Source: https://law.justia.com/cases/new-york/other-courts/2007/2007-52142.html
Timestamp: 2019-04-25 01:53:21+00:00

Document:
[*1] Emperor Indus., Inc. v Rothbaum 2007 NY Slip Op 52142(U) [17 Misc 3d 1125(A)] Decided on November 8, 2007 Supreme Court, New York County Fried, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.
Barry Rothbaum a/k/a Barry Roth, Defendant.
Plaintiff Emperor Industries, Inc. ("Emperor" or "Plaintiff") brings this motion for summary judgment in lieu of complaint, pursuant to C.P.L.R. § 3213, seeking judgment against Defendant, Barry Rothbaum, in the amount of $219,585.75 plus interest and costs.
The basis for Plaintiff's motion for summary judgment in lieu of complaint is a memorandum, dated June 3, 2006 (the "Memo"). (See Wong Aff. Exh. A.) The Memo is addressed to the attention of "Waalce," from "Fories" and Re: "Loan of Barry." It contains a table, with columns for date, loan amount, bonus, deduction of sales commission, and balance. At the top of the column labeled, "Loan" and containing sums which appear to be the amount of each loan, the words, "To Barry" are written in by hand. The last amount appearing in the "Balance" column is $267,146.29. Appearing below the table, near the bottom of the page, is a mark that, according to Plaintiff, represents the Defendant's initials. This is not disputed by the Defendant.
Section 3213 provides for accelerated judgment in an action that is "based upon an instrument for the payment of money only or upon any judgment." In such an action, the plaintiff may serve the defendant with a summons and, in lieu of a complaint, a notice of motion for summary judgment and supporting papers. The purpose of the rule is "to provide a speedy and effective means of securing a judgment on claims presumptively meritorious." Interman Indus. Prods., Ltd. v. R.S.M. Electron Power, 37 NY2d 151 (1975); see also David D. Siegel, New York Practice 448 (3d ed. 1999) ("CPLR 3213 recognizes that some claims have greater presumptive merit than others and should have easier access to the courts than an ordinary plenary action gets.").
Here, however, the proper question is not whether an account stated is sufficient to support a motion for summary judgment in lieu of complaint, but rather, whether, on this particular statement of account, the terms of the loan agreement are set forth with sufficient [*3]clarity as to warrant accelerated judgment.
In Seaman-Andwall Corp. v. Wright Mach. Corp., 31 AD2d 136 (1st Dep't 1968) aff'd 29 NY2d 617 (1971), the Appellate Division set forth what the Court of Appeals later referred to as "the most cogent analysis of the standard to be applied in ascertaining whether an instrument qualifies for CPLR 3213 treatment." Interman, 37 NY2d at 155. The Seaman-Andwall Court determined that a plaintiff makes out a prima facie case for summary judgment in lieu of complaint by proof of an instrument and the defendant's failure to make payment according to its terms. 31 AD2d at 137 (emphasis added). The terms of payment must therefore be apparent on the face of the instrument itself. See Stern v. Chemical Bank, 83 Misc 2d 508, 514 (NY Civ. Ct. 1975) ("An instrument within the intent of the statute is one which clearly, unequivocally and unconditionally sets forth the basis for liability and the particular liability involved."). If outside proof, other than "simple proof of nonpayment or a similar de minimis deviation from the face of the document," is needed to establish the prima facie case, then the accelerated relief of § 3213 is unavailable. Weissman v. Sinorm Deli, 88 NY2d 437, 444 (1996); Kerin v. Kaufman, 296 AD2d 336, 337 (1st Dep't 2002).
Although from the face of the instrument upon which the present action is based, it appears that more than $300,000 in loans have been rendered "to Barry," and that the balance remaining is $267,146.29, there is no indication as to how or when - or even to whom - the payments should be made. There is also no indication of what interest rate should apply; and although Mr. Wong asserts in his affidavit that the loan was to be "without interest so long as defendant continued in his employment with plaintiff and its affiliated companies" (¶ 5), it is unclear whether, at the termination of Mr. Rothbaum's employment, the loans would simply start accruing interest, or whether the entire outstanding balance would become payable immediately. Furthermore, Mr. Wong avers that he has demanded that Mr. Rothbaum "repay to plaintiff the outstanding indebtedness" (¶ 8), but there is no indication of whether that demand was for a single payment of the entire balance or for a series of payments in smaller amounts.
These deficiencies require me to look toward "outside proof," i.e. something beyond the four corners of the Memo itself, in order to determine whether and to what extent the Defendant has failed to honor his obligation to repay Emperor. Where the terms of the loan arrangement are not apparent from the face of the instrument itself, a prima facie case for summary judgment in lieu of complaint has not been met. Seamann-Andwall, 31 AD2d at 137; Weissman, 88 NY2d at 444. Plaintiff's motion for summary judgment in lieu of complaint is therefore denied.

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