May 14, 2024
Kirsch & Niehaus recently defeated a motion for summary judgment in lieu of complaint by showing that a promissory note was inextricably intertwined with other agreements between the parties such that the borrower’s obligations could not be determined solely by the instrument for the payment of money alone. CPLR § 3213 provides an expedited procedure for filing a motion for summary judgment in lieu of complaint, so long as the action is based “upon an instrument for the payment of money only,” such as a promissory note requiring only the repayment of certain amounts upon maturity. CPLR § 3213 addresses situations where the precise amount indisputably owed can be determined solely by looking at the instrument, and the filing of a formal complaint would be superfluous. However, in rare instances, a defendant may defeat a motion for summary judgment in lieu of complaint by showing that the instrument is sufficiently and inextricably intertwined with a separate contract, and the court would need to review and consider all agreements as a whole, not solely the instrument for the payment of money only, in order to determine the rights and obligations of the parties. If the motion is defeated, the moving and opposition memoranda of law may serve as the parties’ pleadings, and the litigation proceeds as it would in the typical case. Drafters or lenders wishing to utilize the Section 3213 procedure should consider avoiding cross-references to other agreements in order to avoid the defense that the borrower’s obligations under the promissory note are affected by those other agreements.