JPMorgan Chase Bank, N.A. v. S.I. Wood Furniture Corp.

• Decision Date: 24 January 2012
• Docket Number: No. 2964/11.,2964/11.
• Citation: 946 N.Y.S.2d 67
• Parties: JPMORGAN CHASE BANK, N.A., Plaintiff, v. S.I. WOOD FURNITURE CORP., Ikram Said, a/k/a Ikram E. Said, a/k/a Ikram Essa Said, and Amal Said, a/k/a Amal E. Said, a/k/a Amal A. Said, Defendants.
• Court: New York Supreme Court

946 N.Y.S.2d 67

JPMORGAN CHASE BANK, N.A., Plaintiff,

v.S.I. WOOD FURNITURE CORP., Ikram Said, a/k/a Ikram E. Said, a/k/a Ikram Essa Said, and Amal Said, a/k/a Amal E. Said, a/k/a Amal A. Said, Defendants.

No. 2964/11.

Supreme Court, Kings County, New York.

Jan. 24, 2012.

Michael A. D'Emidio, Helfand & Helfand, New York, for Plaintiff.

Morris Fateha, Brooklyn, for Defendant.

CAROLYN E. DEMAREST, J.

In this action by plaintiff JPMorgan Chase Bank, N.A. (Chase) to recover monies based upon the default of defendants S.I. Wood Furniture Corp. (Wood), Ikram Said, a/k/a Ikram E. Said, a/k/a Ikram Essa Said (Ikram), and Amal Said, a/k/a Amal E. Said, a/k/a Amal A. Saie (Amal) (collectively, defendants) under a commercial line of credit and a concurrently executed personal guaranty, Chase moves, pursuant to CPLR 3212, for summary judgment in its favor as against defendants in the amount of $249,770, with accrued interest in the sum of $5,049.94, interest on $249,770 at its prime rate plus .50%, plus late fees in the sum of $1,935.25, and reasonable attorneys' fees and expenses.

By a Business Credit Application dated October 17, 2005, Wood applied to Chase for a Business Revolving Credit Line in the sum of $250,000.¹ The Business Credit Application set forth the business information of Wood and the personal financial information of Ikram and Amal, as Wood's president and vice-president, respectively. Under the section, entitled “Authorizing Resolution,” Ikram, as the president of Wood, stated that at a corporate meeting. it was resolved that Wood could complete the Business Credit Application and that Wood would then “be obliged to fulfill all of the terms and conditions of the respective note and [Credit] Account Agreement which it shall thereafter receive.” This section of the Business Credit Application was executed by both Ikram and Amal on October 17, 2005.

The Business Credit Application, under the section entitled “Personal Guarantee and Collateral Agreement,” in pertinent part, provided as follows:

“I/we individually and personally, jointly and severally, absolutely and unconditionally guarantee to ... Chase ... payment of each and every obligation and liability of every nature and description of the Applicant to Chase whether now existing or arising in the future (Obligations'). I agree that all Obligations will become immediately due without notice or demand from Chase if the Applicant at any time breaches any terms or conditions of the Obligations, note or [Credit] Account Agreement for which the Applicant has applied ... This Personal Guarantee ... is an individual personal liability whether or not signed below in an individual capacity or with any descriptive terms placed after the signer's name.”

Under the section entitled “Acknowledgment Authorization” (which stated “Please read the Personal Guarantee and Collateral Agreement, then sign and date your Application”), the Business Credit Application, in pertinent part, stated:

“I/we the Applicant will receive the note or Account Agreement(s) corresponding to the product(s) for which the Applicant has been approved. Use of the proceeds by deposit or otherwise, or endorsement, constitutes full acceptance of the note and terms specified in this Application, the approval notification and/or applicable agreement(s) ... By signing below, I/we also individually and personally jointly and severally agree to the terms of the Guarantee and Collateral Agreement which appear in the Personal Guarantee and Collateral Agreement Section of this Application.”

This section of the Business Credit Application was also executed by both Ikram and Amal on October 17, 2005.

On or about December 1, 2005, Wood's application was approved by Chase for a line of credit in the sum of $250,000. The terms and conditions of the Business Revolving Credit Line are set forth in the Business Revolving Credit Account Agreement (Credit Account Agreement).

Pursuant to the terms and conditions of the Credit Account Agreement, Wood was to be provided with $250,000 in business revolving credit with checks needed to access the line of credit mailed to it. The Credit Account Agreement provided that “[b]y signing the application for a Credit Line and using the checks provided by [Chase, Wood] has agreed to bound by this ... Credit Account Agreement.”

Paragraph 1 of the Credit Account Agreement stated that in consideration of its terms and conditions, Chase agreed to make loans to Wood up to but not exceeding its credit line. Paragraph 2 of the Credit Account Agreement further stated that Wood agreed to pay an annual fee of $2,500 for the first year, with the annual fee waived thereafter. Paragraph 3 of the Credit Account Agreement set forth that Chase was required to repay the amount advanced with interest at the rate of Chase's prime rate plus .50% per annum, calculated at 360 days per calendar year. Paragraph 3 further set forth that principal was due and payable, on the date provided in Chase's invoice, in monthly installments equal to 1/36 of the outstanding loans as of the date of the last loan made prior to the due date of the installments, and in full as otherwise required by Chase or pursuant to the terms of that agreement, and that payments were due as described by a periodic statement each month. Paragraph 3 also provided for late fees by stating:

“Any principal or interest which is not paid within 10 days after its due date (whether as stated by acceleration or otherwise) shall be subject to a late payment charge of 5% of the total payment due, in addition to the payment of interest. [Wood] agrees to pay and stipulates that 5% of the total payment due is a reasonable amount for a late payment charge. [Wood] shall pay the late payment charge upon demand by [Chase] or, if billed, within the time specified.”

In addition, paragraph 3 of the Credit Account Agreement provided for the recovery of attorneys' fees and expenses by stating:

“In addition to all principal, interest and fees owing under this Agreement, [Wood] and each guarantor agrees to pay upon demand (a) all reasonable costs and expenses incurred by [Chase] and all owners and holders of the indebtedness evidenced by this Agreement in collecting the amount owing under this Agreement through probate, reorganization, bankruptcy or any other proceeding, and (b) costs, expenses and reasonable attorneys' fees if and when this Agreement is placed in the hands of an attorney for collection or enforcement.”

Paragraph 7 of the Credit Account Agreement provided that Wood's failure to make any payment when due would constitute an event of default. Paragraph 7 of the Credit Account Agreement, in pertinent part, further stated:

“If any Event of Default occurs, then [Chase's] obligation to make Loans shall immediately terminate, and the Loans together with accrued interest thereon shall be immediately due and payable without notice of intent to accelerate, notice of acceleration or any other notice, presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived ...”

Wood made all payments due through August 1, 2010. It is undisputed that Wood then failed to make the payment due on September 1, 2010, or to pay any subsequent installments that have now become due, and that such failure of Wood to make such payment due on September 1, 2010 constituted an act of default under the Credit Account Agreement. As a result, Chase, pursuant to paragraph 7 of the Credit Account Agreement, elected to accelerate the balance due and to declare all amounts due immediately due and payable to it. Chase also demanded that Ikram and Amal honor the guarantees given by them under the “Personal Guarantee and Collateral Agreement” section of the Business Credit Application (the Guaranties) and perform the obligations of Wood, but they ignored this demand and refused to do so.

Consequently, on February 8, 2011, Chase filed this action against defendants. Chase's complaint seeks recovery from Wood for the accelerated balance due, plus interest, late fees, and reasonable attorneys' fees based on the Credit Account Agreement, and also seeks to recover this sum from Ikram and Amal, individually, based on the Guaranties. Defendants interposed a verified answer, which contains general denials and 22 affirmative defenses.

In support of its instant motion for summary judgment, Chase has annexed the Business Credit Application, the Credit Account Agreement, and the sworn affidavit of Karl Reed, an assistant vice-president of its Portfolio Management Center. Mr. Reed, in his affidavit, attests that he has access to Chase's business records, maintained in the ordinary course of regularly conducted business activity, including the business records for and relating to Wood. He asserts that he has made his affidavit based upon his review of those records relating to Wood's loan and from his own personal knowledge of how they are kept and maintained. He explains that the loan records for Wood are maintained by Chase in the course of its regularly conducted business activities and are made at or near the time of the event, by or from information transmitted by a person with knowledge. He further sets forth that as to Chase's business records that consist of documents created by third parties, Chase relies on the accuracy of such records in conducting its business and collecting loans.

Mr. Reed recounts Wood's entry into the Credit Account Agreement and Ikram and Amal's execution of the Guaranties on October 17, 2005. He attests that Wood has failed to pay the sums due under the terms of the Credit Account Agreement and is in default. He annexes a copy of the payment history for the Credit Account Agreement, confirming that Wood has not made any payments on the Credit Account Agreement since August 1, 2010. The attached payment history reflects payments made, advances taken under the Credit Account Agreement, and the assessment of...