Opinion
No. 4918/2013.
06-16-2014
VANGUARD ORGANIZATION, INC., Plaintiff, v. Rolando KRAEHER, Defendant. Rolando Kraeher, Third–Party Plaintiff, v. Frank Algier, A.K. MANAGEMENT GROUP, LLC, Third–Party Defendant.
Michael J. Matsler, Esq., Rider, Weiner & Frankel, P.C., New Windsor, NY, Attorneys for Plaintiff. Joseph A. Catania, Jr., Esq., Catania, Mahon, Milligram & Rider, PLLC, Newburgh, NY, Attorneys for Defendants.
Michael J. Matsler, Esq., Rider, Weiner & Frankel, P.C., New Windsor, NY, Attorneys for Plaintiff.
Joseph A. Catania, Jr., Esq., Catania, Mahon, Milligram & Rider, PLLC, Newburgh, NY, Attorneys for Defendants.
Opinion
JAMES D. PAGONES, J.
Plaintiff moves for an order, pursuant to CPLR 3212, granting it summary judgment against the defendant, Rolando Kraeher. Plaintiff also seeks to sever the third-party action. Further, plaintiff requests costs and attorney's fees.
The following papers were read:
| Notice of Motion–Affirmation in Support | 1–2 |
| Affidavit in Support–Affidavit | 3–4 |
| Exhibits A–L–Affidavit–Memorandum of Law | 5–17 |
| Affirmation in Opposition | 18 |
| Affidavit in Opposition–Affidavit of Service | 19–20 |
| Reply Affirmation–Affidavit of Service | 21–22 |
Upon the foregoing papers, the motion is decided as follows:
On a motion for summary judgment, the test to be applied is whether triable issues of fact exist or whether on the proof submitted judgment can be granted to a party as a matter of law (see Andre v. Pomeroy, 35 N.Y.2d 361 [1974] ). The movant must set forth a prima facie showing of entitlement to judgment as matter of law, tendering sufficient evidence to demonstrate the absence of any material issue of fact (see Alvarez v. Prospect Hospital, 68 N.Y.2d 320 [1986] ). Once the movant sets forth a prima facie case, the burden of going forward shifts to the opponent of the motion to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact (see Zuckerman v. City of New York, 49 N.Y.2d 557 [1980] ). Plaintiff herein establishes its prima facie entitlement to judgment by presenting an absolute and unconditional guaranty, the underlying debt, and the guarantor's failure to perform under the guaranty (see City of New York v. Clarose Cinema Corp., 256 A.D.2d 69 [1st Dept 1998] ). Since plaintiff has made a prima facie showing of entitlement to judgment as a matter of law (see Zuckerman v. City of New York, 49 N.Y.2d 557 [1980] ), defendant must show that genuine triable issues of material fact exist in order to defeat plaintiff's motion (id. ). In opposition, defendant Rolando Kraeher's primary defense is fraudulent inducement to execute a guaranty on the note. Defendant indicates that this defense is directly related to the note at issue because the note and its purchase by plaintiff, is a part of a larger scheme that was perpetrated by Algier, plaintiff's principal and defendant's co-member in borrowing from Rhinebeck Savings Bank as AK Management, LLC. It is well settled that where the language of a guaranty provides that it is absolute and unconditional and can not be altered or discharged orally, the defendant is foreclosed as a matter of law from defenses and counterclaims based on fraud (see Citibank, N.A. v. Plapinger, 107 A.D.2d 627 [1st Dept 1985]order affirmed by 66 N.Y.2d 90).
Here, the plaintiff's principal, Algier, is engaged in business with the defendant, under the name AK Management, LLC, a company in the business of selling homes. On February 6, 2007, AK Management, LLC took out a loan payable on February 6, 2008, from Rhinebeck Savings Bank in order to renovate a house for resale. Subsequently, defendant Kraeher and plaintiff's principal Algier signed an absolute, unconditional guarantee of payment, expressly waiving all defenses, set-offs, and counterclaims and agreeing to Rhinebeck Savings Bank's right to assign the note and right to maintain discretion in choosing the means to collect on the note. On June 1, 2008, AK Management, LLC and Rhinebeck Savings Bank agreed that the maturity date was to be extended for a further period, i.e. December 14, 2008, with a renewed “absolute and unconditional” written guarantee of payment. Defendant Kraeher, defendant Kraeher's company Arquitectura Architecture + Design, PLLC, Frank Algier, and plaintiff executed the new guaranty, waiving any and all legal requirements that the lender sue the borrower or exhaust all remedies, as a condition precedent to sue any guarantor. When AK Management, LLC failed to make the payment, the repayment deadline was further extended on numerous occasions before a final deadline of November 14, 2009 was set to repay the loan. Consequently, AK Management, LLC defaulted and plaintiff bought the note, avoiding the bank's foreclosure on AK Management, LLC's property. Plaintiff then commenced this action.Here, the defendant has failed to present evidence that plaintiff's principal fraudulently induced defendant's agreement to the Rhinebeck Savings Bank loan. In order to defeat a motion for summary judgment, oral proof to show that a written pact was obtained by fraudulent inducement must be genuine and based on proof, not shadowy and conclusory statements (see Citibank, N.A. v.. Plapinger, 107 A.D.2d 627 [1st Dept 1985]order affirmed by 66 N.Y.2d 90). Algier's alleged material misrepresentations fall under the separate AK Management Operating Agreement, which does not reference the Rhinebeck Savings Bank loan, nor does the loan reference the Operating Agreement. Despite the complexity of a multi-party agreement, the critical instrument for present purposes is the guaranty agreement, which is independent and by its terms stands alone in imposing direct and primary obligations for payment on the guarantor (see City of New York v. Clarose Cinema Corp., 256 A.D.2d 69 [1st Dept 1998] ). Defendant also indicates that the motion must be denied as discovery remains outstanding. The mere hope and speculation that discovery might uncover evidence to raise a triable issue of fact is insufficient to defeat a summary judgment motion (see Ordonez v. Levy, 19 AD3d 385 [2nd Dept 2005] ).
Based upon the foregoing, plaintiff's motion for summary judgment is granted. The third-party action is severed and any contribution claim may be litigated via this action. Plaintiff is directed to submit an affirmation of legal services and judgment on seven (7) days notice consistent with the foregoing within thirty (30) days hereof.
The foregoing constitutes the decision and order of this Court.