| Superior Fid. Assur., Ltd. v Schwartz |
| 2010 NY Slip Op 00669 [69 AD3d 924] |
| January 26, 2010 |
| Appellate Division, Second Department |
| Superior Fidelity Assurance, Ltd., Respondent, v DennisSchwartz et al., Defendants, and Ken Housner et al., Appellants. |
—[*1] Jones Hirsch Connors & Bull P.C., New York, N.Y. (Donald Joseph Cayea, Rita W. Gordon,and Elina Kerzhnerenko of counsel), for appellant John Trepani. Quadrino & Schwartz, P.C., Garden City, N.Y. (Brad Schlossberg of counsel), forrespondent.
In an action to enforce certain guaranties, brought by motion for summary judgment in lieuof complaint pursuant to CPLR 3213, the defendants Ken Housner and Marilyn Housner appeal,and the defendant John Trepani separately appeals, as limited by their respective briefs, from somuch of (1) an order of the Supreme Court, Nassau County (Parga, J.), entered June 20, 2008, asgranted those branches of the plaintiff's motion which were for summary judgment in lieu ofcomplaint pursuant to CPLR 3213 enforcing their respective guaranties, and (2) a judgment ofthe same court entered September 19, 2008, as, upon the order, is in favor of the plaintiff andagainst them in the principal sum of $168,000. The notices of appeal from the order are deemedalso to be notices of appeal from the judgment (see CPLR 5501 [c]).
Ordered that the appeals from the order are dismissed; and it is further,
Ordered that the judgment is reversed insofar as appealed from, on the law, those branchesof the plaintiff's motion which were for summary judgment in lieu of complaint enforcing therespective guaranties of the defendants Ken Housner, Marilyn Housner, and John Trepani aredenied, and the order is modified accordingly; and it is further,
Ordered that one bill of costs is awarded to the appellants appearing separately and filingseparate briefs.
The appeals from the intermediate order must be dismissed because the right of direct appealtherefrom terminated with the entry of judgment in the action (see Matter of Aho, 39NY2d 241, 248 [1976]). The issues raised on the appeals from the order are brought up forreview and have been [*2]considered on the appeals from thejudgment (see CPLR 5501 [a] [1]).
The plaintiff loaned the sum of $168,000 to Smithtown Chevrolet, LLC (hereinafterSmithtown). In exchange, Smithtown executed a promissory note for $168,000 in favor of theplaintiff. According to the terms of the promissory note, Smithtown agreed to market a PremierVehicle Service Contract program, of which Premier Dealer Services, Inc. (hereinafter PDS),was the administrator and obligor. The promissory note stated that Smithtown shall pay to PDS,and PDS shall forward to the plaintiff, $200 of the profit retained by Smithtown for everyPremier Service Contract sold, at a minimum of 35 sales per calendar month. Payment was dueon the first day of each month. The promissory note also contained an acceleration clause, whichprovided, "[s]hould default be made in the payment of any sums due under this Note. . . and such default continues after any notice from the [the plaintiff] to[Smithtown] and the expiration of any period granted to [Smithtown] for curing such default. . . the whole sum of principal and accrued interest hereunder shall, at the option of[the plaintiff], become immediately due and payable."
To induce the plaintiff to make the loan to Smithtown, the defendants Ken Housner and JohnTrepani, principals of Smithtown, executed personal guaranties, which guaranteed payment ofthe promissory note. The defendant Marilyn Housner, the defendant Ken Housner's wife, alsosigned the personal guaranty that was executed by her husband. The plaintiff commenced thisaction by motion for summary judgment in lieu of complaint pursuant to CPLR 3213, inter alia,seeking to enforce the guaranties.
In order for the plaintiff to establish a prima facie case, it was required to submit proof of theexistence of an underlying note, the guaranties, and the failure to make payment in accordancewith their terms (see Famolaro v CrestOffset, Inc., 24 AD3d 604, 604-605 [2005]; E.D.S. Sec. Sys. v Allyn, 262AD2d 351 [1999]; Capital Circulation Corp. v Gallop Leasing Corp., 248 AD2d 578[1998]). Although the guaranties were instruments for the payment of money only within themeaning of CPLR 3213 (see European Am. Bank v Lofrese, 182 AD2d 67, 71 [1992];Rhodia, Inc. v Steel, 32 AD2d 753 [1969]), the plaintiff failed to meet its burden ofestablishing a prima facie case. The promissory note was due "on demand and no later than July31, 2008." However, the plaintiff moved for summary judgment in lieu of complaint on January25, 2008, approximately six months before July 31, 2008. Therefore, in essence, the plaintiff wasattempting to invoke the acceleration clause because it sought full payment of the promissorynote prior to the due date, and without making any prior demand. However, there is no evidencein the record that the plaintiff sent a notice of default to Smithtown or that Smithtown wasafforded any opportunity to cure, as required by the terms of the acceleration clause. Thus, theplaintiff failed to demonstrate that it was owed the full amount of the promissory note bySmithtown and, consequently, it failed to meet its prima facie burden of establishing itsentitlement to judgment as a matter of law with respect to the guaranties (see Putman High Yield Trust v Bank ofN.Y., 7 AD3d 439 [2004]; Ultimate Connection, Inc. v Friedfertig, 12 Misc 3d1175[A], 2006 NY Slip Op 51236[U] [2006]; cf. European Am. Bank v Lofrese, 182AD2d at 71).
Accordingly, those branches of the plaintiff's motion which were for summary judgmentenforcing the guaranties of Ken Housner, Marilyn Housner, and John Trepani should have beendenied (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]).
The parties' remaining contentions need not be reached in light of this determination. Skelos,J.P., Eng, Belen and Austin, JJ., concur.