Opinion
No. 38023/2011.
2012-08-22
GREAT PLAINS CAPITAL CORPORATION, Plaintiff, v. Sigal S. LEVI, Defendant.
Stewart Wolf, Esq., Foster & Wolkind, P.C., New York, attorneys for plaintiff. Michael L. Hurwitz, Esq., The Hurwitz Law Firm, New York, attorneys for defendant.
Stewart Wolf, Esq., Foster & Wolkind, P.C., New York, attorneys for plaintiff. Michael L. Hurwitz, Esq., The Hurwitz Law Firm, New York, attorneys for defendant.
HARRIET L. THOMPSON, J.
PROCEDURAL AND FACTUAL HISTORY
This civil court action was commenced by the Plaintiff, GREAT PLAINS CAPITAL CORPORATION (hereinafter referred to as “GREAT PLAINS”), to recover sums alleged due and owing by the Defendant, SIGAL S. LEVI (hereinafter referred to as “LEVI”), based upon a purported breach of contract and a purported breach of the personal guarantee of the underlying contract.
GREAT PLAINS commenced this action by service of a summons and complaint, dated May 13, 2011, by personal service at the principal place of business of the Defendant. The Defendant appeared by counsel and interposed a verified answer which alleged, inter alia, improper service of process, the failure to name and serve a necessary party, the lack of standing, wrongful conduct, failure to mitigate damages, accord and satisfaction, waiver, setoff and recoupment, unjust enrichment, estoppel, laches, and violations of public interest. The answer was not verified by the party but was verified by the attorney pursuant to CPLR § 741.The Plaintiff, by Notice of Motion, returnable on August 24, 2011, moved the court for an Order pursuant to CPLR § 3211(b) seeking the dismissal of all the aforementioned affirmative defenses and for summary judgment in accordance with CPLR § 3212. The attorneys, pursuant to a stipulation, adjourned the motion from August 24, 2011 to September 23, 2011 for motion practice. On the adjourned date of September 23, 2011, the Plaintiff's motion was denied nonappearance movant.
Subsequently, the Plaintiff, by Order to Show Cause, returnable on October 20, 2011, moved the court to restore the motion to the calendar based on law office failure. On October 20, 2011, the Court vacated the denial of the motion, restored the motion to the calendar and adjourned the motion to November 17, 2011 and then, to December 8, 2011.On December 8, 2011, the court record shows that the motion was submitted to one of the judges of this court, and subsequently referred back to Special Term Part 1 based on judicial recusal. On the adjourned date of December 8, 2011, after oral argument, the motion was submitted to the undersigned judge for a final disposition.
In summary, the Plaintiff argues that the defenses set forth in the attorney's verified answer failed to comport with CPLR § 3013 to the extent that the defenses as alleged lack sufficient peculiarity and the material elements of the respective defenses. It should be noted that the Plaintiff does not expressly rely on this particular provision of the CPLR but instead relies on CPLR § 3211(b). It is the opinion of this court that CPLR § 3013 is applicable; CPLR § 3211(b) is the procedural mechanism to seek dismissal of the defenses. As significant, the Plaintiff asserts that the Defendant executed a line of credit and concomitantly a personal guarantee with a maximum allowable principal sum of $18,000.00, and defaulted in monthly payments. The Plaintiff asserts that notwithstanding the fact that the Defendant borrowed monies under the line of credit from Fleet Bank between February 18, 2005 and May 10, 2011 and made full restitution to the bank, subsequently, on May 11, 2010, the Defendant borrowed the maximum principal sum of $18,000.00 and failed to repay any portion of that sum. Moreover, on November 9, 2010, Bank of America, for good and valuable consideration, sold, assigned and transferred all rights, title and interests in the line of credit and the personal guarantee to GREAT PLAINS and produces documentary evidence to substantiate this fact.
The Plaintiff further argues that despite the fact that GREAT PLAINS did not submit complete copies of the line of credit and the guarantee because portions of said instrument were lost, New York Courts authorized GREAT PLAINS to maintain this action. GREAT PLAINS contends that notwithstanding the fact that the negotiable instrument is lost, stolen or destroyed, it does not defeat the rights of the holder or discharge the holder's interest. The Plaintiff relies on Section 3–804 of the Uniform Commercial Code and Section 390(a) of the General Business Law which allows a holder to prove the contents of a lost instrument by parole evidence or other secondary evidence. According to Plaintiff's claims, it has sustained its prima facie case for entitlement to judgment as a matter of law.
Furthermore, the Plaintiff contends that the twelve (12) affirmative defenses raised in the answer do not expressly articulate viable defenses to the complaint. In particular, the Plaintiff states that the defense that “the complaint does not state a valid cause of action” cannot be interposed in an answer and asserts that case authority supports its proposition that the assertion of such a defense is more appropriately raised in a motion to dismiss.
The Defendant, in opposition, avers that the loan was a business line of credit and the bank intentionally put the line of credit in the Defendant's individual name. The Defendant more importantly asserts that the Plaintiff is not the original loan maker and thus, has no standing. The Defendant adamantly contends that the loan and the entire transaction is “nonsensical” and claims that the line of credit and the personal guarantee are contracts of adhesion, are unconscionable and unenforceable. The Defendant further claims that the bank asserted undue influence against the Defendant in the execution of the loan documents and asserts that the predecessor maker of the note and guarantee had superior and unfair bargaining power in this commercial transaction. The Defendant also avers that the original lender “induced Defendant to mistakenly obligate herself for the payment of this debt.” Lastly, the Defendant asserts that the Plaintiff has failed to comply with discovery and inspection demands to the detriment of the Defendant.
The Plaintiff, in reply and in further support of the motion, answers that the Defendant has utterly failed to produce evidentiary proof in admissible form to defeat the motion for summary judgment and argues that the supporting affirmation from the attorney without personal knowledge is inadmissible evidence as a matter of law. The Plaintiff directs the court's attention to the supporting affidavit of the Defendant which the Plaintiff argues is an admission of the validity of the line of credit and guarantee. The Plaintiff asserts that the Defendant did not deny that she borrowed the monies and did not deny that she breached the line of credit and guarantee by failing to make payments.
The Plaintiff further asserts that the unsubstantiated claims by the Defendant that she is not personally liable is belied by the fact that the Defendant executed the loan documents in her individual name and the loan was based on her personal information and not her business. The Plaintiff produced an allonge that shows that the Defendant dutifully made payments on the line of credit for a period in excess of three (3) years, then borrowed an additional sum of $18,000.00, and failed to make any further payments.
The Plaintiff rebuts any claims that the line of credit or guarantee were unconscionable or were contracts of adhesion but are instruments that are standard and customary in the banking industry. The Plaintiff even argues that the contracts of adhesions, as interpreted by the courts, are only applicable when a party obtains funding for personal reasons as opposed to those contracts that are entered into for business purposes.
LEGAL DISCUSSION
It seems prudent to begin with the request by Plaintiff to dismiss the affirmative defenses in the answer. As to the first affirmative defense, the Defendant states that the complaint fails to state a cause of action. This court is in accord with the Plaintiff's claims that such conclusory and bald assertions are inadequate to dismiss the underlying complaint. More importantly, the failure to state a cause of action should not be raised in an answer but rather should be raised in a motion to dismiss pursuant to CPLR § 3211(a)(7) (Charnis v. Shohet, 195 Misc.2d 188, 757 N.Y.S.2d 671 [App. Term, 2nd Dept., 2002] ). Accordingly, the first affirmative defense lacks merit and therefore, is dismissed.
The second affirmative defense alleges improper service of the summons and complaint. The Plaintiff bears the burden of proving by a preponderance of the evidence that the jurisdiction over the Defendant was obtained by proper service of process. Banker's Trust Company of California, N.A. v. Tsaukas, 303 A.D.2d 343, 756 N.Y.S.2d 92 (2nd Dept., 2003). Generally speaking, any objection to the personal jurisdiction of the Court must be made at the time when the litigant first appears in the action or proceeding, or before the time to amend the answer has expired, or it is deemed waived. Iacovangelo v. Shepherd, 5 NY3d 184, 800 N.Y.S.2d 116 (2005). See CPLR § 3211(e).
It is well settled law in the State of New York that affidavits of service attesting to service of process constitute prima facie evidence of proper service unless rebutted by a sworn statement of someone with personal knowledge. Bidetti v. Salter, 108 A.D.2d 890, 485 N.Y.S.2d 772 (2nd Dept.1985); Mitchel1 v. Mendez, 107A.D.2d 737, 484 N.Y.S.2d 98 (2nd Dept.1985). Where, however, there is a sufficient sworn denial of receipt by the party, the affidavit is rebutted and the Plaintiff must establish jurisdiction by a preponderance of the evidence at a hearing. Bank of America National Trust and Savings Associations v. Herrick, 233 A.D.2d 351, 650 N.Y.S.2d 754 (2nd Dept.1996); Banker's Trust v. Tsaukas, supra.
In this state, when a Plaintiff files an affidavit of service that alleges proper service of process, the Defendant must plead a sufficiently detailed and specific statement to be entitled to a hearing on service of process. Bear v. Lipson, 194 A.D.2d 787, 599 N.Y.S.2d 618 (2nd Dept.1993); Carlino v. Cook, 126 A.D.2d 597, 511 N.Y.S.2d 38 (2nd Dept.1987); Skyline Agency, Inc. v. Ambros, Coppotelli, Inc. 117 A.D.2d 135, 502 N.Y.S.2d 479 (2nd Dept.1986); Bideppi v. Salter, 108 A.D.2d 890, 485 N.Y.S.2d 772 (2nd Dept.1985); Colon v. Beekman Downtown Hospital, 111 A.D.2d 841, 490 N.Y . S.2d 581 (2nd Dept.1985). The defense of a lack of personal jurisdiction is waived if it has not been asserted with sufficient specificity in the answer or in a motion to dismiss. (Hypo Bank Claims Group, Inc. v. Am. Stop Transfer & Trust Co., 2004 N.Y.Slip Op. 50974(u) [Sup.Ct., N.Y. County, 2004]; See also Carrenard v. Mass, 11 AD3d 501 [2nd Dept., 2004] ).
It has been firmly established that the mere claim of improper service of process without more is insufficient to rebut an affidavit of service in proper form. Nussbaum Resources I v. Gillmartin, 195 Misc.2d 145, 756 N.Y.S2d 408 (N.Y. Civ.Ct., 2003)citing Dr. De Zeto v. Bruhn, 57 N.Y.S.2d 875, 501 N.Y.S .2d 801,Hindes v. 2461 Realty, 169 A.D.2d 629, 564 N.Y.S.2d 763 (1st Dept., 1991); Frankel v. Schilling, 149 A.D.2d 657, 540 N.Y.S.2d 469 (2nd Dept.,1989). See also the more recent cases of First Ave. Owners Corp v. Riverwalk Garage Corp., 6 Misc.3d 439, 442, 784 N.Y.S2d 844 (Civ Ct, N.Y. County 2004) and Am. Sav. & Loan Assn. V. Twin Eagles Bruce, 208 A.D.2d 446, 617 N.Y.S2d 717 (1st Dept., 1994) finding, respectively, that a mere denial of receipt of service is insufficient to rebut the presumption of proper service created by a properly executed affidavit of service, and a conclusory denial not accompanied by further probative facts does not require a traverse hearing.
Even in the recent matter of Kokot v. Green, NYLJ, 3/2/07, pg. 22, col.1, Judge Wendt, in relying on long standing appellate authority to strike a defense of the lack of personal jurisdiction, citing Clarkson Arms v. Arabatiz, supra; and 335 West 38th Street Cooper Corp. v. Anchev, NYLJ, 12/17/97, p. 21, col. 25 HCR 353A (App. Term 1st Dept., 1996,) to support his findings that the defense stated by the Respondent that merely reiterated the language of the statute, which stated that service was not effectuated in accordance with the law, was improperly plead and thus, was sufficient grounds to dismiss the claim.
In reviewing the above cases, as well as the more recent cases, the general rule of law provides that a conclusory denial, not accompanied by “further probative facts,” does not require a traverse hearing. ( See Shimko v. Chao, 28 Misc.3d 1212, 2010 WL 2891191 (N.Y. City Civ.Ct., 2010) finding that the Respondent's claim that she never received the predicate notice timely was unpersuasive to the court and did not establish that the Petitioner failed to comply with Section 735 of the RPAPL; First Avenue Owner's Corp. v. Riverwalk Garage Corp., supra, finding, inter alia, that the Respondent's conclusory allegation that it was not served with the Rent Demand is insufficient to rebut the presumption of proper service; Townhouse St., LLC v. New Fellowship Full Gospel Baptist Church, Inc., 29 AD3d 893, 815 N.Y.S.2d 281 (App.Div, 2nd Dept., 2006) finding that the Appellant's unsubstantiated denial of receipt of service of process did not amount to a reasonable excuse for its default and was insufficient to rebut the presumption of proper service created by an affidavit of service; Anderson v. G.H.I. Auto & Serv., Inc., 45 AD3d 512, 845 N.Y.S.2d 129 (App.Div., 2nd Dept., 2007) declining to vacate a default judgment on the grounds that the Defendant's mere denial of receipt of the summons and complaint failed to rebut the presumption of proper service created by the affidavit of service. CPLR 5015[a][4]; General Motors Acceptance Corp. v. Grade A Auto Body, Inc., 21 AD3d 447, 779 N.Y.S2d 748 (2nd Dept.2005).
Although a majority of the cases have deemed service proper, some decisions support a finding for the Defendant and/or the Respondent when the allegation of improper service was sufficiently described to rebut the affidavit of service and was properly articulated in the supporting legal papers. ( See Almeida v. Hernandez, 9 Misc.3d 986, 804 N.Y.S.2d 648 (Sup.Ct., Kings County, 2005) granting a Petition for an Article 78 proceeding in a New York City Housing Authority case where the court determined that the presumption that the Section 8 tenant received the Notice of Default sent by the City Housing Authority in connection with termination of her rent subsidy, so as to commence the four (4) month limitation period for bringing an Article 78 challenging determination, was rebutted by the fact that the first copy sent by certified mail was not delivered to the tenant and by the tenant's denial of the receipt of the second Notice sent by regular mail, together with the absence of documentary evidence or sworn statement by someone with personal knowledge that the second Notice had been mailed to the tenant by regular mail. The court ordered New York City Housing Authority to restore the subsidy based on the analysis that “under the William Consent Judgment it is the receipt, not the mailing, that starts the Statute of Limitations period running. The presumption of receipt has been adequately rebutted by the facts that the certified mail was not delivered and that the Petitioner denies receipt of a notice by regular mail together with the absence of any documentary evidence or sworn statement by someone with personal knowledge that the Notice had been mailed to the Petitioner by regular mail.”
See also the matter of 650 Fifth Ave. Co. v. Travers Jewelers Corp., 29 Misc.3d 1215(A), 918 N.Y.S 2d 400, 2010 WL 4187936 (N.Y. City Civ.Ct., 2010) in which the court held that a traverse hearing was warranted where the rebutting affidavit specifically contradicted claims contained in the Process Server's affidavit. The Court found that “[h]ere, the Process Server claims he gave the papers to Sam Kassin on July 26, 2010, and Sam did not offer a conclusory denial; Mr. Kassin affirmatively states that no one gave him papers on that day-and that he is six (6) inches taller than described by the Process Server. This is a classic situation which requires a court to conduct a traverse hearing; both stories cannot be true. Where a Respondent rebuts an affidavit of service with a sworn denial of service, a Petitioner must establish jurisdiction by a preponderance of the evidence at a traverse hearing. (Backman v.. Kleidman, 27 Misc.3d 1215(A), 910 N.Y.S2d 760, 2010 WL 1712245 [Civ.Ct., N.Y. County 2010], citing Skyline Agency v. Ambrose Coppotelli, 117 A.D.2d 135, 502 N.Y.S.2d 479 [2nd Dept.1986] )”.
CPLR § 3211(e) provides that within sixty (60) days of service of the Notice of Appearance and answer, the Defendant must move to dismiss on the grounds of improper service of process or the defense is deemed waived unless the court extends the time on the grounds of undue hardship. (Teachers Federal Credit Union v. Jones, 2009 N.Y. Slip Op. 50967(u), 23 Misc.3d 134(A), 886 N.Y.S2d 69 [App. Term, 2nd Dept., 2009] Aretakis v. Tarantino, 300 A.D.2d 160, 751 N.Y.S.2d 481 [1st Dept., 2002]; Worldcom v. Dialing Loving Care, 269 A.D.2d 159, 702 N.Y.S.2d 76 [1st Dept., 2000]; Zucco v. Antin, 257 A.D.2d 421, 422, 682 N.Y.S.2d 354 [1st Dept., 1999] ). See also Riverton Assoc. v. Harvey, 1 Misc.3d 822, 772 N.Y.S.2d 199 (Civ.Ct ., 2003) in which the court granted the Petitioner's motion to dismiss the Respondent's first affirmative defense of a lack of personal jurisdiction on the grounds that the Respondent failed to move to dismiss within sixty (60) days of service pursuant to CPLR § 3211(e).
Lastly, it has been a long-standing rule of law in this state that the interposition of the defense of improper service of process in a verified Attorney's answer is legally insufficient to require a traverse hearing as a matter of law. The supporting rationale is that the affirmation of an attorney without personal knowledge has no probative value, a nullity, and cannot support any motion for dispositive relief. Zuckerman v. City of New York, 49 N.Y.2d 557, 404 N.E.2d 718 (1980). It has been more succinctly held that an answer by an attorney without personal knowledge is worthless. Hasbrouck v. City of Gloverville, 102 A.D.2d 905, 477 N.Y.S2d 486 (3rd Dept., 1984). Thus, where a Respondent's attorney served and filed her answer without a sworn denial of service by the Respondent, the defense was deemed waived pursuant to CPLR § 3211(e).
Turning our attention to the case at bar, the second affirmative defense mirrors the statutory language of CPLR § 3211(a)(8). The Defendant's answer in paragraph 7 states that “the court lacks personal jurisdiction over the Defendant.” This vague and conclusory denial of service of process is insufficient to rebut the Process Server's affidavit which asserts that the Defendant was personally served with the summons and complaint. The affidavit describes service on a female, white skin, blonde hair, age 47, approximately 5'6 and weighing 127 lbs at the Defendant's place of business. The allegations in the answer and in the opposition papers do not address the allegations of personal service as described in the affidavit of service. The Notice of Appearance, verified answer and the opposition papers do not rebut or even attempt to contradict the affidavit of service. The Defendant does not deny personal service; does not deny substituted service; does not deny affixation of the pleadings; and does not even deny receipt of the summons and complaint by regular mail (See CPLR § 308(1),(2) & (3); 650 Fifth Ave. Co. v. Travers Jewelers Corp., 29 Misc.3d 1215(A), 918 N.Y.S2d 400, 2010 WL 4187936 [NY Civ.Ct., 2010] ).
As significant, on the date of oral argument before this court, the Defendant was present in the courtroom. This court had ample opportunity to observe the physical appearance of the Defendant and can, without reservation, determine that the description in the affidavit of service adequately describes the Defendant in sufficient detail for this Court to conclude that she was personally served with the summons and complaint contrary to her claims.
The answer in this action is verified by the attorney for the Defendant and not by the Defendant, and therefore, does not rebut the presumption of proper service and has no probative value. Zuckerman v. City of New York, supra, Hasbrouck v. City of Gloverville, supra.
Suffice to say, the Defendant also failed to move to dismiss this underlying action based on improper service of process in accordance with § CPLR 3211(e) and proffers no good cause in the responsive papers to the motion for the failure to move to dismiss.
For the reasons stated above, this court finds that the defense of improper service of process lacks merit and is dismissed as a matter of fact and law. Turning our attention to the other affirmative defenses in the answer, CPLR § 3013 provides that “statements in a pleading shall be sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action or defense.” The four corners of the pleadings must contain the factual basis for each of the legal elements of the claim or defense.
A sparse complaint or answer has little probative value. From the view of the bench, the issue can be articulated as follows: If the facts fit a legal claim or defense, then the pleadings are sufficient and the court can draw all inferences in favor of the pleader. However, if no facts are particularized in the pleading, the court can draw no inferences in favor of the pleader.
In this case, the vague, conclusory and general statements contained in the answer, which are also unsupported by any factual allegations in the responsive affirmation and affidavit, fall well below the standards of required specificity as mandated by CPLR § 3013. ( See Airweld Inc. v. Medical Gases, Inc., 13 Misc.3d 1211(a), 824 N.Y.S.2d 752 [Sup.Ct., Nassau County, 2006]; Johnson v. Goord, 290 A.D.2d 844, 736 N.Y.S.2d 284 [App. Div., 3rd Dept., 2002]; see generally Matter of Ross v. Goord, 262 A.D.2d 883, 693 N.Y.Supp.2d 649,appeal dismissed;93 N.Y.2d, 1039, 697 N.Y.S.2d 567, 719 N.E.2d 928).See also FRG Ninth Ave., LLC v. Alrubay I, 19 Misc.3d 1130(A), 866 N.Y.S.2d 92 (Civ.Ct., N.Y. County, 2008) in which the court denied the motion for summary judgment and granted the motion to dismiss the affirmative defenses in an answer based upon claims of the lack of specificity and the inapplicability of various defenses to the recovery of possession in a commercial lease.
The affirmative defenses in this answer do not state any facts whatsoever and are devoid of any of the material elements of the named defenses. As equally compelling, the supporting affidavit of the Defendant does not state any of the factual elements necessary to support any of the affirmative defenses in the answer. Many of the alleged affirmative defenses are completely inapplicable to this case. For example, the defenses of wrongful conduct, mitigation of damages, accord and satisfaction, waiver, unjust enrichment, estoppel and laches are inapplicable to this case. Although the affirmative defense of setoff and recoupment are legally cognizable claims in this action, they are not defenses in this type of action.
Now, the issue of standing requires some discussion. The complaint states sufficient facts to state a valid cause of action for breach of contract and damages. It is within the discretion of this court, according to well settle case authority, to afford the complaint a liberal construction; accept as true the allegations contained therein; accord the Plaintiff the benefit of every favorable inference and determine only whether the facts alleged fit within any cognizable legal bearing (1455 Washington Ave. Assoc. v.. Rose & Kiernan, 260 A.D.2d 770, 687 N.Y.S.2d 791 [3rd Dept.,1999]; Murray v. Breski, 277 A.D.2d 867, 716 N.Y.S.2d 810 [3rd Dept., 2000] ).
In examining the Complaint, the authorization agreement, the Small Business Credit Express Agreement and Small Business Service Credit Offering RDYBK on June 15, 2004 in addition to the irrefutable statements made by the Defendant in her supporting affidavit in opposition, the Plaintiff has tendered sufficient proof to support a finding that Fleet National Bank assigned all rights, title and interest to this commercial paper to Bank of America, and Bank of America subsequently, by a Bill of Sale, transferred all rights, title and interest in the underlying loan and guarantee to GREAT PLAINS. Giving all benefit to the Plaintiff that the terms and conditions of the underlying documentary evidence are true, the Plaintiff has standing to sue. (Portfolio Recovery Assoc., LLC. v. King, 55 AD3d 1074, 866 N.Y.S.2d 395 (App.Div., 3rd Dept., 2008).
Therefore, the affirmative defense of the lack of standing is dismissed as a matter of fact and law.
The Defendant alleges that the Plaintiff has failed to name and serve a necessary party. Section 1001(a) of the CPLR provides in pertinent part as follows: Parties who should be joined shall be made Plaintiffs or Defendants “if complete relief is to be accorded between the parties or who might be inequitably affected by judgment in this action.” Section 1001(b) provides that if a person is necessary and jurisdiction over him cannot be obtained after his consent, “the court, when justice required may allow the action to proceed without him being made a party.” The statute further specifies the elements that the court must consider in determining if the action will proceed or not. The criteria include whether the Plaintiff has another effective remedy if the case is dismissed; the prejudice which may accrue if the party is not joined; whether and by whom prejudice may be avoided or may in the future be avoided; the feasibility of a protective provision by order of the court or in a judgment; and whether an effective judgment may be rendered in the absence of the person who is not joined ( Citations omitted ).
Our system of jurisprudence allows a party, namely, the Plaintiff to decide the person that she seeks to join as a party to the action. There are specific instances in which this principle of law deprives the party of that right and mandates a certain party to be joined, if feasible.
In this case, the answer does not identify the name of the party that has not been joined in this action or articulate the justification for such joinder. In reviewing the line of credit agreement and the guarantee, it is clear that only the parties named in this action are necessary parties GREAT PLAINS and LEVI. Based on this clear ambiguity in the answer and the failure to provide any justification for joinder of this unknown party in the responsive affirmation and affidavit, this defense lacks merit and is dismissed.
The Defendant states that “Plaintiff request is contrary to the public interest.” During detailed legal research, this court was unable to find any affirmative defense at law or in equity that meets the description of this alleged defense. Since the Defendant has neglected to express any factual evidence of this alleged defense, pursuant to CPLR § 3013, this defense is likewise dismissed.
For all the reasons stated above, each and every affirmative defense stated in the Defendant's answer is dismissed. It is now necessary to direct our attention to the Plaintiff's motion for summary judgment. A brief look at CPLR § 3212 is appropriate. CPLR § 3212(b) provides that a motion for “summary judgment shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party [The] motion shall be denied if any party shall show fact sufficient to require a trial of any issue of fact. If it shall appear that any party other than the moving party is entitled to a summary judgment, the court may grant such judgment without the necessity of a cross-motion.”
It has been established long ago by our appellate highest court that on a motion for summary judgment, “the movant must submit evidentiary proof in admissible form to establish that she is entitled to judgment as a matter of law, and to defeat the motion, the opponent must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which she rests her claim or must demonstrate acceptable excuse for her failure to meet the requirements of tender in admissible form.” (Zuckerman v. City of New York, 49 N.Y.2d 557, 562 [1980] ). To defeat the motion, it is encumbent upon the Defendant “to assemble, lay bare and reveal his or her proof in order to show that their defenses are real and capable of being established at trial It is insufficient to merely set forth averments of factual or legal conclusions. [Internal citation omitted].” ( City Financial Co. (De) v. McKinney, 27 AD3d 224, 226, 811 N.Y.S2d 359 [1st Dept., 2006]; Machinery Funding Corp. v. Stan Loman Enterprises, Inc., 91 A.D.2d 528, 456 N.Y.S2d 401 [1st Dept., 1982]; see also Tabor v. Logan, 114 A.D.2d 8] ); Mazurek v. Metropolitan Museum of Art, 27 AD3d 227, 228, 812 N.Y.S2d 33 (1st Dept., 2006); Smalls v. AJI Industry Inc., 10 NY3d 733, 735, 853 N.Y.S2d 526 [2008];Melendez v. Parkchester Medical M.D. Servs., P.C., 76 AD3d 927, 908 N.Y.S2d 33 [1st Dept., 2010] ). If there is any doubt as to the existence of a triable fact, the motion for summary judgment must be denied. Rotuba Extruders v. Ceppos, 46 N.Y.2d 223, 231,413 N.Y.S2d 141 (1978).
ELEMENTS OF A PRIMA FACIE CASE
New York Courts have carved out three (3) elements required to sustain a prima facie case for business transactions such as business loans and lines of credit. A lender must prove the following elements to sustain a prima facie entitlement to judgment as a matter of law: (1) evidence, in admissible form, of the underlying credit/loan agreement; (2) a personal guarantee of the obligations of that line of credit/loan agreement; and (3) default in the payments in accordance with the terms of the credit/loan agreement. ( Layden v. Voccio, 253 A.D.2d 54, 686 N.Y.S.2d 367[1st Dept.1999]; East New York Savings Bank v. Baccaray, 214 A.D.2d 601, 602, 625 N.Y.S.2d 88 [2nd Dept.1995]; Northfork Bank Co. v. Graphic Forms Ass'n, Inc., 36 AD3d 676, 828 N.Y.S.2d 194 [2nd Dept .2007]; JPMorgan Chase Bank v. Gamut–Mitchell, Inc., 27 AD3d 622, 623, 811 N.Y.S.2d 777 [2nd Dept.2006]; Ceglia v. Marine Midland Bank, 296 A.D.2d 473, 474, 745 N.Y.S.2d 470 [2nd Dept.2002]; see also Northfork Bank v. ABC Merchant Servs., Inc., 49 AD3d 701, 853 N.Y.S.2d 633 [2nd Dept., 2008]; and also HSBC Bank USA, N.A. v. Laniado, 72 AD3d 645, 897 N.Y.S.2d 514 [2nd Dept.2010]; Wolf v. Citibank, N.A., 34 AD3d 574, 575, 824 N.Y.S.2d 176 [2nd Dept.2006]; Kensington House Co. v. Oram, 293 A.D.2d 304, 304–305, 739 N.Y.S.2d572 [1st Dept.2002] ).
Legal research disclosed that the first stage of such inquiry is whether the underlying line of credit or loan agreement is unequivocal and contain elements that constitute a meeting of the minds between the parties. A determination of whether or not an agreement is ambiguous is a question of law to be decided by the courts and only after an analysis of the four corners of the instrument ( see Kass v. Kass, 91 N.Y.2d 554, 566, 673 N.Y.S.2d 350 [1998];Todd v. Grandoe Corp., 302 A.D.2d 789, 790, 756 N.Y.S.2d 658 [3rd Dept.2003] ). Suffice to say, if any ambiguity exists in the instrument, then the courts will look to extrinsic evidence and may consider such facts in its analysis of the terms and conditions of the instrument ( see F & K Supply v. Willowbrook Dev. Co., 288 A.D.2d 713, 714, 732 N.Y.S.2d 734 [3rd Dept.2001]; Ruthman, Mercadant & Hadjis v. Nardiello, 260 A.D.2d 904, 906, 688 N.Y.S.2d 823 [3rd Dept., 1999] ).
One of the basic tenets of contract law is that all agreements are construed in accordance with the intent of the parties and the best evidence of the parties' intent is what they express in their written contract. Thus, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms, without reference to extrinsic material outside the four corners of the document [ internal quotation marks and citations omitted]. Goldman v. White Plains Center for Nursing Care, LLC, 11 NY3d 173, 176, 867 N.Y.S2d 27 (2008); MHR Capital Partners L.P. v. Presstek, 12 NY3d 640, 884 N.Y.S2d 211(2009); Vanship Holdings Ltd. v. Energy Improv Structure Acquisition Corp., 65 AD3d 405 (1st Dept., 2009).
In interpreting any contract, the courts will not look outside of the four corners of the instrument especially “where the instrument was negotiated between sophisticated, counseled people negotiating at arm's length [ internal quotation marks and citations omitted ] .” Tag 380, LLC v. ComMet 380, Inc., 10 NY3d 507, 513,860 N.Y.S2d 433 (2008); Logiudice v. Logiudice, 67 AD3d 544, 889 N.Y .S2d 164 (1st Dept., 2009).
An agreement “is unambiguous if the language it uses has a definite precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion” (Greenfield v. Philes Records, 98 N.Y.2d 562, 569, 750 N.Y.S.2d 565 (2002), quoting Breed v. Ins. Co. of North America, 46 N.Y.2d 351, 355, 413 N.Y.S.2d 351 (1978); see Williams v. Village of Endicott, 91 AD3d 1160, 1162, 936 N.Y.S.2d 759 (2012)). See also the recent matter of Colonial Pacific Leasing Corp. v. Brown, 28 Misc.3d 1214(a), 2010 WL2927283 (N.Y.Supp.2010) in which Judge Freed denied a motion for summary judgment and granted Defendant's motion for summary judgment dismissing the complaint based on various ambiguities in the underlying documentary evidence submitted by the Plaintiff.
In addition, “it is a recognized rule of construction that a court should not adopt an interpretation which will operate to leave a provision of a contract without force and effect. An interpretation that gives effect to all the terms of an agreement is preferable to one that ignores terms or accords them an unreasonable interpretation [ internal quotation marks and certain citations omitted ].” Ruttenberg v. Davidge Data Systems Corp., 215 A.D.2d 191, 196, 626 N.Y.S2d 174 (1st Dept., 1995).
In addition to the above, the instrument must be for the payment of money only. In European American Bank v. Cohen, supra, the Appellate Division, First Department rejected the Defendant's contention that a note which contained an unconditional promise to pay on a certain date, the current balance in Defendant's line of credit, was not an instrument for the payment of money only because there was a need to resort to outside records (i.e., Plaintiff's bank account) in order to determine the amount that had been taken out of the line of credit. Similarly, in Asco Credit Corp. v. Borough Park Twelfth Ave. Realty, 187 A.D.2d 632, 590 N.Y.S2d 890 (2nd Dept., 1992) a premium finance agreement qualified as an instrument for the payment for money only because it contained “an unconditional promise by the insured to repay to the lender the monies advanced on its behalf for the payment of the insured's insurance premium. Although the agreement also contained other provisions and terms, none of these required additional performance by the lender as a condition precedent to repayment or otherwise altered the insured's promise of repayment” (Asco Corp. at 634).
On the other hand, in Bonds Financial Inc. v. Astrer Tech, LLC, 448 AD3d 230 (1st Dept., 2008) the note was not found to be an instrument for the payment of money only because it required resort to an extrinsic document to define the events of default under the note, i.e., an acceleration clause in a separate revolving credit agreement and the provisions “outline several default events other than the mere failure to make payments in particular, the closing of a real estate transaction in Maryland” ( Bonds Financial Inc., 448 AD3d at 430). Similarly, the note in Manufacturers Hanover Trust v. Hixon, 124 A.D.2d 488, 507 N.Y.S.862 (1st Dept., 1986) also did not qualify as an instrument for the payment of money only because proof of the note and their failure to make the payments were insufficient to establish Plaintiff's prima facie case since the note stated that reference had to be made to the mortgage to define default and the need to resort to the mortgage to establish default precluded CPLR 3213 (summary judgment in lieu of a complaint) treatment. See also Technical Tape, Inc. v. Great Spray Tuck, Inc. 131 A.D.2d 404, 517 N.Y.S2d 147 (1st Dept., 1987) where the note was specifically made subject to the terms and conditions of an asset purchase agreement concerning Defendant's purchase of Plaintiff's subsidiary assets. Because the agreement of sale contained no definite statement of the amount due since it was subject to adjustment and offset computations, the note, which was subject to the asset purchase agreement's terms and conditions, did not merely require the payment of money only. More recently, in Ippolito v. Family Medicine of Tarrytown and Ossining, LLP (46 AD3d 752, 847 N.Y.S2d 681 (2nd Dept., 2007)), the Appellate Division reversed the trial court determination to grant summary judgment because more than simple proof of non-payment or a similar de minimus deviation from the document was involved.
The second line of inquiry involves the maker of the guarantee. Was the guarantee individual or corporate? What are the terms and conditions of the guarantee?
Black's Law Dictionary (4th Ed.) defines a guarantee as a collateral agreement for performance of another's undertaking. An undertaking or promise that is collateral to the primary or principle obligation and that binds guarantor to performance in the event of non-performance by the principle obligor. It goes on to further provide that a guarantee is “a promise to answer for payment of debt or performance of obligation if the person liable in the first instance fails to make payment or perform obligation. An undertaking by one person to be answerable for the payment of some debt, or the due performance of some contract or duty, by another person, who himself remains liable to pay or perform the same ...” The courts have looked to whether the instrument of guarantee, which was a basis for the inducement of the bank to extend financial obligations to the defaulting party, is unconditional and explicit that guarantees all sums that are due and owing to be promptly paid. The contractual language establishing a continuing guarantee must be clear and unambiguous; thus, resort to extrinsic evidence to vary the terms of the written contract of guarantee is precluded (Trade Bank and Trust Co. v. Golberg, 38 A.D.2d 405, 330 N.Y.S.2d 69 [1972;] General Phoenix Corp. v. Cabot, 300 N.Y. 87, 89 N.E.2d 238 [1949];County Nat'l Bank v. Grunwald, [ (1968] ).
It is well-settled that a guarantee is continuing and applicable to future incurred obligations ( citations omitted ). It has been repeatedly held that a guarantee may be terminated or modified only in writing, and is enforceable by the courts unless otherwise terminated or modified in writing. It cannot be deemed to expire by mere time, conduct or change of circumstances (Chemical Bank v. Seplar, 60 N.Y.2d 289, 469 N.Y.S.2d 609 [1983];Exte Bank v. Ziegler, 207 A.D.2d 327, 615 N.Y.S.2d 419 [1994] ). Such a guarantee may not be orally modified and are strictly enforced by the courts ( see Exte Bank v. Ziegler, supra ). Most guarantees, like the guarantee in this case, precludes the assertion of any defense other than payment and/or performance ( United Orient Bank v. Boa Lee, 223 A.D.2d 500, 631 N.Y.S.2d 96).See also Apple Bank for Savings v. Arias Stripping, Inc., 240 A.D.2d 524, 658 N.Y.S.2d 682 (App.Div., 2nd Dept., 1997) which held that the guarantees and security agreement which irrevocably and unconditionally guaranteed bank payment on all existing or future loans of the debtor and that required modifications or waivers to be in writing, were enforceable, despite the guarantor's assertions that the agreement was stale (over ten years old) where the guarantees were never terminated or modified in writing ( emphasis added ).
The only extraneous proof to such agreements is the perfunctory proof of the amount of credit extended (i.e., the bank account information and the amount of the claimed default) (Seaman–Andweall Corp. v. Wright Mac. Corp., 31 A.D.2d 136 [1st Dept., 1968) ] aff'd 29 N.Y.2d 619 [1971];European American Bank v. Cohen, 183 A.D.2d 453 [1st Dept., 1992) ] Siegal, N.Y.Practice 289 at 472 [4th Ed.] ). See also an exemplary review and analysis of many of most notable banking cases in the matter of Hudson Valley Bank N.A. v. BanxCorp, 28 Misc.3d 1232(A), 2010 N.Y.Slip.Op. 51572(U). In the case at hand, the Plaintiff has presented a plethora of evidence to support its contentions that it is entitled to judgment as a matter of law. In accordance with CPLR § 3212, the Plaintiff has presented a copy of the pleadings, including the summons and verified complaint, and verified answer. The Plaintiff has also presented an affidavit by Gary Wieseler, the Vice President of the Plaintiff's Corporation that sufficiently recites the material facts of the underlying banking transaction and the default in payment under the line of credit.
Based on that evidence, the court finds that on May 7, 2004, the Defendant, SIGAL S. LEVI, submitted an application to Fleet National Bank for a small business line of credit that is evidenced by the Small Business Credit Express Agreement annexed as Exhibit “F” to the underlying motion. On the same day, the Defendant executed the credit application (hereinafter “Authorization Agreement”) which granted the Plaintiff authorization to verify her personal information provided in connection with the application including but not limited to credit reports, and certified that the information provided therein was true and accurate. The Authorization Agreement additionally provided that the “applicant agreed that if the bank elects to include the credit requested in the application in the bank's SBA (U.S. Small Business Administration) loan program, the Bank may submit an SBA loan application on behalf of applicant using the information contained in the application and other information subsequently obtained from the applicant.” If approved, the applicant will receive an approval letter, the Fleet Small Business Credit Agreement (the “Line of Credit Agreement”), a Small Business Credit Express visa card and express checks from the bank. The approval letter will specify the applicant's credit limit, the initial interest rate and the margin to be added to the index value to determine periodic rate adjustments. As equally important, the Authorization Agreement provided that “BY SIGNING THE APPLICATION, APPLICANT AGREES TO BE BOUND BY THE TERMS OF THE LINE OF CREDIT AGREEMENT AND APPROVAL LETTER. NO FURTHER SIGNATURE IS REQUIRED.” The Agreement set forth various methods in which the Defendant had access to the line of credit. (See provisions 4a–4e). The Agreement further provides that “in consideration of Fleet National Bank or any affiliates thereof (collectively, “Bank”) extending credit to applicant, the person signing below jointly and severally and unconditionally guarantees the Bank and its successes and assigns, payment and performance of all present and future obligations, liabilities and undertakings of applicant to the Bank of every kind (“obligations”). Guarantor's liability hereunder shall be immediate and unlimited in amount. This guarantee shall operate as a continuing and absolute guarantee until five (5) business days after actual receipt by the Bank of written notice of revocation by certified mail, return receipt requested sent to the Bank. The guarantee further provides that “guarantor waives all requirements of notice, demand, presentment or protest, all other defenses that may be available to a surety and any right guarantor may have to require Bank first to proceed against applicant or any other person or entity, or first to realize on any security held by Bank before proceeding against the guarantor hereunder. Guarantor waives all rights of setoff, or subrogation until the obligation shall have been paid in full.” Lastly, the execution line whereby the Defendant subscribed her signature provides that “I acknowledge that I have read and agreed to the terms and conditions of the Authorization Agreement, the personal guarantee and the Fair Credit Reporting Act noticed above and receipt of the pricing summary and terms of offer. Notwithstanding any title that I have included annexed to my signature, I also agreed to be personally liable as the Guarantor under the personal guarantee.” Furthermore, the Small Business Credit Express Agreement in paragraph 1 provides an unconditional promise to pay the Bank and any subsequent holder of the Agreement all amounts advanced under the terms of the loan.Events of default, as provided in Section V of the agreement, are explicitly stated in sections a-l; the primary provision being the failure to pay the principal or interest on the account or other indebtedness of the borrower to the Bank (see ¶ b).
The Agreement also contains the standard written modification and waiver provisions which expressly state that there can be no modification or waiver of the Agreement unless it is in writing and signed by the Bank (§ VI(6)).The Agreement also acknowledges the rights of the Bank to assign the underlying line of credit, guarantee and payments thereunder to its affiliates, subsidiaries and/or other assignees (§ VI(12)).
Lastly, in ¶ 7 of the Agreement, it states that “the Borrower understands and acknowledges that the monthly payment arrangements set forth in subsection 2(10), above, is for the convenience of the Borrower, and is not intended to alter the demand nature of this Agreement, and shall continue only so long as it is satisfactory to the Bank. The Bank may demand immediate payment of the entire indebtedness evidenced hereby in its sole judgment at any time and for any reason or for no reason.
The Plaintiff has presented the Bank approval of the loan as shown in Exhibit “G” of the motion. The approval describes the customer's name, the trade name of the customer-the Defendant in this action, the amount of the commitment of $18,000.00 and the rate of interest of 4.0%. The acceptance by the Bank was executed by the underwriter, James Kleinrock.
The court finds that the authorization agreement, the Small Business Credit Express Agreement and Small Business Service Credit Offering RDYBK on June 15, 2004 constitute instruments for the payment of money only and are irrevocable, unequivocal and unconditional. Despite the fact that GREAT PLAINS has not presented any note, the aforementioned documents and the above statutory authority presented by GREAT PLAINS does not preclude recovery. These documents are sufficient to find that the parties had a note, agreement and guarantee.
As equally significant, this court accepts as admissible evidence the letter, dated November 24, 2010, in which the Plaintiff notified the Defendant of the assignment from Bank of America to the Plaintiff corporation and the right to dispute the debt. (See Exhibit “L”) In a subsequent letter, dated December 22, 2010, annexed also as Exhibit “L”, the Vice President of the Plaintiff Corporation stated that they had received no reply from the Defendant to the first correspondence; asserted the right to the payment of the principal balance of $18,000.00 plus accrued interest and offered the Defendant an opportunity to discuss a payment schedule or discounted settlement of the loan. She was also notified in the letter that if she failed to respond to the letter, the Plaintiff would pursue necessary collection of the debt. Lastly, in a subsequent letter, dated January 11, 2011, the Vice President, once again, in an effort to resolve the matter without pursuing litigation, offered to accept the principal balance of the loan in the sum of $18,000.00 at a rate of $250.00 monthly and agreed to waive all unpaid accrued interest and late charges. The Defendant had until January 31, 2011 to accept or reject the offer. The Defendant has not proffered any rebuttal evidence to explain her failure to respond to the three (3) letters from the Plaintiff Corporation. Since there is no rebuttal evidence presented to prove that the Defendant disputed the debt, this court finds conversely, that the Defendant has acknowledged the debt.
The court finds that the instrument of guarantee, which was a basis for the inducement of the bank to extend financial assistance in this case, is unconditional and explicitly guarantees that the Defendant make all payments due and owing. Just as relevant, the loan was a commercial loan that did not contain any other collateral of the Debtor/Defendant other than the personal guarantee ( emphasis added ) The contractual language is clear and unambiguous and thus, this court is precluded from resort to extrinsic evidence to vary the terms of the written contract of guarantee as the Defendant seeks by alleging that the bank officer told her that she would not be personally bound by the terms therein (Trade Bank and Trust Co. v. Golberg, 38 A.D.2d 405, 330 N.Y.S.2d 69 [1st Dept.1972]; General Phoenix Corp. v. Cabot, 300 N.Y. 87, 89 N.E.2d 238 [1949];County Nat'l Bank v. Grunwald, 30 A.D.2d 663, 291 N.Y.S.2d 823[2nd Dept.1968]; James Talcotd, Inc. v. Bloom, 29 A.D.2d 390, 288 N.Y.S.2d 398 [1st Dept.1968] ).
The affidavit of the President of the Plaintiff Corporation definitively established that the Defendant is in default of the loan. Exhibit “I”, a summary of the account demonstrates that the Defendant paid the entire loan amount of $18,000.00 on the account between February 18, 2005 and May 10, 2011 and, subsequently, in or about May 11, 2010, used the credit line to advance $18,000.00, incurred fees on this cash advancement and made no payments on the account subsequent to that date. The Defendant has also not disputed this claim in their opposition papers, and has not presented any evidence to the contrary.
The Plaintiff, now having established a prima facie case that the lender had a line of credit, an unconditional guarantee and the Guarantor's non-payment after notices of default, the burden now shifts to Defendant to come forward with evidentiary facts demonstrating the existence of a material issue of fact that would defeat summary judgment. ( see North Fork Bank v. ABC Merchant Svs. Inc., 49 AD3d 701, 853 N.Y.S2d 633 [2nd Dept., 2008]; B.G., Fleet Bank v. M & Z Headware, Inc., 308 A.D.2d 507 [2nd Dept., 2003]; Moezinia v. Baroukhian, 247 A.D.2d 452 [2nd Dept., 1998]; Alicanto, S.A. v. Woolverton, 142 A.D.2d 703 [2nd Dept., 1988], lv. denied 73 N.Y.2d 702 [1988] ) accord in the cases Banco Popular North America v. Victory Taxi Mgmt., Inc., 1 NY3d 381, 383 [ (2004]; Maestro v. Carroll, 296 A.D.2d 802, 745 N.Y.S2d 619 [3rd Dept., 2002]; BDE Vito v. Bejamin, 243 A.D.2d 600, 633N.Y.S2d 266 [2nd Dept., 1997] ). The court has reviewed the affirmation and affidavit in opposition to the motion for summary judgment and concludes that it utterly fails to demonstrate the existence of a bona fide defense to the proceeding. It is incumbent upon the Defendant to demonstrate the existence of a bona fide defense by evidentiary facts ( See Rotuba Excruder v. Seppos, 46 N.Y.2d 223, 231, 413 N.Y.S.2d 141 [1978];Curwil Construction Corp. v. RHP Dev. Corp., 194 A.D.2d 514, 515, 598 N.Y.S.2d 306 [2nd Dept.1993] ). The affidavit of the Defendant contains nothing more than bald conclusory allegations unsupported by proof. It is totally unacceptable and more so, insufficient for the Defendant to merely state legal conclusions and sparse factual claims in the supporting affirmation and affidavit Putnam County Savings Bank v. Aditya, 28 Misc.3d 1211(a), 2010WL2816634 (N.Y. Sup.2010).
Contrary to the contentions by the Defendant, the allegations that she was told that she would not have to pay if the business failed to make payment when due is contrary to the terms of the personal guarantee.This court has assessed the claims made by the Defendants in the affidavit and surmises that the Defendant alleges that the Bank acted in bad faith. Defendant states that “at the time the account was open lender, Fleet Bank, stated that the business was the primary obligor and I would only have to pay if the business fails to make payment when due my attorney has informed me that the contract states something different. The contract appears to state I am the only person or entity responsible for this debt. This is not the agreement that was made with Fleet Bank. After all, the contract itself states it is a business loan not a personal loan'.” (Levi Affidavit at ¶ 2 & 3.) See Bank of Smithtown v. Buckhan, 90 A.D.2d 508 (2nd Dept., 1982), holding that a Respondent's allegation “that he executed [a continuing] guarantee only because the bank told him that the guarantee was for the original loan only” was insufficient to defeat summary judgment.
Principally, the Defendant would have this court rewrite the terms of this Agreement to relieve the Defendant of personal liability. However, the courts will not rewrite the agreements of the parties by deleting provisions that were made or adding provisions that were not made (Vanlex Stores, Inc. v. BSP 300 Madiison, LLC, 66 AD3d 580 [1st Dept., 2009]; Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. Xerox Corp., 25 AD3d 309 [1st Dept., 2006], lv dismissed7 NY3d 886 [2006];see also Willsey v. Gjuraj, 65 AD3d 1228 [2nd Dept., 2009] ).
As provided above, the guarantee is unconditional and unambiguous. The Agreement and the guarantee speak entirely for themselves, and all that is required to establish prima facie liability is a simple proof of non-payment. The Defendant did not deny the debt in her affidavit and did not dispute the debt in reply to the three letters from the President of the Plaintiff Corporation. The Defendant also did not dispute the validity of the business line of credit or the Authorization Agreement. The Defendant merely states that she is not obligated under the personal guarantee. ( See Ippolito v. Family Medicine of Tarrytown and Ossining, LLP, 46 AD3d 752 [2nd Dept., 2007]; Executive Flighteways, Inc. v. Caballero, 207WL6714353 [Sup.Ct., Suffolk County, 2007] ).
In opinion of this court, the unsurmountable obstacle that the Defendant faces in this case is the guarantee that she executed in connected with the line of credit. As clearly stated in Citibank v. Plapinger, 66 N.Y.2d 90, 92, 495 N.Y.S.2d 309, 485 N.E.2d 974 [1985], the Court of Appeals held that a defense alleging fraudulent inducement of a guarantee was barred by the express terms of the guarantee which stated that it was absolute and unconditional, irrespective of any lack of validity or enforceability of the guarantee or any of the circumstances which might otherwise constitute a defense.” Relying on Citibank, supra, New York Courts have consistently upheld broadly worded waiver language of this type to preclude the assertion of defenses to a guarantee ( see Gannett Co. v. Pesler, 177 A.D.2d 353, 577 N.Y.Supp.2d 248 [1991];see also Banco Do Estada De Saetaulo v. Menbesjr. Intl. Co., 249 A.D.2d 137, 138, 672 N.Y.Supp.2d 28 [1998];General Trading Co. v. A & D Food Corp., 292 A.D.2d 266, 267, 738 N.Y.S.2d 845 [2002] ). Stated another way, our highest appellate court has specifically recognized that public policy requires that a person who, for the accommodation of the bank, executes an instrument which is in form a binding obligation, to be estopped from thereafter asserting that simultaneously the parties agreed that the instrument should not be enforced. A look at the guarantee in this case proves that the Defendant waived all defenses except for actual payment and the Defendant, by omission, has failed to state that payments have been made on the loan.
This case is clearly distinguishable from the recent matter of Red–Kap Sales, Inc. v. Northern Light Energy Products, 94 AD3d 1281, 942 N.Y.S.2d 283 (App.Div., 3rd Dept.2012) where it was unclear whether the Defendant was guaranteeing the loan agreement in its individual or a representative capacity, and therefore the court had no reservation to examine extrinsic evidence in order to determine the intent of the party. Here, there is no signature other than the individual signature of the Defendant; the contract is devoid of any other legal entity.
If the Defendant sought relief from the terms of the guarantee, the Defendant had a remedy. The Defendant had the right to terminate the Agreement and guarantee. However, the Defendant has not presented any evidence to that effect (Anglo Irish Bank Corp., Ltd. v. Ashkenazy, 2010 N.Y.SlipOp. 51428 [U], 28 Misc.3d 1222[a] [Sup.Ct., New York County, 2010] ).
Under the present circumstances, the Defendant's conclusory and belated allegations of wrongdoing and claims that the contract are adhesion contracts are insufficient to establish the existence of a genuine triable issue of fact Mlcoch v. Smith, 173 A.D.2d 443, 570 N.Y.S.2d 70 [2nd Dept., 1991]. It has been repeatedly held that “a shadow resemblance of an issue or bold conclusory assertions, even if believable, are not enough to defeat a motion for summary judgment” (Morowitz v. Naughton, 150 A.D.2d 536, 541 N.Y.S.2d 122 [2nd Dept.1989]; Capelin Assoc. v. Globe Mfg. Corp., 34 N.Y.2d 338, 357 N.Y.S.2d 478, 313 N.E.2d 776 [1974];American Savings Bank v. Imperato, 159 A.D.2d 444, 553 N.Y.S.2d [1st Dept.1990]; Assing v. United Rubber Supply Co., 126 A.D.2d 590, 511 N.Y.S.2d 31 [2nd Dept.1987]; Kaye v. Keret, 89 A.D.2d 885, 453 N.Y.S.2d 449 [2nd Dept.1982].)
In a strikingly similar case to the case at bar, the Appellate Term, First Department in PNC Bank v. Blue Media Print LLC, 26 Misc.3d 139(a), 2010 WL653905 (N.Y. Sup.Ct., Appellate Term) found that the “Defendant's deposition testimony to the effect that he did not read or understand his obligations as guarantor under the loan does not constitute a viable defense to the Plaintiff's motion since the Defendant was obligated to exercise ordinary diligence to ascertain the terms of the document he admittedly signed (PNC Capital Recovery v. Mechanical Parking Systems, Inc., 283 A.D.2d 268, 272 [2001].
Similarly, and directly on point with the case at hand, the Appellate Division, Second Department in the matter of HSBC Bank USA v. Laniado, 72 AD3d 645, 897 N.Y.S.2d 514 (2nd Dept.2010) upheld a finding that granted summary judgment to the bank. The court giving no weight to the claims by the Defendant that he did not intend to make himself personally liable for the company's obligation by signing the credit document and that he signed the documents on behalf of the company only after the bank representative assured him that he would not be personally liable. The court specifically found that “these assertions conflicted with the unambiguous terms of the credit application and the incorporated credit agreement which Laniado expressly signed both on behalf of the company and as a guarantor and thus was insufficient to raise a triable issue of fact as to whether he intended to bind himself individually or was fraudulently induced to sign the credit document (Key Equipment Fin. v. Southshore Imaging, Inc., 69 AD3d 805, 893 N.Y.S.2d 574 [2nd Dept.2010]; North Fork Bank v. ABC Merchants Svs. Inc., supra; North Fork Bank Corp. v. Graphic Forms Assn. Inc., 36 AD3d at 67, 828 N.Y.S.2d 194 [2007];Korean Exchange Bank v. A.A. Trading Co., 8 AD3d 344, 345, 777 N.Y.S.2d 736 [2nd Dept.2004]; PNC Capital Recovery v. Mechanical Parking Systems, 283 A.D.2d 268, 270 and 271, 726 N.Y.S.2d 394 [1st Dept.2001] ).
The Appellate Division, Second Department, as recently as this year, in JPMorgan Chase Bank v. Bauer, 92 AD3d 641, 938 N.Y.S.2d 190 (2nd Dept.2012) ordered summary judgment for the bank in a case where the borrower contested the authenticity of the signature on a personal guarantee. The court specifically found that the Defendant failed to substantiate a triable issue of fact in opposition to the motion for summary judgment and determined that “something more than ma bald assertion of forgery is required to create an issue of fact contesting the authenticity of the signature” and “Bauer's affidavit was alone inadequate to raise an issue of fact necessitating a trial” (Banco Popular N.A. v. Victory Taxi Mgt., 1 NY3d 381, 384, 774 N.Y.S.2d 480, 806 N.E.2d 488 [2004];see Seaboard Sur. Co. v. Nigro Bros., 222 A.D.2d 574, 635 N.Y.S.2d 296 [2nd Dept.1995] ).
In our case, the Defendant attacked the written document itself by asserting that it is “a contract of adhesion”, “non-sensical” in nature, is “boilerplate” and were not explained to or understood by the Defendant. She further asserts that the personal guarantee are unconscionable and the bank asserted undue influence against her “knowing full well she had not read nor understood the terms thereof due to their superior or unfair bargaining power, lack of luster and substance” (Hurwitz Aff. at ¶ 7). Suffice to say, these assertions conflict with the unambiguous terms of the authorization application and the business line of credit to which the Defendant signed in her individual capacity and not on behalf of any company, corporation or partnership. Such allegations are insufficient to raise any issue of fact as to whether she intended to bind herself individually or was allegedly fraudulently induced to sign the credit documents. HSBC Bank USA v. Laniado, 72 AD3d 645, 897 N.Y.S.2d 514 (2nd Dept.2010); see also Key Equipment Fin. v. Southshore Imaging, Inc., 69 AD3d 805, 893 N.Y.S.2d 574 (2nd Dept.2010); Northfork Bank v. ABC Merchants Svs. Inc., supra; North Fork Bank Corp. v. Graphic Forms Assn. Inc., 36 AD3d at 67, 828 N.Y.S.2d 194 (2007); Korean Exchange Bank v. A.A. Trading Co., 8 AD3d 344, 345, 777 N.Y.S.2d 736 (2nd Dept.2004)PNC Capital Recovery v. Mechanical Parking Systems, 283 A.D.2d 268, 270 and 271, 726 N.Y.S.2d 394 (1st Dept.2001).
As set forth above, the Defendant does not dispute the outstanding principal balance due under the credit agreement or that she defaulted under the instrument. The Defendant's framed averments that she did not agree to be personally bound is belied by the irrefutable evidence that in the immediate six (6) months after the line of credit was approved in the sum of $18,000.00, the Defendant received more than $10,000.00 from the line of credit and in fact, repaid that amount. It was not until May 11, 2010, which is not refuted by the Defendant, that the additional sum of $18,000.00 was advanced from the line of credit and no payment has been made on that amount.
Lastly, the Defendant's contention is that the Plaintiff has failed to comply with discovery would not change the results of the deficiencies in the Defendant's alleged defenses and responsive papers in this action. The Plaintiff correctly asserts that the Defendant has not proffered any statement, express or implied, that the discovery would yield evidence that would create a triable issue of fact in accordance with case law.This court is of the opinion that the documentary evidence submitted by the Plaintiff in this motion are not only relevant but should have been the documentary evidence demanded in discovery by the Defendant. A majority of the Defendant's discovery and inspection requests are irrelevant to this action, namely, items number 1, 8, 9, 10, 12, 13, 14, 17, 18, 20, 21, 22, 23 and 24. The Defendant's request for discovery exhibits a “fishing expedition” and would not produce any documentary evidence to prove any of the defenses alleged in the answer. Despite the production of these relevant documents, in evidentiary form, by the Plaintiff in its motion, the Defendant, in the affidavit and supporting affirmation, do not rebut any of the elements of the Plaintiff's prima facie case. Based upon the foregoing facts, the Defendant failed to produce any evidence in admissible form that would raise any triable issues of fact or viable defenses and accordingly, the Plaintiff is entitled to summary judgment as a matter of law. Therefore, the court grants the Plaintiff a final judgment against the Defendant in the sum of $19,009.91, together with statutory interest from November 9, 2010.
This case is set down for an evidentiary hearing on October 16, 2012 at 10:00 a.m. to hear and to determine the reasonable attorney's fees, late fees and expenses incurred by the Plaintiff in the prosecution of this matter. Both parties shall report to the Seventh (7th) floor security desk to obtain the courtroom assignment for Part 64.
This court shall mail a courtesy copy of this Decision and Order to both sides.
The Plaintiff shall serve a copy of this Order and Decision with Notice of Entry on the Defendant within thirty (30) days of the date of the entry of the final judgment Defendant in the sum of $19,009.91 by the Clerk of the Court and shall file proof of service thereof with the Clerk of the Court.
This constitutes the Decision and Order of the court.