Opinion
COUNSEL
David Isaacson, New City, for plaintiff.
Neil R. Flaum, New York City, for defendant.
OPINION
Yvonne Lewis, J.
Plaintiff, Meryl Keezing, has motioned this court to render a judgment in her favor against the defendant in the amount of $20,000, plus interest from April 11, 2002. Ms. Keezing predicates this request on the fact that on January 11, 2002 she had loaned the defendant $25,000 to be repaid within 90 days, i.e., on or before April 11, 2002, and that after an initial $5,000 Howard v Kirkpatrick
This court finds the arguments advanced by both sides to be specious. On the one hand, the plaintiff's reply assertion that the parties' agreement constituted an investment vehicle whereby she was sold an equity share of the defendant's promissory note with a third party is belied by her initial motion papers where she sought repayment of a loan. On the other hand, the defendant's contention that he was duped into a usurious undertaking is contradicted by the fact that the transaction was of his making; that is, that he authored the transactional document and utilized a third-party promissory The Court of Appeals, in Seidel v 18 E. 17th St. Owners (supra, 79 N.Y.2d 735 [1992]), discussed the considerations to be resolved herein. " When 'any bond, bill, note, assurance, pledge, conveyance, contract, security or any evidence of debt, has been taken or received in violation' of the usury laws, 'the court shall declare the same to be void, and enjoin any prosecution thereon, and order the same to be surrendered and cancelled" ' (at 741, citing General Obligations Law § 5-511 [2]). Hence, the " consequences to the lender of a usurious transaction can be harsh: the borrower is relieved of all further payment--not only interest but also outstanding principal, and any mortgages securing payment are cancelled." (Id.) It is in this regard that the plaintiff's point comes to bear, namely, that " [u]sury laws apply only to loans and forebearances, not investments (General Obligations Law § 5-501 [1], [2]). [Hence,] [i]f the transaction is not a loan, 'there can be no usury, however unconscionable the contract may be" ' (id. at 744, citing Orvis v Curtiss, 157 N.Y. 657, 661 [1899]). However, it is equally the case that " a party will be concluded [sic] from denying his own acts or admissions which were expressly designed to influence the contract of another, and did so influence it, and when such denial will operate to the injury of the latter" (id. at 742 [internal quotation marks omitted], citing Payne v Burnham, 62 N.Y. 69, 73 [1875]). In Seidel v 18 E. 17th St. Owners (79 N.Y.2d 735, 743), it was held that " [a]lthough the mortgagor is estopped from claiming usury, the illegal transaction is not entirely purged of its taint. Balancing the competing interests of law and equity, 'the innocent assignee is permitted to recover only the amount advanced with interest, rather than to enforce the mortgage for its face amount" ' (citing Clafin v Boorum, 122 N.Y. 385 [1890]; Payne v Burnham, 62 N.Y. at 74, supra). In Seidel v 18 E. 17th St. Owners (supra), the plaintiffs alleged that one of the defendant's principals both suggested the interest rate and drafted the documents and that his representations were relied upon that the transaction was legal. In other words, the plaintiffs argued, as does the instant plaintiff, Meryl Keezing, that the borrower's conduct/wrongdoing should estop any usury defense. The Court thereupon Abramovitz v Kew Realty Equities,
Schaaf v Borsher, Angelo v Brenner,Wherefore, summary judgment (in lieu of complaint) is rendered in favor of the plaintiff against the defendant in the amount of $20,000, plus interest from April 11, 2002. Defendant's cross motion to dismiss is denied.