FRYDCO CAPITAL GROUP LLC v. PARK RIO EAST LLC (2024)

Order, Supreme Court, New York County (Suzanne J. Adams, J.), entered April 3, 2023, which denied plaintiff's motion for summary judgment in lieu of complaint pursuant to CPLR 3213, and deemed plaintiff's moving papers the complaint in the action and defendants’ answering papers the answer, unanimously reversed, on the law, without costs, to grant plaintiff's motion for summary judgment in lieu of complaint as to liability against defendants and to remand the issue of damages for further determination.

Plaintiff established its prima facie entitlement to judgment as a matter of law by submitting the promissory note and an affidavit asserting that defendants failed to pay the loan in accordance with the terms of the note (see Zyskind v. FaceCake Mktg. Tech., Inc., 101 A.D.3d 550, 551, 956 N.Y.S.2d 45 [1st Dept. 2012]).

In opposition, defendants failed to raise a triable issue of fact.  The language of the promissory note expressly waived defendants’ rights to interpose any defense (other than payment), setoff, or counterclaim to an action brought to enforce plaintiff's rights under the note.  Moreover, even if the terms of the note did not contain a waiver of setoff, counterclaim, or defenses, defendants did not establish that their obligation under the promissory note was in any way linked to the distribution of the settlement proceeds in connection with a separate business venture involving the parties (see Embraer Fin. Ltd. v. Servicios Aereos Profesionales, S.A., 42 A.D.3d 380, 381, 839 N.Y.S.2d 756 [1st Dept. 2007]).  In any event, assertion of defenses based on facts extrinsic to the instrument are insufficient to defeat a motion brought pursuant to CPLR 3213 (see Deka Immobilien Inv. GmbH. v. Lexington Ave. Hotel, L.P., 196 A.D.3d 424, 425, 151 N.Y.S.3d 390 [1st Dept. 2021]).

Furthermore, a dispute over the amount of damages owed is not a defense to liability pursuant to CPLR 3213 (see Allied Irish Banks, PLC v. Young Men's Christian Assn. of Greenwich, 36 Misc.3d 216, 224, 944 N.Y.S.2d 828 [Sup. Ct., N.Y. County 2012], affd 105 A.D.3d 516, 961 N.Y.S.2d 920 [1st Dept. 2013]).  Accordingly, the matter is remanded for further determination on the amount due and owing to plaintiff.