where NBK’s state-law motion for summary judgment in lieu of complaint became a motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure.

Summary-judgment standard

Summary judgment is appropriate when there is no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. Because Parker represented himself, the court applied the same summary-judgment standard but gave him special latitude in responding to NBK’s motion.

Guaranty claim

The guaranty selected New York law. Under that law, NBK had to prove the guaranty’s existence, the underlying debt, and Parker’s failure to perform. The burden then shifted to Parker to present admissible evidence of a genuine issue concerning a valid defense.

The court held that NBK met its initial burden. It was undisputed that Galleria filed for bankruptcy, an event that triggered Parker’s obligation under the guaranty to repay the entire debt. Parker did not dispute that he had failed to repay the debt fully and promptly.

The court found no viable defense in Parker’s arguments. His assertion that the borrower had paid was unsupported by admissible evidence. His argument that he was no longer liable because he had previously separated from Galleria failed because the guaranty did not condition his obligations on continued employment for the company. His argument that an agreement with Galleria’s principal transferred ownership of his interest was supported only by an internal NBK email that did not mention Parker and did not establish the claimed agreement. Parker also did not request additional time for discovery or explain what additional facts would support his opposition.

Settlement-release defense

Parker argued that a settlement agreement between Galleria and NBK released him as a guarantor. The agreement included guarantors within the definition of the released parties, and NBK acknowledged that Parker would have been entitled to a release if the release conditions were satisfied.

The settlement agreement, however, stated that the release would become effective upon NBK’s receipt of either a settlement payment or a purchase-option payment. NBK stated that it received neither payment, and Parker did not dispute that Galleria failed to make them. Applying Texas law, which governed the settlement agreement, the court treated the payment requirement as a condition that had to occur before the release became effective. Because the required payment was not made, the court held that the release never became effective and could not be enforced by Parker in this case.

Request to pause the case and Texas forum argument

Parker also referred to related Texas litigation in which Galleria’s principal claimed that NBK breached the settlement agreement. To the extent Parker asked the court to pause this case until that litigation ended, Judge Arun Subramanian denied the request. The court considered the factors governing a request to pause a case and found the request unwarranted, including because Parker had not shown a strong likelihood of success and multiple Texas courts had rejected the related breach claim.

Parker further argued that the dispute belonged in Texas state court because the settlement agreement designated a Harris County, Houston, Texas court as the exclusive forum for disputes arising from that agreement. The court rejected the argument because NBK’s claim against Parker arose from the guaranty, not from the settlement agreement.

Disposition

The court held that no genuine dispute concerned facts material to NBK’s claim for payment under the guaranty. NBK’s motion for summary judgment was GRANTED. The court directed the parties to jointly propose by June 20, 2025, a date for a hearing to determine the total amount due under the relevant agreements, or to notify the court if they resolved that issue without further court involvement. The clerk was directed to terminate Docket Entry 24.