Opinion
Index No. 656900/2022
02-02-2023
Elaine Richardson, Plaintiff, v. Louis V. Greco, Defendant.
Molod Spitz & DeSantis, P.C., New York, NY (Andrew Bruce Small of counsel), for plaintiff. DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, White Plains, NY (Nicholas M. Menasché and Lee S. Wiederkehr of counsel), for defendant.
Unpublished Opinion
Molod Spitz & DeSantis, P.C., New York, NY (Andrew Bruce Small of counsel), for plaintiff.
DelBello Donnellan Weingarten Wise & Wiederkehr, LLP, White Plains, NY (Nicholas M. Menasché and Lee S. Wiederkehr of counsel), for defendant.
Gerald Lebovits, J.
Plaintiff, Elaine Richardson, brings this action for breach of contract and an equitable accounting against defendant, Louis V. Greco. Defendant previously acted as executor of the Estate of Lewis C. Horowitz, plaintiff's deceased partner. Unrelated to the administration of the estate, on March 1, 2014, the parties entered into an agreement under which defendant executed a promissory note in plaintiff's favor in the principal amount of $325,000. (See NYSCEF No. 1 at 5; NYSCEF No. 2 [promissory note].) Plaintiff alleges that defendant has failed to make payments on the promissory note and has been in default since July 30, 2021, with an outstanding amount due of $133,804.76. (See NYSCEF No. 20 at ¶¶ 7-10.)
Plaintiff's complaint asserts six causes of action: (1) defendant's failure to remit payments from various business interests to plaintiff, as a beneficiary of her deceased partner; (2) defendant's mismanagement of various funds; (3) breach of contract based on defendant's alleged failure to perform his obligations as executor; (4) breach of fiduciary duties; (5) defendant's failure to fully disclose financial obligations and associated financial interests; and (6) breach of contract based on defendant's alleged failure to repay money owed under the promissory note. (See NYSCEF No. 1.)
Defendant counterclaimed, asserting that the Estate wrongly failed to pay defendant the commission as executor of the Estate in the amount of $184,000 and that plaintiff, as the Estate's sole beneficiary, is obligated to pay defendant his commission. (See NYSCEF No. 16 at ¶¶ 19-25.)
Plaintiff now moves for partial summary judgment on her sixth cause of action, seeking payment on the promissory note. Defendant cross-moves to hold entry of summary judgment in abeyance pending the resolution of plaintiff's other five causes of action and defendant's counterclaims. Plaintiff's motion is granted; defendant's cross-motion is denied.
DISCUSSION
A party moving for summary judgment "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact." (Alvarez v Prospect Hosp., 68 N.Y.2d 320, 324 [1986].) To rebut such a showing, the opposing party must present evidence raising a material question of fact. (Id.)
Plaintiff has proffered the promissory note (NYSCEF No. 22), plaintiff's affidavit (NYSCEF No. 26), and the statement of material facts of the default (NYSCEF No. 20). Defendant concedes that he executed the promissory note, received $325,000 from plaintiff in exchange, and has failed to repay plaintiff the balance due in the amount of $133,804.76. (NYSCEF No. 29 at ¶ 2.). This showing establishes plaintiff's prima facie entitlement to judgment as a matter of law.
Defendant has not presented evidence that raises a fact question. Instead, defendant cross-moves under CPLR 3212 (e) (2) to stay entry of summary judgment on plaintiff's promissory-note claim. Courts may impose conditions on the grant of partial-summary judgment under CPLR 3212 (e) when there is "some articulable reason for concluding that the failure to impose conditions might result in some prejudice... to the party against whom the partial summary judgment is granted." (Robert Stigwood Org. v Devon Co., 44 N.Y.2d 922, 923 [1978].) Defendant argues that the amount sought on his counterclaims exceeds the outstanding balance under the promissory note, and therefore that he will be financially prejudiced should this court grant summary judgment now on the promissory-note claim while addressing the counterclaims later.
This argument is unpersuasive because the promissory-note claim and the counterclaims are concededly independent and unrelated. This case thus differs from Levy v Renck (137 A.D.2d 464, 466 [1st Dept 1988]), relied on by defendant. That decision addresses a related claim and counterclaims that all derived from the same contract. Not so here. To be sure, when the claim and counterclaim are unrelated, prejudice may still exist "if it appear[s] that plaintiff is financially unstable." (Pease & Elliman v 926 Park Ave. Corp., 23 A.D.2d 361, 362 [1st Dept 1965].) But the record here does not indicate that plaintiff is insolvent.
Additionally, the language of the promissory note expressly "waives [defendant's] right to interpose any defense (other than payment), set-off, or counterclaim" to an action brought to enforce the rights of the payee. (NYSCEF No. 22 at 1 ¶ 3.) Any counterclaim or set-off must "be asserted in a separate proceeding instituted" by defendant that "may not be consolidated with the Payee's suit on this Note." (Id. at 1-2 ¶ 3.) "Such a waiver may be enforced and is not against public policy." (Chemical Bank NY Trust Co. v Batter, 31 A.D.2d 802, 802 [1st Dept 1969].) Defendant asserts that the promissory note's waiver provision is inapplicable because his counterclaims do not concern the note. But the waiver provision applies not just to counterclaims, but also to set-offs, which by their nature may stem from some other unrelated payment or payment obligation arising from other dealings between the parties. And the express (indeed, emphasized) basis of defendant's cross-motion to stay is that "any amount awarded" on plaintiff's motion for partial summary judgment will assertedly be" offset, entirely, by [defendant's] pending counterclaims." (NYSCEF No. 32 at 2 [emphasis in original].)
Defendant emphasizes that plaintiff did not move to dismiss the counterclaim on the ground that it is barred by the Note. (NYSCEF No. 35 at 3.) But a motion to dismiss on that ground would be in the nature of a request for dismissal for failure to state a cause of action; that request need not be made in a party's initial responsive pleading. (See CPLR 3211 [e].) And even assuming that plaintiff made the deliberate choice to permit defendant to press his counterclaims in this action-which defendant has not established-that would not also constitute consent to hold entry of judgment on plaintiff's promissory-note claim in abeyance pending adjudication of those counterclaims and plaintiff's equitable causes of action.
Accordingly, it is
ORDERED that plaintiff's motion for summary judgment under CPLR 3212 on her sixth cause of action is granted and plaintiff is awarded a judgment against defendant for $117,367.31, with interest running from July 30, 2021, at the contractual default rate of 12%, plus costs and disbursements to be taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further
ORDERED that defendant's cross-motion to stay under CPLR 3212 (e) (2) is denied; and it is further
ORDERED that plaintiff's sixth cause of action is severed and the balance of the action shall continue; and it is further
ORDERED that plaintiff shall serve a copy of this order with notice of its entry on defendant and on the office of the County Clerk, which shall enter judgment accordingly.