Nassau Candy Distrib. v. Lokaiyan

Full title: NASSAU CANDY DISTRIBUTORS, Plaintiff, v. RAJ LOKAIYAN, FRANK SHAH a/k/a…

Court: Supreme Court of the State of New York, Nassau County

Date published: Mar 19, 2010

2010 N.Y. Slip Op. 30696 (N.Y. Sup. Ct. 2010)

Opinion

9864/07.

March 19, 2010.

DECISION/ORDER

ANTONIO I. BRANDVEEN, Judge.

The following papers having been read on this motion:

1, 2

Notice of Motion, Affidavits, Exhibits...................... _____ Answering Affidavits.......................................... _________ Replying Affidavits............................................. _______ Briefs: Plaintiff's / Petitioner's ........................... _________ Defendant's / Respondent's................................ _________

The plaintiff moves for summary judgment on the ground there is no triable issue of fact, and no defenses to the complaint. The defendants oppose this motion, and cross move pursuant to CPLR 3212 for an order dismissing this action on the ground the defendants had not been doing business with the plaintiff, an unincorporated business entity. The underlying goods and services rendered action involves a credit application with a personal guaranty. This Court carefully reviewed and considered all of the papers submitted with respect to both motions.

The plaintiff's chief financial officer states, in an August 6, 2009 affidavit, both defendants executed a credit application with the plaintiff for their business, and that application contained a personal guaranty. The plaintiff's chief financial officer states the defendants ordered certain groceries, products and supplies from the plaintiff commencing on about October 31, 2005, through and including December 15, 2005. The plaintiff's chief financial officer reports the plaintiff delivered many times to the defendants' place of business as requested by the defendants as shown in invoices for the goods ordered and delivery tickets for the items. The plaintiff's chief financial officer points out either these defendants or their representative signed for the deliveries upon delivery without protest or objection. The plaintiff's chief financial officer indicates there is a $7,608.70 outstanding balancing due and owing by the defendants which they have not paid despite numerous demands to them. The plaintiff's chief financial officer notes the agreement with the defendants requires, upon payment default, the payment of interest at the rate of 18% per annum from November 16, 2006, together with $1,902.18 in reasonable attorneys fees, and costs and disbursements.

The defendants interposed an answer to the complaint denying knowledge and information sufficient to form a belief concerning each and every allegation in paragraphs one and three in the complaint. The defendant Frank Shah states, in a December 22, 2009 affidavit, he had no business dealings with the plaintiff's chief financial officer. Shah claims the defendants were not doing business as Northport Associates, Inc. under a trade name of Strawberry Fields as alleged by the plaintiff, but rather they were employees of Northport Associates, Inc. Shah states he did not sign the instrument on which liability is sought by the plaintiff. Shah states the personal guarantee, which purports to be his signature, is followed by the letters "v.p." demonstrating it was signed in a corporate capacity rather than personal liability. Shah also points out the personal guarantee presented by the plaintiff does not appear to bear the defendant Raj Lokaiyan's signature. Shah questions the plaintiff status as either a corporation or an unincorporated entity.

Under CPLR 3212(b), a motion for summary judgment "shall show that there is no defense to the cause of action or that the cause of action or defense has no merit. The motion shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party." "The motion shall be denied if any party shall show facts sufficient to require a trial of any issue of fact." Summary judgment is a drastic remedy that is awarded only when it is clear that no triable issue of fact exists ( Alvarez v. Prospect Hosp. , 68 N.Y.2d 320, 325; Andre v. Pomeroy , 35 N.Y.2d 361). Summary judgment is the procedural equivalent of a trial ( Museums at Stony Brook v. Village of Patchogue Fire Dept ., 146 A.D. 2d 572). Thus the burden falls upon the moving party to demonstrate that, on the facts, it is entitled to judgment as a matter of law ( see, Whelen v. G.T.E. Sylvania Inc. , 182 A.D. 2d 446). The court's role is issue finding rather than issue determination ( see, e.g., Sillman v. Twentieth Century-Fox Film Corp. , 3 N.Y.2d 395; Gervasio v. Di Napoli , 134 A.D.2d 235, 236; Assing v. United Rubber Supply Co. , 126 A.D.2d 590). Nevertheless, "the court must evaluate whether the alleged factual issues presented are genuine or unsubstantiated" ( Gervasio v. Di Napoli, supra , 134 A.D.2d at 236, quoting from Assing v. United Rubber Supply Co., supra; see , Columbus Trust Co. v. Campolo , 110 A.D.2d 616, aff'd 66 N.Y.2d 701). If the issue claimed to exist is not genuine, and, therefore, there is nothing to be resolved at the trial, the case should be summarily decided ( see, Andre v. Pomeroy , 35 N.Y.2d at 364; Assing v. United Rubber Supply Co., supra).

The plaintiff established its entitlement to judgment as a matter of law by submitting the relevant credit application and personal guarantee of Shah, and demonstrating that defendant was in default under the terms of the credit application and his personal guarantee. In opposition, Shah failed to submit any evidence raising a material triable issue of fact rebutting the plaintiff's showing or as to the merit of any of what appears to be a general denial of the complaint ( see Wells Fargo Bank Minnesota Nat. Ass'n v. Perez , 41 A.D.3d 590, 837 N.Y.S.2d 877 [2^nd Dept., 2007]). "It has long been the rule that a party opposing a motion for summary judgment must assemble, lay bare and reveal his proof in order to establish that the matters set forth in his pleading are real and capable of being established at a trial [citation omitted]" ( Castro v. Liberty Bus Co. , 79 A.D.2d 1014, 1015, 435 N.Y.S.2d 340 [2^nd Dept., 1981]). The Second Department holds:

While a guarantee is a separate, independent contract between the guarantor and the creditor-obligee and is collateral to the contractual obligation between the creditor-obligee and the principal-obligor ( see, American Trading Co. v. Fish , 42 N.Y.2d 20, 396 N.Y.S.2d 617, 364 N.E.2d 1309; Fehr Bros. v. Scheinman , 121 A.D.2d 13, 509 N.Y.S.2d 304), a guarantee in writing and a principal contract are considered as one for the purpose of interpretation, where the guarantee is made at the time the principal contract is executed ( see, Catskill Natl. Bank v. Dumary , 206 N.Y. 550, 100 N.E. 422; Everson v. Gere , 122 N.Y. 290, 25 N.E. 492)

Components Direct, Inc. v. European American Bank and Trust Co. , 175 A.D.2d 227, 230-231, 572 N.Y.S.2d 359 [2^nd Dept., 1991].

"[W]hen the guarantor has bound himself to satisfy an obligation of a specified debtor, he may not be held liable for the debt of another debtor, unless the contract clearly discloses such an intent [citation omitted]" ( Fehr Bros., Inc. v. Scheinman , 121 A.D.2d 13, 16, 509 N.Y.S.2d 304 [1^st Dept., 1986]).

Shah claims he did not the sign the credit application and personal guarantee, so in effect the signature on the credit application and personal guarantee was a forgery ( see JPMorgan Chase Bank v. Gamut-Mitchell, Inc. , 27 A.D.3d 622, 811 N.Y.S.2d 777 [2^nd Dept., 2006]). However, the Second Department holds such a bare, self-serving claim to that effect is insufficient, as a matter of law, to raise a material triable issue of fact ( see Brown Bark I, L.P. v. Imperial Development and Const. Corp. , 65 A.D.3d 510, 882 N.Y.S.2d 919 [2^nd Dept., 2009]). Moreover, Shah fails to submit an expert opinion regarding the forgery claim with an analytical basis for his conclusion the signature on the credit application and personal guarantee was not his genuine signature ( see Brown Bark I, L.P. v. Imperial Development and Const. Corp., supra). Shah's contentions concerning a different name for the plaintiff and pen scratch lacking specification about the name of the affiant in a moving paper are insufficient, as a matter of law, to show a material issue of fact. Shah continued to purchase merchandise on credit without seeking to terminate the guarantee agreement (see Fehr Bros., Inc. v. Scheinman , 121 A.D.2d 13, supra ).

While officers or agents of a corporation are not liable on its contracts if they do not purport to bind themselves individually ( see generally Savoy Record Co. v. Cardinal Export Corp ., 15 N.Y.2d 1, 4, 254 N.Y.S.2d 521, 203 N.E.2d 206; Weinreb v. Stinchfield , 19 A.D.3d 482, 483, 797 N.Y.S.2d 521), the terms of the instant guaranty constituted a deliberately stated, unambiguous, and separate expression personally obligating the individual defendants for South Shore's debt ( see PNC Capital Recovery v. Mechanical Parking Sys. , 283 A.D.2d 268, 270, 726 N.Y.S.2d 394)

Key Equipment Finance v. South Shore Imaging, Inc. , 69 A.D.3d 805, 893 N.Y.S.2d 574 [2^nd Dept., 2010].

The plaintiff presented evidence showing Shah personally liable for the corporation's performance and payment under credit application and personal guarantee. Shah had an obligation to exercise ordinary diligence in ascertaining the terms of the document he signed ( see Sander v. J.P. Morgan Chase Home Mortg. , 6 A.D.3d 301, 867 N.Y.S.2d 87 [1^st Dept., 2008]. In opposition, Shah's mention of the "vp" phrasing is insufficient to show a material issue of fact. The Appellate Division has held an interpretation such as suggested by Shah that he signed as a guarantor solely in his capacity as vice president of the corporation would require an unintelligent determination the intention of the guaranty was to render in a corporate default, the company guaranteeing its own financial obligation, making the entire guaranty worthless ( see 150 Broadway N. Y. Associates, L.P. v. Bodner , 14 A.D.3d 1, 784 N.Y.S.2d 63 [1^st Dept., 2004]).

With respect to the defendant Raj Lokaiyan a/k/a Falaun Shah, neither the plaintiff nor Raj Lokaiyan a/k/a Falaun Shah established their entitlement to summary judgment as a matter of law by showing a material issue of fact at issue. It should be noted there is no sworn statement nor other admissible evidence supporting any contentions by the defendant Raj Lokaiyan a/k/a Falaun Shah.

Accordingly, the plaintiff's motion for summary judgment is granted as to the defendant Frank Shah, but denied as to the defendant Raj Lokaiyan a/k/a Falaun Shah. The cross motion brought by the defendants Frank Shah and Raj Lokaiyan a/k/a Falaun Shah is denied.

So ordered.