Opinion
501 CA 21-00891
08-04-2022
COUNSEL FINANCIAL HOLDINGS LLC, Plaintiff-Respondent, v. SULLIVAN LAW, L.L.C., Robert C. Sullivan, Bianca T. Sullivan, John R. Bondon, Parrot Properties, Inc., Robba Properties, L.L.C., and South Side Investment Company, Defendants-Appellants. (Appeal No. 2.)
PHILLIPS LYTLE LLP, BUFFALO (SEAN C. MCPHEE OF COUNSEL), FOR DEFENDANTS-APPELLANTS. WOODS OVIATT GILMAN LLP, BUFFALO (JOHN C. NUTTER OF COUNSEL), FOR PLAINTIFF-RESPONDENT.
PHILLIPS LYTLE LLP, BUFFALO (SEAN C. MCPHEE OF COUNSEL), FOR DEFENDANTS-APPELLANTS.
WOODS OVIATT GILMAN LLP, BUFFALO (JOHN C. NUTTER OF COUNSEL), FOR PLAINTIFF-RESPONDENT.
PRESENT: LINDLEY, J.P., NEMOYER, CURRAN, WINSLOW, AND BANNISTER, JJ.
MEMORANDUM AND ORDER It is hereby ORDERED that the judgment so appealed from is unanimously affirmed without costs.
Memorandum: Defendants appeal from a judgment awarding plaintiff damages in the amount of $6,865,243.34. By motion for summary judgment in lieu of complaint (see CPLR 3213 ), plaintiff sought to recover on a revolving promissory note (note) executed by defendant Sullivan Law, L.L.C. (Sullivan Law) and a guaranty for payment and performance (guaranty) for the note executed by defendants Robert C. Sullivan, Bianca T. Sullivan, John R. Bondon, Parrot Properties, Inc., Robba Properties, L.L.C., and South Side Investment Company (collectively, guarantors). Monies advanced under the line of credit evidenced by the note were for the purpose of funding Sullivan Law's operating expenses or interest payments due under the note. Supreme Court granted plaintiff's motion, and we affirm.
We reject defendants’ contention that the note and guaranty are not instruments for the payment of money only within the ambit of CPLR 3213. The note contains an unambiguous promise to pay as and when required, as well as provisions governing default and acceleration of the debt upon default. The guaranty obligates the guarantors to "irrevocably, absolutely and unconditionally" guarantee to plaintiff "the punctual payment and performance" of the debt owed by Sullivan Law and to waive all defenses thereto. Thus, the instruments may be read "in the first instance" as instruments for the payment of money only ( Weissman v. Sinorm Deli, Inc. , 88 N.Y.2d 437, 445, 646 N.Y.S.2d 308, 669 N.E.2d 242 [1996] [internal quotation marks omitted]).
Defendants further contend that the note is not an instrument within the scope of CPLR 3213 because it is neither a negotiable instrument nor a commercial paper. CPLR 3213, however, does not require that an instrument either be negotiable or qualify as commercial paper. CPLR 3213 has been applied even though an instrument was "technically not commercial paper," and "the statute is not limited to negotiable and non-negotiable paper within the terms of Article 3 of the Uniform Commercial Code" inasmuch as " CPLR 3213 contains no such restriction nor does the policy underlying this procedure" ( Maglich v. Saxe, Bacon & Bolan , 97 A.D.2d 19, 21-22, 468 N.Y.S.2d 618 [1st Dept. 1983], appeal withdrawn 61 N.Y.2d 906, ––– N.Y.S.2d –––, ––– N.E.2d –––– [1984] ; see Logan v. Williamson & Co. , 64 A.D.2d 466, 468-469, 409 N.Y.S.2d 883 [4th Dept. 1978], appeal dismissed 46 N.Y.2d 996, 416 N.Y.S.2d 242, 389 N.E.2d 837 [1979] ). We likewise reject defendants’ contention that a line of credit may not be the subject of a motion for summary judgment in lieu of complaint pursuant to CPLR 3213 (see Stache Invs. Corp. v. Ciolek , 174 A.D.3d 1393, 1393, 106 N.Y.S.3d 458 [4th Dept. 2019] ; see generally Counsel Fin. Servs., LLC v. David McQuade Leibowitz, P.C. , 67 A.D.3d 1483, 1484, 889 N.Y.S.2d 811 [4th Dept. 2009] ).
Defendants also contend that the guaranty is not an instrument for the payment of money only because, in addition to guaranteeing Sullivan Law's obligation to make payment under the note, it contains language obligating the guarantors to guarantee performance under the note. We decline to follow the First Department precedent advanced by defendants (see e.g. PDL Biopharma, Inc. v. Wohlstadter , 147 A.D.3d 494, 495-496, 47 N.Y.S.3d 25 [1st Dept. 2017] ), and we conclude that the guaranty's references to ensuring the performance of the note's obligations do not negate its status as an instrument for the payment of money only (see Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A., "Rabobank Intl.," N.Y. Branch v. Navarro , 25 N.Y.3d 485, 488, 492, 15 N.Y.S.3d 277, 36 N.E.3d 80 [2015] ; see generally Northwoods, L.L.C. v. Hale , 201 A.D.3d 1357, 1357-1358, 158 N.Y.S.3d 701 [4th Dept. 2022] ; Midtown Mkt. Mo. City, Tx. LLC v. Tavakoli , 192 A.D.3d 1646, 1647-1648, 141 N.Y.S.3d 382 [4th Dept. 2021] ). In any event, the guaranty "required no additional performance by plaintiff[ ] as a condition precedent to payment [nor] otherwise made [the guarantors’] promise to pay something other than unconditional" ( iPayment, Inc. v. Silverman , 192 A.D.3d 586, 587, 146 N.Y.S.3d 51 [1st Dept. 2021], lv dismissed 37 N.Y.3d 1020, 154 N.Y.S.3d 27, 175 N.E.3d 909 [2021] [emphasis added and internal quotation marks omitted]).
We have considered defendants’ remaining contentions and conclude that none warrants modification or reversal of the judgment.