Court Denies Motion For Summary Judgment In Lieu Of Complaint

On April 5, 2024, Justice Margaret A. Chan denied plaintiff’s motion for summary judgment in lieu of complaint based on certain promissory notes. The decision in Elisa Wietschner, as trustee of the WFIG Trust v. 9 Vandam JV LLC, Index No. 655573/2023, explained:

Plaintiff’s motion for summary judgment in lieu of complaint is denied. At the outset, the Notes are not instruments for the payment of money only that qualify for CPLR 3213, because “they referred to other documents with regard to events of default” and therefore plaintiff’s “right to payment could not be ascertained solely from the face of” the Notes (Matter of Estate of Peck, 191 AD3d at 537). It is undisputed that the Notes have not matured if not accelerated by an event of default (NYSCEF #s 4-6, § 1 [the maturity date the Notes is either the date that the Maxim Loans are fully satisfied or April 20, 2024]). Plaintiff nevertheless claims that payments under the Notes have been due and outstanding since October 2023 because defendant has allegedly "admit[ted] in writing its inability to pay, its debts" by virtue of Simpson's email to Howard on September 28, 2023 (NYSCEF #s 4-6, § 3.1 [c]).

To evaluate whether such an admission has occurred would require the court to look beyond the four corners of not just the Notes but also Simpson's email, in which the Notes were not explicitly mentioned, and Simpson did not expressly hold himself out as defendant's representative (NYSCEF # 8 [Simpson's email signature only identified him as managing partner of Arch]). Determining whether Simpson acted on behalf of defendant in the email would entail examination of extrinsic evidence on Arch's management roles in this real estate project. And assessing whether the Notes were within the scope of the email would require outside proof as to the ownership structure and financing arrangements of the Vandam entities.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning the summary judgment in lieu of complaint.