On July 27, 2023, Justice Crane of the New York County Commercial Division issued a decision in GLD Legacy Holdings, LLC v. Legacy Educ. Alliance, Inc., 2023 NY Slip Op. 32601(U), holding that a party cannot assert a standing defense in an action to collect on a note when it agreed to waive all defenses, explaining:
CPLR 3213 provides for accelerated judgment where the instrument sued upon is for the payment of money only and the right to payment can be ascertained from the face of the document without regard to extrinsic evidence, other than simple proof of nonpayment or a similar de minimis deviation from the face of the document. Accelerated judgment under CPLR 3213 is appropriate where the plaintiff establishes the existence of a guaranty of payment and defendant’s failure to pay. Once a plaintiff establishes prima facie entitlement to summary judgment in lieu of complaint, the burden shifts to the defendant to submit evidence establishing the existence of a triable issue with respect to a bona fide defense.
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Legacy does not dispute the debt or amounts it owes GLD but argues that . . . GLD lacks the legal capacity to sue, because GLD waived it under the Intercreditor Agreement. Specifically, Legacy argues that the only person permitted to bring a suit on behalf of GLD with respect to the GLD Note is Barry Kostiner, the person who the Lenders designated as their sole and exclusive agent under the Intercreditor Agreement. . . .
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The court also rejects Legacy’s arguments concerning GLD’s standing and capacity to sue in this case. Pursuant to the Forbearance Agreement, Legacy waived all defenses, legal or equitable, it might have as to any action which might be commenced to enforce its obligations under the GLD Note. Therefore, it is irrelevant that the Intercreditor Agreement designates Barry Kostiner as the agent to act on behalf of the Lenders, because lack of standing is a defense that can be waived, and Legacy did so here.
(Internal quotations and citations omitted).