Opinion
Nos. 16244 16245 M-1666 Index No. 650728/20 Case Nos. 2022-1131 2022-00108
06-14-2022
ATX Debt Fund 2, LLC, Plaintiff-Respondent, v. Natin Paul Also Known as Nate Paul, Defendant-Appellant.
MCShapiro Law Group PC, Great Neck (Mitchell C. Shapiro of counsel), for appellant. Gibson, Dunn & Crutcher LLP, New York (Mitchell A. Karlan of counsel), for respondent.
MCShapiro Law Group PC, Great Neck (Mitchell C. Shapiro of counsel), for appellant.
Gibson, Dunn & Crutcher LLP, New York (Mitchell A. Karlan of counsel), for respondent.
Before: Kapnick, J.P., Friedman, Moulton, Shulman, Pitt, JJ.
Order, Supreme Court, New York County (Andrew Borrok, J.), entered March 7, 2022, which denied defendant guarantor's motion to strike plaintiff lender's note of issue and certificate of readiness, granted plaintiff's motion to dismiss the affirmative defenses, denied defendant's cross motion to file an amended answer, and granted plaintiff's motion for summary judgment on its claims, unanimously modified, on the law and the facts, to grant defendant's motions to strike the note of issue and to amend the answer to the extent of asserting the fraud-based affirmative defenses and counterclaim, and deny plaintiff's motion for summary judgment, and otherwise affirmed. Order, same court and Justice, entered on or about October 4, 2021, which denied defendant's motions to compel discovery, for a confidentiality order, to commission the service of third-party subpoenas, and to extend the discovery deadline, unanimously reversed, on the facts, with costs, the order vacated, and the matter remanded for the setting of a discovery schedule concerning the affirmative defenses and counterclaim and for further consideration of defendant's discovery motions.
While defendant waived his affirmative defenses pursuant to the broad waiver provisions in the guaranties, he is entitled to serve the amended answer to the extent it asserts affirmative defenses based on fraudulent conduct that occurred after the execution of the guaranties. The guaranties include a waiver carveout provision that negates the broad waiver with respect to postclosing claims or defenses that sound in fraud (cf. North Fork Bank v Computerized Quality Separation Corp., 62 A.D.3d 973, 974 [2d Dept 2009]). The allegations in the amended answer are sufficient to state the fraud-based affirmative defenses as well as the counterclaim for a declaration that this action is fraudulent, within the scope of the waiver carveout.
M-1666 - ATX Debt Fund 2, LLC v Natin Paul
Motion to dismiss the appeal in Case No. 2022-00108, denied.