ABR WHOLESALERS INC v. Michael J. Woodward, Jr., and Hughesco of Buffalo, Inc., Defendants. (2019)

MEMORANDUM AND ORDER

It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.

Memorandum:  Defendant Hughesco of Buffalo, Inc. (Hughesco) owed nearly $90,000 on its credit account with plaintiff for goods and materials that it had purchased prior to the death of its owner.  After the owner's death, plaintiff requested that defendants Gena M. King, the owner's stepdaughter, and Michael J. Woodward, Jr., the then-operator of Hughesco, execute a promissory note in favor of plaintiff for the outstanding balance, in exchange for which plaintiff would continue to supply goods and materials to Hughesco on credit.  King and Woodward signed the note, and three payments were made in accordance with the terms thereof.  When payments ceased, plaintiff commenced this action seeking to enforce the note and to recover the balance owed.  King appeals from an order granting plaintiff's motion for summary judgment on the complaint and denying her cross motion for summary judgment dismissing the complaint against her.  We affirm.

Contrary to King's contention, we conclude that plaintiff met its initial burden by submitting a copy of the note and an affidavit from its director of finance attesting to King's failure to repay the note in accordance with its terms (see Quadrant Mgt. Inc. v. Hecker, 102 A.D.3d 410, 410, 957 N.Y.S.2d 697 [1st Dept. 2013];  Sandu v. Sandu, 94 A.D.3d 1545, 1546, 942 N.Y.S.2d 914 [4th Dept. 2012];  see also Thor Gallery at S. DeKalb, LLC v. Reliance Mediaworks [USA] Inc., 143 A.D.3d 498, 498, 39 N.Y.S.3d 16 [1st Dept. 2016] ).  Thus, the burden shifted to King to “come forward with evidentiary proof showing the existence of a triable issue of fact with respect to a bona fide defense of the note” (Sandu, 94 A.D.3d at 1546, 942 N.Y.S.2d 914 [internal quotation marks omitted];  see Lamar v. Vasile [appeal No. 4], 49 A.D.3d 1218, 1219, 852 N.Y.S.2d 900 [4th Dept. 2008];  Moezinia v. Baroukhian, 247 A.D.2d 452, 453, 668 N.Y.S.2d 688 [2d Dept. 1998] ).  Although “lack of consideration ․ and fraud in the inducement ․ may be bona fide defenses to a promissory note” (Creative Culinary Concepts, LLC v. Sam Greco Constr., Inc., 134 A.D.3d 1294, 1295, 22 N.Y.S.3d 609 [3d Dept. 2015] ), here, King failed to raise triable issues of fact with respect to the existence of either defense (see id.).

King contends that Supreme Court erred in granting plaintiff's motion and denying her cross motion because her execution of the promissory note was unsupported by consideration.  We reject that contention.  “Consideration consists of either a benefit to the promisor or a detriment to the promisee” (Anand v. Wilson, 32 A.D.3d 808, 809, 821 N.Y.S.2d 130 [2d Dept. 2006];  see Weiner v. McGraw–Hill, Inc., 57 N.Y.2d 458, 464, 457 N.Y.S.2d 193, 443 N.E.2d 441 [1982] ).  “ ‘[I]t is enough that something is promised, done, forborne, or suffered by the party to whom the promise is made as consideration for the promise made to him’ ” (Weiner, 57 N.Y.2d at 464, 457 N.Y.S.2d 193, 443 N.E.2d 441, quoting Hamer v. Sidway, 124 N.Y. 538, 545, 27 N.E. 256 [1891];  see Anand, 32 A.D.3d at 809, 821 N.Y.S.2d 130).  Although King asserts that she would not receive any significant financial benefit from Hughesco's continued viability, she concedes in her affidavit that she signed the note because she had “some concern for Hughesco's employees” and wanted to keep Hughesco in business.  In so doing, she confirmed that plaintiff's promise to continue to supply materials on credit, which is “ample consideration” (Movado Group v. Presberg, 259 A.D.2d 371, 371, 687 N.Y.S.2d 116 [1st Dept. 1999], lv dismissed 94 N.Y.2d 794, 700 N.Y.S.2d 423, 722 N.E.2d 503 [1999] ), was something she sought to secure by executing the note.

King further asserts that the court erred in granting plaintiff's motion because there are issues of fact concerning whether plaintiff misrepresented the note as a guaranty for future credit purchases.  We also reject that contention.  Such a contention constitutes one for fraud in the factum, also known as fraud in the execution, i.e., “that the [party] was induced to sign something entirely different than what [the party] thought [he or] she was signing” (Ackerman v. Ackerman, 120 A.D.3d 1279, 1280, 993 N.Y.S.2d 53 [2d Dept. 2014];  see Dasz, Inc. v. Meritocracy Ventures, Ltd., 108 A.D.3d 1084, 1084–1085, 969 N.Y.S.2d 653 [4th Dept. 2013];  see generally UCC 3–305, Official Comment 7).  However, “[a] party to a writing is presumed to have read and understood the document which he [or she] signed” (Marine Midland Bank v. Idar Gem Distribs., 133 A.D.2d 525, 526, 519 N.Y.S.2d 898 [4th Dept. 1987] ) and, absent some impairment, cannot justifiably rely on another's representation that the words used in the relevant document mean something other than what they plainly state (see Countrywide Home Loans, Inc. v. Gibson, 157 A.D.3d 853, 856, 70 N.Y.S.3d 580 [2d Dept. 2018];  Ackerman, 120 A.D.3d at 1280, 993 N.Y.S.2d 53;  see also Dasz, Inc., 108 A.D.3d at 1084–1085, 969 N.Y.S.2d 653;  Sorenson v. Bridge Capital Corp., 52 A.D.3d 265, 266, 861 N.Y.S.2d 280 [1st Dept. 2008], lv dismissed 12 N.Y.3d 748, 876 N.Y.S.2d 699, 904 N.E.2d 836 [2009];  Norstar Bank of Upstate N.Y. v. Office Control Sys., 165 A.D.2d 265, 268, 566 N.Y.S.2d 743 [3d Dept. 1991] ).  Here, the one-page, seven-sentence, conspicuously-labeled promissory note that King signed and twice initialed clearly articulated the obligation she was agreeing to assume.