N.Y. Cmty. Bank v. Fessler

• Decision Date: 04 October 2011
• Citation: 2011 N.Y. Slip Op. 07014,88 A.D.3d 667,930 N.Y.S.2d 601
• Parties: NEW YORK COMMUNITY BANK, respondent,v.Eric FESSLER, appellant.
• Court: New York Supreme Court — Appellate Division

88 A.D.3d 667

930 N.Y.S.2d 601

2011 N.Y. Slip Op. 07014

NEW YORK COMMUNITY BANK, respondent,

v.Eric FESSLER, appellant.

Supreme Court, Appellate Division, Second Department, New York.

Oct. 4, 2011.

Harvey Sorid, Uniondale, N.Y., for appellant.Loeb & Loeb LLP, New York, N.Y. (Helen Gavaris and Martin Fojas of counsel), for respondent.

DANIEL D. ANGIOLILLO, J.P., THOMAS A. DICKERSON, L. PRISCILLA HALL, and JEFFREY A. COHEN, JJ.

In an action to recover on a promissory note, brought by motion for summary judgment in lieu of complaint pursuant to CPLR 3213, the defendant appeals, as limited by his brief, from so much of an order of the Supreme Court, Nassau County (Cozzens, Jr., J.), entered April 16, 2010, as, upon reargument, vacated so much of an order of the same court entered September 29, 2009, as denied the plaintiff's motion for summary judgment in lieu of complaint, and thereupon granted the plaintiff's motion for summary judgment in lieu of complaint.

ORDERED that the order entered April 16, 2010, is affirmed insofar as appealed from, with costs.

On September 27, 2006, the defendant signed a “line of credit note” (hereinafter the note) in which he promised to pay the plaintiff, New York Community Bank, the principal sum of $2,500,000 in accordance with the terms of the note. In June 2008, the defendant defaulted on the note by failing to make the required monthly payment or any payments due thereafter. As of November 2008, the defendant's unpaid principal debt under the note was $1,842,980.38. After the defendant did not respond to the plaintiff's demand letter, the plaintiff commenced the instant action by motion for summary judgment in lieu of complaint pursuant to CPLR 3213. The defendant opposed, and while he did not dispute his default under the note, he raised as a defense that the plaintiff's line of credit agreement with corporations he solely controlled was inextricably intertwined with the note, and that the plaintiff's breach of the line of credit agreement relieved him of his obligation to repay the note. In reply, the plaintiff contended that the separate line of credit agreement it had with the defendant's corporations was irrelevant to the defendant's default under the note and that its decision to stop extending credit to the defendant's corporations did not relieve the defendant of his personal obligation to repay the note. Initially, the Supreme Court denied the motion, but subsequently, upon granting that branch of the plaintiff's motion which was for leave to reargue its prior motion, it granted the plaintiff summary judgment in lieu of complaint.

The plaintiff established its prima facie entitlement to judgment as a matter of law by setting forth “the existence of a promissory note, executed by the defendant, containing an unequivocal and unconditional obligation to repay, and the failure by the defendant to pay in accordance with the note's terms” ( Lugli v. Johnston, 78 A.D.3d 1133, 1135, 912 N.Y.S.2d 108; see Ro & Ke, Inc. v. Stevens, 61 A.D.3d 953, 953, 878 N.Y.S.2d 394; Premium Assignment Corp. v. Utopia Home Care, Inc., 58 A.D.3d 709, 709, 871 N.Y.S.2d 724; Bank of N.Y. v. Vega Tech. USA, LLC, 18 A.D.3d 678, 679, 794 N.Y.S.2d 922; Cardella v. Giancola, 297 A.D.2d 618, 619, 747 N.Y.S.2d 31; Gregorio v. Gregorio, 234 A.D.2d 512, 651 N.Y.S.2d 599). In opposition, the defendant failed to raise a triable issue of fact as to a bona fide defense. “[T]he general rule is that the breach of a related contract cannot defeat a motion for summary judgment on an instrument for money only unless it can be shown that the contract and the instrument are ‘intertwined’ and that the defenses alleged to exist create material issues of triable fact” ( Mlcoch v. Smith, 173 A.D.2d 443, 444, 570 N.Y.S.2d 70). The defendant failed to raise a triable issue of fact as to whether the line of credit...