Opinion
2017-475 Q C
12-07-2018
AFFORDABLE LEASING, INC., and Gadi Ben Hamo, Respondents, v. STERLING NATIONAL BANK, Appellant.
Kevin A. Stevens, P.C. (Kevin A. Stevens of counsel), for appellant. Murray Honig, Esq., for respondents (no brief filed).
Kevin A. Stevens, P.C. (Kevin A. Stevens of counsel), for appellant.
Murray Honig, Esq., for respondents (no brief filed).
PRESENT: : DAVID ELLIOT, J.P., MICHELLE WESTON, BERNICE D. SIEGAL, JJ
ORDERED that the order is affirmed, without costs.
In this action to recover the principal sum of $7,813, allegedly representing the amount of interest that was to be earned in a "Business Money Market Account" held as collateral by defendant for a $5 million revolving line of credit it had funded pursuant to agreements executed by the parties, defendant moved for summary judgment dismissing the complaint. In support of the motion, defendant's senior vice president alleged that the parties had executed a master loan agreement and an account pledge agreement wherein defendant had agreed to loan $5 million to plaintiffs. As a condition thereto, plaintiffs agreed to deposit the sum of $1 million into a "Business Money Market Account" with defendant. It was further alleged by defendant that the master loan agreement did not require defendant to pay plaintiffs any specific rate of interest on the $1 million dollars held in the money market account as collateral for the loan. The master loan agreement contained a merger clause and a provision that the agreement could not be orally modified.
In opposition to the motion, plaintiff Gadi Ben Hamo alleged that he is president of the corporate plaintiff. He further stated that defendant had agreed to pay .76% interest on the "Business Money Market Account," and that the account opening document reflected the amount of interest that was to be earned on this account. In addition, plaintiffs submitted monthly bank statements for the account, indicating that interest had earned a rate of .76% for several months after the loan was funded and that the interest rate subsequently was reduced to .28% and again to .01% by defendant. Plaintiffs also submitted an affidavit by defendant's former employee, who had negotiated the agreements on behalf of defendant, wherein he stated that the rate of interest of .76% was to be earned on this money market account, and that this rate of interest was reflected in the account opening document.
In reply, defendant's senior vice president alleged that the account opening document, annexed to the reply papers, did not contain any provision for the payment of interest on the money market account.
The Civil Court denied the motion for summary judgment upon finding that the affidavit of defendant's former employee submitted in opposition to the motion raised a question of fact warranting a trial.
On appeal, defendant argues that since the loan agreement between the parties contained a merger clause and was unambiguous, the Civil Court should not have considered parol evidence in deciding the motion for summary judgment because there is no ambiguity in the contract.
"The question whether a writing is ambiguous is one of law to be resolved by the courts" (Matter of Wallace v. 600 Partners Co. , 86 NY2d 543, 548 [1995] ). "[W]hen the language of a contract is ambiguous, its construction presents a question of fact which may not be resolved by the court on a motion for summary judgment" ( Leon v. Lukash , 121 AD2d 693, 694 [1986] ). Here, the parties had agreed in the account pledge agreement that the collateral for the loan would be deposited into a specified "Business Money Market Account." The term "Business Money Market Account" has some meaning or practical implication that has not been expressed in any of the agreements submitted by defendant in support of the motion. Thus, the agreement is ambiguous as to what was intended by the parties with respect to the rate of interest that was to be earned on this type of money market account. The agreement did not set any rate of interest nor did it explicitly grant defendant the right to arbitrarily set the interest rate. Since the agreement is ambiguous as to the rate of interest to be earned under the account, the issue cannot be resolved by the court, as a matter of law, on a motion for summary judgment (see Leon v. Lukash , 121 AD2d at 694 ). Indeed, plaintiffs' parol evidence raised an issue of fact with respect to the intent of the parties concerning the rate of interest that was to be earned on the money market account (see Mallad Constr. Corp. v. County Fed. Sav. & Loan Assn. , 32 NY2d 285, 291 [1973] ).
Accordingly, the order is affirmed.
ELLIOT, J.P., WESTON and SIEGAL, JJ., concur.