513 West 26th Realty LLC v. George Billis Galleries, Inc. (Guaranty Law Contracts Clause Ruling)

New York's Appellate Division, First Department held on October 20, 2026 that New York City's pandemic-era 'guaranty law' (Administrative Code § 22-1005), which barred enforcement of personal guaranties on certain commercial leases for a 16-month COVID-19 period, does not violate the Contracts Clause of the U.S. Constitution. The ruling reverses a Supreme Court, New York County decision that had declared the law unconstitutional and reinstated landlord 513 West 26th Realty LLC's claims against gallery guarantor George Billis, reviving the guaranty-law defense for the guarantor instead.

Why it matters

The decision is a significant data point in a yearslong, unresolved conflict over the guaranty law's constitutionality: a federal district court had found the law unconstitutional in Melendez v. City of New York, only for the Second Circuit to vacate that ruling in Bochner v. City of New York without reaching the merits. The First Department's holding now controls guaranty disputes litigated in New York's state courts -- where most such cases are filed -- meaning landlords pursuing legacy claims against pre-2020 commercial lease guarantors for pandemic-period defaults face a reaffirmed statutory shield, while the question remains open if a similar claim is litigated in federal court.

Case timeline · 4 entries Latest: October 20, 2026 — Appellate Division, First Department reverses, holding the guaranty law does not violate the Contracts Clause

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