On March 8, 2022, Justice Cohen of the New York County Commercial Division issued a decision in Sanghvi Diamonds LLC v. Agadjani, 2022 NY Slip Op. 30738(U), denying a motion for summary judgment in lieu of complaint because the amount of the underlying debt was not established in the agreement sued upon, explaining:
Under CPLR 3213, a motion for summary judgment in lieu of complaint may be served by a plaintiff when an action is based upon an instrument for the payment of money only. The prototypical example of an instrument within the ambit of CPLR 3213 is of course a negotiable instrument for the payment of money – an unconditional promise to pay a sum certain, signed by the maker and due on demand or at a definite time. And an unconditional guaranty is an instrument for the payment of money only within the meaning of CPLR 3213.
CPLR 3213 is available where a right to payment can be ascertained from the face of a document. It is not available where there are other issues and considerations presented by the writing, for example if the liabilities and obligations can only be ascertained by resort to evidence outside the instrument, or if more than simple proof of nonpayment or a de minimis deviation from the face of the document is involved.
To demonstrate entitlement to summary judgment in lieu of complaint based on a personal guaranty, the plaintiff must show (1) the existence of a guaranty, (2) the underlying debt, and (3) the guarantor’s failure to perform under the guaranty. Once the plaintiff has done so, “the burden shifts to the defendant to establish, by admissible evidence, the existence of a triable issue with respect to a bona fide defense.
Here, Plaintiff fails to make a prima facie case under CPLR 3213 because the amount of the underlying debt cannot be established without resorting to evidence outside of the Guaranty and the underlying documentation. To begin with, Plaintiff is correct that the Guaranty represents an absolute and unconditional promise to pay TraxNYC’s debts. But the Guaranty, on its face, does not establish the amount of Defendant’s indebtedness. Nor does the Guaranty refer to any underlying agreement that would conclusively establish Defendant’s- or TraxNYC’s- obligations to Plaintiff.
Plaintiff seeks to establish the amount due under the Guaranty by submitting approximately 1,000 pages of Memorandums and Invoices dating back to 2018, along with some evidence about the parties’ course of dealing. That is not the kind of simple, direct proof of indebtedness conducive to CPLR 3213 treatment. The Memorandums, for example, do not set out terms for payment, or even for sale. As Defendant points out, the reverse side of the Memorandums (which Plaintiff omitted) indicate they are consignment agreements. As for the Invoices, there is a fact dispute over whether Defendant received them, and since the Invoices are not signed, there are further disputes over whether the Invoices are enforceable under the Statute of Frauds and, if so, whether for each transaction an oral or implied contract for sale existed. Again, this is hardly the kind of de minimis undertaking for establishing indebtedness envisioned by CPLR 3213.
(Internal quotations and citations omitted).