Abir v Estate of Zabian

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Abir v Estate of Zabian 2011 NY Slip Op 32449(U) July 22, 2011 Sup Ct, NY County Docket Number: 106787/2010 Judge: Lucy Billings Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SCANNED ON 911612011 SUPREME COURT OF THE STATE OF NEW YORK MINOO ABIR, Index N . 106787/2010 Plaintiff DECISION - against - I. ORDER BACKGROUND Borrower Mozafar Zabian gave plaintiff lender a promisBory note dated March 20, 2002, in the principal amount of $40,000, in consideration for plaintiff s loan of that amount. The note required monthly payments of interest at 16.5% per y e a r and was payable in full 30 daye after demand. Plaintiff claims no interest payments have been made since October 2009. borrower died December 20, 2009. The On February 24, 2010, the Surrogate s Court in New York County appointed David Zahabian Administrator of the borrower s estate. Plaintiff now moves for summary judgement in lieu of a complaint to recover the note s principal plus accrued interest and late fees. N.Y. C.P.L.R. § 3213. Defendant c~oss-rnoves to dismiss the complaint, based on defenses of improper service of the motion; the estate s lack of capacity to be sued, instead of the estate s administrator; failure to file a notice of claim and bring the action in Surrogate s Court; premature commencement of the action; and usury. a b i x . 135 C.P.L.R. § 1 3 2 1 1 ( a ) (1) ( 2 ) , ( 3 ) , ( 7 ) , and , [* 2] (8). Plaintiff in turn cross-moves to substitute David Zahabian, Administrator of the Estate of Mozafar Zabian (a/k/a Mozafar Zahabian), as defendant. C.P.L.R. 5 5 l002(b) and 1003. The parties do not dispute that plaintiff and the deceased borrower entered into a loan agreement for $40,000, payable on demand, with monthly paymenta of 16.5% interest; t h a t t h e borrower made his last payment two months before he died; and that no further payment has been made. Plaintiff thus establishes his prima facie claim for payment of a sum certain. Defendant nonetheless sets forth its several defenses to support its cross-motion to dismiBs the action. 11. SUBSTITUTING TRE DEFENDANT Plaintiff also does not dispute that the defendant to be sued is the administrator of the estate, David Zahabian as Administrator of the Estate of Mozafar Zabian (a/k/a Mozafar Zahabian), rather than the estate itself, and movea to substitute him as defendant. N . Y . Est. Powers & Trusts Law (EPTL) § 11-3.1; C.P.L.R. 5 1003. Although substitution of that defendant would comply with EPTL § 11-3.1, that substitution would not avert defendant's defenaes of premature filing and usury. N.Y. Surr. Ct. Proc. Act (SCPA) § 1806; N.Y. Gen. Oblig. Law 5 5-501, 5 - 511(2). 111. PLAINTIFF ADEQUATELY SERW3D THE qPMINISTRAT0R OF TEE ESTATE. Plaintiff's affidavit of sewice of his motion describes attempted service at the address the estate's administrator li6ted as his residence in the petition for letters of a b i r .I35 2 [* 3] administration. The affidavit then describes substitute service at his place of business, on a person who identified himself as the administrator's manager, a pers'on of suitable age and discretion, followed by first class mail Hervice to the administrator at his place of business. C.P.L.R. § 308(2). Although the adminiatrator alleges t h a t he never received the original motion in lieu of a complaint, he never disputes the validity of the addresaea used for his residence or place of business nor that a manager at his place of business matched the descript on in the affidavit of service or was a person of suitable age and discretion. Therefore nothing demonstrates t h a t service of the motion in lieu of a complaint on David Zahabian failed to comply with C.P.L.R. 308(2). § IV. UPON ADEQUATE SERVICE OF A NOTICE OF CLAIM, PLAINTIFF MAY BRING THIS ACTION IN SUPREME COURT. Plaintiff also adequately served a notice of claim on the estate's administrator by certified mail, return receipt requested, at his residence. SCPA 5 1803(2). Procedure Act § Surrogate's Court 1803(2) merely requires lldeliveryll does not and limit the means of achieving it, via mail or otherwise. The administrator admita that he received the notice, and thus it was delivered, at his residence. The notice of claim must be delivered to the estate's fiduciary, but need not be filed in Surrogate's Court. SCPA § The action likewise need not lSOZ(3). be brought in Surrogate's Court, but may be brought in Supreme Court as plaintiff did here. abir. 135 SCPA 3 § 1810. [* 4] V. PLAINTIFF COIcprlENCED THE AC TION P R E m T W LY. The court nevertheless must deny plaintiff's motion for summary judgment in lieu of a complaint: and di6miss the action because plaintiff commenced it prematurely. A prerequisite to plaintiff's action is defendant's rejection of plaintiff's notice of claim. SCPA § 1806. Neither p a r t y demonstrate@ t h a t defendant r e j e c t e d t h e notice of claim before plaintiff commenced this action. The notice of claim may be considered rejected 90 days after service, SCPA § 1806, but plaintiff concedes he commenced this action by aerving the estate's administrator less than 90 days after service of the notice of claim. Therefore defendant's time to acknowledge the claim had not yet expired when plaintiff commenced this action. VI. THE LOAN IS USURIOUS. Even were the court to take into account the time that now has elapsed since plaintiff served the notice of claim, his action fails on its merits. A loan with interest over 16% per year is usurious and void by law, so that the borrower need repay neither t h e principal nor interest. N . Y . Gen. Oblig. Law 501, 5 - 5 1 1 ( 2 ) . §§ 5- Absent a special or fiduciary relationship intended to influence the lender and injury to the lender from that influence, the loan is void regardless which p a r t y drafted the loan or suggested the rate. Seidel v. 18 E. 17th St. Owners, 79 N.Y.2d 735, 743 f 1 9 9 2 ) ; .Pemperv. Reifer, 264 A.D.2d 625, 6 2 6 (1st Dep't 1999); Ru@@Q v. Carev, 271 A.D.2d 889, 890 (3d Dep't 2000). abir - 135 Plaintiff alleges neither a fiduciary relationship with 4 [* 5] the borrower, nor that plaintiff was injured by relying on the borrower, as opposed to injury simply from the nonpayment now claimed. Regarding the interest charged, plaintiff alleges that t h e miBsed payments began as of November 2009. The deceased made monthly,interest payments of $550, representing 16.5% interest per y e a r , for seven years and eight months, between execution of the note in March 2002 and the default, totaling $50,600. The payments fully repaid the $40,000 principal and provided plaintiff a 2 6 . 5 % profit on the loan rather than inflicting any injury. See Seidel v. 18 E. 17th St. Owners, 79 N.Y.2d at 743. Although the borrower's estate may n o t recover funds the borrower already paid to plaintiff other than the amount in excess of 16% interest, the borrower's previous payments do not estop the estate from now claiming a usury defense, as the usurious interest voids the loan and relieves the borrower and his estate of the obligation to make further payments. Seidel v. 18 E. 17th St. Owners, 79 N.Y.2d at 744. VII. CONCLUSION After o r a l argument and for the foregoing reasons, the court deniea plaintiff's motion for summary judgment in lieu of a complaint, grants defendant's cross-motion to dismiss the action, and denies as futile plaintiff's cross-motion to substitute a A i r . 135 5 [* 6] defendant. C.P.L.R. 5 5 1003, 3211(a), 3213. constitutes the court's order and judgment of DATED: Thia decision dismissal. J u l y 2 2 , 2011 C M ' LUCY BILLINGS, J.S.C. LUCY BILLINGS J.S.C. a b i r . 135 6

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