Porat v Rybina (2017 NY Slip Op 51933(U)) (2024)

9392/2015

Attorneys for plaintiff
Firm Name: C.T. Lee & Associates
Address:225 Broadway, Suite 3005, New York, NY 10007
Phone: 212-566-5509

PAPERS NUMBERED

Motion sequence numbers 1 and 2 are consolidated fordisposition.

This is an action commenced by plaintiff Gary Porat (plaintiff) against Svetlana Rybina(Rybina) and Igor Rybin (Igor) (collectively, defendants), to enforce three Promissory Notes thatwere allegedly executed between the parties on April 22, 2014 for $30,000 (the First Note),$62,568.00 (the Second Note) and $39,914.50 (the Third Note) (collectively, the Notes). Plaintiffalleges that defendants defaulted on the Notes by failing to pay back the sum of $154,193.19 plusinterest, pursuant to the terms of the Notes. Before the Court is plaintiff's motion for summaryjudgment in lieu of the Complaint, pursuant to CPLR 3213, seeking judgment in his favor in thesum of $154,193.19 plus interest at the default rate of 9% from July 2015 until the judgment isentered, and statutory interest thereafter and reasonable attorneys as allowed by the Notes(motion sequence 1). Defendants oppose the motion and cross-move, [*2]pursuant to CPLR 3211(a)(1) and (7), for an Order dismissing theComplaint on the basis that the Notes are unenforceable for lack of consideration (motionsequence 2). Plaintiff submits opposition to defendants' cross-motion. Defendants submit amemorandum of law in opposition to plaintiff's summary judgment motion in lieu of Complaintas well a Reply in support of their cross-motion to dismiss.

BACKGROUND

Plaintiff contends that in or about June2012, he and Rybina entered into a verbal agreement to become 50/50 business partners inImmortality Healing Inc. (Immortality), a business venture distributing Mayan medicine - relatedhealth products. Plaintiff alleges that he covered all of Rybina's expenses relating to her 50%interest in the business venture as a well as paid for her business travels. Plaintiff avers that onApril 22, 2014, in order to memorialize the amount he contributed towards Rybina's partnershipinterest, defendants executed the Notes in favor of plaintiff, which Igor personally andunconditionally guaranteed. The Notes stated in relevany part: "for value received, theundersigned Svetlana Rybina and Igor Rybin (collectively, the "borrowers")... each as principal,jointly and severally, promise to pay to the order of Gary Porat (the "lender")... the sum of [theindividual loan amount] on the unpaid principal." The Notes were signed by plaintiff, Rybina andIgor. Rybina and Igor also initialed each page of the Notes. Under the terms of the First Note,defendants agreed to pay plaintiff the sum of $30,000, payable on December 22, 2014, with anannual interest rate of 18%.^[FN1] Under the terms of the Second Note, defendants agreed to pay plaintiff the sum of $62,568.00,payable on April 22, 2015, with an annual interest rate of 12%. Under the terms of the ThirdNote, defendants agreed to pay plaintiff the sum of $39,914.50, also due on April 22, 2015, at anannual interest rate of 12%. Plaintiff avers that Rybina acknowledged in an email exchangebetween them that she owed plaintiff monies totaling the sum of the promissory notes but failedto make payments. Plaintiff thereafter retained counsel, and on June 25, 2015, plaintiff's counselmade a written demand for full payment of the Notes. When no payment was received, plaintiffcommenced this lawsuit to enforce the Notes.

In support of his motion for summary judgment in lieu of the Complaint, plaintiff submits,inter alia, the Notes; a demand letter from plaintiff's counsel dated June 23, 2015; andplaintiff' own affidavit dated July 24, 2015. Plaintiff contends that he is entitled to judgment as amatter of law for the sum of $154,193.19 plus interest as set forth in the Notes because the Notescontain an unconditional promise to pay a sum certain, signed by the maker and due on demandor at a definite time. Plaintiff also argues that the Notes were duly executed before a notarypublic and timely demand namely, the demand letter from his counsel to defendants, dated June23, 2015, constitutes reasonable and timely request for payment on the Notes.

In opposition and in support of their cross-motion, defendants submit, inter alia, anaffidavit from Rybina dated September 1, 2016; an affidavit from Igor dated September 1, 2016;and a memorandum of law. Defendants argue that plaintiff's motion should be denied and theircross-motion granted because the Notes are unenforceable for lack of consideration. Defendants[*3]further aver that plaintiff's motion should be denied inasmuchas plaintiff's affidavit in support of his motion fails to affirmatively state that he tendered thefunds enumerated in the Notes to defendants.

In opposition to defendants' cross-motion, plaintiff submits, inter alia, an uncertifiedcopy of Immortality's 2013 tax filing; copies of Immortality's journal entries showing monetarydeposits to an account belonging to Regina Porat; an email exchange between plaintiff and aperson whom plaintiff refers to as Steva; and plaintiff's supplemental affidavit dated September6, 2016. Plaintiff argues that defendants fail to proffer evidence in admissible form with respectto the bona fide defense of lack of consideration. Specifically, plaintiff argues that Rybina andIgor's affidavit are inadmissible inasmuch as the affidavits were signed on September 1, 2016 andnotarized by Victoria Bach (Bach), a notary public in the State of New York. However, Bach'snotary commission expired on January 30, 2016, hence the affidavits are defective andinadmissible. Plaintiff also argues that the Notes are unambiguous on their face as the Notesexplicitly recite that they were executed "for value received."

SUMMARY JUDGMENT STANDARD

Summary judgment is a drastic remedy that should be granted only if no triable issues of factexist and the movant is entitled to judgment as a matter of law (see Alvarez v ProspectHosp., 68 NY2d 320, 324 [1986]; Andre v Pomeroy, 35 NY2d 361, 364 [1974];Winegrad v NY Univ. Medical Cntr., 64 NY2d 851, 853 [1985]). The party moving forsummary judgment must make a prima facie case showing of entitlement to judgment as a matterof law, tendering sufficient evidence in admissible form demonstrating the absence of materialissues of fact (see Alvarez, 68 NY2d at 324; CPLR 3212[b]). A failure to make such ashowing requires denial of the motion, regardless of the sufficiency of the opposing papers (see Smalls v AJI Indus., Inc., 10 NY3d733, 735 [2008]; Qlisanr, LLC vHollis Park Manor Nursing Home, Inc., 51 AD3d 651, 652 [2d Dept 2008];Greenberg v Manlon Realty, 43 AD2d 968, 969 [2d Dept 1974]). Once a prima facieshowing has been made, however, "the burden shifts to the nonmoving party to produceevidentiary proof in admissible form sufficient to establish the existence of material issues of factthat require a trial for resolution" (Giuffrida v Citibank Corp., 100 NY2d 72, 81 [2003];Zuckerman v City of NY, 49 NY2d 557, 562 [1980]).

When deciding a summary judgment motion, the Court's role is solely to determine if anytriable issues exist, not to determine the merits of any such issues (see Sillman v TwentiethCentury-Fox Film Corp., 3 NY2d 395, 404 [1957]). The Court views the evidence in thelight most favorable to the nonmoving party, and gives the nonmoving party the benefit of allreasonable inferences that can be drawn from the evidence (see Negri v Stop & Shop,Inc., 65 NY2d 625, 626 [1985]; Boyd v Rome Realty Leasing Ltd. Partnership, 21 AD3d 920, 921[2d Dept 2005]; Marine Midland Bank, N.A. v Dino & Artie's Automatic TransmissionCo., 168 AD2d 610 [2d Dept 1990]). CPLR 3212(f) provides that "[s]hould it appear fromaffidavits submitted in opposition to the motion that facts essential to justify opposition mayexist but cannot then be stated, the court may deny the motion or may order a continuance topermit affidavits to be obtained or disclosure to be had and may make such other order as may bejust. If there is any doubt as to the existence of a triable fact, the motion for summary judgmentmust be denied (Vega v RestaniConstruction Corp., 18 NY3d 499 [2012]; Ayotte v Gervasio, 81 NY2d 923[1993]; Rotuba Extruders v Ceppos, 46 NY2d 223, 231 [1978]; CPLR 3212[b]).

DISCUSSION

On November 21, 2016 the parties appeared before this Court for oral argument of themotion and cross-motion at which time defendants submitted another memorandum of law in"opposition to plaintiff's summary judgment in lieu of complaint and a reply in support of thecross-motion to dismiss." Defendants attached Rybina's and Igor's corrected affidavit datedNovember 17, 2016 and a copy of Bach's notary public license showing that her license was validon September 1, 2016. Plaintiff's counsel objected to defendants' submission arguing thatdefendants are not permitted to submit a reply to their cross-motion under CPLR 2214. Plaintiff'scounsel stated that defendants' submission is an improper sur-reply. Plaintiff further argued thateven if the Court were to consider defendants' submission, defendants cannot raise the issue ofusury as a bona fide defense to the First Note in reply as that theory was not initially argued indefendants' opposition to plaintiff's motion. The Court accepted defendants' submission with theproviso that it would review CPLR 2214 and determine the applicability of same.

After reviewing the record as well as the applicable statutes, the Court finds that defendants,as a matter of law, are entitled to submit a reply to plaintiff's opposition to their cross-motion.Notwithstanding defendants mislabeling their memorandum of law, it is apparent to this Courtthat their submission was a reply in support of their cross-motion inasmuch as the argumentsproffered by defendants responded directly to plaintiff's opposition dated September 9, 2016(see Ryan Mgt. Corp. v Cataffo, 262 AD2d 628, 630 [2d Dept 1999]; Matapos Technology Ltd. v CompaniaAndina de Comercio Ltda., 68 AD3d 672, 672 [1st Dept 2009]; Ticor Tit. Guar. Co.v Bajraktari, 261 AD2d 156, 156 [1st Dept 1999] [the motion court's consideration ofplaintiff's reply affidavit explaining the calculation of interest was not improper since the replymerely responded to defendants' argument]). The Court also finds Rybina's and Igor's affidavitsdated September 1, 2016 valid as a search of the complete record (see CPLR 3212[b]; Maheshwari v City of New York, 2NY3d 288 [2004]); Executive Law § 142-a [2][d]) reveals that Bach's notarycommission was valid on September 1, 2016. However, the Court declines to considerdefendants' argument that the First Note is usurious since defendants improperly raise thisargument for the first time in their reply papers (see Board of Mgrs. of Foundry at Washington Park Condominium vFoundry Dev. Co., Inc., 111 AD3d 776, 777 [2d Dept 2013]; Frost v New York City Tr. Auth., 140AD3d 695, 696 [2d Dept 2016]; Allstate Ins. Co. v Dawkins, 52 AD3d 826, 826-27 [2d Dept 2008];Ritt v Lenox Hill Hosp., 182 AD2d 560, 562 [1st Dept 1992]). The Court also declines toconsider defendants' assertion of fraud as that argument is also improperly raised for the firsttime in defendants' reply papers (see id.). The function of reply papers is toaddress arguments made in opposition to the position taken by the movant, not to permit themovant to introduce new arguments or new grounds for the requested relief (see Allstate Ins.Co., 52 AD3d at 827, HarleysvilleIns. Co. v Rosario, 17 AD3d 677, 677-678 [2d Dept 2005]).

A. Plaintiff's motion for summary judgment (Motion Sequence 1)

In accordance with CPLR 3213, a party may commence an action in lieu of complaint whenthe action is "based upon an instrument for the payment of money only or upon any judgment." Apromissory note is an instrument for the payment of money only, provided that it contains anunconditional promise by the borrower to pay the lender over a stated period of time [*4](see Bloom v Lugil, 81 AD3d 579, 580 [2d Dept 2011]; Comforce Telecom, Inc. v Spears HoldingCo., Inc., 42 AD3d 557 [2d Dept 2007]; Gregorio v Gregorio, 234 AD2d 512,512—513, [2d Dept 1996]). "The instrument does not qualify if outside proof is needed,other than simple proof of nonpayment or a similar de minimis deviation from the face of thedocument" (Weissman v Sinorm Deli, 88 NY2d 437, 444 [1996]; see Oak Rock Fin.,LLC v Rodriguez,148 AD3d 1036, 1039 [2d Dept 2017]; , 953 [2d Dept2010]; Stallone v Rostek, 27 AD3d449, 450 [2d Dept 2006]).

"To establish prima facie entitlement to judgment as a matter of law with respect to apromissory note, a plaintiff must show the existence of a promissory note, executed by thedefendant, containing an unequivocal and unconditional obligation to repay, and the failure bythe defendant to pay in accordance with the note's terms" (Lugli v Johnson, 78 AD3d1133 [2d Dept 2010]; see Roopchand vMohammed, 154 AD3d 986, 986 [2d Dept 2017]; Gullery v Imburgio, 74 AD3d 1022 [2d Dept 2010]).

Here, the Court finds that plaintiff established his prima facie entitlement to judgment as amatter of law against defendants by submitting the Notes coupled with his own affidavitasserting that the defendants failed to repay the loan in accordance with the terms of the Notes(see Gullery, 74 AD3d at 1022; , 735[2d Dept 2015]; Chervinsky vRezhets, 132 AD3d 713, 714 [2d Dept 2015]; Rachmany v Regev, 11 AD3d840, 841 [2d Dept 2014]; Verela vCitrus Lake Dev., Inc., 53 AD3d 574, 575 [2d Dept 2008]).

In opposition, the Court finds defendants' unsupported and conclusory allegations withrespect to the defenses of lack of consideration insufficient to defeat the plaintiff's entitlement tosummary judgment (see Sheng He vSing Huei Chang, 83 AD3d 788, 789 [2d Dept 2011]); Patel v NJDV Hospitality, Inc., 114AD3d 738, 739 [2d Dept 2014]). Specifically, in her corrected affidavit dated November 17,2016, Rybina states that "plaintiff and I had previously discussed working together whereby Iwould manufacture and produce certain creams and products..." (see Defendants'memorandum in opposition and in Reply, exhibit A at 3 ¶ 8). Rybina further avers that"once the products are distributed by the plaintiff, we would then share in the profits on a 50/50basis... in reliance on these discussions with plaintiff, and in exchange for my share of the cost ofthese materials, I executed three promissory notes that are the subject of this action" (id.).The Court finds that Rybina, by her own admission, concedes that she not only executed theNotes but she also received some form of consideration. Moreover, the Court finds unavailingdefendants' argument that plaintiff's motion should be denied because they did not receivemonies due under the Notes. Rybina stated "it is my understanding that the alleged amounts wereactually paid to a third party to obtain the production materials...I executed the Notes in relianceon plaintiff's promise that once he obtained the production materials he would give me access touse the materials..."(id. at ¶ 13). Therefore, the Court finds defendants' oppositioninsufficient to raise triable issues of fact. As such, plaintiff's motion for summary judgment inlieu of the Complaint must be granted.

B. Defendants' Cross- Motion to Dismiss (Motion Sequence 2)

"A party seeking dismissal on the ground that its defense is founded on documentaryevidence under CPLR 3211(a)(1) has the burden of submitting documentary evidence thatresolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claim"[*5](Botach Mgt. Group v Gurash, 138 AD3d 771, 771 [2d Dept 2016];see Sullivan v State, 34 AD3d 443 [2d Dept 2006]). "A motion pursuant to CPLR3211(a)(1) to dismiss a complaint on the ground that a defense is founded on documentaryevidence 'may be appropriately granted only where the documentary evidence utterly refutes [the]plaintiff's factual allegations, conclusively establishing a defense as a matter of law'" (, 924-925 [2d Dept 2014], quoting Goshen v Mut. Life Ins.Co., 98 NY2d 314, 326 [2002]; Sabre Real Estate Group, LLC v Ghazvini, 140 AD3d 724 [2d Dept2016]; Yue Fung USA Enters., Inc. vNovelty Crystal Corp., 105 AD3d 840, 841 [2d Dept 2013] ["dismissal pursuant toCPLR 3211(a)(1) is warranted only if the documentary evidence submitted conclusivelyestablishes a defense to the asserted claims as a matter of law"]).The evidence submitted insupport of a motion pursuant to CPLR 3211(a)(1) to dismiss a complaint on the ground that adefense is founded on documentary evidence "must be documentary or the motion must bedenied" (Rodolico, 114 AD3d at 925 [internal quotation marks omitted]). "In order to beconsidered documentary evidence within the meaning of CPLR 3211(a)(1), the evidence 'must beunambiguous and of undisputed authenticity'" (,851 [2d Dept 2012], quoting Fontanettav John Doe 1, 73 AD3d 78, 86 [2d Dept 2010]; Yue Fung USA Enters., Inc., 105AD3d at 841-842). "'Judicial records, as well as documents reflecting out-of-court transactionssuch as mortgages, deeds, contracts, and any other papers, the contents of which are essentiallyundeniable, would qualify as documentary evidence in the proper case; however, affidavits andletters are not considered documentary evidence'"(Hartnagel v FTW Contracting, 147 AD3d 819, 820 [2d Dept2017]; see Cives Corp. v George A.Fuller Co., Inc., 97 AD3d 713, 714 [2d Dept 2012], quoting Fontanetta, 73AD3d at 84-85; Granada CondominiumIII Assn. v Palomino, 78 AD3d 996, 997 [2d Dept 2010]).

On a motion to dismiss pursuant to CPLR 3211(a)(7), the court should "accept the facts asalleged in the complaint as true, accord plaintiffs the benefit of every possible favorableinference, and determine only whether the facts as alleged fit within any cognizable legal theory"(Leon v Martinez, 84 NY2d 83, 87-88 [1994]; see Biro v Roth, 121 AD3d 733 [2d Dept 2014]; Parekh v Cain, 96 AD3d 812, 815[2d Dept 2012]). The standard is not whether the complaint states a cause of action, but whetherthe plaintiff has a cause of action (seeMorales v Copy Right, Inc., 28 AD3d 440 [2d Dept 2006]). "CPLR 3211(a)(7)dismissals merely address the adequacy of the [pleading], and do not reach the substantive meritsof a [party's] cause of action" (Lieberman v Green, 139 AD3d 815, 816 [2d Dept 2016], quotingHendrickson v Philbor Motors, Inc.,102 AD3d 251, 255 [2d Dept 2012]).

Whether the complaint will later survive a motion for summary judgment, or whether theplaintiff will ultimately be able to prove his or her claims, plays no part in the determination of aprediscovery CPLR 3211 motion to dismiss (see Biro v Roth, 121 AD3d at 735; , 38 [2d Dept 2006]). "Such amotion should be granted where, even viewing the allegations as true, the plaintiff cannotestablish a cause of action" (id.). "However, '[a] court is, of course, permitted to considerevidentiary material submitted by a defendant in support of a motion to dismiss pursuant toCPLR 3211 (a)(7)'" (Bokhour v GTIRetail Holdings, Inc., 94 AD3d 682, 682-683 [2d Dept 2012], quoting Sokol v Leader, 74 AD3d 1180,1181 [2d Dept 2010]).

Here, the Court finds that the documentary evidence submitted by defendants fails to [*6]utterly refute plaintiff's allegations or conclusively establish adefense as a matter of law (see 25-01Newkirk Ave., LLC v Everest Natl. Ins. Co., 127 AD3d 850 [2d Dept 2015]; ThreeAM SPC, Ltd. v Ribotsky, 113AD3d 837 [2d Dept 2014]). Specifically, Rybina and Igor's affidavits dated September 1,2016 as well as their corrected affidavits dated November 17, 2016 are insufficient to constitute"documentary evidence" under CPLR 3211(a)(1) (see Cives Corp., 97 AD3d at 714;Granada Condominium III Assn., 78 AD3d at 997). Thus, these documents fail tounequivocally establish defendants' defense to plaintiff's claims that they failed to repay thebalance due under the Notes. Accordingly, the portion of defendants' motion seeking dismissalunder CPLR 3211(a)(1) must be denied (see Siracusa v Sager, 105 AD3d 937, 938 [2d Dept 2013] ["Here,the evidence submitted by the Horn defendants either was not documentary within the meaningof CPLR 3211(a)(1) or failed to utterly refute the plaintiff's allegations and conclusively establisha defense as a matter of law"]; Attias vCostiera, 120 AD3d 1281 [2d Dept 2014]).

The Court further finds that the papers submitted in support of plaintiff's motion forsummary judgment in lieu of the Complaint establishes sufficient allegations that, if accepted astrue, establish a cause of action to recover under the Notes. Since plaintiff has a cognizable causeof action, the portion of defendants' cross-motion to dismiss the Complaint pursuant to CPLR3211 (a)(7) is also denied (see Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]["four corners factual allegations are discerned which taken together manifest any cause of actioncognizable at law"]).

CONCLUSION

Accordingly it is hereby,

ORDERED that plaintiff's motion for summary judgment in lieu of his Complaint is granted;and it is further,

ORDERED that the issue of damages, including the calculation of the amount due and owingfor interest, costs of collection and reasonable attorney's fees shall be set down for an inquestbefore a JHO/ Special Referee; and it is further,

ORDERED that defendants' cross-motion to dismiss plaintiff's Complaint, pursuant to CPLR3211(a)(1) and (7), is denied in its entirety; and it is further,

ORDERED that counsel for plaintiff Gary Porat is directed to serve a copy of this Order withNotice of Entry upon the defendants and the County Clerk who shall enter judgmentaccordingly.

This constitutes the Decision and Order of the Court.

Dated: December 26, 2017

PAUL WOOTEN J.S.C.

Footnotes

Footnote 1:The Court is aware of the discrepancy inthe interest rate listed in the preamble of the Note as 12 % and that listed in paragraph I(A) as18%. However, plaintiff's counsel and plaintiff (in his supplemental affidavit submitted inopposition to plaintiff's cross-motion) concede that the 18% interest rate was an typographicalerror and that the parties intended to agree at 12 % per annum.