PC Riverview, LLC v. Cao

In 2003, a corporation was assigned a lease that permitted a restaurant to operate. Xiao-Yan Cao, the corporation’s president, personally guaranteed the corporation’s performance. In 2006, the lease was assigned to Hong Lin. As part of the assignment, the lease term was extended until 2013. Both Cao and Lin signed the lease extension as guarantors. In 2010, Lin stopped making timely rent payments. Lin and the property’s landlord agreed to a repayment schedule to permit Lin to catch up. In 2013, Lin defaulted on rent payments. The landlord sued both Lin and Cao for a sum representing the last month’s rent and a balance from the month prior. The district court concluded that the 2010 repayment materially modified the contract and discharged Cao’s guaranty. The court of appeals reversed, concluding that extending the period within which a tenant could pay its rent did not materially modify the contract. The Supreme Court affirmed, holding that the court of appeals correctly determined that the 2010 repayment agreement did not materially modify the contract and that Cao was not relieved of her responsibilities as guarantor. View "PC Riverview, LLC v. Cao" on Justia Law