| Fred Schutzman Co. v Park Slope Advanced Med.,PLLC |
| 2015 NY Slip Op 04447 [128 AD3d 1007] |
| May 27, 2015 |
| Appellate Division, Second Department |
[*1]
| Fred Schutzman Company, Appellant, v ParkSlope Advanced Medical, PLLC, et al., Respondents. |
Schrader & Schoenberg, LLP, New York, N.Y. (Bruce A. Schoenberg ofcounsel), for appellant.
Solomon Rosengarten, Brooklyn, N.Y., for respondents Park Slope AdvancedMedical, PLLC, Varuzhan Dovlatyan, Rosemarie Phillip, and Robert Kent.
In an action to recover on a promissory note, the plaintiff appeals from an order ofthe Supreme Court, Suffolk County (Emerson, J.), dated October 10, 2013, whichgranted the motion of the defendants Park Slope Advanced Medical, PLLC, VaruzhanDovlatyan, Rosemarie Phillip, and Robert Kent for summary judgment dismissing thecomplaint insofar as asserted against them, and, upon, in effect, searching the record,awarded summary judgment to the defendant William J. Coletto dismissing the complaintinsofar as asserted against him.
Ordered that the order is affirmed, with costs.
Pursuant to a promissory note dated January 10, 2011, the plaintiff loaned theprincipal sum of $52,900, plus further additional sums, to the defendant Park SlopeAdvanced Medical, PLLC (hereinafter Park Slope). The loan was personally guaranteedby the individual defendants. Upon the defendants' default in repaying the loan pursuantto its terms, the plaintiff commenced this action.
Park Slope, and the defendants Varuzhan Dovlatyan, Rosemarie Phillip, and RobertKent (hereinafter together the moving defendants) moved for summary judgmentdismissing the complaint insofar as asserted against them. The moving defendantsestablished their prima facie entitlement to judgment as a matter of law by demonstratingthat the subject promissory note imposed an annual interest rate in excess of 25%, andtherefore was criminally usurious on its face (see Penal Law§ 190.40; Venables v Sagona, 85 AD3d 904, 905 [2011]). Theplaintiff concedes that the subject promissory note charged an annualized interest rate of60%.
In opposition, the plaintiff failed to raise a triable issue of fact. Although acorporation or professional limited liability company (hereinafter PLLC), or anindividual guarantor of such an entity's debt, may not assert the defense of civil usury(see General Obligations Law § 5-521 [1]; Limited LiabilityCompany Law § 1104 [a]; Schneider v Phelps, 41 NY2d 238, 242[1977]; Pepin v Jani, 101AD3d 694, 695 [2012]; Arbuzova v Skalet, 92 AD3d 816, 816 [2012]), acorporation or PLLC, or a guarantor of such an entity's debt, may assert the defense ofcriminal usury (see General Obligations Law § 5-521 [3]; LimitedLiability Company Law § 1104 [c]; Penal Law § 190.40; Blue Wolf Capital [*2]Fund II, L.P. v American Stevedoring, Inc., 105 AD3d178 [2013]; Nikezic v Balaz, 184 AD2d 684, 685 [1992]). Contrary to theplaintiff's contention, even though the defendants in this case would have been precludedfrom interposing the defense of usury if the note had not been criminally usurious, thenote imposed an annual interest rate in excess of 16%, and since that rate was more thanthe rate prescribed in General Obligations Law § 5-501 (seeBanking Law § 14-a [1]), the note was void, pursuant to GeneralObligations Law § 5-511. Contrary to the plaintiff's further contention, aclause in the subject promissory note purporting to reduce the rate of interest to anon-usurious rate if the rate originally imposed was found to be usurious could not savethe note from being usurious (see Simsbury Fund v New St. Louis Assoc., 204AD2d 182 [1994]).
Accordingly, the Supreme Court properly granted the moving defendants' motion forsummary judgment dismissing the complaint insofar as asserted against them. Moreover,upon, in effect, searching the record, the Supreme Court properly awarded summaryjudgment to the defendant William J. Coletto dismissing the complaint insofar asasserted against him. Dillon, J.P., Leventhal, Chambers and Maltese, JJ., concur.