Note Requiring Defendant to Become Registered on an Exchange Not an Instrument for Payment of Money Only Under CPLR 3213

On May 14, 2020, the First Department issued a decision in Alpha Capital Anstalt v. Generex Biotechnology Corp., 2020 NY Slip Op. 02877, holding that a note requiring a defendant to become registered on an exchange is not an instrument for the payment of money only under CPLR 3213, explaining:

The note upon which plaintiff sues does not qualify as an instrument for the payment of money only. Insofar as it required defendant Generex to become listed on a NASDAQ exchange (the failure to do so triggering Generex's alleged default and this litigation), it required something in addition to the defendant's explicit promise to pay a sum of money.

(Internal quotations and citations omitted).

Cases in the Commercial Division of the New York courts usually involve a motion to dismiss at the outset and then a motion for summary judgment at the close of discovery, so such motions are a big part of our practice. The decision above is about a special procedure in New York for quickly resolving claims relating to unpaid notes or similar documents allowing the plaintiff to move for summary judgment at the beginning of an action. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions about seeking or opposing a motion for pre-trial dismissal or judgment of a commercial lawsuit.