Opinion
706063/20
09-03-2020
James KAYS and Nissam Sade, Plaintiffs, v. Alex G. ANTZOULATOS, Esq., Defendant.
James Kays and Nissam Sade, Plaintiffs, Alex G. Antzoulatos, Esq., Defendant.
James Kays and Nissam Sade, Plaintiffs,
Alex G. Antzoulatos, Esq., Defendant.
Allan B. Weiss, J.
The following papers read on this motion by plaintiffs to "attach" and preliminarily enjoin defendant from transferring, encumbering, disposing of, selling, alienating, changing title to, mortgaging, encumbering and taking any action pertaining to the real property known as 25–55 49th Street, Astoria, New York during the pendency of this action, and for a money judgment in favor of plaintiffs and against defendant in the sum of $370,000.00, together with interest at the legal rate of 9% per annum from January 1, 2020 to the date of payment.
Papers Numbered
Order to Show Cause- Affidavits, Affirmation-Exhibits EF Doc. No.1-#20
Answering Affirmation - Exhibits EF Doc. #21-#25
Reply Affirmation- Exhibits EF Doc. #26-#28
Upon the foregoing papers it is ordered that the motion is determined as follows:
Plaintiffs commenced this action on May 28, 2020, and caused the simultaneous service of a summons and the order to show cause, seeking summary judgment in lieu of complaint against defendant, and a prejudgment order of attachment of the real property known as 25–55 49th Street, Astoria, New York or for a preliminary injunction, and supporting papers, including, among other things, an affirmation of plaintiffs' counsel, an affidavit of James Kays, and a copy of a document dated August 4, 2019 (the Document). Plaintiffs assert defendant is plaintiff James Kays's former attorney and business associate in certain business, including H.M.S Hussar, Inc., and Apaloon Enterprises Inc. and Apaloon Entertainment Corp. (the Apaloon companies), and defendant has acknowledged, in the Document that the total amount due and owing plaintiffs is the sum of $370,000.00. Plaintiffs further assert that pursuant to the Document, defendant promised to repay $370,000.00 to them no later than January 1, 2020, and personally guaranteed repayment of the sums to Kays. According to plaintiff James Kays, defendant has defaulted under the terms of the Document, by failing to make any payments to them by January 1, 2020. Plaintiffs assert that in the absence of any attachment or preliminary injunction, defendant will transfer or encumber the 25–55 48th Street, Astoria, New York property with an intention to defraud them and other creditors, and frustrate the enforcement of any money judgment to be awarded in plaintiffs' favor in this action. Plaintiffs contend that defendant is continuously strapped for cash and funds, and the 25–55 48th Street property is the only asset which defendant owns in his personal capacity. They also contend defendant has offered the 25–55 48th Street property as security, in connection with his applications to obtain a loan from various lenders. They further contend that defendant has other creditors, including Maria Atsas, defendant's former office manager, who have made claims against him for unpaid wages and breach of contract.
Defendant, an attorney licensed to practice in the State of New York, but appearing in a self-represented capacity, opposes the motion.
The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case (see Zuckerman v. City of New York , 49 NY2d 557, 562 [2011] ; Sillman v. Twentieth Century-Fox Film Corp. , 3 NY2d 395, 404 [1957] ). Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers (see Winegrad v. New York Univ. Med. Ctr. , 64 NY2d 851, 853 [1985] ). To prevail on a motion for summary judgment in lieu of complaint, the action must be "based on an instrument for the payment of money only" ( CPLR § 3213 ) and the plaintiff must establish his or her entitlement to judgment as a matter of law (see Zuckerman v. City of New York , 49 NY2d at 562 ), by proof of the instrument and the defendant's failure to make payments in accordance with its terms (see Dubovsky & Sons, Inc. v. Schwartz , 75 AD2d 802, 803 [2d Dept 1980], citing McNeilly v. Rodgers , 58 AD2d 724, 725 [3rd Dept 1977] ).
"Relief pursuant to CPLR 3213 for summary judgment in lieu of complaint is unavailable when proof outside the purported instrument for money is needed, other than simple proof of nonpayment or a de minimis deviation from the face of the document (see Weissman v. Sinorm Deli , 88 NY2d 437, 444 [1996] )" ( US Premium Finance v. Sky Materials Corp. , 182 AD3d 629 [2d Dept 2020] ). "Where the instrument requires something in addition to [the] defendant's explicit promise to pay a sum of money, CPLR 3213 is unavailable" ( Weissman , 88 NY2d at 444 ).
In this case, the Document is on letterhead reading "ALEX ANTZOULATOS LAW FIRM," and indicates it is "RE: Loan Agreement," but does not specifically denominate the document as a loan agreement. The Document bears the signatures of plaintiff James Kays, and defendant, and an illegible signature, above the notary stamp of Maria Atsas. The Document contains an acknowledgment that defendant owes plaintiff James Kays certain specified sums, i.e. $155,000.00, $80,000.00, $25,000.00 and $110,000.00, which sums are listed along with a brief description related to each sum. Plaintiff James Kays claims that the sum of (1) $155,000.00 represents the balance of a liquidated "Delaware structured settlement in [his] favor" which had been deposited into defendant's trust account, (2) $80,000.00 is for "personal loans" to defendant, (3) $25,000.00 represents moneys wired by Kays into defendant's trust account to cover a shortfall in relation to a real estate closing, and (4) $110,000.00 represents Kays' payment of penalties and fees which were incurred as a result of defendant's withdrawal of monies from the Apaloon companies' bank accounts.
Reference to another agreement does not necessarily qualify or alter the obligation to pay on an instrument, but plaintiffs make no claim that there is a separate "Loan Agreement" in support of their motion.
There is no indication on the Document that plaintiff James Kays and defendant executed the Document before Atsas, as the notary public.
The Document provides:
"Total amount of reimbursement due to James Kays is $370,000.00 .
Payment structure disbursements is [sic] to begin on October 1st 2019 [sic] or earlier as funds become available to my office and is to be completed by and not later than January 1st 2020 (emphasis in original). I Alex Antzoulatos Esq. [sic] personally guarantees [sic] the above payments to James Kays with my personal assets and financial holdings. In the event of a serious illness or my unfortunate death, my estate takes full responsibility to complete all payments in full to James Kays. If payments are not fully satisfied by January 1st 2020 [sic] legal actions will automatically will [sic] be implemented by James Kays and Nissim Sade."
The recitation in the Document of the sums acknowledged to be owed, is in the nature of a ledger, or possibly an account stated. An action based upon an instrument for the payment of money only must be based upon something more than simply an account stated (see Interman Industrial Products v. R.S.M. Electron Power , 37 NY2d 151 [1975] ), although the evidence thereof cannot be drawn from sources outside the agreement itself (see Goodman v. Solow , 27 AD2d 920 [1st Dept 1967] ; see also New Rochelle Dodge, Inc. v. Bank of New York , 127 AD2d 638 [2d Dept 1987] ). In this instance, the statement in the Document regarding "[payment structure disbursements" is in the passive voice, without any indication as to who shall make the disbursements. The Document does not specify that defendant is obligated to pay the sum of $370,000.00 to plaintiffs by a date no later than October 1, 2019. Furthermore, to the extent the Document provides that defendant "personally guarantees the above payments to James Kays with [defendant's] personal assets and financial holdings," such provision does not constitute an unconditional guaranty so that the Document may qualify as an instrument amenable to CPLR 3213 treatment. A guaranty normally relates to an underlying obligation, and requires the guarantor to perform the obligation of another, the primary obligor. Even assuming defendant may guaranty the payment of his own purported obligations to plaintiffs, again, there is no explicit promise by defendant to make a required payment of a sum certain to either plaintiff. Furthermore, the purported guaranty is conditioned upon personal assets and financial holdings of defendant being available as a source for payment on such guaranty.
Although plaintiff Nissim Sade is a signatory on the Document, the Document contains no acknowledgment by defendant that defendant owes Sade any sum of money, or any promise by defendant to pay Sade any sum. In addition, the statement that "[i]f payments are not fully satisfied by January 1st 2020 legal actions will automatically be implemented by James Kays and Nissim Sade," does not authorize plaintiff Nissim Sade to bring an action against defendant based upon the Document, either in Sade's individual capacity or as an agent of plaintiff James Kays. Further, to the extent plaintiff James Kays asserts plaintiff Nissim Sade provided some moneys which Kays "transferred" to defendant, such assertion is insufficient to establish that defendant owes any sum certain to Sade pursuant to the Document.
Under such circumstances, plaintiffs have failed to demonstrate that by the terms of the Document, defendant has expressly obligated himself to make required payment of a sum certain to either plaintiff (see Interman Indus. Products, Ltd. v. R.S.M. Electron Power, Inc. , 37 NY2d 151 ; US Premium Finance v. Sky Materials Corp. , 182 AD3d 629 ). Thus, to the extent proof outside the document is necessary to establish the underlying obligation, the CPLR 3213 procedure does not apply. Plaintiffs have failed to establish, prima facie, their entitlement to judgment as a matter of law regardless of the sufficiency of the opposition papers (see Winegrad v. New York Univ. Med. Ctr. , 64 NY2d 851, 853 ). Plaintiffs also have failed to show that an attachment or preliminary injunction is warranted, insofar as they have failed to demonstrate it is probable that they will succeed on the merits since they have failed to offer any such additional proof to establish the underlying obligation (see CPLR 6212, CPLR 6301 ). Accordingly, the motion for summary judgment in lieu of complaint, and an order of attachment or a preliminary injunction is denied, and plaintiffs' time to serve a complaint is extended until 20 days after service upon them of a copy of this order with notice of entry, and defendant shall serve his answer within 20 days after service of the complaint.