National Recovery Systems v. Mazzei

• Decision Date: 30 March 1984
• Citation: 475 N.Y.S.2d 208,123 Misc.2d 780
• Parties: NATIONAL RECOVERY SYSTEMS, as Assignee of Grand Resorts, Inc., Plaintiff, v. Rudolph L. MAZZEI, Defendant.
• Court: New York Supreme Court

Page 208

475 N.Y.S.2d 208

123 Misc.2d 780

NATIONAL RECOVERY SYSTEMS, as Assignee of Grand Resorts Inc., Plaintiff, v. Rudolph L. MAZZEI, Defendant.

Supreme Court, Special Term Suffolk County, Part I.

March 30, 1984.

Wexner, Koenig & Margolies, Rockville Centre, for plaintiff.

Mars, Sloane & Conlon, Patchogue, for defendant.

ELI WAGER, Justice.

It is, ORDERED that this motion to dismiss the complaint is denied.

Rudolph L. Mazzei, the defendant in this action to recover $12,500.00 allegedly lent him in 1977 by the plaintiff's assignor, moves to dismiss the complaint on the ground that the court lacks subject matter jurisdiction and that the complaint fails to state a cause of action. Defendant alleges in his affidavit--in conclusory fashion--that the money was advanced to him by the MGM Grand Hotel in Las Vegas, Nevada (plaintiff's assignor) exclusively "for the purpose of casino gambling" and may thus not be recovered in a New York court. The purpose of the loan does not appear on the face of the complaint and defendant's answer (dated August 11, 1983) consists only of denials. Thus, the threshold issue is whether defendant's failure to plead the defense or to move before the time to answer had expired constitutes a waiver pursuant to CPLR 3211(e). A resolution of that issue depends upon whether the defense of illegality (see Molina v. Games Management Services, 89 A.D.2d 69, 454 N.Y.S.2d 730, 731; General Obligations Law § 5-401) comes within the ambit of CPLR 3211(a) paragraph 2 or paragraph 7 or whether it is an affirmative defense which must be pleaded (CPLR 3211[a], par. 5).

Where illegality appears on the face of the complaint, a motion to dismiss for failure to state a cause of action (CPLR 3211[a], par. 7) is proper (see McCall v. Frampton, 99 Misc.2d 159, 415 N.Y.S.2d 752) and recovery may be barred even where defendant has failed to plead the defense (see e.g., Attridge v. Pembroke, 235 App.Div. 101, 256 N.Y.S. 257; Radnay v. Schor, 41 Misc.2d 789, 246 N.Y.S.2d 492). However, the presumption is that contracts are legal (and enforceable) and illegality is a defense to be pleaded unless it appears on the face of the complaint (Brearton v. DeWitt, 252 N.Y. 495, 170 N.E. 119; Morgenstern v. Cohon, 2 N.Y.2d 302, 160 N.Y.S.2d 633, 141 N.E.2d 314; Vrooman v. Village of Middleville, 106 Misc.2d 945, 436 N.Y.S.2d 662; Bishop Estates, Inc. v. Murphy, 41 Misc.2d 719, 246 N.Y.S.2d 73; see CPLR 3018[b] ). It has been held that a trial court may refuse to enforce a contract when it becomes apparent from the evidence adduced that the agreement is antagonistic to the public interest, despite a defendant's failure to plead (Klein v. D.R. Comenzo Company (N.Y.Mun.Ct.) 207 N.Y.S.2d 739; see also Dodge v. Richmond, 10 A.D.2d 4, 196 N.Y.S.2d 477). Similarly, when such evidence is presented on a motion for summary judgment the defendant's failure to plead will not bar summary disposition (see Carlson v. Travelers Insurance Company, 35 A.D.2d 351, 316 N.Y.S.2d 398).

Since the unenforceability of the instant contract does not appear on the face of the complaint, the defense must be treated as an affirmative defense pursuant to CPLR 3211(a), par. 5 and is thus subject to waiver. As noted above, such a waiver may be ignored by the trial court if the evidence indicates that the contract should not be enforced, but the necessary evidence does not appear in the record as it presently exists.

A gambling debt will not be enforced in New York unless it was validly contracted in another jurisdiction and is enforceable there (Aspinall's Club Limited v. Aryeh, 86 A.D.2d 428, 450 N.Y.S.2d 199). In Nevada, debts incurred and checks drawn for gambling purposes are void and unenforceable (Sea Air Support, Inc. v. Herrmann, 96 Nev. 574, 613 P.2d 413). The Nevada courts, however, require consideration of the surrounding circumstances in order to determine that money...