Court Opinion

ID: 5902995
Source: CourtListenerOpinion
Date Created: 2022-01-13 03:27:14.500901+00
Date Added: 2024-06-11T08:45:44.527439
License: Public Domain

Kupferman, J. P., and Ellerin, J.,
dissent in part in a memorandum by Ellerin, J., as follows: The defenses raised in opposition to this motion for summary judgment in lieu of complaint are insufficient to establish any genuine reason to deny the motion.
The promissory notes here at issue were issued by MiCAD Systems, Inc. to the individual plaintiffs in May 1986. One note is dated May 22, 1986, and is payable to Ira Hayes Fuchs in the amount of $6,000 on August 15, 1986. Three notes, two in the amount of $20,000 each and one in the amount of *315$15,000, are dated May 30, 1986 and payable to Allen Hillman on various dates between August 15, 1986 and October 15, 1986.
Pursuant to a merger agreement and plan of reorganization dated July 18, 1986, two months after execution of the notes, DocuGraphix, Inc. acquired MiCAD Systems. Under the express terms of the contract, DocuGraphix expressly acknowledged its indebtedness to the plaintiffs with respect to these very promissory notes. Article III of the contract, together with an attached "exception schedule”, sets forth extensive disclosure of the finances of MiCAD. Among the other liabilities disclosed, the contract specifically states, in its exhibit C, section 3.4, that: "MiCAD is indebted to the following individuals under outstanding promissory notes: Allen Hillman, $55,000, due August 15, 1986-October 15, 1986; Ira Hayes Fuchs, $5,000 due August 15, 1986 and $6,000 due monthly”.
As the IAS court noted, "it is evident that plaintiffs and Mr. Taylor, the Chief Executive Officer and MiCAD, Inc., are capable professional businessmen who were ably assisted by attorneys and accountants at the time of the corporate organization between DocuGraphix and MiCAD Systems, Inc. [The Agreement] expressly noted the existence of the promissory notes at issue which were duly disclosed and made a part of the merger agreement. Therefore, for defendant to raise an argument which suggests the spectre of fraud perpetrated by plaintiffs upon defendant appears to be nothing more than a frivolous attempt by defendant to raise a non-existent triable issue to defeat plaintiffs’ claims.”
The affidavit of Mr. Taylor in opposition to the motion, which is given great deference by the majority, contains nothing more than conclusory allegations of fraud and lack of consideration, without the slightest factual support and is of no probative value. The promissory notes state their consideration "for value received” and are presumptively valid. In opposing plaintiffs’ motion for summary judgment, it was incumbent upon the defendant to do more than merely raise an issue of consideration. It was essential for the defendant in claiming the absence of consideration, to state its version of the facts in evidentiary form. Bald, conclusory allegations, even if believable, are not enough. (Ehrlich v American Moninger Greenhouse Mfg. Corp., 26 NY2d 255; see also, P. D. J. Corp. v Bansh Props., 29 AD2d 927, affd 23 NY2d 971.) Taylor’s claims of lack of consideration consist of nothing more than bare statements that he "doesn’t know” or "has not yet found evidence” of any consideration for the notes, but *316he does not set forth any particular evidence to raise a triable issue of fact as to consideration.
Nor is there merit to defendant’s assertion that summary judgment should be denied because only the movants possess knowledge of the facts. Summary judgment should be denied on this ground only if the salient facts essential to justify opposition are unavailable. (CPLR 3212 [f].)
Here, the record does not bear out the assertion that the salient facts were unavailable to the defendant. When the agreement was negotiated DocuGraphix had a chance to question the notes but did not. DocuGraphix admits that it knew of these notes before it acquired MiCAD Systems. The debt was specifically acknowledged in the "exception schedule” of the agreement, and DocuGraphix agreed to pay this obligation and went ahead with the purchase. The purchase price reflected these obligations. Defendant cannot ignore its knowledge of the notes in this freely negotiated agreement and now seeks to hide behind the claims that the facts are available only to the plaintiffs.
Finally, the alleged issue of fraud has no place in this motion relating to the notes. The Taylor affidavit contains a litany of charges of fraudulent conduct supposedly committed by the plaintiffs, but these conclusory assertions all relate to the alleged wrongdoing of Fuchs in his conduct of MiCAD’s business. None of these alleged frauds relate to the promissory notes here in issue. In fact, none relate to Mr. Hillman, the payee of three of the notes. These allegations, if proven, may form the basis for certain counterclaims, but should not prevent independent summary judgment on the notes, and are more appropriately the subject of other litigation already pending between the parties.
During oral argument of the appeal, counsel for the plaintiffs admitted that through his inadvertence he submitted duplicate copies of one $20,000 note payable to Hillman, instead of the two separate notes in that amount. As an appellate court we are bound by the record, and judgment on the duplicate note submitted on the motion cannot stand. Accordingly, I would reverse to deny judgment on the $20,000 duplicate note, but otherwise affirm the grant of summary judgment in lieu of complaint on the remaining promissory notes.