Great Plains Capital Corp. v. Levi
| Decision Date | 22 August 2012 |
| Docket Number | No. 38023/2011.,38023/2011. |
| Citation | 2012 N.Y. Slip Op. 51673,960 N.Y.S.2d 50,36 Misc.3d 1236 |
| Parties | GREAT PLAINS CAPITAL CORPORATION, Plaintiff, v. Sigal S. LEVI, Defendant. |
| Court | New York Civil Court |
OPINION TEXT STARTS HERE
Stewart Wolf, Esq., Foster & Wolkind, P.C., New York, attorneys for plaintiff.
Michael L. Hurwitz, Esq., The Hurwitz Law Firm, New York, attorneys for defendant.
This civil court action was commenced by the Plaintiff, GREAT PLAINS CAPITAL CORPORATION (hereinafter referred to as “GREAT PLAINS”), to recover sums alleged due and owing by the Defendant, SIGAL S. LEVI (hereinafter referred to as “LEVI”), based upon a purported breach of contract and a purported breach of the personal guarantee of the underlying contract.
GREAT PLAINS commenced this action by service of a summons and complaint, dated May 13, 2011, by personal service at the principal place of business of the Defendant. The Defendant appeared by counsel and interposed a verified answer which alleged, inter alia, improper service of process, the failure to name and serve a necessary party, the lack of standing, wrongful conduct, failure to mitigate damages, accord and satisfaction, waiver, setoff and recoupment, unjust enrichment, estoppel, laches, and violations of public interest. The answer was not verified by the party but was verified by the attorney pursuant to CPLR § 741.The Plaintiff, by Notice of Motion, returnable on August 24, 2011, moved the court for an Order pursuant to CPLR § 3211(b) seeking the dismissal of all the aforementioned affirmative defenses and for summary judgment in accordance with CPLR § 3212. The attorneys, pursuant to a stipulation, adjourned the motion from August 24, 2011 to September 23, 2011 for motion practice. On the adjourned date of September 23, 2011, the Plaintiff's motion was denied nonappearance movant.
Subsequently, the Plaintiff, by Order to Show Cause, returnable on October 20, 2011, moved the court to restore the motion to the calendar based on law office failure. On October 20, 2011, the Court vacated the denial of the motion, restored the motion to the calendar and adjourned the motion to November 17, 2011 and then, to December 8, 2011.On December 8, 2011, the court record shows that the motion was submitted to one of the judges of this court, and subsequently referred back to Special Term Part 1 based on judicial recusal. On the adjourned date of December 8, 2011, after oral argument, the motion was submitted to the undersigned judge for a final disposition.
In summary, the Plaintiff argues that the defenses set forth in the attorney's verified answer failed to comport with CPLR § 3013 to the extent that the defenses as alleged lack sufficient peculiarity and the material elements of the respective defenses. It should be noted that the Plaintiff does not expressly rely on this particular provision of the CPLR but instead relies on CPLR § 3211(b). It is the opinion of this court that CPLR § 3013 is applicable; CPLR § 3211(b) is the procedural mechanism to seek dismissal of the defenses. As significant, the Plaintiff asserts that the Defendant executed a line of credit and concomitantly a personal guarantee with a maximum allowable principal sum of $18,000.00, and defaulted in monthly payments. The Plaintiff asserts that notwithstanding the fact that the Defendant borrowed monies under the line of credit from Fleet Bank between February 18, 2005 and May 10, 2011 and made full restitution to the bank, subsequently, on May 11, 2010, the Defendant borrowed the maximum principal sum of $18,000.00 and failed to repay any portion of that sum. Moreover, on November 9, 2010, Bank of America, for good and valuable consideration, sold, assigned and transferred all rights, title and interests in the line of credit and the personal guarantee to GREAT PLAINS and produces documentary evidence to substantiate this fact.
The Plaintiff further argues that despite the fact that GREAT PLAINS did not submit complete copies of the line of credit and the guarantee because portions of said instrument were lost, New York Courts authorized GREAT PLAINS to maintain this action. GREAT PLAINS contends that notwithstanding the fact that the negotiable instrument is lost, stolen or destroyed, it does not defeat the rights of the holder or discharge the holder's interest. The Plaintiff relies on Section 3–804 of the Uniform Commercial Code and Section 390(a) of the General Business Law which allows a holder to prove the contents of a lost instrument by parole evidence or other secondary evidence. According to Plaintiff's claims, it has sustained its prima facie case for entitlement to judgment as a matter of law.
Furthermore, the Plaintiff contends that the twelve (12) affirmative defenses raised in the answer do not expressly articulate viable defenses to the complaint. In particular, the Plaintiff states that the defense that “the complaint does not state a valid cause of action” cannot be interposed in an answer and asserts that case authority supports its proposition that the assertion of such a defense is more appropriately raised in a motion to dismiss.
The Defendant, in opposition, avers that the loan was a business line of credit and the bank intentionally put the line of credit in the Defendant's individual name. The Defendant more importantly asserts that the Plaintiff is not the original loan maker and thus, has no standing. The Defendant adamantly contends that the loan and the entire transaction is “nonsensical” and claims that the line of credit and the personal guarantee are contracts of adhesion, are unconscionable and unenforceable. The Defendant further claims that the bank asserted undue influence against the Defendant in the execution of the loan documents and asserts that the predecessor maker of the note and guarantee had superior and unfair bargaining power in this commercial transaction. The Defendant also avers that the original lender “induced Defendant to mistakenly obligate herself for the payment of this debt.” Lastly, the Defendant asserts that the Plaintiff has failed to comply with discovery and inspection demands to the detriment of the Defendant.
The Plaintiff, in reply and in further support of the motion, answers that the Defendant has utterly failed to produce evidentiary proof in admissible form to defeat the motion for summary judgment and argues that the supporting affirmation from the attorney without personal knowledge is inadmissible evidence as a matter of law. The Plaintiff directs the court's attention to the supporting affidavit of the Defendant which the Plaintiff argues is an admission of the validity of the line of credit and guarantee. The Plaintiff asserts that the Defendant did not deny that she borrowed the monies and did not deny that she breached the line of credit and guarantee by failing to make payments.
The Plaintiff further asserts that the unsubstantiated claims by the Defendant that she is not personally liable is belied by the fact that the Defendant executed the loan documents in her individual name and the loan was based on her personal information and not her business. The Plaintiff produced an allonge that shows that the Defendant dutifully made payments on the line of credit for a period in excess of three (3) years, then borrowed an additional sum of $18,000.00, and failed to make any further payments.
The Plaintiff rebuts any claims that the line of credit or guarantee were unconscionable or were contracts of adhesion but are instruments that are standard and customary in the banking industry. The Plaintiff even argues that the contracts of adhesions, as interpreted by the courts, are only applicable when a party obtains funding for personal reasons as opposed to those contracts that are entered into for business purposes.
It seems prudent to begin with the request by Plaintiff to dismiss the affirmative defenses in the answer. As to the first affirmative defense, the Defendant states that the complaint fails to state a cause of action. This court is in accord with the Plaintiff's claims that such conclusory and bald assertions are inadequate to dismiss the underlying complaint. More importantly, the failure to state a cause of action should not be raised in an answer but rather should be raised in a motion to dismiss pursuant to CPLR § 3211(a)(7) (Charnis v. Shohet, 195 Misc.2d 188, 757 N.Y.S.2d 671 [App. Term, 2nd Dept., 2002] ). Accordingly, the first affirmative defense lacks merit and therefore, is dismissed.
The second affirmative defense alleges improper service of the summons and complaint. The Plaintiff bears the burden of proving by a preponderance of the evidence that the jurisdiction over the Defendant was obtained by proper service of process. Banker's Trust Company of California, N.A. v. Tsaukas, 303 A.D.2d 343, 756 N.Y.S.2d 92 (2nd Dept., 2003). Generally speaking, any objection to the personal jurisdiction of the Court must be made at the time when the litigant first appears in the action or proceeding, or before the time to amend the answer has expired, or it is deemed waived. Iacovangelo v. Shepherd, 5 NY3d 184, 800 N.Y.S.2d 116 (2005). See CPLR § 3211(e).
It is well settled law in the State of New York that affidavits of service attesting to service of process constitute prima facie evidence of proper service unless rebutted by a sworn statement of someone with personal knowledge. Bidetti v. Salter, 108 A.D.2d 890, 485 N.Y.S.2d 772 (2nd Dept.1985); Mitchel1 v. Mendez, 107A.D.2d 737, 484 N.Y.S.2d 98 (2nd Dept.1985). Where, however, there is a sufficient sworn denial of receipt by the party, the affidavit is rebutted and the Plaintiff must establish jurisdiction by a preponderance of the evidence at a hearing. Bank of America National Trust and Savings Associations v. Herrick, 233 A.D.2d 351, 650 N.Y.S.2d 754 (2nd Dept.1996); Banker's Trust v. Tsaukas, sup...
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Cypress Fin. Recoveries LLC v. Morris
...557 (1980). It has been more succinctly held that an answer by an attorney without personal knowledge is worthless ( Great Plains Capital Corp v. Levi , 36 Misc 3d 1236(A) (Civ Ct. Kings Co. 2012) (citation omitted).In this case, the purported affidavit of facts and answer in this action ar......