NC Two, L.P. v. G2 Global, LLC, 2007 NY Slip Op 31114(U) (N.Y. Sup. Ct. 5/7/2007)

• Court: New York Supreme Court
• Writing for the Court: Rolando T. Acosta
• Citation: NC Two, L.P. v. G2 Global, LLC, 2007 NY Slip Op 31114(U) (N.Y. Sup. Ct. 5/7/2007), 2007 NY Slip Op 31114, 0601636/2006., Seq. No. 1. (N.Y. Sup. Ct. May 07, 2007)
• Decision Date: 07 May 2007
• Docket Number: 0601636/2006.,Seq. No. 1.
• Parties: NC Two, L.P., as successor in interest to Bank of America, N.A., successor in interest to FLEET NATIONAL BANK, Plaintiffs, v. G2 Global, LLC and OLEG G. GENSHAFT, Defendants.

Page 1

2007 NY Slip Op 31114(U)

NC Two, L.P., as successor in interest to Bank of America, N.A., successor in interest to FLEET NATIONAL BANK, Plaintiffs, v. G2 Global, LLC and OLEG G. GENSHAFT, Defendants.

0601636/2006.

Seq. No. 1.

Supreme Court of the State of New York, New York County.

May 1, 2007.

May 7, 2007.

Stuart Wolf, Esq., Foster & Wolkind, PC, New York, NY, Attorneys for Plaintiff.

Albert A. Levy, Esq., Feldman Rosman, New York, NY,

DECISION/JUDGMENT

ROLANDO T. ACOSTA, Judge.

Background

According to plaintiff, on or about November 4, 2002, defendant G2 Global applied to Fleet National Bank ("Fleet") for a business line of credit, and Fleet offered G2 Global a business line of credit of $14,000 pursuant to the terms of a Fleet Small Business Credit Express Agreement. G2 Global accepted the terms of the agreement by using the line of credit and borrowed $14,000, which defendant Genshaft personally guaranteed. G2 Global then defaulted on the loan.

Fleet subsequently merged with Bank of America, and Bank of America assumed all of Fleets rights, title and interest in and to the agreement. Thereafter, on or about November 15, 2005, Bank of America sold its rights, title and interest in and to the agreement to plaintiff NC Two. At that point, there remained a balance of principal and interest on the agreement in the amount of $17,448.18. By letter dated January 25, 2006, plaintiff demanded payment in the amount of $18,596.55, but defendant did not make a payment or objected to the account. Although a copy of this letter is not attached to the moving papers, a letter dated December 5, 2005, attached as plaintiff's Exhibit K, demand payment of $17,448.

In his complaint, plaintiff asserts four causes of action, breach of contract, reasonable attorneys fees, breach of the personal guarantee, and account stated. Defendant raised ten affirmative defenses, see Answer, plaintiff's Exhibit D, none of which have any merit.

Plaintiff now moves for summary judgment on all four causes of action even though it does not possess the original agreement or the guarantee. Rather, relying on NY UCC 3-804, plaintiff has submitted an affidavit from Brad Hreben, NC Venture (plaintiff's general partner)'s Senior Vice President and Chief Information Officer, and attached certain documents to establish its ownership of the agreement, the circumstances for its loss, and the terms of the agreement. These documents include: (1) a Lost Instrument Affidavit prepared by a Vice President of Bank of America, attesting that it was the lawful owner and holder of an instrument executed by G2 Global on November 4, 2002 with an obligation to pay the original principal sum of $14,000, to the order of Fleet; (2) a copy of the loan application, signed by defendant Genshaft as president of G2 Global and agreeing to be personally liable as a guarantor under the personal guarantee; (3) a copy of a Fleet Small Business Line of Credit Agreement; (4) the underwriter's approval of the agreement for $14,000 at a rate of 9.5%; (5) a copy of the order approving the merger of Fleet and Bank of America; (6) an allonge dated November 15, 2005, and executed by the Bank of America, made part of the original agreement, indicating that the original amount of $14,000 was to be paid to the order of NC Two; and, (7) the Loan Sale Agreement between the Bank of America and NC two, whereby the Bank of America sold the G2 Global loan (outstanding balance at that juncture was $17,448) to NC two.

Analysis

It is well settled that the proponent of a motion for summary judgment must establish that "there is no defense to the cause of action or that the cause of action or defense has no merit," (C.P.L.R. §3212[b]), sufficiently to warrant the court as a matter of law to direct judgment in his or her favor. Bush v. St. Claire's Hospital, 82 N.Y.2d 738, 739 (1993); Winegrad v. New York University Medical Center, 64 N.Y.2d 851, 853 (1985). This standard requires that the proponent of the motion "tender[] sufficient evidence to eliminate any material issues of fact from the case," id., "by evidentiary proof in admissible form." Zuckerman v. City of New York, 49 N.Y.2d 557, 562 (1980). Thus, the motion must be supported "by affidavit from a person having knowledge of the facts], by a copy of the pleadings and by other available proof, such as depositions." C.P.L.R. §3212(b).

Where the proponent of the motion makes a prima facie showing of entitlement to summary judgment, the burden shifts to the party opposing the motion to demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action, or to tender an acceptable excuse for his or her failure to do so. Vermette v. Kenworth Truck Company, 68 N.Y.2d 714, 717 (1986); Zuckerman v. City of New York, supra, 49 N.Y.2d at 560, 562. Like the proponent of the motion, the party opposing the motion must set forth evidentiary proof in admissible form in support of his or her claim that material triable issues of fact exist. Id. at 562.

Pursuant to UCC 3-804, the owner of a lost instrument may recover upon a showing of ownership, facts which prevent its production of the original, and the terms of the instrument:

The owner of an instrument which is lost, whether by destruction, theft or otherwise, may maintain an action in his own name and recover from any party liable thereon upon due proof of his ownership, the facts which prevent his production of the instrument and its terms. The court shall require security, in an amount fixed by the court not less than twice the amount allegedly unpaid on the instrument, indemnifying the defendant, his heirs, personal representatives, successors and assigns against loss, including costs and expenses, by reason of further claims on the instrument, but this provision does not apply where an action is prosecuted or defended by the state or by a public officer in its behalf.

(emphasis added); see also Marrazo v. Piccolo, 163 A.D.2d 369 (2^nd Dept. 1990); Kraft v. Sommer, 54 A.D.2d 598 (4^th Dept. 1976); Outman v. National Westminster Bank, 146 Misc. 2d 391 (Sup. Ct. N.Y. Co. 1990). Although this showing is often done at trial, the owner of a lost instrument may seek summary judgment upon making the requisite showing under UCC 3-804. Citibank, N.A. v. Benedict, 2000 WL 322785 (S.D.N.Y. 2000).

Here, plaintiff established its prima facie entitlement to summary judgment on his breach of contract, attorneys fees and personal guarantee causes of action (first, second and third). That is, it established ownership of the agreement executed by Fleet and...