Opinion
October 16, 1997
Appeal from the Supreme Court, Schenectady County (Lynch, J.).
From 1987 through 1994 defendant Cornell Development Corporation purchased lumber from plaintiff in conjunction with a residential real estate project. In 1989, Cornell Development's accounts payable to plaintiff began to increase and by 1992 the outstanding debt was quite substantial. Between 1992 and June 1993, efforts were made between the parties to resolve the issue of payment on the outstanding account, to no avail. During this time period, Cornell Development continued to purchase lumber from plaintiff.
By letter dated June 2, 1993, defendant Peter J. Cornell, president of Cornell Development, proposed that promissory notes be executed to pay the outstanding debt. Thereafter, on June 16, 1993, two promissory notes in the amount of $305,457.56 and $20,000, respectively, were signed by Cornell personally and as president of Cornell Development. The promissory notes were "[f]or value received" and were to be paid in full on or before June 15, 1994. Each contains a clause providing that the note cannot be changed or terminated orally. After defendants failed to pay the amounts due by June 15, 1994, plaintiff moved, pursuant to CPLR 3213, for summary judgment in lieu of complaint. Defendants opposed the motion claiming as affirmative defenses that consideration for the notes was lacking, that the notes were signed as a result of fraudulent misrepresentations made by plaintiff's officers and agents and that Cornell was forced to sign the notes under economic duress. In addition to these affirmative defenses, several counterclaims were interposed for breach of various warranties and negligence in conjunction with the lumber sold. Supreme Court granted plaintiff's motion, prompting this appeal.
As instruments for the payment of money only, the promissory notes are entitled to the expedited procedure outlined in CPLR 3213 ( see, R-H-D Constr. Co. v. Miller, 222 A.D.2d 802, 803; Lavelle v. Urbach, Kahn Werlin, 198 A.D.2d 751). The prima facie case proven by plaintiff — demonstration of the execution of the notes and defendants' default in payment ( see, Seaman-Andwall Corp. v Wright Mach. Corp., 31 A.D.2d 136, affd 29 N.Y.2d 617) — can be defeated only by proof demonstrating the existence of a triable issue of fact with respect to a bona fide defense ( see, Lavelle v Urbach, Kahn Werlin, supra). Defendants have failed in this regard.
It is beyond contradiction that the promissory notes relate to defendants' antecedent obligations to plaintiff for lumber purchases. Accordingly, the failure of consideration defense cannot be considered a "bona fide" defense barring the CPLR 3213 motion ( see, McCarthy v. Sessions, 170 A.D.2d 25; Crumbliss v Swerdlow, 158 A.D.2d 502, lv denied 75 N.Y.2d 710; Perlstein v Kullberg Amato Picacone/ABP, 158 A.D.2d 251, 252; Tabor v. Logan, 114 A.D.2d 894; see also, UCC 3-303 [b]; 3-408).
Cornell claims that he was fraudulently induced into executing the notes based upon oral representations by plaintiff's officers and agents that the one-year term would not be enforced. With respect to this affirmative defense, we note several points First, evidence in support of this claim is limited to Cornell's own general and unsubstantiated allegations ( cf., Amirana v Howland, 202 A.D.2d 783, 785). Moreover, the execution of promissory notes was proposed by Cornell, an experienced business person, and he was responsible for drafting them ( see, Chimart Assocs. v. Paul, 66 N.Y.2d 570, 571; Keeseville Natl. Bank v. Gulati, 194 A.D.2d 970, 971, lv denied 82 N.Y.2d 663). Finally, and most importantly, Cornell's claim in this regard is inconsistent with the unambiguous terms of the promissory notes themselves ( see, Keeseville Natl. Bank v. Gulati, supra) and therefore is barred by the parol evidence rule ( see, Falco v Thorne, 225 A.D.2d 582; DH Cattle Holdings Co. v. Reno, 196 A.D.2d 670, 673; National Bank v. ESI Group, 167 A.D.2d 453, 454; Benderson Dev. Co. v. Hallaway Props., 115 A.D.2d 339, affd 67 N.Y.2d 963).
Nor are defendants' vague and conclusory assertions of economic duress sufficient to defeat the motion. The alleged threat by plaintiff's officers and agents that plaintiff would sue defendants for the outstanding debt if Cornell did not sign the notes does not constitute economic duress and is therefore not a bona fide defense to the claim ( cf., Sosnoff v. Carter, 165 A.D.2d 486). The existence of economic duress is demonstrated by proof that one party to a contract has threatened to breach the contract by withholding performance unless the other party agrees to some further demand ( see, 805 Third Ave. Co. v. M.W. Realty Assocs., 58 N.Y.2d 447; Austin Instrument v. Loral Corp., 29 N.Y.2d 124, 130). Indeed, defendants must establish that they were compelled to agree to the terms of the promissory notes because of a wrongful threat by plaintiff which precluded the exercise of their free will ( see, id.). Just as a party cannot be guilty of economic duress for refusing to do that which he or she is not legally required to do ( see, 805 Third Ave. Co. v. M.W. Realty Assocs., supra; MLI Indus. v. New York State Urban Dev. Corp., 205 A.D.2d 998), the threatened exercise of a legal right does not amount to economic duress ( see, Niagara Frontier Transp. Auth. v Patterson-Stevens, 237 A.D.2d 965; Wall St. Clearing Co. v Ainbinder, 212 A.D.2d 488; Marine Midland Bank v. Hallman's Budget Rent-A-Car, 204 A.D.2d 1007; Marine Midland Bank v. Mitchell, 100 A.D.2d 733; Marine Midland Bank v. Stukey, 75 A.D.2d 713, affd 55 N.Y.2d 633).
Finally, plaintiff's claim for the money due under the promissory notes and defendants' counterclaims relating to the purchased lumber are not so inseparable that the counterclaims should preclude summary judgment to plaintiff. With respect to the counterclaims interposed, "[g]enerally, a counterclaim that does not itself meet the criteria of CPLR 3213 should not be allowed to obstruct a claim brought thereunder" ( Vinciguerra v Northside Partnership, 188 A.D.2d 861, 862).
Here, the promissory notes were executed by defendants with full knowledge of the alleged defective lumber. Moreover, defendants' failure to make the agreed-upon payments was not based upon alleged defects in the lumber; rather, Cornell Development's financial problems and lack of capital prevented the timely payment of the debts. Thus, although the counterclaims are tangentially related to plaintiff's claim in that they arise out of lumber purchases made by defendants over the years, they do not represent a defense to plaintiff's claim and are not sufficiently tied to defendants' obligations under the notes to constitute a valid basis for denying plaintiff's motion. Said differently, we cannot conclude that the counterclaims regarding the lumber purchases and the execution of the promissory notes themselves are inseparably intertwined ( see, Grasso v. Shutts Agency, 132 A.D.2d 768, appeal dismissed 70 N.Y.2d 797; cf., A + Assocs. v. Naughter, 236 A.D.2d 655; Eurotech Dev. v. Adirondack Pennysaver, 224 A.D.2d 738; Inpar Bldg. Corp. v. Veoukas, 143 A.D.2d 810; Chisholm Ryder Co. v. Munro Games, 58 A.D.2d 972).
Crew III, J.P., White, Yesawich Jr. and Spain, JJ., concur. Ordered that the judgment is affirmed, with costs.