HAKIM v. HAKIM (2026)

Order, Supreme Court, New York County (Joel M. Cohen, J.), entered March 6, 2026, which, insofar appealed from as limited by the briefs, granted plaintiff Said Hakim an accounting and denied defendant Kamran Hakim's fourth counterclaim, unanimously affirmed, without costs.

The trial court properly dismissed Kamran's fourth counterclaim against Said seeking recovery under the 1998 promissory note upon determining that it was improperly premised on past consideration.

Kamran made a prima facie case for recovery under the promissory note signed by Said by submitting the note, wherein Said promised to pay him $525,000 on June 9, 2003, plus interest at 12% per annum, and testifying that Said never satisfied his obligation on the note (see e.g. Neo Universe Inc. v. Ito, 147 AD3d 682, 682 [1st Dept 2017] ).  Kamran “was not required to demonstrate that there was adequate consideration for the note” (Carlin v. Jemal, 68 AD3d 655, 656 [1st Dept 2009];  see Neo Universe Inc., 147 AD3d at 682–683).  Rather, “[i]t was ․ [Said]'s burden to demonstrate a lack of consideration” (Neo Universe Inc., 147 AD3d at 682;  see Navon v. Zackson, 191 AD3d 578, 578 [1st Dept 2021];  Carlin, 68 AD3d at 656).

Said met his burden of establishing inadequate consideration for the note because, according to Kamran's own affirmation, the note was for past consideration.  “[T]the general rule is [that] past consideration is no consideration” (Mann v. Green, 159 AD3d 545, 545 [1st Dept 2018] [internal quotation marks omitted] ).  The burden thus shifted back to Kamran to demonstrate an exception to the general rule, which he failed to do.

There are two exceptions to the general rule.  First, the note may be enforceable where it expressly recites the nature of the past consideration in writing.  The writing “must be explicit and not ‘vague’ or ‘imprecise’ ” (Korff v. Corbett, 155 AD3d 405, 408 [1st Dept 2017], lv denied 31 NY3d 912 [2018];  see General Obligations Law § 5–1105).  Here, the note “provides no details about consideration, stating merely that the promise is ‘for value received,’ ” which is insufficient (Mann, 159 AD3d at 546;  see Korff, 155 AD3d at 408).

Second, under Uniform Commercial Code § 3–408, “no consideration is necessary for an instrument ․ given in payment of ․ an antecedent obligation of any kind.”  Kamran argues that this exception applies because Said agreed to sign the note to repay Kamran for Kamran's 1970's deposit of $600,000 for a letter of credit;  thus, it was “for value received” as provided in the note.  Although Said admitted that his signature appeared on the note, he said it pertained to a proposed real estate transaction that never came to fruition.  The trial court did not credit Kamran's testimony regarding the purpose of the note.  Thus, even if Kamran's allegations would provide a basis to enforce the note under UCC 3–408, the court's credibility determination is entitled to deference (see Hemmings v. Sutton, 151 AD3d 457, 458 [1st Dept 2017] ).

The trial court also properly granted Said's request for an accounting of Ranell Freeze Company, an entity in which the parties were partners.  Kamran contends that Said was not entitled to an accounting because he could not identify any wrongdoing on Kamran's part, such as diversion of partnership funds, unexplained imbalance in distributions, or denial of access to records.  However, “[a]n allegation of wrongdoing is not an indispensable element of a demand for an accounting where the complaint indicates a fiduciary relationship between the parties” (Adam v. Cutner & Rathkopf, 238 A.D.2d 234, 242 [1st Dept 1997] [internal quotation marks omitted] ).  The complaint alleges, and Kamran admits, that Said and Kamran are partners in derivative plaintiff/nominal defendant Ranell Freeze Company, a New York partnership.  Kamran testified that he was Ranell's Chief Executive and it is undisputed that at all relevant times, Kamran by and through Ranell, was the managing partner of the subject property.  Thus, Kamran owes a fiduciary duty to Said (see Unitel Telecard Distrib.  Corp. v Nunez, 90 AD3d 568, 569 [1st Dept 2011] [“shareholders in a close corporation owe fiduciary duties to one another”] ).

Moreover, although it is true that an equitable accounting is ordinarily available only when the plaintiff has no adequate remedy at law, this Court has also held that “the only manner in which a partnership can be wound up is through an accounting,” and that “upon dissolution, any partner is entitled to an accounting (Shandell v. Katz, 95 A.D.2d 742, 743 [1st Dept 1983] ).  Here, Kamran consented to a dissolution of Ranell, so it was appropriate to order an accounting while dissolving the partnership.

Kamran's argument that Said is not entitled to an accounting because he has unclean hands is also without merit.  The conduct attributed to Said did not rise to the level of “immoral, unconscionable conduct” (National Distillers & Chem. Corp. v Seyopp Corp., 17 N.Y.2d 12, 15 [1966] ).  Further, Kamran's objection to the accounting based on his contention that the court converted this case “into an open-ended post-trial inquest,” is unavailing as the trial court specifically limited the accounting to the distributions withheld from Said since 2005.

Finally, the court did not improvidently exercise its discretion by not drawing an adverse inference against Said for failing to testify, given his age and ill health (see 855–79 LLC v. Salas, 40 AD3d 553, 556 [1st Dept 2007];  318 E. 93 v. Ward, 276 A.D.2d 277, 278 [1st Dept 2000] ).

We have considered Kamran's remaining arguments and find them unavailing.