PREFERRED CAPITAL INC v. PBK INC (2003)

Supreme Court erred in denying plaintiff's motion seeking summary judgment.   Plaintiff commenced this action to recover payments due under a lease agreement executed by defendant PBK, Inc., doing business as Holland Willows (PBK), and guaranteed by defendant Ronald A. Pilkington, covering an ATM terminal supplied by the Credit Card Center (CCC) (see generally UCC 2-A-103 [g] ).  The original terminal broke down shortly after PBK leased it from plaintiff, and a replacement terminal supplied by CCC also broke down, after which CCC went bankrupt.

 Plaintiff met its initial burden of establishing its entitlement to judgment as a matter of law by submitting the lease agreement and proof of nonpayment (see Canon Fin. Serv. v. Medico Stationery Serv., 300 A.D.2d 66, 751 N.Y.S.2d 194).   The burden thus shifted to defendants to “demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action or tender an acceptable excuse for [their] failure” to do so (Zuckerman v. City of New York, 49 N.Y.2d 557, 560, 427 N.Y.S.2d 595, 404 N.E.2d 718).   Defendants opposed the motion on the basis of an unpleaded affirmative defense of fraud and collusion involving plaintiff and CCC.

 Contrary to plaintiff's contention, an unpleaded affirmative defense may be invoked to defeat a summary judgment motion (see Nassau Trust Co. v. Montrose Concrete Prods. Corp., 56 N.Y.2d 175, 182-183, 451 N.Y.S.2d 663, 436 N.E.2d 1265, rearg. denied 57 N.Y.2d 674, 454 N.Y.S.2d 1032, 439 N.E.2d 1247;  Denburg v. Parker Chapin Flattau & Klimpl, 213 A.D.2d 297, 624 N.Y.S.2d 151, mod. on other grounds, 82 N.Y.2d 375, 604 N.Y.S.2d 900, 624 N.E.2d 995;  see also Allen v. Matthews, 266 A.D.2d 782, 784, 699 N.Y.S.2d 166).   Nevertheless, defendants' allegations of fraud and collusion are supported by nothing more than the unsubstantiated suspicion, expressed by Pilkington in his affidavit in opposition to the motion, that CCC was running a “Pyramid Scheme” for the benefit of plaintiff.  “In opposing plaintiff's motion for summary judgment, it was incumbent upon the defendants to * * * state their version of the facts in evidentiary form.  ‘Bald conclusory assertions, even if believable, are not enough’ ” (Ehrlich v. American Moninger Greenhouse Mfg. Corp., 26 N.Y.2d 255, 259, 309 N.Y.S.2d 341, 257 N.E.2d 890, quoting Kramer v. Harris, 9 A.D.2d 282, 283, 193 N.Y.S.2d 548;  see State of New York v. Peerless Ins. Co., 67 N.Y.2d 845, 848, 501 N.Y.S.2d 651, 492 N.E.2d 779).   Furthermore, Pilkington's unsubstantiated allegation of an agency relationship between plaintiff and CCC is belied by the express provisions of the lease agreement (see Federal Deposit Ins. Corp. v. Jacobs, 185 A.D.2d 913, 587 N.Y.S.2d 978;  Lejkowski v. Petrou, 178 A.D.2d 465, 576 N.Y.S.2d 816;  see also Zigabarra v. Falk, 143 A.D.2d 901, 902, 533 N.Y.S.2d 536).

 In addition, defendants' “belief that additional discovery might reveal something helpful” in this case is insufficient to defeat plaintiff's motion (Cooper v. Milton Paper Co., 258 A.D.2d 614, 615, 683 N.Y.S.2d 911;  see Ostrander v. Biel's Info. Tech. Sys. Corp., 299 A.D.2d 886, 887, 749 N.Y.S.2d 755).   Although a motion for summary judgment may be opposed on the ground “that facts essential to justify opposition may exist but cannot then be stated” (CPLR 3212[f] ), “the opposing party must make an evidentiary showing supporting this conclusion, mere speculation or conjecture being insufficient” (Pank v. Village of Canajoharie, 275 A.D.2d 508, 509, 712 N.Y.S.2d 210;  see Firth v. State of New York, 287 A.D.2d 771, 773, 731 N.Y.S.2d 244, affd. on other grounds 98 N.Y.2d 365, 747 N.Y.S.2d 69, 775 N.E.2d 463).   Defendants here failed to make the necessary evidentiary showing.

Thus, we reverse the order, grant plaintiff's motion and order that judgment be entered in favor of plaintiff in the amount of $17,639.86 together with interest at the rate of 9% (see CPLR 5004) commencing May 27, 2001, the date of the default.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously reversed on the law without costs, the motion is granted and judgment is ordered.

MEMORANDUM: