Summary
holding that claims of a breach of fiduciary duty did not constitute either a defense to a claim for payment on a note or a basis for the note's cancellation
Summary of this case from Slade v. NewmanOpinion
August 19, 1993
Appeal from the Supreme Court, New York County (Harold Tompkins, J.).
Once plaintiff Herman Miller, on his motion for reargument which, in reality, was a motion for renewal, clarified the question of the agreed upon interest rate, which was the only reason for denying him summary judgment on the $363,970 note in the first instance, he was entitled to an award of summary judgment. There was never any issue concerning payment. Midtown, the maker, merely alleged that the purchase price for plaintiff Herman Miller's shares of the corporation had been paid in full and produced copies of cancelled checks in support of that claim. That payment, however, was not at issue. Midtown has never alleged payment of the note, which was given in payment of plaintiff Herman Miller's share of undistributed profits. Since there is no factual issue concerning the execution, delivery, demand and default on the note, summary judgment thereon is warranted and the motion of defendant Herman Miller in action No. 1 to dismiss that part of Midtown and Fred Miller's complaint seeking cancellation of the note should have been granted as a matter of law. The IAS Court erroneously relied on Lackmann Food Serv. v E S Vending Co. ( 125 A.D.2d 366), which held that summary judgment should be withheld where a counterclaim is inseparable from the main action on the note. Unlike Lackmann, however, Midtown and Fred Miller's claims of breach of fiduciary duty over a fifteen-year period in support of their action to cancel the note do not involve the note; nor do they constitute either a defense to a claim for payment thereon or a basis for cancellation. It is "well established that * * * assertion of defenses based on facts extrinsic to the instrument" is insufficient to defeat a motion brought pursuant to CPLR 3213. (Woodbridge Vil. Assocs. v Goren, 188 A.D.2d 293.)
Nor, given the foregoing, was it proper to grant consolidation of the two actions.
Concur — Sullivan, J.P., Rosenberger, Asch and Rubin, JJ. [As amended by unpublished order entered Nov. 16, 1993.]