Opinion
Index No.: 655422/2018 Index No.: 655426/2018 Index No.: 655427/2018
04-01-2019
FIRST CENTRAL SAVINGS BANK, Plaintiff, v. EDGAR WEINGARTEN, PIKE TAXI CO. INC., QUICHE TRANSIT INC., and NECTARINE TRANSIT INC., Defendants, FIRST CENTRAL SAVINGS BANK Plaintiff, v. JANET WANDERMAN, LENA CAB CORP., and W. MIT TRANS. CORP., Defendants, FIRST CENTRAL SAVINGS BANK Plaintiff, v. SABRINA BIRNBAUM, W. LOL TRANS. CORP., BRINI TRANSIT INC., FENWAY CAB CORP., and SPECTER CAB CORP., Defendants.
NYSCEF DOC. NO. 15
DECISION AND ORDER
Motion Sequence No.: 001
O. PETER SHERWOOD, J. :
This Decision and Order relates to three separate civil actions brought by plaintiff First Central Savings Bank ("FCSB") in connection with multiple promissory notes and related guarantees made to separate but related defendants. The parties are represented by the same lawyers and the arguments are the same in each case. The affidavits in opposition to the motions are all signed by Victor Birnbaum who in each instance states that he "supervises the management and operations" of the corporate defendants (see Doc. No. 11 ¶ 1 in each case).
These actions are brought pursuant to CPLR 3213 for summary judgment in lieu of complaint to collect on promissory notes executed by the named individual defendant ("Borrower") and named corporate defendants in each case, (collectively as "Defendants"). The notices of motion each allege that Defendants defaulted on the notes by failing to repay the amounts due by the maturity dates of the notes.
I. WEINGARTEN ACTION, Index No. 655422/2018
In the Weingarten Action, plaintiff submitted business records consisting of a copy of the Note signed by or on behalf of defendants in that case dated March 11, 2013 in the amount of $3,875,000 ("Weingarten Note") (Doc. No. 3, Ex. A). The loan was made by non-party Progressive Credit Union ("PCU"). By Master Participation Agreement ("MPA") dated as of May 14, 2013, FCSB acquired on 100% participation interest in the loan from PCU (id., Ex. B). By Assignment Assumption and Transfer Agreement ("AATA") dated as of May 22, 2018, PCU assigned the Note to FCSB (Doc. No. 3, Ex. D). Plaintiffs also submitted an Omnibus Assignment ("OA") of the same date assigning the loan and all loan documents from PCU to FCSB (Doc. No. 3, Ex. F). Plaintiff states and Weingarten in his affidavit does not dispute, that defendants defaulted under the Note (affd of John Cetta, ¶ 19). Weingarten asserts but offers no documentary evidence in support, that FCSB agreed to extend the maturity dates under the Notes and otherwise modify them (Doc. No. 11, ¶ 21).
Weingarten makes the same unsubstantiated assertion in the other two cases (see Doc. No. 11, ¶ 21 in Wanderman and Birnbaum actions).
Plaintiff submits a letter dated June 28, 2018 addressed to Weingarten offering to extend the maturity date of the loan from July 1, 2018 to October 1, 2018. The letter includes a provision whereby Weingarten agreed to waive any defenses in connection with the loan (Doc. No. 3, Ex. G at p. 2). The signature of each defendant appears under the heading "Acknowledged and Agreed" (id., at p. 3).
Weingarten defaulted when the loan matured on October 1, 2018. Plaintiff by its attorneys made demand for payment by letter dated October 3, 2018 (Doc. No. 3, Ex. H) but Weingarten failed to pay (Cetta affd, ¶ 19). Citing the electronic business records of FCSB, Cetta states that the outstanding principal as of the maturity date was $3,875,000. He includes a printout from those records which details the payment history of the loan (Doc. No. 3, Ex. I). The amounts due as of October 31, 2018 was $3,859,676.70 which includes interest from October 1 to 31, 2018 at a per diem rate of $312.15 (Cetta affd, ¶ 23). Defendant's counsel contests the admissibility of these business records but do not dispute the amounts shown.
Defendants claim plaintiff has no clear right to relief because (1) plaintiff is not a party to the Note, (2) there are issues as to whether plaintiff is a valid assignee and holder in due course, and (3) the amount due are not clear from the face of the Note. These defenses must be rejected. The note in this case is a negotiable instrument and may be assigned unless it contains restrictions (see NYUCC § 3-104[2][d]). The Note contains no restrictions and is payable to FCSB as bearer (see NYUCC § 3-111). The documents attached to the Cetta affidavit show that the Note was properly assigned (Doc. No. 3). Although plaintiff is not a party to the Note, the Cetta affidavit shows that according to FCSB's records kept in the ordinary course of its business (which defendants have not refuted), plaintiff is the holder in due course of the Note, having taken the instrument "for value, in good faith and without notice that it is overdue or has been dishonored or of any defense against or claim to it on the part of any person" NYUCC § 3-302 (1).
As noted above, the amount outstanding is not disputed. Accordingly, the case need not be referred to a Special Referee to calculate the amount of the judgment.
II. WANDERMAN ACTION, Index No. 655426/2018
The facts in the Wanderman Action are similar to those in the Weingarten Action. The records submitted in support of the motion are similar and the arguments of the parties are the same.
FCSB has submitted evidence of two loans evidenced by notes dated May 7, 2013 and May 14, 2013 in the amounts of $4,650,000 and $1,550,000 respectively (the "Notes") to defendant Janet Wanderman ("Wanderman Borrower") and corporate defendants Lena Cab Corp. and W. MIT Corp. (Guarantors and together with Wanderman Borrower "Wanderman Defendants") (Doc. No. 3, Ex. A and B). PCU, the original lender, assigned the Notes to FCSB by AATA and OA dated May 22, 2018 (id. at Ex. 12 and 16).
The Cetta affidavit states erroneously that the principal amount of the second loan is $1,555,000 (see Cetta affd ¶ 7).
Pursuant to the terms of letter agreements between FCSB and Wanderman Defendants dated June 29, 2018, the maturity date of each loan was extended to October 1, 2018. The letters contain the same waiver clause described in the Weingarten Action (Doc. No. 3, Ex. K & L). The Wanderman Defendants defaulted under each Note. Demands for payment were sent on or about October 3, 2018 (Doc. No. 3, Ex. M & N) but Wanderman Defendants have failed to pay. Citing the same business records discussed above, FCSB has shown that as of October 31, 2018, the outstanding principal and interest due for Note One and Note Two are $4,661,611.98 and $1,553,870.66 respectively (Cetta affd ¶ 31, Doc. No. 3). Interest continues to accrue at per diem rates of $374.58 and $124.86 respectively. As in the Weingarten Action, defendants' counsel contests the admissibility of these business records but does not dispute the amounts shown.
III. BIRNBAUM ACTION, Index No. 655427/2018
Once again, the facts in this case, the Birnbaum Action, are similar to those in the Weingarten Action. In this case, PCU made four loans to defendant Sabrina Birnbaum ("Birnbaum Borrower" and corporate defendants W. LOL Trans. Corp., Brini Transit, Inc., Fenway Cab Corp. and Specter Cab Corp (collectively the Guarantor and together with Birnbaum Borrower, "Birnbaum Defendants"). The loans are evidenced by promissory notes dated as of May 8, 2013, in the amount of $1,550,000 each (collectively "Birnbaum Notes") (Docs No. 3, Ex. 1 to 4).
The Cetta Affidavit states that the principal amounts in Note Three is $1,555,000 (Cetta affd ¶ 8). The Note shows that amount to be $1,550,000 (id. at Ex.3).
PCU, the original lender, assigned Note One, Note Two and Note Three to FCSB by AATA and OA dated as of May 22, 2018 (id. ¶ ¶ 14 and 18). As of the same date PCU also assigned Note Four to FCSB by AATA and OA but retained a 13% Participation Interest. PCU also assigned to FCSB the right to engage in collection efforts as necessary relating to its interest in Note Four (id. ¶ 19).
The Birnbaum Defendants and FCSB entered into letter agreements dated May 22, 2018 similar to the letter agreement discussed in the Weingarten Action extending the maturity date on all four loans to October 1, 2018 (id. ¶ 23). The letters contain the same waiver clause discussed above. The Birnbaum Defendants defaulted under each of the notes and demand for payment was made in each case (id. ¶ ¶ 27-29). Birnbaum Borrower and Guarantor failed to pay the amounts due and owing (id.).
Based on the same business records discussed above, FCSB has established that as of October 31, 2018, the outstanding principal and interest due for each of Note One, Note Two, Note Three and Note Four is $1,553,870.66 (with interest accruing on each note at a per diem rate of $124,86) (id. ¶ 32). As in the Weingarten Action, the Birnbaum defendants' counsel contests the admissibility of these business records but does not dispute the amounts shown.
IV. CONCLUSION
For the reasons discussed in the Weingarten Action, the motions for summary judgment in lieu of complaint in the Weingarten Action, Wanderman Action and Birnbaum Action shall be granted. Accordingly, it is hereby
ORDERED that the motion for summary judgment in lieu of complaint is GRANTED in each case and plaintiff shall settle judgment separately for each case on ten (10) days' notice to defendants' counsel.
This constitutes the decision and order of the court.
DATED: April 1, 2019
ENTER,
/s/ _________
O. PETER SHERWOOD J.S.C.