On July 10, 2023, Justice Chan of the New York County Commercial Division issued a decision in Quartix Fin. Inc. v. KSH Brands LLC, 2023 NY Slip Op. 32453(U), denying a motion for summary judgment in lieu of complaint because of its reliance on extrinsic evidence, explaining:
Another reason Quartix is not entitled to summary judgment under CPLR 3213 is because without extrinsic evidence, many vital terms of the alleged obligations-such as amounts due, applicable interest rates, and maturity dates-are not ascertainable on the face of the Customer Services Agreement and the Guarantee. If resort to extrinsic evidence is necessary, plaintiff fails to establish a prima facie entitlement to summary judgment in lieu of complaint. Courts have denied summary judgment under CPLR 3213 when the writing relied upon by plaintiff fails to recite to any agreement by the parties on several vital terms, and when an excursion outside the four corners of the agreement is required to determine defendants’ liabilities. In short, an instrument does not qualify for CPLR 3213 treatment if outside proof is needed to make out a prima facie case, other than simple proof of nonpayment or a similar de minimis deviation from the face of the document. In the present case, Quartix cannot make out its prima facie case without resorting to evidence outside the four corners of the Customer Services Agreement.
. . .
Quartix’s motion for summary judgment also fails for defendants have not acknowledged the alleged indebtedness. Cases permitting the use of the CPLR 3213 procedural device have dealt primarily with some variety of commercial paper in which the party to be charged has formally and explicitly acknowledged an indebtedness. Where the instruments upon which plaintiff bases its action have not been subscribed by the defendant, CPLR 3213 relief is not available.
In the present action, there is no written instrument by which the defendant has expressly obligated itself to make the payments required by the accounts stated. Here, defendants signed the Customer Services Agreement and the Guarantees, acknowledging the obligations thereunder. But based on the evidence Quartix has submitted, the terms of the Customer Services Agreement and the Guarantees remain disconnected from the items shown in the Internal Report and the Dashboard Screenshot. Quartix has not demonstrated that by signing the Customer Services Agreement and the Guarantees, defendants have expressly obligated themselves to make the payments required by the Internal Report and the Dashboard Screenshot. Put differently, Quartix still needs to prove that defendants’ conditional obligations under the Customer Services Agreement and the Guarantees have materialized and are accurate as alleged in the Internal Report and Dashboard Screenshot. Regarding the Internal Report and Dashboard Screenshot, defendants have not signed either of them, and do not agree on their accuracy or correctness. Claims based on accounts stated fail, when there is no agreement between parties with respect to the correctness of the account items and balance due. Here, Israel Friedman states that it is impossible for me to verify this amount without more documentation and evidence. From the submitted pleadings and evidence, I cannot tell whether KSH were advanced funds or whether any vendors were paid, which vendors were paid, whether KSH Brands agreed to the interest rate and/or whether the maturity dates are correct and agreed upon. Therefore, to the extent that Quartix bases its claim on the Internal Report and the Dashboard Screenshot, which are not agreed to by defendants, Quartix’s claim cannot stand.
(Internal quotations and citations omitted).