| Estate of Goth v Tremble |
| 2009 NY Slip Op 01273 [59 AD3d 839] |
| February 19, 2009 |
| Appellate Division, Third Department |
| Estate of George L. Goth, Deceased, Appellant, v Todd N.Tremble, Respondent. |
—[*1] Todd N. Tremble, Cornwallville, respondent pro se.
Malone Jr., J. Appeal from an order of the Supreme Court (Teresi, J.), entered July 1, 2008in Greene County, which denied plaintiff's motion for summary judgment.
Plaintiff commenced this action seeking payment as holder of two promissory notesexecuted by defendant in favor of George L. Goth (hereinafter decedent). In his answer,defendant argued that the notes are unenforceable as they were made without consideration and,alternatively, that they were satisfied by services rendered in lieu of payment. Defendant alsocounterclaimed seeking payment for services provided to decedent under theories of quantummeruit and unjust enrichment. Plaintiff moved for summary judgment on both its complaint andthe counterclaims. Supreme Court explicitly denied plaintiff's motion for summary judgment onthe complaint and implicitly denied plaintiff's motion for summary judgment dismissing thecounterclaims. Plaintiff now appeals.
First, we reject plaintiff's contention that Supreme Court erred in denying its motion forsummary judgment on the complaint. In support of its motion, plaintiff primarily relies on thepromissory notes and the dearth of any documentation that any payments were received bydecedent on the notes. The first note—executed December 5, 2003 and prepared by anattorney—is in the amount of $58,700 with 8% interest and includes specifications as tothe manner of repayment. It expressly states that it "represents repayment for loans made bydecedent to [defendant] and includes in this balance a prior loan and note for $18,000.00 whichis [*2]encompassed hereby." The second note was handwrittenby defendant on January 1, 2006 and promises to pay decedent the sum of $146,800 at 8%interest and states "Interest only payments can be paid until the time [that decedent and] I bothrequests [sic] a change." On this evidence, plaintiff met its initial burden of establishinga prima facie case for summary judgment (see Mastro v Carroll, 296 AD2d 802, 802[2002]; Maikels v Albany Broadcasting Co., 248 AD2d 915, 916 [1998]; FriendsLbr. v Cornell Dev. Corp., 243 AD2d 886, 887 [1997]).
We further conclude, however, that defendant demonstrated the existence of at least onetriable issue of fact which precludes summary judgment in plaintiff's favor (see CPLR3212 [b]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). "Lack ofconsideration is a viable defense" to enforcement of a promissory note (Mastro v Carroll,296 AD2d at 802; see Manufacturers Hanover Trust Co. v L.N. Props., 174 AD2d 383[1991]). Here, defendant admits that decedent provided him with financial assistance at timeswhen defendant's farm was struggling, but asserts that decedent intended to gift the various sumsinvolved and did not expect repayment. According to defendant, decedent was his best friendand, as fellow farmers, the two helped each other voluntarily. Likewise, defendant testified thatthe promissory notes were intended as gifts and, further, were limited to gifts causa mortisinasmuch as defendant had no expectation of being able to complete the gifts during his lifetime.He testified that he delivered each note to decedent in an envelope marked, "To be opened onlyin the event of [defendant's] death" because he hoped that should defendant die he "couldsomehow reimburse [decedent] for these gifts from the proceeds of [his] estate." Defendant'scharacterization of the mutual generosity between decedent and defendant is corroborated by theaffidavit of decedent's nephew. Plaintiff, on the other hand, presented the affidavit of an attorneywho stated that shortly before decedent's death, decedent communicated to the attorney that thepromissory notes should be counted among decedent's assets. Accordingly, when construed inthe light most favorable to the nonmoving party, defendant has raised a triable issue of fact withrespect to the existence of consideration supporting the promissory notes (see Mastro vCarroll, 296 AD2d at 803; Paolangeli v Cowles, 208 AD2d 1174, 1175 [1994];cf. Bell v Xanthopoulos, 202 AD2d 910, 912 [1994]; see also DeVito vBenjamin, 243 AD2d 600, 602 [1997]; Dayan v Yurkowski, 238 AD2d 541,541-542 [1997]; Lombard & Co. v De La Roche, 235 AD2d 333, 334 [1997]).
Further, although the Dead Man's Statute (see CPLR 4519) may impact defendant'sability at trial to prove that decedent did not expect repayment of the money that he provided todefendant, contrary to plaintiff's argument, that fact does warrant summary judgment on thisrecord. "Evidence, otherwise relevant and competent upon a trial or hearing, but subject toexclusion on objection under the Dead Man's Statute, should not predetermine the result onsummary judgment in anticipation of the objection" (Phillips v Kantor & Co., 31 NY2d307, 310 [1972]; see Williams v Ross, 277 AD2d 776, 778 [2000]). Unlike a case wherethe sole evidence offered in support of a defense would be barred by the Dead Man's Statute,here, the key issue underlying defendant's defense—i.e., defendant's intent indrafting the notes—does not necessarily hinge on any representation or action made ortaken by decedent (cf. Mantella v Mantella, 268 AD2d 852, 853 [2000]; Albany Sav.Bank v Seventy-Nine Columbia St., 197 AD2d 816, 817 [1993]). Further, if plaintiff decidesto rely, as it did here, on the assertion of the attorney who stated that decedent considered thenotes part of his estate, the door will open, under the plain text of the statute, to defendant'stestimony about the same transaction (see CPLR 4519; Matter of Wood, 52NY2d 139, 145 [1981]). Accordingly, we fully concur with Supreme Court's decision to leaveapplication of the Dead Man's Statute to the trial court.
On the other hand, we conclude that plaintiff's motion for summary judgment on the [*3]counterclaims should have been granted. The first counterclaimpleaded a cause of action sounding in quantum meruit for services provided by defendant todecedent. However, defendant candidly admits that he had no expectation that decedent wouldpay him for such services. Inasmuch as an expectation of compensation is a necessary element ofa cause of action for quantum meruit, plaintiff was entitled to summary judgment on thiscounterclaim (see Rowley, Forrest,O'Donnell & Beaumont, P.C. v Beechnut Nutrition Corp., 55 AD3d 982, 983 [2008];Clark v Torian, 214 AD2d 938, 938 [1995]). Defendant's second counterclaim, soundingin unjust enrichment, required defendant to show that plaintiff was enriched at defendant'sexpense and that "it would be inequitable to permit [plaintiff] to retain that which is claimed by[defendant]" (Clifford R. Gray, Inc. vLeChase Constr. Servs., LLC, 31 AD3d 983, 988 [2006]). "The essence of such a causeof action is that one party is in possession of money or property that rightly belongs to another"(id.) and "[g]enerally, courts will look to see if a benefit has been conferred on thedefendant under mistake of fact or law" (Paramount Film Distrib. Corp. v State of NewYork, 30 NY2d 415, 421 [1972], cert denied 414 US 829 [1973]). Again,defendant's candid admissions that he voluntarily provided services to decedent out of friendshipwithout expectation of any compensation would defeat the claim that plaintiff possesses propertyrightfully belonging to defendant. Accordingly, plaintiff is entitled to summary judgment on bothcounterclaims.
Mercure, J.P., Lahtinen, and Kavanagh, JJ., concur. Ordered that the order is modified, onthe law, without costs, by reversing so much thereof as denied plaintiff's motion for summaryjudgment dismissing defendant's counterclaims; motion granted to that extent, summaryjudgment awarded to plaintiff, and said counterclaims dismissed; and, as so modified, affirmed.